In Search of the Perfect Investment

One school of investment thought: Do the exact opposite of what Harry says. When Harry says sell short, buy aggressively. When Harry says buy, sell.

I’ll say it again. I can’t predict one day to the next. No one can. Yesterday was a rocketship. Who knew?  Spain was going to be solved, again. But today may be different. Today’s New York Times  “

Spain Holds a Trump Card in Bank Bailout Negotiations

BERLIN – The bargaining has begun over a deal to rescue Spain’s ailing banks, confronting Europe with urgent choices about whether to try to enforce onerous bailout terms on Madrid as the crisis spreads to the region’s largest economies.

The question has seemingly become one of when, and not if, Spain’s banks will receive assistance from European countries, with investors on Wednesday predicting an imminent rescue and pushing up stocks and bonds on both sides of the Atlantic.

Spain, the euro zone’s fourth-largest economy, is too big to fail and possibly too big to steamroll, changing the balance of power in negotiations over a bailout. Political leaders in Madrid are insisting that emergency aid to their banks avoid the stigma in capital markets that has hobbled countries like Greece, Portugal and Ireland after accepting tough rescue terms. They are also fighting to slow the pace of austerity and economic change that have pushed those smaller countries into deeper recessions.

Spain has the added advantage of seeking help in a changed political environment in which calls for growth have begun to outweigh German insistence on austerity. Unlike Greece, Spain’s government did not run large budget deficits before the crisis, giving it leverage to argue that European aid to its banks should not come weighed down with a politically delicate loss of decision-making power over its own economic and fiscal policies.

Madrid’s trump card in this latest game of euro-zone poker is that the consequences of a Spanish default and exit from the euro zone would probably be so catastrophic that policy makers in Berlin will be willing to bend their bailout rules for Spain, and are on the verge of doing just that.

German officials have said they are prepared to weather a Greek exit from the euro if necessary, but no such claims are made about Spain. As such, Spanish leaders, who feel Madrid has already made many painful changes and spending cuts, are holding out for a deal that requires only a tightening of oversight on the financial sector and no strings attached to the country’s budget powers.

Spain also appears to be forcing a reckoning about the expensive steps political leaders in Europe need to take if they want to hold the euro zone together. Hopes that the European Central Bank would ride to the rescue, as it did with two waves of generous loans to Europe’s banks in December and March, or at the very least cut interest rates, now at 1 percent, were dashed when the bank’s president, Mario Draghi, said Wednesday that he did not “think it would be right for monetary policy to fill other institutions’ lack of action.”

You can read the New York Times piece here.

Yesterday was good for my long/short portfolio. The shorts all lost, but the longs — especially the mortgage REITs more than made up. I don’t touch my muni bonds, despite the fact that my friends say interest rates are on the rise. Of course, they’ve been saying that for the only last five years.

I am not sanguine about the second half of this year, especially for cockroach stocks and high fliers. Look at Lululemon today. Best Buy, a favorite short, is down big in the pre-market. Yipee.

I’m disgusted with Nasdaq. They couldn’t have botched Facebook’s first day’s trading more if they had actually tried. I had three allocations of Facebook (minute amounts). I gave instructions to sell them at the same time at the market.  One brokerage firm got $40.28. Another got $39.71. A third got $38 — the low of the day. All three should have gotten more — if it were not for the glitches in Nasdaq’s computers.

Nasdaq is setting up a fund to compensate the Facebook investors it screwed. Go ask them for money. It will be amusing, if nothing else.

What is wrong with our taxing entities? I’ve sent three sets of my 2010 federal return to three different offices of the IRS. Why different offices? “Because we’re too big to have one address.” But, you lose my returns constantly, I reply.  “Yes, we know. But please send another one to my address. I’ll try not to lose it.” Such nice people, the IRS.

Now, the New York State Department of Taxation and Finance has written me (letter received yesterday) “We haven’t received your New York State income tax return for tax year 2008.“

Are they stupid or what? They waited three years to see if I owed them any money. Maybe they don’t need my money? Should I ask them?

Oh, and by the way, says New York, if I don’t have a copy of my 2008 return, I should ask the IRS for a copy of my return.

Is New York State even more stupid than the IRS. Hard to believe.

Change your LinkedIn’s password.You need to. Someone hacked 8.5 million of their user’s password, including yours. How to change your password. Click here.

What do you do with the millions of photos you take at a wedding, birthday, or trip? All the relatives and friends want to see them. You can stick them on Facebook. But not millions. You can stick them on Picassa, now called Google+. I’ve used them. But of late, Google+ has been acting up. I do have one recommendation — something called Phanfare. You can get a free 14-day trial. It’s worth trying. A yearly subscription costs $29 and comes with no restrictions (like not being able to email more than ten people per day). Phanfare will take up to 500 pictures in one album. Google+ will take up to 250 — if you can figure out how to work it. It’s very quirky and unreliable.  For Phanfare, which is easier to use and has more options, click here.

‘Rich people can be creeps too!’ Charlize Theron is young, blonde, talented and single, making her one of Hollywood’s most sought after women.

Especially to rich strangers, willing to take Charlize Theron out for dinner all in the name of charity. But the actress said although she agreed to be auctioned off, the whole incident was ‘scary’.

Charlize, 36, was appearing on the Conan Show last night when she revealed that she volunteered to go on a date for charity. And she told host Conan O’Brien: ‘Don’t ever do it. It is the worst idea ever. It’s one of things, I was like, yeah I am a dumb blonde. ‘They trick you with the whole, “oh you know you can help so many people”, and then you fall for it.

The worst idea: Charlize said she wished she’d never agreed to the date but felt like she was talked into because it was for charity ‘and before you know it you’re at a restaurant with some stranger. Like you could end up in Dahmer’s apartment!’ (Jeffrey Dahmer was an American serial killer.)

She added: ‘I went to dinner with a strange man. I made two of my girlfriends go and sit at the restaurant while I was there.

‘I’d rather just give the money [to charity]. It was a scary thing. And [the guy] was weird!’

Charlize stars tarring in Ridley Scott’s Prometheus and as the evil Queen Ravenna in Snow White and the Huntsman.

You can see the Conan video here.

Not everybody pays.
A little old lady was walking down the street dragging two large plastic garbage bags behind her. One of the bags was ripped and every once in a while a $20 fell out onto the sidewalk.

Noticing this, a policeman stopped her, and said, “Ma’am, there are $20 bills falling out of that bag.” “Oh, really? Darn it!” said the little old lady. “I’d better go back and see if I can find them. Thanks for telling me, officer.”

“Well, now, not so fast,” said the cop.” Where did you get all that money?  You didn’t steal it, did you?”

“Oh, no, no”, said the old lady. “You see, my back yard is right next to a golf course.  A lot of Golfers come and pee through a knot hole in my fence, right into my flower garden. It used to really tick me off. Kills the flowers, you know. Then I thought, “why not make the best of it?”

So now I stand behind the fence by the knot hole, real quiet, with my hedge clippers. Every time some guy sticks his thing through my fence, I surprise him, grab hold of it and say, ‘O.K., buddy! Give me $20, or off it comes.”

“Well, that seems only fair,” said the cop, laughing. “OK. Good luck! Oh, by the way, what’s in the other bag?”

“Not everybody pays.”

The French Open continues. It’s on ESPN2, The Tennis Channel and NBC this weekend.

Harry Newton who wastes too much time seeing startups. My favorite yesterday was one pitching a product to the education community. Its Powerpoint deck had spelling mistakes.  I don’t make this stuff up.

Key to patience with startups — one hour of vigorous exercise each day and regular naps. I love napping.