In Search of the Perfect Investment

Friday, the day after Thanksgiving:

It’s good day to buy things you don’t need. And a good day to do all the things on the “Honey Do” List — the lightbulbs that need changing, the pictures that need to be hanging, the passports that need to be renewed.

It would be good to do a little exercise after yesterday.

Today will be light. Stockmarkets close at 1 PM. Even the machines that trade stocks without people are shutting down early. Go figure.

For fun, you can always read the million stories on why HP screwed up on its purchase of Autonomy, and why this has continued a history of disastrous HP purchases, including Compaq, Palm and Electronic Data Systems (EDS). HP is spending itself into insolvency, which is amusing, if not sad.

In contrast Oracle’s purchases have worked out nicely. Sadly, HP has limited competent management (Meg Whitman?) while Oracle’s founder, Larry Ellison, is still there and adding sanity.

I’ll be back Monday. Have a great weekend.

I’ve left Wednesday’s post, in case you missed it…

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Dream 1 fulfilled.: For eons I’ve wanted to “push” my blog to my subscribers as a regular email. This would save them having to remember to come to the site. The good news: I may have done it. Look on the top left. You’ll see a box. It’s says “SUBSCRIBE.” Put your email address in. And with luck, you will receive an emailed version of my priceless words. 

Much that I’d like to peddle your email address to every spammer with a pulse, I won’t and can’t. Simply: I don’t know where the software stores your name. Which means if I can’t get at it, no one else can. So, sign up and see if my new system works.

This column uses software called WordPress. Much that I would like to admit having discovered it, WordPress is actually used by more than 60 million website blogs all around the world. Big names and little names. The New York Times, Bloomberg and even the CIA use it You can — and probably should also.

It’s a great tool for making goodwill among your customers. It’s free. Even better, there are thousands of talented people who write plug-ins — bits of software that allow your WordPress to do extra things — like sending emails of your blog to your subscribers. You can pick up a copy of the software at WordPress.org. There are a zillion books on how to use it — including WordPress For Dummies,

which I will admit to never having read. But I’m told is good. Click here.

There are also some fabulous consultants out there. I recommend the services of tadpole — their people ran the Genius Bar at last night’s WordPress NYC Meetup Group, which I attended. They helped me add the email subscription and the rejiggering of today’s site. They’re really good. I love their logo:

Thanks for all the help last night.

The point of all this is: You need a website/blog for your customers/prospects. If I can get one gong, you can too.

Dream 2 dashed. I have no full-time job. I can’t live on the pittance in Google advertising from this column or the dwindling sales on my beloved dictionary. I also can’t pick stocks sufficiently successfully to live on my picks and dividends. Hence, the bulk of my portfolio — the part that I have to live on — must be in safe, bonds. For years, they’ve been muni bonds. And it’s been great. Not one has defaulted or deferred (bond-talk for delaying a dividend payment). All my dividends have been paid like clockwork. And — miraculously, my bonds have appreciated in value as Bernanke drove interest rates through the floor. My muni bonds actually have been my best-performing asset class. No more.

So, I’m sitting yesterday afternoon with the world’s best bond manager and asking, “What do I do now?”

And the answer: Not much. Last year’s 6-7% mostly-tax-free return is now down to 3- 3.25% (if I’m lucky).That’s not taking any more risk than what I’ve been taking for the past 15 years — which was buying only the top-rated New York triple tax-free bonds.

I can’t live on 3% — unless I put more money into bonds, or increase my risk and buy higher-yielding, junkier corporate bonds. A few weeks ago, I eyed other high-yielders like MLPs, utilities (I even bought Con Edison) and the telecom yielders (like Verizon and AT&T). But they all carry principal risk — and they demonstrated that handsomely in recent weeks by falling through the floor. And of course, there were my mortgage REITs, which I pushed on you my readers, until they fell through the floor. And we invoked our inviolate stop loss rule and got the hell out.

Ironically two bond fund recommendations — listed on the right — VWALX and TIP — have done well, but now yield less, but still something. Maybe I should put even more into these? Individual bonds basically suck. A couple of days ago a broker offered me a handsome, safe triple tax-free muni bond which comes due in March next year and yields the grand sum of 0.75% . Which I thought was totally awful until my friends presented me yesterday with a chart showing muni yields. Here goes with some excerpts:

2015 — 0.420%
2020 — 1.110%
2025 — 1.740%
2042 — 2.540%

You read that correctly. A 30-year AAA muni bond today yields 2.54%. Whoopee. And, of course, you wouldn’t want to buy it. At some stage Bernanke’s successor will raise rates and the value of long bonds will fall through the floor. Yes, bonds can be worse than equities.

This morning I’m having breakfast with my friend who’s found some commercial property out web he claims is a “steal.”

And then I’ll be talking with my investment banker who claims that this start-up is 20-banger or a toilet stock, i.e. it carries a little risk.

Obviously Mr. Bernanke is not one of my favorite people. By keeping rates low, he has destroyed the lives of countless millions of retired Americans. And for what purpose? To encourage businesses to borrow and invest and grow the economy? Sadly that little strategy is not working big-time. If you don’t believe me, read his latest speech “on the economic recovery and economic policy.” (His title, not mine.) click here. Warning: Do not read this speech on a full stomach, lest you throw up.

This is Nelson DeMille’s fun new book. Don’t read it. Buy the unabridged CD version and listen to it in your car. It makes every trip fly by. You;ll love John Corey’s wisecracking mouth. The plot if pretty good, too  It’s No. 1 on the New York Times best seller list. Buy here.

The little flashlight that could. I love the TAC Ace $9.99 LED flashlight. Ultra-powerful. Yet very small.

To buy one (they make great stocking stuffers), click here. To read more about this 2006 startup (I love successful startups), click here.

Harry plays doctor: Everyone is coming down with “Fuzzy Brain,” also called sinusitis or an infection of the sinuses. You cough up yellow and green stuff. You feel like shit. Your brain won’t work, hence “fuzzy brain.” Don’t delay. Get yourself to a doctor and get a prescriptoin for a Z-Pak — a five day supply of an antibiotic called Azithromycin. I’m repeating this message because it’s working on everyone, including most recently our doorman, Abraham, who had it much worse than I did.

More great New Yorker cartoons.

Unconfirmed rumor:

Bill Clinton has asked Paula Broadwell to write his biography.

Harry Newton who thinks Thanksgiving this year has to be more than simply giving thanks. It has to be about  compassion for your friends and neighbors.

After 26 years of Wall Street and several years of retirement, my neighbor is going back to work. He needs the money.  Last night I met a man whose six-month job had abruptly ended that day. His startup closed, having blown through the $500,000 they raised. A west coast friend has a seriously-bright kid (1,600 on the SATs), who has no idea what he’ll do when he graduates from college. Says his father, “it’s not good out there for my son.”

I have many friends whose children have no jobs, and, worse, have limited ideas what they will do in coming months.

You can’t blame this on Washington. You can’t blame it on the lousy go-nowhere stockmarket of the past ten years:

You can’t blame it on outsourcing to China or India. You can’t blame it on technology which lets us make things more cheaply, and with fewer people.

There are opportunities out there — to start new businesses, to find a job. There are three millions jobs going begging.  Matching the jobs to the kids; matching the financial returns to the needs is not the easy match it was when you and I graduated. I remember going on zillions of  recruitment junkets. They flocked to my school to hire the graduates. No more.

It’s a new world. Some of us are coping. Some of us are not and profoundly depressed. Talk to yor friends and neighbors this Thanksgiving. A little sharing and discussing might alleviate the misery I see so widely.