In Search of the Perfect Investment

I don’t have a real job. Hence, I should earn enough interest from my muni bonds to pay my extravagant lifestyle. That’s my “logic.” At 67, my “long-term” is not as long-term as yours. So, while the stockmarket always goes up in the long-term (though it didn’t in the last 10 years), I need assured, non-agita causing cash in the meantime.

Muni bonds appeal to New Yorkers, Californians and others who are raped by local taxes, and will increasingly be raped as taxes rise — as they are doing and will do more.

I can earn the equivalent of 7% triple tax-free if I find the right bond. The “issues” with muni bonds are:

1. If interest rates ever rise, my bonds will be worth less. But if I hold them to maturity, I couldn’t care less.

2. Some municipalities have no money. So the key is to pick the right bond. A general obligation bond from a destitute city or state (think California or New York) doesn’t cut it. But a water and sewage bond which pays my interest before it fixes the pipes make huge sense.

3. There is no “real” market in muni  bonds. True. You can’t look their prices up in the Wall Street Journal or online. They’re traded in smokey backrooms. To sell a bond,  you “shop” it around. To buy one, you buy a good one when Todd or Bill have one, and call you instead of their father-in-law. Last year Obama made Build America Bonds, in which the Feds subsidized the bonds’ interest payments to the tune of 35% (and then later to 27.5% or so). Some of these bonds paid over 7%. They were taxable. They were so popular many Wall Street houses simply marked them up day one, and made out like the bandits they are alleged to be.

Now you know where all those bond trading profits came from which Goldman Sachs reported earlier this week.

I’m not gloating. Not much. But I have been pounding the table for Apple. And today, after last night’s beautiful earnings, the stock will soar, again.

Meantime, I still haven’t bought an iPad, but all my rich friends have. iPads are a major hit at ritzy golf clubs, where they can be used for scoring games, and saving trees (?). Meantime, Ken Auletta, in the latest New Yorker,  has written a piece on Publish or Perish — Can the iPad topple the Kindle, and save the book business? Read the piece here.

The VIX measures volatility. It tells us (sort of) if investors are complacent or anxious. Lately they have been mucho complacent.

If you think that one day soon, they’ll become less complacent, you can bet against their complacency with this new derivative called VXX.

I’m not pushing this trade, simply opening a discussion. Add some comments below, please.

Use a headset, please. Every few years someone jumps all over the cell phones saying they cause cancer. The latest piece is Nathaniel Roth’s long, detailed article For Whom The Cell Tolls.

The upshot: We don’t really know 100%. But there is sufficient evidence to suggest we take these precautions:

1. Use a headset. Keep the phone away from your brain.

2. Don’t rest the phone in your crotch. Keep it away from your body.

3. Insist your kids use headsets. Brain tumors have recently edged out leukemia as the leading cause of death from cancer for children under the age of fourteen.

Bet against the American Dream. A wonderful song.

For the video, click here. Enjoy.

It’s gets zanier and zanier. You have a bad back. How about a treadmill desk?

Yes, for only $1,995, you can walk while you work. I bet somewhere in this great universe someone owns one of these things and believes this is the next best thing to sliced bread. Oops… Here she is.

Buy yours here. Remember, I don’t make this stuff up. I’m not smart enough.

Goldman CEO to Perform Community Service as Treasury Secretary.

NEW YORK – In a settlement of the government’s securities fraud case against Goldman Sachs, the bank’s CEO, Lloyd Blankfein, has agreed to perform two years of community service as Treasury Secretary of the United States.

At a press conference in New York, Mr. Blankfein said that as Treasury Secretary he would “continue to do God’s work as I did at Goldman, but at a significant pay cut.”

A Treasury Dept. spokesperson said that by performing community service as Treasury Secretary, Mr. Blankfein will be able to do less harm to the economy because he will have significantly less power than he had as Chairman of Goldman.

His experience at Goldman, however, will be “invaluable” in his new role as Treasury Secretary, the spokesperson said: “Lloyd Blankfein’s years of marketing worthless securities have prepared him for the important task of selling U.S. Treasuries to the Chinese.”

Mr. Blankfein is the latest in a long line of Goldman chairmen to serve as Treasury Secretary, although he is believed to be the first to do so while wearing an electronic ankle bracelet:

A couple were celebrating 50 years together.

Their three kids, all very successful, agreed to a Sunday dinner in their honor. “Happy Anniversary Mom and Dad,” gushed son number one …. ‘Sorry I’m running late. I had an emergency at the hospital with a patient, you know how it is, and I didn’t have time to get you a gift.”

“Not to worry,” said the father. “The important thing is that we’re all together today.”

Son number two arrived and announced, “You and Mom look great, Dad. I just flew in from Los Angeles between depositions and didn’t have time to shop for you.”

“It’s nothing,” said the father. “We’re glad you were able to come.”

Just then the daughter arrived. “Hello and happy anniversary! I’m sorry, but my boss is sending me out of town and I was really busy packing so I didn’t have time to get you anything.”

After they had finished dessert, the father said, “There’s something your mother and I have wanted to tell you for a long time. You see, we were very poor. Despite this, we were able to send each of you to college. Throughout the years your mother and I knew that we loved each other very much, but we just never found the time to get married.”

The three children gasped and all said, “You mean we’re bastards?”

“Yep,” said the father.  “And cheap ones too.”

Harry Newton, who’s sad they have cancelled classes on How to Open a Door 101 for spoilt New Yorkers. The doormen strike has been averted.