In Search of the Perfect Investment

I’m worried about interest rates and their affect on real estate. Here’s the deal. Today you can buy a building (commercial or residential apartments) and borrow cheap, e.g. 3.47% for 5 or 7 years, interest only and maybe 80% LTV (loan to value). That means when your time is up, you must pay off the entire loan. You can do this in three ways: refinance, borrow the money from someone else or sell the building. Those are pretty big gambles which involve long-term predictions. About the only thing you know is that the world will be different, maybe in deep recession, again. At that stage, do you really want to lose your building to your lender?

There are two “solutions.” Borrow less money. Perhaps 60% LTV. That means your building can drop up to 40% in value and you’ll still keep it. Second, start paying off the loan immediately. That may reduce the payout  to your investors. But it will also make the deal somewhat safer.

Though interest rates will rise, one day. Possibly in 2015. Meantime, rates are low or falling. It still makes sense to have a little federal tax-free muni bond in your portfolio.

This fund returned 9.45% last year, some of which was tax-free.

It’s presently yielding 2.52% which is a lot better than what you can get at the bank. The fund is liquid, which means you can sell it. You can juice your return by automatically reinvesting your dividends.

More reasons to love Qualcomm. Click here. Nice chart, too:

It’s the parabola. It’s the ownership. It’s the law of bigness.Three things about Apple:

+ It rose too fast.

+ Everyone and their uncle owns the stock already. Ask yourself: Who’s going to buy it to drive it to $1,000? Or whatever ridiculous guess by some bozo Wall Street analyst.

+ When you’re this big, you can’t keep growing this fast. It’s the law of bigness.

And then there are the arguments I’ve already given a zillion times: Steve is gone. Top management is in revolt. There are no dramatically new products in the pipeline. Samsung and Android are eating Apple’s lunch.

I was right.

And now Apple is getting bad press: The iPhone’s battery is atrocious (which it is ). Apple should make bigger phones to compete with Samsung (which it won’t), etc.

There’s talk of Apple falling further, perhaps to $425. This is not a stock I want to mess with.

Next one I’m worried about: Netflix.

Every guy should have one of these. The world’s largest outdoor TV — 201 inches. Click here.

Memoto life-logging camera. Another successful crowd-funded project. Read more.

Uniqlo is now online. I love their socks. Click here. When you’re next in New York, visit their store on Fifth and 53rd. Truly fun (and cheap) shopping. Socks are slightly cheaper in the store and feature more wild wonderful colors.

No reason ever to erase a single precious family photo or your stolen movies. This USB external hard drive stores four terabytes of your precious stuff. That’s four thousand gigabytes. Or 4,398,046,511,104 bytes. ,This thing works with a Mac or a Windows machine. And costs only $190. Click here.

Favorite New Yorker chart.

Harry Newton, who will buy more Berkshire Hathaway and Qualcomm today.