In Search of the Perfect Investment

The BIG psychology. All the chatter is rotten. The Fed is tightening, cutting the money it’s pumping in. China is slowing. Japan stocks are cratering because no one believes Abenomics is up for the task of saving Japan. Turkey is in flames.

It’s just talk. For now you have to live with it — with one eye on our inviolate 8% stop loss rule.

At one stage I loved DXJ, the Japan hedged equity fund. The idea of the fund is that as Japanese stocks go up we’ll be hedged against a fall in the Japanese currency, the yen. All the best laid plans of men (and mice) went awry and the Japanese stocks began falling shortly after I got enthusiastic about the DXJ. I bailed before the sh*t really hit the fan — and long before today’s calamity — about 6% down for Japanese stocks.

No one can predict where this market is going. It may turn on a dime and go back up. It may crater. You can’t panic, sell all your shares and go to cash. That would be stupid. All you can do is to watch your individual stocks. If any one reaches the 8% drop. ask yourself: What’s the reason? Is there something fundamentally wrong with the stock? If not, should I buy more?

Most likely, there won’t be a clear answer — e.g. DXJ. Without a clear answer you’ll need to sell it. Don’t fall in love with the stock — just like I fell in love with Qualcomm.

But Harry, you ask, won’t the stock I sell because of my stop loss order bounce back? Won’t I have sold at the bottom? Won’t I hate myself?

Yes, yes and yes. Yes to all three questions.

I’ve been studying the Stop Loss stuff for years. Fact is most of the time. It cuts your losses. Your portfolio will definitely be better off if you follow it. But you will lose occasionally on individual stocks — but not often.

You can, of course, always jump back in. With online trading it doesn’t cost much to jump back in.

One thing you will find: great stocks (the ones you want to own) rarely drop 8% — unless the entire market is cratering — e.g. 2008.

Stick with this ride and our rules. This is not the time to panic.

More on high-speed Internet.

+ The faster the better. Verizon FiOS is much faster than cable.

+ A technician can tweak your speed remarkably — with new cable, better connections, replaced equipment, etc.

+ New wireless routers are much better than the old ones. Get a new one every two years. Verizon gave me their latest wireless router. It was more twice as as fast as the old one — on the same circuit, same computer, etc. In other words, my wireless speed more than doubled — for no other reason than switching to a new wireless router. Miracles happen.

+ The speed you get varies throughout the day. FiOS is your own fiber to their office. But after that your connection to the Internet is shared with every other Tom, Dick and Harry. FiOS is still faster.

+ Move to channel 10 on your wireless router. It works better than automatic channel selection. I don’t know why.

+ Personal hot spots on 4G/LTE phones and MiFi units work — but only intermittently. It depends on where you are — like all cell phones.

Jane Laino’s latest telephone money saving tips. Jane is my favorite consultant to corporations. She checks and cuts communications bills (both mobile and landline). The savings can be ginormous. These days, the big savings are in mobile phones. Every employee has a phone paid for by the corporation. Figure a minimum of $100 a month. The costs add up. Tips:

+ When employees leave, get their phones back. Cancel their service or reassign the line to another employee (if the line is still under contract there may be an early termination fee of up to $175, so check that, too).

+ Don’t let them use their mobile phones overseas without the right plan. Jane has seen bills of $10,000 and more for two weeks of data and voice roaming in Europe. There was one for $15,000, which an employee incurred for streaming a full length movie onto an iPad while travelling in Asia.

There are a thousand cheaper ways to save making calls while out of the country, including going on an international plan before you leave, renting a phone there, taking an unlocked phone and inserting a local SIM card, and using Skype on WiFi for long data, voice and video calls — and webinars, presentations, etc.

+ Order a service like AT&T’s Purchase Blocker for each of your mobile lines which will prevent your employees from ordering expensive downloads and ringtones.

+ One of Jane’s clients was paying for 20 mobile phones ($2,000 monthly) with “push to talk” capability that were formerly used by security personnel.  The phones had not been used for several years but the service provider never said anything. This happens all the time.

+ No matter how good your contract rates, ask the service provider if they have better programs, as new ones are coming out all the time.

+ Ask for international roaming plans at no charge. Then leave them in place for all users all the time.

+ Optimize your bill at least quarterly. The service providers say they do it, but they are not incentivized to lower your bill.

+ Even if employees want to use their own mobile devices, make sure that they are enrolled under your corporate plan for the best rates.

+ Look for users that have more than one mobile line. Often they get a new one and fail to cancel the old.  You may be billed for many mobile lines that do not even have a device associated with them. The phones may have been lost, in a drawer, replaced with a new device and new line, etc.

Jane is at DIgby4 Group in New York — digby4.com.

Harry Newton who visited his dermatologist yesterday. The nice man ripped several suspicious things off and issued his standard warning: Apply sunscreen every day. He likes Neutrogena — SPF 30 or stronger.