In Search of the Perfect Investment

Here’s how they fake the Dow Jones Averages index. Yesterday they took out three dreary companies with falling stocks —  Hewlett-Packard, Alcoa and Bank of America and replaced them with three “hot” ones — Nike, Visa and Goldman Sachs. When you read that the Dow went up, you know know why. Going up is good for Wall Street. And lots of people still watch the Dow, when they should be watching the S&P 500 index, which more accurately reflects the market. 

What’s even weirder is that yesterda, Nike, Visa and GS rose strongly, while HPQ and AA fell. BAC was actually up.

Apple’s disappoinments. Apple is now run by production and design people, not (any longer) by marketing people. The biggest indication: Last night I tried to pre-order a new iPhone  5S and was told to call back in ten days time!

I learned one thing when  I was running a business: Take the customer’s money when he offers it. The nice Apple call center lady told me it was the first time Apple had introduced a new phone and had not taken pre-orders. She didn’t know why. She thought the policy pretty weird.

As regards innovation at Apple, the big problem is there’s no Steve. Jony Ives, who now controls both software and hardware, is too obsessed with tweaking hardware and software design to make it pleasingly perfect. Who cares about the rounded edges, etc? Everything Apple announced yesterday — from the faster processor to the fingerprint reader to the larger battery are all obvious improvements that you, I and Blind Freddie could have figured.

The new iPhone 5S it will attract rich people who lost their iPhone 5, like me. (Not a big market.) But anyone with an iPhone 5 can happily live without an 5S. Susan will get a 5S because her contract has expired and she’s “entitled” to a free upgrade — if she signs to Verizon’s extortionist two-year contract. She presently has a 4S. Maybe she’ll give me her old 4S? And I’ll save the $700 or so?

The iPhone 5C is really today’s iPhone 5 in a cheap plastic case. Sadly for Apple stockholders, it won’t be the blockbuster seller that it could have been. According to what I read, the 5C will retail for around 4,500 yuan, or $730, in China, a third higher than the $549 (or $99 with a two-year contract) that it will cost in America. I don’t understand that decision one bit. Except that maybe Apple has deliberately opted, with the 5c, for the small, high margin luxury cellphone business. It definitely exists in China, which now has 315 billionaires (see below).

Once the world’s top smartphone maker by unit shipments, the iPhone’s sales now account for only 19% of the market, while Samsung represents nearly 32%, according to Gartner research. Apple’s share is declining.

Lately, I’ve been using a beautiful, large HTC One phone on T-Mobile. It runs Android. It has everything the iPhone 5s has (and more), except the fingerprint reader. I do like its bigger size. Size matters when you’re about to have your second cataract operation (tomorrow). Size matters because things like maps, emails, photos, movies, websites look better when they’re bigger. Why Apple didn’t introduce a larger phone strikes me as a form of arrogance.

The sad part is that two years after Steve’s death, Apple has yet to come out with any new products. Just tweaks.

You can’t be a “hot” stock with tweaks. Look at Microsoft.

The Arab Spring has been a gigantic bust. Good for Islamists. Bad for everyone else. Dictators make sense, sadly, because they keep the nutcases in check. Don’t believe me? Read this horrific story from last weekend. This sort of stuff is happening in Syria also. Today is September 11, 2013. It’s 12 years since the Islamists inflicted their horrors on us.

Islamists Seize Town in Southern Egypt and Attack Christians

DALGA, Egypt (AP) – The Coptic Orthodox priest would talk only after hiding from the watchful eyes of the bearded Muslim outside, who wore a pistol bulging from under his robe.

The priest, Father Yoannis, moved behind a wall in the charred skeleton of an ancient monastery to describe how it was torched by Islamists and then looted when they took over Dalga, in southern Egypt, after the ouster of the country’s president, Mohamed Morsi, on July 3.

“The fire in the monastery burned intermittently for three days,” Father Yoannis said. “The looting continued for a week. At the end, not a wire or an electric switch is left.”

The monastery’s 1,600-year-old underground chapel was stripped of ancient icons, and the ground was dug up in the belief that a treasure was buried there. “Even the remains of ancient and revered saints were disturbed and thrown around,” Father Yoannis said.

Dalga, a town of about 120,000 people, including 20,000 Christians, has been outside government control since hard-line Islamist supporters of Mr. Morsi drove out the police and occupied the police station on the day the Egyptian military removed Mr. Morsi.

The Islamists’ actions were part of a wave of attacks in the province of Minya that targeted Christians, their homes and their businesses.

Since then, the militants have imposed their grip on Dalga, twice driving off attempts by the army to send in armored personnel carriers, fending them off with gunfire.

Their hold points to the power of hard-line Islamists in southern Egypt even after Mr. Morsi’s removal – and their determination to defy the military-backed leadership that had him replaced.

With the army and the police already fighting an expanding militant insurgency in the Sinai Peninsula, there are growing signs that a second insurgency could erupt in the south – particularly in the provinces of Minya and Assiut, both Islamist strongholds that are also home to Egypt’s two largest Christian communities.

The takeover of Dalga has been disastrous for Christians in the town, which is 160 miles south of Cairo on the edge of the Nile Valley, near cliffs that mark the start of the desert.

In the initial burst of violence, the town’s only Catholic church was ransacked and set ablaze, as was the Monastery of the Virgin Mary and St. Abraam. The Anglican church was also looted.

Nearly 40 Christian-owned homes and stores have been attacked by Islamists, according to activists in Minya. Bandits from the nearby desert joined the looting and burning, they said. Among the homes burned was that of Father Angelos, an 80-year-old Orthodox priest who lives near the monastery. Father Yoannis’s house was spared a similar fate by his Muslim neighbors.

A Christian who fired shots from his roof to ward off a mob was dragged down and killed, the activists said. Armed men can be seen in the streets, and nearly every day Islamists hold rallies demanding Mr. Morsi’s reinstatement.

Most Christians remain indoors as much as possible, particularly during the rallies. “The Copts in Dalga live in utter humiliation,” said a local rights activist, Ezzat Ibrahim. “They live in horror and cannot lead normal lives.”

 Chinese billionaires explode. Eat your heart out.

(AFP) The number of dollar billionaires in China has passed 300 for the first time, an annual ranking of wealth in the world’s second-largest economy showed Wednesday.

The Hurun Report, a luxury magazine publisher, named property tycoon Wang Jianlin as China’s new richest person, saying he had more than doubled his worth to $22 billion.

There were a total of 315 dollar billionaires in the country, it said, up 64 from a year ago.

The average fortune of the top 1,000 stood at $1.04 billion — more than double their $440 million during the global financial crisis five years ago.

But some were dogged by scandal.

Three of last year’s 10 richest people in Chengdu, the capital of Sichuan, have been detained amid a corruption crackdown in the province.

Two others on the list are in prison, while Xu Ming, who joined this year at No 676 with $490 million, was a key witness against Bo Xilai last month in China’s biggest political corruption trial in decades.

According to court transcripts, Xu said he gave the former senior politician 21 million yuan ($3.4 million) in bribes, including purchasing a villa in the French resort of Cannes for Bo’s wife.

Real estate businesswoman and recent divorcee Wu Yajun fell from No 8 to No 22 and her wealth dropped nearly a quarter to $4.6 billion after she gave her ex-husband $3 billion — propelling him into the Top 50 in his own right.

Hurun called the transaction “the most expensive divorce settlement from a wife to her husband”.

Real estate was the biggest source of ultrarich fortunes, led by Wang, whose conglomerate Wanda Group recently also acquired the US cinema chain AMC Entertainment and a luxury British yacht builder.

But Lei Jun of mobile phone maker Xiaomi rose the fastest on the 2013 rankings after his worth shot up seven-fold to $2.6 billion.

Wang was also named as China’s richest man by Forbes magazine earlier this week, which estimated his wealth at $14 billion.

The perfect present:

It holds the new iPad and roll of toilet paper. What more could you want in your bathroom? Only $49.99 at Bed Bath and Beyond. Click here.

This Saturday is Yom Kippur. It’s the holiest day in the Jewish calendar. It celebrates the three characteristics of all Jewish festivals:

1. They came to kill us.
2. They failed.
3. So, let’s eat.

Sex after hospital.
The Kentucky Post reported that a woman, one Anne Maynard, has sued St Luke’s hospital, saying that after her husband had surgery there, he lost all interest in sex.

A hospital spokesman replied, “Mr. Maynard was admitted in Ophthalmology; all we did was correct his eyesight.”

How to fix a marriage.
Husband and wife had a tiff. Wife calls mum and says: “He fought with me again, I am coming to live with you.”

Mum replies, “No darling, he must pay for his mistake.  I am coming to live with you.

Kerry Shocked to Be Taken Seriously.

WASHINGTON (The Borowitz Report)-Secretary of State John Kerry said today that he was “shocked and flabbergasted” that the Russians heeded his suggestion about Syria’s chemical weapons, telling reporters, “After four decades in public life, this is the first time someone has taken me seriously.”

“Whether as a senator, a Presidential candidate, or Secretary of State, I’ve devoted countless hours to thunderous and droning speeches that people have consistently tuned out,” he said. “So naturally, to be listened to all of a sudden came as something of a shock.”

But after the novelty of not being ignored wore off, Mr. Kerry said, the Russians’ assertion that he had said something worth paying attention to “seemed like a trick.”

“You mean to tell me that after decades of spewing mind-numbing rhetoric I all of a sudden blurted out an idea worth acting on?” he said. “It doesn’t pass the smell test.”

At the White House, spokesman Jay Carney welcomed the Russians’ engagement in the Syria crisis, but warned that “further actions based on John Kerry’s remarks will not be tolerated.”

“We ask the Russians to be constructive participants in this process,” he said. “And taking John Kerry seriously is a clear violation of international norms.”

Harry Newton who yesterday spun some money into a residential real estate syndication. As the syndicator told me at lunch, you’ll get an 8% dividend immediately, and, as we manage the place better, fix it up a little and bump the rents, your dividend will increase. At some point the property will be worth a little more, we’ll refinance it, so you’ll get much of your initial investment back, but still own the property. And maybe in 5-7 years we’ll sell the whole thing at a higher price. What’s there not to like?

I’ll tell you about Harry’s, Warby Parker and Uniglo tomorrow. Those are three companies giving great innovation a whole new meaning.