In Search of the Perfect Investment

Larry Fink is Chairman and CEO of BlackRock, the largest money-management firm in the world by assets under management. He was on Charlie Rose last night. He’s engrossing. I’m guessing they’ll have last night’s video up in a a couple of days. Click here.

For now, Fink’s points:

+ He’s bullish on North America — Canada, the US and Mexico because of our energy abundance and cheapness. BlackRock just located a data center in upstate New York. He’s paying 3 cents a KWH, versus 22 cents in New York City and 46 cents in Germany. Guess where energy-intensive businesses (like data centers) would prefer to locate? (Germany doesn’t allow fracking.)

+ He loves Mexico because of its reforms and its new management. Mexico’s finance minister was on Charlie Rose after Fink. The man was ultra-impressive. He figures Mexico can grow at 5% a year for many years. Frankly I believe him. There are lots of ways to invest in Mexico, including ETFs and of course, BlackRock funds. For BlackRock’s impressive web site, click here.

+ If you’re in your twenties, you’ll live into your nineties. Everyone is healthier and living longer. That’s been addressed. What hasn’t been is getting set with sufficient money so you can enjoy your retirement “with dignity.”

+ Fink worries about job creation. Factories, farms, offices … everything is being improved with technology. A few years ago you ran a factory with X workers. Now you run it with a tenth of the workers and produce more.

Blackstone (which I’ve been pushing) does well:

Latest dividend (in blue circle) is 58 cents per share. The other three you see on this chart (going backwards) were 23, 23, and 30.

Lesson of the week. Maybe the millennium.

+ No one listens. Unless you’re in 100% absolute control, keep your mouth shut. My problem is opening my mouth.

+ If you’re a minority stockholder, you’re along for someone else’s ride. I don’t like gambling. It’s been hard for me to go from running my own business to going along for the ride. The big key is to make sure you can get out quickly when things go awry. That’s the basic charm of public companies, which most of us should stick with.

This chart is making the rounds again.

Writes Business Insider:

The 1929 chart is making the rounds again. You’ve probably seen this chart, which compares the market’s gains over the last year to those in 1929, leading up to the crash.

Noted market-timer Tom DeMark has been talking about it.

So too, apparently, has Doug Kass, according to Mark Hulbert, a columnist at MarketWatch.

“In an email earlier this week, Kass wrote of the parallels with 1928-29: ‘While investment history doesn’t necessarily repeat itself, it does rhyme’,” says Hulbert. “And, based on a number of indicators rather than just this chart drawing the 1928-29 parallel, he believes that ‘the correction might have just started.'”

Let’s take another look at this.

S&P 500 IN 1929 VERSUS TODAY. We explained the flawed logic behind this comparison back in November, the first time the chart made the rounds.

If you adjust the chart to show how far the market advanced in each case in percentage terms, it looks much less scary. What is in stake for the S&P 500 in the unlikely event that it does end up following the 1929 pattern? A 24% decline from the January 15, 2014 peak – about half the size of 1929’s initial 44% crash.

It’s not going to happen. So don’t get freaked when the chart floats into your email.

I used to write headlines on the magazines I published. There are from the latest Cosmo. They’re magnificent. I actually paid the $3.99 just so I could scan the cover.

Update on Microsoft and its “support”:

+ You will never get intelligent support out of Microsoft on any of its products. Don’t even bother contacting them. You’re on your own.

+ Apache’s OpenOffice is a much better alternative for those of us still using Microsoft Office. Its free. Download it here. It doesn’t have a mail client. For mail, use Google Gmail and your browser.

+ Office is buggy on the Mac also. But Apple has software that will let you do what Office does. And it works reliably.

+ The only solution to most serious problems with Windows is to re-image your hard disk, i.e. bring it back to what it was when it came out of the factory. I did that for Claire. Here’s our dialog:

Harry: Does your new computer work?

Claire: Yes!! Thank you. It’s awesome. So much faster than the other one. (I sent her a ThinkPad X220).  And I got my work applications working. It’s perfect – thanks!

I seriously doubt that Microsoft will be around in ten years.

What happens in the backwoods

Bob a young journalism graduate from Tennessee had gone to work for the New York Times. His first assignment was to write a brief human interest story. An idea came to Bob and he returned to one of the most remote areas he knew of in his home state of Arkansas. Deep in the woods, Bob came upon a farmer’s house and decided this would be a good place to start. He introduced himself to the back country farmer and explained why he was there. The farmer (named Farmer Dick) agreed to answer his questions. Bob asked Farmer Dick what event in his life had made him the happiest? Farmer Dick replied, “One time a neighbor lost one of his sheep. We all formed a posse and found it. After we all had sex with it, we took it back to the farmer that lost it.”

“I can’t print that,” said Bob, the reporter. “Is there another event that made you really happy?”

Farmer Dick thought for a minute and said, “Yep. One time the daughter of another local farmer got lost. She was a good-lookin’ young girl. We all formed a posse and found her. After all of us had sex with her, we took her back to her daddy.”

Again Bob knew he couldn’t print the story and decided to take a different tack. He asked Farmer Dick, “Is there any event in your life that has made you really sad?”

Farmer Dick hung his head and replied, “Well, I got lost once.”

Tact, as taught by the Marines

A young Naval Officer was in a terrible car accident, but due to the heroics of the hospital staff the only permanent injury was the loss of one ear. Since he wasn’t physically impaired he remained in the military and eventually became an Admiral. However, during his career he was always sensitive about his appearance.

One day the Admiral was interviewing two Navy Master Chiefs and a Marine Sergeant Major for his personal staff.

The first Master Chief was a Surface Navy type and it was a great interview. At the end of the interview the Admiral asked him, “Do you notice anything different about me?”

The Master Chief answered, “Why yes. I couldn’t help but notice you are missing your starboard ear, so I don’t know whether this impacts your hearing on that side.”

The Admiral got very angry at this lack of tact and threw him out of his office.

The next candidate, an Aviation Master Chief, when asked this same question, answered, “Well yes, you seem to be short one ear.”

The Admiral threw him out also.

The third interview was with the Marine Sergeant Major. He was articulate, extremely sharp, and seemed to know more than the two Master Chiefs put together. The Admiral wanted this guy, but went ahead with the same question.

“Do you notice anything different about me?”

To his surprise the Sergeant Major said, “Yes. You wear contact lenses.”

The Admiral was impressed and thought to himself, what an incredibly tactful Marine. “And how do you know that?” the Admiral asked.

The Sergeant Major replied, “Well sir, it’s pretty hard to wear glasses with only one friggin’ ear.”

Harry Newton whose granddaughter Eleanor, aged nearly three months, is visiting. I got a smile out of her yesterday. It was magical. This is the best I could do, so far. It’s not easy to photograph babies:

ADSK is flying.

It’s a huge enabler of the technology that Fink was talking about last night.