In Search of the Perfect Investment

Venture deals you and I get. Why I’m saying NO increasingly. There are three ways startups get financed — in order:

1. Friends and family.

2. Professional venture capitalists.

3. You and I, the great unwashed.

As members of class 3, we see the worst deals. They’re the ones everyone else has rejected.

I saw one for a restaurant chain that, in small print, said they charged a 12% “entry fee” on top of the equity monies you were providing them. And then there were the Class A and Class B shares. Guess which ones you and I would get?

Why did they bring this “deal” to me? Maybe because no one else would touch it?

The mystery of Citigroup. For weeks, Citigroup has been harassing me to remove a tiny research report from June, 2009 from this web site:

And for weeks I politely ignored them. Then they got nasty and threatened the company that hosts this site, who freaked out and in turn threatened to shut me down. Last night I removed the offending document. But my curiosity got the better of me. This is the first time ever that anyone has ever asked me to remove a document from this web site. The first time.

So what could be so embarrassing to Citi that it would spend thousands of dollars on legal fees and threaten a one-man “business” with all sorts of horrors? I read the five-year old document several times. The closest I can figure is that Citi is embarrassed  that it put out a research report that was egregiously wrong. Three months into the beginnings of a gigantic stockmarket boom (which began in March 2009), Citi’s learned research report, under the heading, “The Unsustainable Fire,” wrote:

The healing in investor confidence appears fragile and unexpected challenges to the recovery story have emerged in the form of overly rapid corrections in oil prices and Treasury yields.

The report itself which looked like this (I made it so small you can’t read it and I can’t go to jail):

The words read:

The Unsustainable Fire

+ The healing in investor confidence appears fragile and unexpected challenges to the recovery story have emerged in the form of overly rapid corrections in oil prices and Treasury yields.

+ The  current  cyclical  and  market  environments  cannot  support  sharply  higher interest rates or generally higher prices. Overly rapid corrections in oil prices and Treasury yields pose a challenge to tentative improvements in financial conditions, while credit easing has yet to filter through from capital markets to the economy’s grass roots.

+ Although data and markets have been mutually supportive of recovery prospects, consumer behavior reveals deep-seated caution that so far has dominated fiscal stabilization efforts. Enormous wealth losses continue to underpin rising savings preferences.

+ Pricing and compensation plans among small firms reflect punishing competitive conditions as sales remain poor.

I wonder..is someone suing Citigroup for shitty advice and using this document as “evidence?” Who knows?

The only moral to this sordid story is that learned investment analyst/economists get it wrong. Their advice should have been:

“Mortgage your house and bet the farm on the upcoming stockmarket explosion. It’s going to be huge. And you’ll get rich beyond your wildest dreams.”

But who knew? I certainly didn’t, says he eating humble pie.

Three ultra-neat iPhone apps:

+ Strava for biking and running. Keeps track of how far you went and useful statistics. Helps you compare yourself to others and find out how much better they are. Maybe good motivation?

+ Dark Sky for figuring when it’s going to rain next. Best weather app. Susan won’t move without checking it. I tend to look out the window to figure if I need a raincoat that day. She prefers her iPhone and Dark Sky.

+ Waze for tracking police and traffic delays and alerting you to alternate faster routes. Every friend swears by it. Says it saves money and time.

Things I’ve learned:

+ LLBean’s TEK fabric is as waterproof as Goretex, but much cheaper.

+ The fastest way to speed up your laptop or desktop is to swap out your old spinning platter hard drive with a solid state drive (SSD). Intel has not been speeding its processors up dramatically — like it used to do in the old days. I’m finding virtually no speed difference between Lenovo’s new X230 and its older X220 — now selling for bargain prices on eBay. Don’t touch the newest X240. With SSDs you don’t need Lenovo added software called Rapid Boot Shield.

+ My bank used to charge me $13 for every incoming wire — no matter how big (or small). I asked several times that they stop charging me… And yesterday, they did. I don’t know why yesterday, and not six months ago. Maybe because I told them I had opened an account with JPMorgan Chase, which is really good about fees. But whom am I to complain? Persistence is the better part of valor.

+ If you’re going to sell somebody (like me) something, do me the courtesy of looking me up on the Internet. Always look up your prospect on the Internet. It’s polite.

+ I have a Harvard Business School reunion in September. I call their special reunions hotline. It says send an email to Alumnae at HBS dot edu. But it doesn’t say how to spell alumnae. Apparently, it’s not alumnae. Maybe they also run the Burger Kings in Detroit? This is an actual sign in the window of one:

+ Messaging on your iPhone has its charms and dangers. Send an iMessage on your iPhone. Bingo, it appears on your iPad and your new Mac laptop. This is not good for privacy, especially if your spouse is watching the progress of your affairs on the iPad you left at home. But wait, there’s more. Find my iPhone app can track your or your spouse’s movements. None of this makes for happy marriage if someone is playing around. And you can get fired if you’re playing around with someone who works for you and you promoted them several times. I don’t make this stuff up.

+ Active Trade Pro version 10.1 from Fidelity works like a charm. Much better to run the software on your machine — than to run their ridiculous web app, which relies on Microsoft’s buggy Silverlight software.

+ Never never eat food with marijuana in it. It takes a while for the stomach to process the drug. But when it does, it hits instantly and can quickly put you in the emergency room, as it’s done to many. A favorite comedian of mine, Bill Maher, a pothead for a thousand years, ended Friday’s show with serious warnings and the words “You don’t need to take drugs to have a good time…

I cried and cried. Michael and I are walking in Central Park last night having a Father-Son talk when we spy:

Yes, he proposed to her right before our very eyes. We watched for ten minutes while they kissed and hugged and she cried and cried. Eventually we sidled up, congratulated them and asked to see the ring:

His name is Ross Cumming and he’s a football coach at the University of Southern California. You can send him a congratulation email to RossCumming at Yahoo dot com.

I asked why he had proposed in the middle of Central Park’s bridal (bridle?) path, decorated with horse droppings? He said the sun was going down and he was afraid he’d miss his chance. Good reason. Never have I seen a happier couple. Yes, amazingly, good things do happen in New York City. He came all the way from LA to propose. She is also from LA.

Harry Newton who has this bizarre wish: Please Middle East blow up completely. Suddenly there would be no more middle-eastern oil, there’d be a crisis in the U.S. Also called an emergency and then Congress and our governors would get off their collective tushies. New York would get fracking. They’d open the second big oil field in Northern Alaska. they’d approve more offshore drilling. They’d approve that pipeline from Canada. They’d enact big tax benefits for solar and wind. Within a couple of years we’d be energy independent and we’d never had to give money to countries like Saudi Arabia who finance the terrorism that costs us precious American lives and American treasure.

I’m still plowing through my list of birthday presents. I admit to spending too much time on the Citigroup puzzle/idiocy.

Every portfolio, I believe, needs some dividend stocks. Ones I like include NLY, AGNC, HTGC, STWD, DX and DIV.