In Search of the Perfect Investment

Cockroach stock. Cramer predicted on his show this week that BP will go bankrupt. I assume the stock will, at that stage, be worth zilch, nada, niente. Couldn’t happen to a nicer company.

The economy is about to go double dip.The Wall Street Journal reported:

The  Federal Reserve officials downgraded their outlook for the U.S. economy, indicating that short-term interest rates could remain at near zero until next year. Central bankers used more tentative language on the strength of the recovery compared with their previous meeting almost two months ago. They noted how financial conditions had become less supportive of economic growth.

As before, the committee said, economic conditions “including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.”

The Washington Post had this story, New-Home Sales Plunge 33% with Tax Credits Gone:

Sales of new homes collapsed in May, sinking 33 percent to the lowest level on record as potential buyers stopped shopping for homes once they could no longer receive government tax credits.

The bleak report from the Commerce Department is the first sign of how the end of federal tax credits could weigh on the nation’s housing market.

The credits expired April 30. That’s when a new-home buyer would have had to sign a contract to qualify.

“We fear that the appetite to buy a home has disappeared alongside the tax credit,” Paul Dales, U.S. economist with Capital Economics,” wrote in a note. “After all, unemployment remains high, job security is low and credit conditions are tight.”

New-home sales in May fell from April to a seasonally adjusted annual sales pace of 300,000, the government said Wednesday. That was the slowest sales pace on records dating back to 1963. And it’s the largest monthly drop on record. Sales have now sunk 78 percent from their peak in July 2005.

Pretty gruesome! Meantime more and more people have stopped paying their mortgages. This will put more pressure on the banks.

Russell remains positive on gold. He writes,

The world (minus the US) is loading up with the yellow metal with banks running out of vault space. The great 10-year primary bull market is moving into its 11th year. The bull market in gold attests to the systematic decline in the value of the dollar compared with real money – gold.

One of the greatest modern traders, John Paulson, who made billions on the housing collapse, has, I understand, all his personal money in gold-related items. Many of my subscribers have now built gold profits beyond anything they have ever achieved before. I know at this point one could get itchy fingers thinking of the profits achievable by switching gold for fiat currency. I warn subscribers, stay on the yellow brick road. The big profits, the astounding profits, will accrue when gold finally bursts loose of its prejudices and freely expresses itself.

My advice now is to put as much of your money as you’re comfortable with in bullion coins. Remember the simple phrase that’s been around through years of history – “There’s no fever like gold fever.” Fiat money is doomed. Act on it.

Obama’s firing of Gen. Stanley McChrystal reflects two things:

1. Obama’s gigantic ego, his immature sensitivity and his belief in his own “walking on water” ability, but more importantly:

2. The fact that the Afghanistan occupation has no goal. Hence nobody knows what they’re meant to do, and everybody does whatever they feel like. and everybody disagrees with everybody else.  Think Alice in Wonderland. Think of the old joke about a Chinese fire drill. You couldn’t run a business the way this bunch is running Afghanistan. Why are we still there? Beats me. It’s been almost 10 years. Our initial goal was to find Osama, but we didn’t and probably never will. My CIA friends tell me that everyone is the mountainous region of Pakistan where he’s hiding protect Osama. And anyway, if they even speak to you and me, their family will be killed. Lovely place.

Postscript: Today’s New York Times commented:

The firestorm over the article was fueled by increasing doubts — even in the military — that Afghanistan can be won and by crumbling public support for the nine-year war as American casualties rise. The remarks also laid bare the disarray and enmity in a foreign policy team that is struggling with the war.

What’s next — pay toilets? Several airlines are selling the chance to jump to the front of check-in lines, boarding queues and even security lines for about $10 to $30 per flight. Perks that used to be reserved only for elite-level frequent fliers and first-class passengers are now up for grabs to those who’ll pay to jump the line. Lots of travelers are buying. You can read all about this in today’s Wall Street Journal.

I biked by Apple’s Meat Packing District store last night. About 100 people were camped out for this morning’s 7:00 AM opening and the chance to buy Apple’s new iPhone 4. The lady is first in line. She arrived at 1 PM yesterday. She’ll wait 18 hours to get her new iPhone, which she’ll pay full retail for.

I was there around 11 PM.When I said I wasn’t buying an iPhone 4, these four — the first four in line — were incredulous. “How could you not want one? The iPhone  4 will change the world.” And other wonderful words.

The crowd stretched down the block.

What would you give to have customers as enthusiastic as these?And a stock price like this?

Why not have BP run Afghanistan? Latest news:

The Coast Guard said on Wednesday that BP had been forced to remove a cap that was containing some of the oil gushing into the Gulf of Mexico.

Adm. Thad W. Allen of the Coast Guard said that an underwater robot had bumped into the venting system. That sent gas rising through vent that carries warm water down to prevent ice-like crystals from forming in the cap.

My friend is pre-diabetic. I suspect we all may be. What this means is if he doesn’t do his regimen, he could become diabetic. His regimen is:

1. Plenty of exercise.

2. No sugar. No bread. No pasta. No Coca Cola.

He says he’s holding and his doctor is pleased. He’s not pleased about giving up two cans of Coke each day. “The sugar in Coke is unreal.”

It’s time to retire to Florida. My friend’s mother  retired to Florida. Here’s what it’s like. You must read this. It’s hysterical.

For those of you contemplating retirement, I would like to share my retirement experiences with you, which I hope will be helpful.

Fifteen years ago my wife and I moved into a retirement development on Florida’s Southeast coast. The last time we saw our grandkids was on Grandchildren’s Day when they were dragged down by their parents. We were living in the Delray/Boca/Boynton, Golf, Spa, Bath and Tennis Club on Lake Fake-a-hachee. [There are 3000 lakes in Florida, only 3 are real. It would be great if the kids came down to visit us this winter, as there is so much going on.

Back by popular demand, the feisty, Hip Replacement Tappers Club will be tap dancing to the Flight Of The Bumble Bee. It promises to be quite a production with lots of singing and dancing. This year I am not in the cast but will be standing by with the defibrillator volunteers.

Our biggest retirement concern was time management. What were we going to do all day Let me assure you, passing the time is not a problem. Your days will be eaten up by simple, daily activities. Just getting out of your car takes 15 minutes. Trying to find where you parked takes 20 minutes. It takes 1/2 hour on the check-out line in Wal-Mart and 1 hour to return the item the next day. Then of course, there are the visits to the doctor’s and dentist’s offices.

Let me take you through a typical day.

We get up at 5:00am, have a quick breakfast and join the early morning Walk and Talk Club. There are about 30 of us and rain or shine we walk around the streets, all talking at once. Every development has some late risers who stay in bed until 6 AM. After a nimble walk avoiding irate drivers out to make us road kill, we go back home, shower and change for the next activity.

My wife goes directly to the pool for her under water Pilates class, followed by gasping for breath and CPR.

I put on my ‘Ask me about my Grandchildren’ T-shirt, my mid-calf shorts, my socks and sandals and go to the club house lobby for a nice nap. Before you know it it’s time for lunch. We go to Costco to partake of the many tasty samples dispensed by ladies in white hair nets. All free! After a filling lunch, if we don’t have any doctor appointments, we might go to the flea market to see if any new white belts have come in or to buy a Rolex watch for $2.00.

We’re usually back home by 2 PM to get ready for dinner. People start lining up for the early bird about 3 PM, but we get there by 3:45 because we are late eaters. The dinners are very popular because of the large portions they serve. You can take home enough food for the next day’s lunch and dinner, including extra bread, crackers, sweet-and-low packets and mints.

At 5:30 we’re home ready to watch the 6 o’clock news. By 6:30 we’re fast asleep. Then we get up and make 5 or 6 trips to the bathroom during the night and it’s time to get up and start a new day all over again.

Doctor related activities will eat up most of your retirement time. I enjoy reading old magazines in sub zero temperatures in the waiting room, so I don’t mind. Calling for test results also help the days fly by. It takes at least half an hour just getting through the doctor’s phone menu. T hen there is the hold time until you are connected to the right party. Sometimes they forget you are holding, and the whole office goes to lunch.

Many of the receptionists are quite rude. They keep you standing at that dopey little, closed glass window, totally ignoring you. After 1/2 an hr, I ignore the ‘Do not tap on the window’ sign and tap on the window. This always drives them nuts. If you do, they put down their Egg McMuffin or their copy of the Enquirer, and fling open the window, ready for a fight. I lie, explaining I tapped on the window accidentally because I have Parkinson’s.

They claim they are required to keep the window closed because of the privacy law but l don’t believe it. Are they afraid if I were to overhear Sol Lip****z has hemorrhoids, that I would blackmail him or sell the information to a foreign government? In Florida everyone has hemorrhoids!

Should one find they still have time on their hands, volunteering provides a rewarding opportunity to help the less fortunate.

Florida has the largest concentration of seniors under five feet and they need our help. I myself am a volunteer for ‘The Vertically Challenged Over 80.’ I coach their basketball team—‘The Arthritic Avengers.’ The hoop is only 4 1/2 feet from the floor. You should see the look of confidence on their faces when they make a slam dunk.

Food shopping is a problem for short seniors or ‘bottom feeders’ as we call them because they can’t reach the items on the upper shelves. There are many foods they have never tasted. Whenever I see one of them struggling to reach a jar of gefilte fish, I rush over to lend a hand. After shopping, most seniors can’t remember where they parked their cars. They wander the parking lot for hours looking for their car while their food defrosts.

Choosing a development with suitable amenities is an important decision. The various clubs in these communities provide most of the activities. Our development has over 300 clubs. There’s something for everyone. Clubs like the kidney donating club, the Taliban Club, the East meets West club, not to be confused with the West meets East club, etc. A truly active community is one where the ambulance is there several times a day and is part of the Travel Club.

Lastly, it’s important to choose a development with an impressive name. Italian names are very popular in Florida. They convey… world traveler, uppity sophistication and wealth. Where would you rather live… Murray’s Condo’s or the Lakes Of Venice? There is no difference. They are both owned by Murray who happens to be a cheap bastard!

The Italian names appeal to those name-dropping, phony snow birds that are out to impress their friends up north. I once heard someone say …’we spend our summers in the Catskills, but we winter at Villa Borghese in Delray Beach’. I have been to Villa Borghese. There are 1,200 Jews and 2 Italians!!

I hope this material has been of some help to you future retires. If I can be of any further assistance, please look me up when you’re in Florida. I live in The Leaning Condos of Pisa in Boynton Beach.

Harry Newton, who actually likes living in New York. Tennis is on ESPN2 during the day and The Tennis Channel from 7 PM to 3 AM.  The historic 10-hour plus Isner/Malut match continues later today. They’re at 60-60 in the last set. Make sure you watch in HD. More high-yielders tomorrow. Playing and watch tennis is far too exciting.