I’m too depressed this morning to write anything useful.
Yesterday I “visited” my bank safety deposit box and leafed through a pile of share certificates. There was the magazine that went broke. There were the many biotech drugs that failed their human trials and never got FDA approval. There’s the New England bank that’s actually doing well but refuses to pay a dividend, or contemplate a buyout or a merger. There’s the restaurant company that was going to be the next Panera Bread, but failed to pay the rent. And then there are even more biotech companies, all of which were going to cure cancer.
There also were the certificates for the companies I formed and the apartments I own. As luck would have it, they’re worth many times more than I lost on the cancer-cures, and raw land developments. On balance, I have come out way ahead. But the road since I sold the BIG company (the one I formed) in 1997 to today has been rocky. The losses have been substantial, but not life-style destroying (no divorce, no forced apartment sales, no margin calls). My natural conservatism stopped me doing even more stupid things. But the emotional pain that has questioned my belief in my own brilliance has been substantial.
A friend decided he knew better. He took his money and his family’s money, put it all into a fund he managed. Every year for the past five years, he bet the market would fall. He shorted stocks. Every year he lost, every year he doubled down his shorts. This week he hung himself.
This afternoon I’ll bike in beautiful crisp fall weather to the tennis court and play brilliant tennis against the pro who’ll be playing his best customer tennis. His job is to make me hit winners. The more winners I hit, the bigger his tip.
I haven’t thought of a similar game with my brokers. Sadly, Wall Street doesn’t play customer tennis.
This morning I met with Todd Kingsley, the only broker I’ve kept. It’s been over 20 years. Todd chooses not to be a (lousy?) stock picker. But he does understand muni bonds. And the ones he sold me — common triple-tax free New York bonds — have done spectacularly. As interest rates have plummeted, the price of my bonds rose and rose. Sometimes we actually sold them. But mostly we took the nice triple tax-free dividends (repeated for emphasis) and bought more bonds, and more bonds. By focusing on successful simple investments like muni bonds, he prevented me from doing even more stupid things, thus saving me from myself.
Had I abandoned my search for the cancer cure and owned even more muni bonds, I’d be happier. My ego would be less fragile. I’d probably be totally insufferable. But I’d be bored.
In 20 years, I’ve taught myself a little about managing money. I now invest in safe, conservative, dividend-paying real estate, especially syndications. No developments. No raw land — been there, done that, lost money there. I invest a little in stocks. They’re no good for the ego either. I recognize that. They slap my ego around big-time. Downturns depress me.
Lately, things have been pretty good. And I’ve learned — own a few crazies (I wrote about them yesterday — Diversifying the Agita). But I keep putting more and money money in “safe” stuff — like BRKA and VFIAX and good real estate with good tenants. I do spend time checking stocks out. When I find something I like, like BBBY and WFM, I’ll put in a little money, and hope for the best. If they pan out (by tomorrow — my time-frame is shorter than my attention span), then I’m the genius that I thought I was. If they don’t, I sell them quickly and I forget them. Hence less impact on the ego. Dwelling on disasters is a serious disaster.
These days, the key is to keep focused on what’s most important. It’s not the world’s problems, It’s not Washington’s idiocy. It’s not the middle east. It’s not cancer. It’s the family. I’m now craving the day I can take my two new granddaughters to DisneyLand and suffer them to the Runaway Train, and me to the Carousel (three hours on that thing with your kid is a beautiful thing), and the endless sounds of It’s a small, small world. (I pray Disney is still playing our song.)
My iPhone has filled this morning with granddaughter pictures. They arrive every few hours. Photostream is the reason all grandparents should own an iPhone. Forget the technology. Forget the stock in Apple (which keeps going up). Forget everything about the iPhone. It’s just one thing — Shared Photostream.
That’s it. I can’t see the screen. I’m tearing up. I’ve been dealt some wonderful luck. If I write more about it, I’ll probably jinx it.
See you tomorrow.
Harry Newton who looks a little older than the photo, but now has two granddaughters (and less hair).
“I’m too depressed this morning to write anything useful.”
There’s always something useful in your daily tidbits.
It’s amazing how some can do so well and be upset by a few setbacks here and there.
I’ve lost my wife, house, and job in the last 3 years. Basically, I have no money to my name at this point.
But I am in the USA. I am free and healthy. I have everything.
Harry, On another note, a few weeks ago you made a comment concerning the infamous ‘weed’ that many people term “Marijuana”. As you may know, there is a hybrid form of this botanical that is simply termed “hemp” which contains extremely small amounts of THC (the psycho-active chemical that induces the high”) because the elevated CBD content is antagonistic to the THC, thus becomes a very effective healing compound.
Interestingly, Nixon gave a grant to the University of Virginia to compile research on the botanical in a effort to provide solid evidence of the harmful nature of the entire species of this plant. When the results were in, he became furious due to the fact that the university proved without a shadow of a doubt that this plant was probably one of the better botanicals on the planet from a health standpoint. The reason for the grant was to affirm that the plant was not in the best interest of society and he wanted the proof to submit to congress for requesting financing for the war against drugs in this country. He actually trashed the reported findings and classified the information!
Should you be interested in reading an impressive series of clinical findings on the CBD efficacy or Cannabidial effects on the neurological and endocrine system of the human body, simply go to this site:
projectcbd.org.
It appears that humans are born with 2 CBD receptors and obviously they are there for a reason.
Once again, this is not “Marijuana”. There has been a vast conspiracy to contain this marvelous hemp from being grown or distributed in this country that dates back to the era of William Randolph Hurst, who, as you know, was a major publisher and owned thousands of acres of pulp wood forest. Hemp is a better base than pulp wood, cost much less to process and the seemingly endless uses in manufacturing many types of products is fascinating.
Also, it appears that the DEA will not, at this time, agree to remove hemp from the scheduled substance roster, even though there is substantial evidence that there are hundreds of testimonials for seizure relief, particularly of children who have gone from hundreds of seizures daily to none after using the hemp! Some say that the union that represents the DEA employees does not want this law reversed because it would result in a reduction of employees necessary to police the nation and consequently would reduce the gross amount of proceeds from union dues to the union coffers!! Does this sound like ‘government” at its best??
In any case, the reading is compelling and as you will see, there is virtually no end to the information on this subject.
good on ya, Harry. You’re a mensch. Real estate is “real”
what is your view on holding some modest amount of PM’s?
What are PMs?
precious metals
Real estate is a lousy investment compared to stocks.
And the correct term is “hanged himself.” BUt you can’t just type a parapgraph like the one below and move on to an item about your bike riding! Details please. What drove your friend to this desperate act? I will not make fun, this is sad stuff. ANd it’s a cautionary tale for those who short.
I’d love Todd’s last name sometime. I do my own stock picking, of course, but could use a good bond guy.
A friend decided he knew better. He took his money and his family’s money, put it all into a fund he managed. Every year for the past five years, he bet the market would fall. He shorted stocks. Every year he lost, every year he doubled down his shorts. This week he hung himself.
Last name is Kingsley. Send me an email and I’ll send you his contact info.
Your story is classic, Harry. You aptly describe why I have always stuck with real estate…no doubt on a much smaller scale than you…however, I have made more money in real estate than I ever did in my 35 year career in the tele-communications management field.Forty-eight years ago I bought 100 shares of long defunct PSA airlines. My stomach could not take the ups and downs so I dumped it and never bought another single share. Today, my stomach is strong and my bank account pleasing.
Harry,
I’ve been reading your daily column for over ten years, lost a lot of money on biotechs too. Today’s column is one of your best, i agree 100% with your conclusions.
thank you.
Harry, I love your blog and have been reading it for about 2 wks. I found it via a link on The Kirk Report. Can you email me with directions on how to subscribe to it via email? I’ve tried to via the box in left upper corner and this doesn’t seem to work. Appreciate all the writing you do and the effort you make to try and teach people what you’ve learned!!
–Chip
To subscribe to my daily email newsleltter of this blog, there’s a box at the top of the left hand column.
Interestingly I mentioned in my post I had tried that