In Search of the Perfect Investment

Friends are selling some of their stocks, thinking the summer stock market will be awful.

I think the idea is bad — since no one can time the market.

The idea of getting rid of bad companies — whose prospects have worsened is not unreasonable.

I look at my list in the right hand column. I feel comfortable.

FedEx is down after a poor earnings report today:

MEMPHIS, Tenn., June 17, 2015 … FedEx Corp. today reported adjusted earnings of $2.66 per diluted share for the fourth quarter ended May 31, compared to adjusted earnings of $2.54 per diluted share a year ago. For fiscal 2015, adjusted earnings were $8.95 per diluted share, compared to $7.05 per diluted share a year ago. Without adjustments, FedEx reported a loss of $3.16 per diluted share for the fourth quarter compared to a profit of $2.62 per diluted share a year ago, and earnings of $3.65 per diluted share for the full fiscal year, compared to $7.48 per diluted share last year.

Quarterly consolidated earnings have been adjusted for previously announced changes in pension accounting ($4.88 per diluted share), aircraft impairments ($0.62 per diluted share), a legal reserve increase ($0.47 per diluted share) and changes in segment reporting (favorable $0.15 per diluted share).

“Fiscal 2015 was a transformative year for FedEx with outstanding financial results driving expanded long-term value for shareowners,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “Significant acquisitions announced in the year promise to strengthen our portfolio of services and change what’s possible for customers. I am very proud of the FedEx team for its accomplishments and look forward to a successful fiscal 2016.”

 I thought this morning’s drop in FedEx screamed “Stock on Sale” and I bought a few FedEx.

So far, I’m up a penny! Whoopee.

I hate funds. You’ve heard my diatribe against funds a million times. The problem is twofold:

+ Their fees are far too high.

+ Their performance is lousy.

Item: I invested in a Citicorp private equity/leveraged buyout fund in 2010. The Citi management left. Citi sold the fund to StepStone. It’s now called StepStone Capital Partners II.

In response to my question, the CFO/COO just emailed me:

“Following up on the SCP II returns, the gross return is right at 9% and the net IRR to Class A investors is 5.3% as of 12/31/2014.”

Wow! That says it all. The Fund earned an average of 9% a year. But I only got 5.3%.

I got screwed!

No wonder Calpers (the country’s largest public pension fund in the U.S.) is dramatically cutting its exposure to funds.

In contrast, a simple S&P Index Fund — e.g. the Vanguard VFIAX — charges just 0.05% and has returned 14.43% a year over the past five years to its investors (including me).

Outlook fixed. I like Microsoft Outlook. I use Outlook 2003. It’s the classic. I use it for emails, calendar, and contacts. It’s been 100% reliable — until I did something stupid — clicking on email I shouldn’t have. One that promised me a $50 coupon on Amazon!

Outlook is so important I keep multiple backups of its main file — Outlook.pst. And I’ll now keep one in the cloud.

When it blew up, I went back to an old backup, and retrieved everything, except the last couple of days.

I went online and bought some software called Kernel for Outlook PST Repair. I downloaded the software, ran it on my corrupted Outlook.pst file. It worked like a charm and I retrieved what seems to be everything.

It cost $50. I’m a happy camper.

Trump psyched me with yesterday’s candidacy speech.

I thought he might actually have a chance — until comedians Jon Stewart and Larry Willmore tore him to shreds last night.

Trump says many intelligent things.

The government must honor its obligations to our seniors. We must protect Social Security, Medicare and Medicaid, without cuts…there will no longer be any waste, fraud and abuse on my watch.

ObamaCare must be repealed and replaced with something far superior and at far less cost.

Likewise, we must greatly simplify our tax code. Our middle class, which has been totally forgotten, will thrive once again under President Trump.

It is time to stop sending jobs overseas through bad foreign trade deals. We will renegotiate our trade deals with the toughest negotiators our country has… the ones who have actually read “The Art of the Deal” (Trump’s book) and know how to make great deals for our country.

It is time to close loopholes for Wall Street and create far more opportunities for small businesses.

It is necessary that we invest in our infrastructure, stop sending foreign aid to countries that hate us and use that money to rebuild our tunnels, roads, bridges and schools—and nobody can do that better than me.

It would be nice to have a real businessman in the white house. Someone who knew how to actually get things done.

Trump also says many stupid things: Like Mexicans are “rapists.” And the American dream is “dead.”

Google “political promises” and you’ll get hundreds of pictures, like this one:

If you’d like to hear his speech — it’s worth watching– click here.

The Scottish bar
“As good as this bar is,”  said the Scotsman, “I still prefer the pubs back home In Glasgow.  There’s a wee place called McTavish’s…. The landlord goes out of his way for the locals. When you buy four drinks,  he’ll buy the fifth drink.”

“Well, Angus,” said the Englishman, “At my local in London, the Red Lion, the barman will buy you your third drink after you buy the first two.”

“Ahhh, dat’s nothin’,” said Paddy Sheehan, the Irishman.  “Back home in me favorite pub in Galway, the  moment you set foot in the place, they’ll buy you a drink, then another, all the drinks you like, actually. Then, when you’ve had enough drinks, they’ll take you upstairs and see dat you get laid.  All on the house!”

The Englishman and Scotsman were suspicious of the claims. “Did this actually happen to you?”

“Not meself, personally, no,” admitted the Irishman, “but it did happen to me sister quite a few times.”

Harry Newton, who eyes two up-days in the market as a heck of a lot better than a slap in the belly with a cold fish.