In Search of the Perfect Investment

It’s not clear. News is gloomy. Consumers are gloomy. Stock prices are not ultra-cheap. One is tempted to follow the mantra, “When in doubt, stay  out.”

At 70% of GDP, the consumer is key to the U.S. economy. The head of the port of LA said yesterday shipping is up 17% over last year. More stuff coming in to buy.

At 60% to 70% of GDP,  capital investment is key to China’s economy. The Baltic Dry Index has surged by 62.1% from a recent low of 1,700, viz.

One observer Prieur du Plessis posts Possible investment implications from this “surge”:

* Metal prices are likely to head higher in the coming weeks.

* Global equity prices could bottom out.

* Emerging-market assets are set to outperform.

* The gold price could fall back.

* US dollar to weaken against the euro and strengthen against the yen.

* Government bond yields to bottom.

I don’t want to throw cold water on his arguments. But charts are a funny thing. I did my own chart.  Mine looks like this:

This morning the durable goods number was totally awful — as awful as the housing numbers for July earlier in the week.

I think this stuff is too hard at present. Emotions are up and down faster than a whore’s drawers. Short-term is too hard to play profitably. Look what has happened to one popular bank:

It’s time to tighten up the stop losses. 8% — not 15% —  sounds more logical for today’s squirrelly market.

I like another mantra: Cash is King.

BHP is an interesting company. The Economist has a long, 3-page piece on it. Some excerpts:

Making the earth move
BHP Billiton’s remarkable growth has been driven by luck, shrewd dealmaking and, above all, China’s demand for steel.

+ In all, BHP’s smart dealmaking has made it not just the biggest but the most influential and the best-positioned of the big mining firms. Alongside its interests in iron ore, coal and a host of metals it owns a large oil and gas business. Last year this contributed a fifth of profits. It provides an extra layer of diversity and a hedge against volatile prices in an industry that is a heavy user of energy.

+ By making a large offer for PotashCorp, BHP has given a clear indication of where it intends to deploy the considerable financial firepower its success has brought.

BHP reports today. The Economist is optimistic. BHP earnings should be good. I own BHP. It’s come back recently, making it look attractive:

For the full Economist piece, click here.

Our children are good with the Internet. They also find neat places to have their wedding, like Riverside Farm, in Pittsfield, Vermont:

They also find neat places to go on their honeymoon, like the Granite Park Chalet in Glacier National Park, Montana.

For more photos, click here.

Logic-Part 1.

An old Jew was refused service in a restaurant. “We don’t serve Jews here., the waiter said.

Replied the old man, “Don’t let that bother you. I don’t eat Jews.”

Logic-Part 2.

“Figure it out. Work a lifetime to pay off the house. You finally own it and there’s no one to live in it.” — Arthur Miller.

Logic-Part 2.

“Susan, please close the window. It’s cold outside.”

“Harry, if I close the window, will it get warm outside?”

Harry Newton,who thinks this new photo shows off his new (expensive) teeth better.