In Search of the Perfect Investment

These are  typical charts. All three companies are in the  Dow Jones 30 Index.

I’m not making a call on the market. I’m simply saying that it’s squirrelly out there. Little is obvious or easy.

Will interest rates skyrocket? Forbes has a cover story on The Global Debt Boom, along with more charts that Carter had liver pills.

You can read the entire article here. Here’s an excerpt:

U.S. corporate income tax receipts were down 55% in the year ended Sept. 30, 2009 to $138 billion. It may be a long while before these tax collections get back to where they were. As corporate profits recover, factory utilization will be up and inflation will be close behind. At that point the 0% yield on Treasury bills will be history. Rolling over the national debt will become a lot more expensive. Higher rates on Treasuries will work their way through the debt market, driving up the cost of money for homeowners, businesses and already struggling state and local governments.

“The economy over the last six months has been on a sugar high,” says Benn Steil, senior fellow at the Council on Foreign Relations and author of Money, Markets and Sovereignty (Yale, 2009), a survey of the relationship between money and the state. If Congress and the Obama Administration don’t trim deficits, he says, “we will get to the point where credit is much more expensive in the U.S. than it ever has been in the past.”

Most states are already having trouble paying their bills and, of course, don’t have printing presses with which to finance their debts. They are turning to Washington for help and may succeed in putting some of their liabilities on the federal balance sheet. With growing off-balance-sheet obligations, notably unfunded pension liabilities (see graphic in “Debt Weight Scorecore”), the states will be competing for years with the federal government for scarce taxpayer dollars.

“U.S. states are like emerging markets,” says Reinhart. “They spend a lot during the boom years and then are forced to retrench during the down years.” Cutting expenses sounds good theoretically, but look at California: Students (and faculty) are up in arms over proposed tuition increases and cutbacks at the state’s once prestigious university system; state employees are mounting a fierce legal battle against furloughs and other wage concessions.

Mainstream credit analysts are worried. The U.S. has been able to sell vast amounts of debt because the Treasury market, with $500 billion a day in turnover, is considered safe and dwarfs all other debt markets. But Brian Coulton, head of global economics at Fitch Ratings in London, warns that once rock-solid economies like the U.S. and the U.K. could join shakier nations like Japan and Ireland in losing their aaa ratings if they don’t get their bad habits under control. “While AAAs can borrow in the short term, very high and rising government debt-to-GDP ratios are ultimately not consistent with AAA  status,” Coulton says.

Requests for my money are increasing. That’s good. The economy must be coming back if the entrepreneurs are.  The bad news is my stomach has changed. I like the word No. I say it often. I usually add, “Thank you for thinking of me.”

I never explain why I rejected the entrepreneur’s brilliance. I say “it doesn’t suit my investment preferences/allocation at present.” Or “I’m  tapped out.” Or anything polite. If I explain my reasoning, I get into an endless discuss with the entrepreneur answering (or trying to answer) all my objections. And that only makes them hate me more.

What I don’t understand is why so few of them don’t keep in touch, apprising me of their progress. Maybe I’ll come in the second or third round. Most, however, just drop me like a hot potato. They disappear from my life never to be seen again. Dumb.

Warren Buffett’s interview on Kraft, etc. was brilliant. It’s here.

The Australian Open continues. But please watch it in HD. Both ESPN2 and the Tennis Channel  have HD. But they’re different channels. On Time Warner New York (my provider), the HD ESPN2 is 729. The low def is 29. The HD Tennis channel is 465. The low def is 455.  The is an incredible tournament. There are more excellent players than in most tournaments.  the matches are close and ultra-exciting.

Bigger type for old eyes. Big computer screens are wonderful. More pixels makes great images. But the type is small, and hard to read. Here’s a simple solution. Go to Control Panel, then Display, then Advanced. You’ll find this screen.

Crank up the DPI to Large size.

Don’t mess with seniors.
A 75-year-old man walked into a crowded waiting room and approached the desk. The Receptionist said, ‘Yes sir, what are you seeing the Doctor for today?’

‘There’s something wrong with my dick’, he replied.

The receptionist became irritated and said, ‘You shouldn’t come into a crowded waiting room and say things like that. ‘

‘Why not, you asked me what was wrong and I told you,’ he said.

The Receptionist replied; ‘Now you’ve caused some embarrassment in this room full of people. You should have said there is something wrong with your ear or something and discussed the problem further with the Doctor in private.’

The man replied, ‘You shouldn’t ask people questions in a roomful of strangers if the answer could embarrass anyone. The man walked out, waited several minutes, and then re-entered.

The Receptionist smiled smugly and asked, ‘Yes??’

‘There’s something wrong with my ear,’ he stated.

The Receptionist nodded approvingly and smiled, knowing he had taken her advice. ‘And what is wrong with your ear, Sir?’

‘I can’t piss out of it,’ he replied.

The waiting room erupted in laughter.

Mess with us and you’ll  lose!

Harry Newton, who’s perplexed, but still believes Cash is King.