In Search of the Perfect Investment

So, now tariffs on Mexican imports — unless they stop the people flow.

Meantime, the China Trade War (squabble?) continues, with more and higher tariffs.

What’s next? Tariffs on cars from Europe? A 25% on Vegemite from Australia.

Used to be we had three equal parts to our government — until Trump discovered he could do things with his Emergency Powers and Cabinet appointments of people who do whatever he wants: toss out clean air regulations, cut enforcement of consumer fraud, lessen up stringencies on banks, etc.

And so the stock market turned ugly in May:

I don’t have any advice, though I suspect that “Sell in May and Go Away” may work this year.  For now

+ Stay the course with what you have — unless they’re real dogs and down more than 20%.

+ I might place some ultra-low bids — e.g. Apple at $150  or Amazon at $1,500.

I do believe we will not fundamentally change the way the Community Party in China runs their economy. I also believe no one wins Tariff Wars. I believe Tariff Wars will drive us into recession.

I like businesses that make handsome new products and services. But these days corporate management is focusing on the day to day crises of dealing with moving production, moving factories, handling higher costs and higher prices, and firing people who are suddenly made redundant by declining sales.

I’m not sanguine. Last year was good. This year won’t be. Yuch.

Hot stock gambling areas

+ Cannabis, maybe. Cramer likes Canopy Growth — CGC. My friend likes MJ, which is an ETF for cannabis.

+ Rare earth minerals. The pick is LEMIF, but it’s a classic penny stock that has already doubled (to 22 cents) since the Chinese started talking about cutting the U.S. off its rare earth minerals. China is presently the leading producer. This chart explains more about what rare earth minerals are used for and how critical they are:

I have little knowledge of both these fields. Other than they’re “hot.” But coming down today.

We sold our California house

On Monday, we will close on our California holiday house for 26% less than what we had in it — our price and our improvements.

I write that because there’s real lesson here.

We put the house on the market eight months ago. We got one offer. Just one The buyer said that was his last price.

We eventually took it.

That’s what known as a Buyers Market — With a Vengeance.

Put in low bids and see what you can snag.

With real estate there are four determinants of your success:

+ The price you pay. This is Number One. Don’t fall in love with it. Low ball your offer and shrug if you don’t get it. Buy on one in ten you bid on. Only bid on ten out of 100 you look at.

+ The rent you can get.We didn’t rent it. Had we, it could have been a business and we would have been able to deduct local real estate taxes — which you can’t under the new tax laws. There are called SALT, short for state and local taxes. Everybody and their uncle in the north-east is moving to Florida to avoid state income and real estate taxes, which, for us morons still living in New York State, we can no longer deduct off our federal taxes.

+ The amount you invest in your property. The whole purpose of improving your property — granite counter tops, stainless steel appliances and plank vinyl “wooden” flooring — is to allow you to hike your rents or your selling price.

+ The price you sell.  You can’t affect that. You can hold off for a year, or two, or three. But no one thinks housing prices are coming back any time soon. This is not 2005-2006. Those years are gone forever.

Meantime, if you like the place and the taxes aren’t too high, enjoy it. It just became a little more expensive. Oops, a lot more expensive.

One man’s simple, effective investing strategy

My friend, Matt Wood, runs the best insurance agency in the the world.

His investment philosophy is four-fold:

+ His insurance company. His day job.

+ Dollar cost averaging, steadily each month into an S&P 500 index fund.

+ Three insurance companies he works with and likes – CINF, PGR and TRV..

+ Buying stocks when they dip dramatically and he spies buying opportunities. In late December he picked up CRM and SQ.

He’s in this for the long-term. Which makes enormous sense when you’re 30 and a great tennis and golf player.

Wonderful video

Harry Newton. On Monday I’ll tell you about the joys of moving cars, furniture and junk across the country.

The BIG lesson was anything that seems ultra-hard the first time is super-easy the second time. Moving is not something I want to do a second time, however.

You can rent a clean, bathroom with a shower stall in most truck stops for $14. Free if you buy 100 gallons of gas or diesel.

Don’t do stupid. My friends keep falling.

Years ago, Donald Trump bought the ground lease on the Empire State Building for something like $100,000. He then proceeded to tell all the tenants they were in “violation” of his lease and they owed him more money. They took him to court. He lost. A little later he quietly sold the ground lease. In those days they had courts to stop him doing what he wanted — make more money. These days he has Executive Privilege and a compliant Senate. Meantime, his Washington hotel is thriving with supplicants seeking his favors from the man in the White House up the road.I’m waiting for the next shoe to drop. I pray it’s not a shooting war with North Korea, Iran or, God Forbid, China.

I’m off to play tennis.