In Search of the Perfect Investment

Buy on yesterday’s 178 Dow dip?  Sell on the 178 Dow dip? How to decide?

Mr. Market knows no sort-term logic. Today might plummet, skyrocket or go nowhere.

But it doesn’t look good. Even perma-bull Jim Cramer has gone negative. My friendly money managers are scared and rushing into cash.

Months of solid increases without a pullback.That’s very unusual. We got lulled in complacency.

Roll your own dice.

Yesterday Libya spooked the markets, according to the news media. The media was looking for a headline,  a reason, or at very worst, a story. Space to fill. It’s pressure constant.

Libya is tiny. It has 6.5 million hapless souls. It has lots of oil, the most in Africa.Since oil is priced at the margin, any disruption in Libya could send oil skyrocketing and seriously disrupt travel, hotel, and retail.

Libya also has a serious nut case for a lifelong president, Muammar al-Gaddafi.

He rose to power in 1969 — 42 years ago — in a military coup.  He’s said he’s staying for the duration. The Libyan economy depends primarily upon revenues from the oil sector, which constitute practically all export earnings and about one-quarter of gross domestic product (GDP).  In the early 1980s, Libya was one of the wealthiest countries in the world. Its GDP per capita was higher than that of developed countries such as Italy, Singapore, South Korea, Spain and New Zealand. Today, high oil revenues and a small population give Libya one of the highest GDPs per capita in Africa and have allowed the Libyan state to provide an extensive level of social security, particularly in the fields of housing and education. Many problems still beset Libya. Unemployment is the highest in the region at 21%. About half  the population is  under age 15. Which is an amazing statistic.

My predictions: Libya will get worse. Oil markets will spook, with prices even higher. And the stockmarket tumbling.

The BIG hope is that the Saudis, which have plenty of spare capacity, will be jawboned (by us?) into opening their spigots and bringing down the price of oil.

In short, this is worth monitoring very very closely.

Remember our two mantras:

1. Cash is king.

2. When in doubt, stay out.

Apple without Steve. Apple can make nice sales without Steve because Steve’s legacy are some nice products. But there is no one at Apple who can replace Jobs on thinking up new products. Suddenly Apple has become, to my mind,  overpriced.

Meanwhile there are rumors of the imminent release of the iPad2 and the iPhone5. Click here. The moral here is: Don’t buy an iPad or an iPhone until the new ones come out.

The madness of UPS and FedEx. You can print shipping labels online. That’s the good news. The bad news is that the websites of both UPS and FedEx are a nightmare. I bet they used the same team of idiot programmers.

Hints: Enter all numbers without dashes or spaces. I prefer FedEx Ground. If UPS won’t take your credit card, open a new account. Good news: FedEx doesn’t insist on a credit card. They’ll send you a bill.

I bet you can negotiate lower rates with both. But I send so few packages.

Prescription glasses are a bigger racket than (even) hearing aids. The BIG lesson is buy your glasses online. The second big lesson is don’t buy high-index plastic lenses. They come with a “scratch resistant coating,” which scratches. I don’t make this stuff up. I just returned one scratched, fogged lens.  Lesson:  Buy the normal CD-39 uncoated (but slightly thicker) plastic lenses which don’t scratch.

Another hearing aid maker has popped up, willing to lend me hearing aids on “trial.” I buy them for several thousand dollars. If I don’t like them, I can return

The wonderful world of muni bonds. Of a  sample of 17,000 municipal borrowers-mostly small issuers, including as school districts, more than a third hadn’t produced financial statements for at least three years. The study was commissioned by the Wall Street Journal.

Modest aerobic exercise is good for your brain. A year of modest aerobic exercise reversed normal brain shrinkage by one to two years in older adults and improved their memory function, according to a study published in the Proceedings of the National Academy of Sciences. As people age, the hippocampus, the brain’s memory center, loses 1% to 2% of its volume annually, affecting memory and possibly increasing the risk for dementia.

A growing body of evidence has pointed to aerobic exercise as a low-cost hedge against neurocognitive decline. In this study, magnetic resonance imaging was used to measure the effects of aerobic exercise on the hippocampus in 120 Americans in their late 50s to early 80s. Half the group walked three times a week for 40 minutes, aiming for their target heart rate, while the other half did yoga and toning exercises. The hippocampus in walkers increased by 2% after a year and shrank by 1.4% in controls.

The Rabbi and his paycheck.
A Rabbi’s wife was expecting a baby, so he stood before the congregation and asked for a raise. After much discussion, they passed a rule that whenever the Rabbi’s family expanded, so would his paycheck.

After six children, this started to get expensive and the congregation decided to hold another meeting to discuss the Rabbi’s expanding salary. A great deal of yelling and inner bickering ensued, as to how much the Rabbi’s additional children were costing the shul, and how much more it could potentially cost.

After listening to them for about an hour, the Rabbi rose from his chair and spoke, ‘Children are a gift from God and we will take as many gifts as He gives us.’

Silence fell on the congregation.

n the back of the shul,  old Mrs. Goldberg struggled to stand, and finally said in her frail voice, ‘Rain is also a gift from God, but when we get too much of it, we wear rubbers.’

The entire congregation said, AMEN.

The pluses of a visit to Israel.
A Jewish businessman in Chicago sent his son to Israel for a year to absorb the culture.

When the son returned, he said, “Papa, I had a great time in Israel. By the way, I converted to Christianity.”

“Oy vey,” said the father. “What have I done?” He took his problem to his best friend, Ike.

“Ike,” he said, “I sent my son to Israel, and he came home a Christian. What can I do?”

“Funny you should ask,” said Ike. “I too, sent my son to Israel, and he also came home a Christian. Perhaps we should go see the rabbi.”

So they did, and they explained their problem to the rabbi.

“Funny you should ask,” said the rabbi. “I, too, sent my son to Israel, and he also came home a Christian. What is happening to our young people?”

And so they all prayed, telling the Lord about their sons. As they finished their prayer, a voice came from the heavens:

“Funny you should ask,” said the Voice. “I, too, sent my Son to Israel . . .”

Harry Newton who loves traveling in well-signed areas. Favorite sign: