In Search of the Perfect Investment

The only constant is change. Business models. Companies. Industries. I have not bought or sold anything in the last few days. Our portfolio — on the right — with heavy emphasis on gold and a few chosen industrials is doing remarkably fine. With the tennis over, I’ll be studying more. I do like store visits. See below.

AT&T is paying hugely for T-Mobile. Far too much. But it’s obsessed with “deals” and beating Verizon. Weirdly, AT&T has agreed, if this T-Mobile deal doesn’t go through (e.g. the US Government says “No.”),  to pay a breakup fee of $3 billion, or almost 8 percent of the total purchase price, which is more than twice the typical fee. The company also will give Deutsche Telekom some of AT&T’s spectrum if the deal falls through. Read today’s Bloomberg story for the “logic” and pricing. Click here. Personally, I think AT&T is a short.

Store visits. They’re useful. You should never buy a stock without visiting their retail store.

1. The Indian Wells Apple store. Amazingly crowded for 9:30 AM. Full of kids begging for iPads and adults buying new Macs and also begging for advice. No iPad2s for sale. They get a delivery every day but quickly sell out. They recommend buying online via the Apple Store, which is quoting a 4-5 week delivery.

Palpable enthusiasm, which you don’t find in most other retail stores.

Advice. Here’s my Favorites screen on my iPhone4.  How do I put it into alphabetical order? First, hit the Edit button. You get this screen.

Then put your finger on the three bars on the right and slide your entry up or down. Neat.

Want a screen shot? Hit the top button and the home button simultaneously. It will drop a screen shot into your Photos. Then email yourself the shot, as I did. Extra neat.

Apple announced this morning they’ll be selling the iPad2 in 25 countries beginning on Friday. Though I already have an iPad, I’m buying a new iPad2. It really is much improved. It is a “must have.”

Meanwhile, Apple’s stock is moving up.

2. Costco. This shopper told me he read about the earthquake in Japan and he was stocking up for the upcoming earthquake in California:

I tried to get his eyes and hair above the cart, but I wasn’t tall enough. He had everything from batteries to water, from propane to ….

I like Costco. Great food, great electronics, great appliances and lousy clothes.

3. Barnes and Noble.Huge store in Palm Desert. A handful of customers. There seem to be more people enjoying the free WiFi, the free seating, the free reading of books and magazines and the free toilets. You could run a huge online international store out of the space B&N has here. How can they ever make money — irrespective of how many Nooks they sell?

They’re probably still a great short. (Ditto for AOL.)

4. Chipolte in La Quinta. Excellent cheap food. Not much ambiance in the store. We’ve taken out twice and been satisfied.

Chipolte has been on a tear.

But at its present 44 P/E, it’s hard to see it worth much more.

Totally tasteless. I’m testing my iPhone2’s camera photographing flowers in the local Vons supermarket.

A lady employee saunters over and says, “Men take pictures of the flowers. They send the photos to their wives, along with an email ‘Thinking of you.’ It saves them money but makes their wife feel loved.”

I don’t make this stuff up.

I sent the photos along with a love email to my wife, Susan.

She was bemused, but probably would have preferred the real thing.

The joy of divorce and bankruptcy lawyers. My friend Pete Howley emails me:

Harry, you wrote yesterday: “There’s a rule in the divorce business. The attorneys for the husband and the wife finally settle the case when their fees have sucked the estate dry of all its assets“.

Correction needed, Harry. They left me with adequate pocket change to make two visits to Starbucks!

Recent computer advice:

1. Backup. Backup. Backup. I lost part of this morning’s column (again) because I didn’t hit the Save as often as I should have. My wife’s Win7 machine blew up.  (I continue to use XP.) Fortunately, I’d brought a spare laptop along. I configured it, added her stuff  and gave it to her. She’s happy to be married to a semi-computer literate husband. Moral of this story: Everything is so cheap these days from laptops to hard drives, it makes sense to have spares.

2. Don’t push it. I like Firefox. it opens many web sites and windows simultaneously but you can abuse it, chew up your machine’s memory and confuse it. You’ll then lock up and lose your work, as happened to me this morning. Use Instapaper to save sites you want to revisit. Better than bookmarks.

Latest favorite New Yorker cartoons:

Harry Newton who wonders what the goal in Libya for us is? When, if ever, do we get out? Three wars in three muslim countries? Already ten years in Afghanistan. This is beginning to look too much like the Crusades.

James Surowiecki has a piece on “Creative Destruction” in the latest new Yorker, which begins:

Even if Japan’s nuclear crisis is contained, its earthquake and tsunami now seem certain to be, economically speaking, among the worst natural disasters in history, with total losses potentially as high as two hundred billion dollars. In response, fearful investors sent the Nikkei down almost twenty per cent on the first day of trading after the tsunami, and it’s still down more than ten per cent. Yet, while the fear is understandable, this may turn out to have been an overreaction: history suggests that, despite the terrifying destruction and the horrific human toll, the long-term impact of the quake on the Japanese economy could be surprisingly small.

You can, and should read the short, optimisitic piece. Click here.