{"id":10841,"date":"2011-12-29T09:03:53","date_gmt":"2011-12-29T14:03:53","guid":{"rendered":"http:\/\/www.technologyinvestor.com\/?p=10841"},"modified":"2011-12-29T10:16:11","modified_gmt":"2011-12-29T15:16:11","slug":"things-i-learned-in-2011-part-1","status":"publish","type":"post","link":"https:\/\/www.technologyinvestor.com\/?p=10841","title":{"rendered":"Things I learned in 2011. Part 1."},"content":{"rendered":"

Investing in things you have no control over is hard. Probably the hardest thing you’ll ever do.<\/p>\n

There is little joy in being right.<\/p>\n

But there’s plenty of hurt (blaming yourself) when something goes wrong, as it always will.<\/p>\n

It’s insane to take your hard-earned money — cash from your day job — and gamble it on something you read about on the Internet or heard about from your friend, or worse, from someone on TV (like Cramer).<\/p>\n

Yet, we keep trying. We convince ourselves we’ll conquer this thing called investing and emerge rich beyond our wildest expectations, or at least have enough for our old age.<\/p>\n

I’m not being deliberately glum this morning. The sun is shining. The family is alive and healthy. And the refrigerator has enough Christmas leftovers to feed us for a month.<\/p>\n

My net worth is maybe up 1.8% for 2011. That’s not brilliant, but it’s good when you figure that was after paying our Susan and my living expenses — like food, outrageous real estate taxes, the many plays and dance performances we saw and the daily tennis games.<\/p>\n

Only one thing worked spectacularly in 2011. And that, like all spectacular things, was a fluke. It was private investment in a Chinese Groupon-like venture. A month after I bought it, some nice person\u00a0 bought it for double what I paid.\u00a0 A couple of real estate commercial syndications were sold, one earning 12% and the other 15% IRR.<\/p>\n

The backbone of my investments are triple tax-free muni bonds — none of which defaulted and all of which continue to pay interest.\u00a0 thank you Todd. Surprisingly, my Vanguard Federal tax-free bond fund VWALX continues to do well and pay a handsome interest rate. I’ll put more money into it.<\/p>\n

Here’s a short list of what I learned in 2011:<\/p>\n

1. Capital preservation is key. I worked 24\/7 for the money. I’m not pissing it away on some speculative nonsense which my friend whispers. There are three elements to this: Tight stops. Sometimes as little as 3%. Don’t speculate. When in doubt, stay out. And cash remains king. I ended the year with a lot of cash.<\/p>\n

2. Diversification is a free lunch. But the idea of diversification is that some things go up. Some things go down. Diversification gives you a balance. But these days, a lot of things move together. If equities go down, gold is meant to go up. But lately it and equities have fallen. In short, you may need to look further. There are oppotunities in real estate. But be wary of non-liquid investments.<\/p>\n

3. Dividends work. Bonds work. NLY will probably return me 6% this year. Not what its 14% dividend yield shows. VWALX will do better. It’s a bond fund investing in government bonds.<\/p>\n

4. Money managers are human. You won’t find one who works consistently good for you. Don’t even think about looking. That’s harsh. There are good ones. hard to find. Hard to get into.<\/p>\n

5. Wall Street is a product machine. They make things for you and I to buy. We want our investments\u00a0 to go up. They want fees. Their goals are different to ours. Their measurements are different. They measure themselves “relatively.” We lost less than our competitors. You and I measure returns absolutely. Did I make any money this year?<\/p>\n

6. Most entrepreneurs won’t make it. Don’t even consider giving any of them any of your serious money — despite the fact that there are some neat things you can do on the Internet these days.<\/p>\n

7. Studying this investment stuff helps. But there are very few good sources of consistently good investment information. My column is not consistently good. It’s occasionally good. Thank God I warned my readers about tight stops. Have you seen what’s happening with gold?<\/p>\n

8. Your time is the key. What do you want to do with your life? Sit in front of a screen. Go traveling? Play tennis? Spend more time with the family? If you don’t like this stuff, buy bonds or a bond funds and bug the family.<\/p>\n

More tomorrow. What did you, my readers, learn in 2011? Send a comment or an email, please.<\/p>\n

AT&T works best on the iPhone.<\/span><\/strong> You can’t get an iPhone with Verizon’s speedy 4G\/LTE. You can only get it with slower 3G. Which carrier is best\u00a0 — Verizon, AT&T or Sprint? Surprisingly, on balance, AT&T. Phone calls on Verizon are clearer and better. But 3G data is slow on Verizon and Sprint. But fast on AT&T. Laptop Magazine did the research. It confirms my own testing. I’m guessing Apple will introduce an iPhone 5 next year which will use Verizon’s 4G\/LTE and offer it as a mobile hot spot as Verizon does with some Android phones today. That will be great. For now, the choice is AT&T and perhaps the Samsung Verizon MiFi broadband card. See right hand column.<\/p>\n

Hugo’s hard disk, continued.<\/strong><\/span> He wakes up one morning. His Apple Mac won’t let him to his stuff recognize his USB-connected external hard drive.\u00a0 Hugo freaks. It’s the only<\/strong> copy of all his files. All 350 gigabytes of movies and songs, several of which he’d written. No backups. Three days later he’s visited the Apple store, a local computer stores, spent many hours on the Internet searching for answers and talking to his hard disk drive maker, Western Digital. Apparently it’s a “rare” problem. There is, maybe, a solution — some software from Western Digital. I give Hugo a 500 gigabyte external drive. But Western Digital’s software, after many hours,\u00a0 says my drive is\u00a0 too small. No explanation. Hugo rushes to Best Buy and buys a 1.5 terrabyte drive (for $150). Western Digital’s recovery software ran all last night, while Hugo, age 14, slept.\u00a0 The software may or may not have worked. If it worked, it messed up the entire organization of his hard drive, removed all the folders and recovered about 35,000 files in random (no particular) order.<\/p>\n

This is clearly not a way to live. Hugo should have backed up his files regularly. A 500 gigabyte external hard drive would have cost him under $100, and saved the time and aggravation. Anotther day of this nonsense and he will develop gray hair.<\/p>\n

I use two types of backups — a file by file backup of all my working files every day. The software is called FileSync.<\/strong><\/span><\/a> Once\u00a0 a week I\u00a0 clone my hard drive using the version of Acronis True Image that came with the Kingston SSD kit. See right hand column.<\/p>\n

Not in the bike lane. <\/strong><\/span>New York City is cracking down on bicyclists like me, who don’t ride in the bike lane. The tickets generally cost $50. Yet riding in bike lanes is more far dangerous than riding in the car lanes. There are pedestrians checking their BlackBerries, cars parked illegally and a million other obstructions.<\/p>\n

A ticketed bicyclist made a “public service announcement” which has been viewed by nearly five million people Watch it. It’s hysterical. Click here.<\/strong><\/a><\/p>\n

Favorite latest New Yorker cartoons:<\/strong><\/span><\/p>\n

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Harry Newton who sometimes wonders about his readers. One of them actually criticized me for the quality of yesterday’s New Yorker cartoons, which he didn’t think were up to scratch! Frankly, I’d like to see less criticism of cartoons and more “I’m doing this investing. And its working.”\u00a0 I don’t get much constructive, useful feedback. Can we all make that a resolution for the New Year?\u00a0 It’s pretty hard writing this column every day. It\u00a0 helps me “think things through.” But, golly, it would be nice to hear from my readers more often. OK? What’s working for you?<\/p>\n","protected":false},"excerpt":{"rendered":"

Investing in things you have no control over is hard. Probably the hardest thing you’ll ever do. There is little joy in being right. But there’s plenty of hurt (blaming yourself) when something goes wrong, as it always will. It’s insane to take your hard-earned money — cash from your day job — and gamble […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-10841","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts\/10841","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10841"}],"version-history":[{"count":0,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts\/10841\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10841"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10841"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10841"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}