{"id":31401,"date":"2015-07-16T08:20:20","date_gmt":"2015-07-16T12:20:20","guid":{"rendered":"http:\/\/www.technologyinvestor.com\/?p=31401"},"modified":"2015-07-16T08:20:20","modified_gmt":"2015-07-16T12:20:20","slug":"with-greece-and-iran-solved-we-can-now-get-rich-beyond-our-wildest-expectations-yes","status":"publish","type":"post","link":"https:\/\/www.technologyinvestor.com\/?p=31401","title":{"rendered":"With Greece and Iran solved, we can now get rich beyond our wildest expectations. Yes!"},"content":{"rendered":"

EBay appeals because of the pending spinoff of PayPal and PayPal’s continuing strong prospects, especially as an independent company. It’s on our list.\u00a0<\/span> <\/span><\/p>\n

\"ebay\"<\/a><\/p>\n

AET looks good. FIT keeps exploding. Both are on our list.<\/p>\n

Someone at Oppenheimer with lots of time on their hands does this chart. It purports to show the value of diversification by showing how different sectors do differently from one year to the next. Hence the keyword is “rebalance.” (If you can’t see the entire chart, click or tap on it.)<\/p>\n

\"TotalReturnsbyAssetclass\"<\/a><\/p>\n

\u00a0According to BusinessInsider which sent the chart out today:<\/p>\n

In any given year, some asset class will outperform another.<\/p>\n

Unfortunately, no amount of skill or experience has enabled anyone to forecast how various asset classes will stack up in any of those given years. And as a result, those who try to predict and time the markets usually get burned.<\/p>\n

This challenge is illustrated nicely in the chaotic colors of this quilt<\/a> of total returns by asset class.<\/p>\n

For Oppenheimer’s John Stoltzfus, it teaches us a valuable lesson in investing.<\/p>\n

“In our view, the quilt illustrates the importance of portfolio diversification and regular rebalancing,” Stoltzfus writes. “On its own, each asset class can be quite volatile, but a mix of assets in a balanced portfolio can lower overall volatility.”<\/p>\n

Diversify. And rebalance.<\/p>\n

Rebalance means sell successes when they’re too big a percentage of your portfolio. Put the money into lagging sectors. It’s an interesting idea. Should you now move into REITs — the poorest recent performer, according to the chart.<\/p>\n

Perfect summer day here in the Greek islands.<\/strong><\/span> Sea is blue and still, not a cloud in the sky, light breeze, ouzo is chilled, and the afternoons are perfect for napping.<\/div>\n

\"Underwater\"<\/a><\/p>\n

Second report on Greece from my favorite Australian investment banker, David Krasnostein, vacationing somewhere beautiful in Greece:<\/em><\/p>\n

On the distant horizon is the faint glow in the night sky of the Greek Parliament burning the midnight oil to pass the economic reforms required by Europe, albeit with a bazooka to its head. No afternoon napping over there in Athens.<\/p>\n

Prime Minister Tsipras has learned on the job what happens when you lose all control of the agenda and place the fate of your nation in the hands of others. Negotiating mistake 101. How could it have been otherwise? Telling your creditors to shove it where the sun don’t shine isn’t all that uncommon. And no doubt very satisfying – for a brief moment. But when you know you have to front up the next morning, cap in hand, and ask for another mega loan, it isn’t the height of genius. “Mega” ironically comes from the Greek “megalos” meaning really big. Big like the mistake of giving the proverbial finger to your creditors.<\/p>\n

Abusing your largest creditor, the Germans, for six months, calling their head of state a Nazi, and demanding war reparations 70 years late, remarkably seemed to have put them offside when it came to lending Greece another $90 billion. Go figure! And then to show how really unreasonable those Europeans can be when you get them offside, after never getting an answer to the question: “By the way, what did you actually DO with that first \u20ac300 billion+ we lent you?”, they then wanted the Greek Parliament to actually pass the promised economic reforms before they lent them another $90 billion. So tough those guys.<\/p>\n

Europe took the abuse for six months from Greece’s new Prime Minister and its very hip Finance Minister Yanis Varoufakis, and then ran out of goodwill. By declining Mr Tsipras’s request to fund his failing banks, after Greek depositors gainfully spent the last 6 months withdrawing \u20ac40 billion in deposits from their Greek banks, the country rapidly asphyxiated. By the second week Mr Tsipras realized that banks are really important. In fact you apparently can’t live without them. Before Mr Varoufakis rode off into the sunset on his motorbike, he might at least have had the decency to leave a note on the PM’s desk with something helpful like: “Note to self: keep raging against the machine Bro! But, by the way, don’t lose the banks! Very bad to lose the banks.”<\/p>\n

In fairness to the Prime Minister (my Greek wife is making me write this in a shallow attempt to appear more “balanced”), he inherited a 40 year legacy of previous Greek Governments who had run up \u20ac300billion+ in debts, wasted the lot, lied their way into the Euro with false accounting, maintained a corrupt, sclerotic, and nepotistic system of government, and never made any useful economic reforms to the economy. You’d think it wouldn’t be too hard to look good against that sort of competition!\u00a0 Sadly for Mr Tsipras it wasn’t to be.<\/p>\n

Remarkably on the already long list of the new Greek Government’s “achievements”, is that there are still members of Parliament who think leaving the Euro and printing the Drachma will give Greece back its independence. As therapists in New York remind their patients who seek to solve their “issues” by running away to sunny California, when you get there you will still be you. Changing\u00a0 geography won’t fix your issues. And similarly, printing its own currency won’t solve Greece’s basic problem, which is balancing its budget for the first time in decades.<\/p>\n

Drachmas, for the faithful, are paper. Pretty paper no doubt. Like Embassies in London and Washington, the poorer the country somehow the more grandiose its Embassy. But it’s just a promise by the Government. A Government with no fiscal or monetary credibility can’t print a currency with any credibility. If they were gold coins, that would be different. Holders could check the daily gold price to know what they are worth. But paper?<\/p>\n

A Government running a current account deficit with no access to credit markets, has a problem. OK, the United States has run a huge deficit for a long time and gets away with it because it prints the world’s favorite currency. But children should not attempt this at home. A Greek Government that can’t control its spending will print more money. After all, what’s that shiny new printing press for if not to use? So many promises to fulfill, so much paper still in the vault. Greeks will need to trade their wallets for wheel barrows to buy a loaf of bread. The Germans know what that’s like. They might just have saved the Greeks from themselves, not that this is such a great time to suggest that in Athens at the moment.<\/p>\n

And a Euro exit with a new currency would have presented a whole new world of pain after the new Government learned lesson number 3 — that they can’t afford to pay for imports because no one wants Drachmas. No matter how pretty they would have looked. And Greeks won’t have hard currencies because its exports are so few. Shame Mr Varoufakis is gone because he could have then abused a whole new group of countries for being mean to Greece. Mr Tsipras avoided another painful learning experience (after that bank thing) that the oil exporters don’t want his new currency, nor the car manufacturers or spare part makers, computer or phone makers, Internet providers, drug makers, medical suppliers, aircraft makers and so on. Good luck running a country under those conditions.<\/p>\n

So after Mr Varoufakis donned his leather jacket and waved good bye, Mr Tsipras got taken out behind the wood shed and given a thrashing by Europe and forced into real economic reform and the road to a balanced budget. As painful as that experience was, it avoided exiting the Euro, printing Drachmas, and having the market teach him a much more painful lesson down the road. At the moment he’s still rubbing his backside, and probably not feeling all that grateful, but maybe time will heal all, or possibly some, of the wounds.<\/p>\n

I asked David if he could send some pictures of paradise. He replied:<\/p>\n

Sorry, I’m struggling with very little internet service here in paradise! I’ve said that this is as close to heaven as you can get without dying to see what’s its like, so I guess don’t count on much Internet in the next life!<\/p>\n

I found the picture of the underwater\u00a0 lady by Googling “models in Greece.”<\/p>\n

How North Korea got the bomb.<\/strong><\/span> From reader John N:<\/p>\n

Having made 6 trips to north Korea on that project, let me tell you about the deal. Everything held until W called them part of the axis of evil. Then they threw our people out and cranked up the reactor leading to the bomb. Once that happened, W decided to negotiate. I went back in 2008 to shut them down again. When Obama got elected, they wanted a better deal. He said no and they threw us out again. I don’t know the current status but they didn’t start the reactor up initially. I don’t have my contacts anymore.
\nJohn N.<\/p>\n

Having fun with Google:<\/strong><\/span><\/p>\n

\"Conversion\"<\/a><\/p>\n

Best recent New Yorker cartoons<\/strong><\/span><\/p>\n

\"Saidtoomuch\"<\/a><\/p>\n

\"Nothanks\"<\/a><\/p>\n

\"WheresWaldo\"<\/a>
\n\"HarryNewton\"<\/a>
\nHarry Newton, who’s checking out some startups this morning at a little conference for angel investors. Should be fun.<\/p>\n

Carly Fiorina and her husband are worth $58,954,494.88. Not bad for someone who cost HP and its shareholders\u00a0 billions.<\/p>\n