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8:30 AM EST, Friday, April 13: Yup. It's Friday, the 13th.

Years back, I played consultant. People would ask me "What does a consultant do?" I'd answer "I help people question their assumptions." This is flip, but true. Any idiot can build a logical course of action, with marketing, finance and personnel plans, etc. But if the assumptions the plan is based on are wrong, you got a busted (though logical) plan.

So, this week, it's been with bonds. Readers are asking themselves, "Why do I own bonds?" Previously they were interested in laddering, and % allocations. Yesterday I gave ten reasons people buy bonds. And yesterday's emails said my reasons were accurate. But the mistake I'm making is that I'm assuming one size fits all. Everyone clearly has a different risk threshold and investment timeline.

Dan Good thinks I should merely be pointing out the risk/rewards and not my prefered allocation (i.e. nothing for bonds). He writes "What works for Yale may not work for an older person who might be getting his affairs in order because he has a terminal illness. It may not work for a young entrepreneur who wants to roll the dice by investing in all Internet stocks."

In short, whether you own bonds depends on:

1. Your age, and

2. Your disposition to spending time on investing. Bonds are virtually a no-brainer. Everything else takes work.

The reality is today you'll lose money by owning bonds. The yield you will get from your bonds (and I'm talking treasuries and munis) is not going to keep up with inflation.

Yesterday, I wrote, "You can lose with bonds. With interest rates rising, bond prices are falling at present. Idiots like me have bought bonds at a premium. If I hold those bonds to maturity, I will lose my premium."

A reader correctly pointed out that I "will still get the yield you bought the bond at so you lose nothing." He's right and I knew that. But it irks me if I buy a bond at $109, only to be given $100 back when it matures. That reduces the yield.

In the old days, bonds paid more and equities were flat. We didn't have real estate syndications, and all the other stuff Yale invests in.

We no longer live in those times.

In short, bonds make sense for some people. But only a few of us. What does make sense is organizing your portfolio by liquidity. Many of these new enticing things you can invest in -- from hedge funds to private equity funds to real estate syndications -- all have sizable lockup periods. There may come a time when you need a chunk of cash -- e.g. your daughter's wedding. You don't want to pay for that with monies that are tied up for 7 to 10 years in a private equity fund. But you can pay for it with investments that you can sell from one day to the next -- e.g. Vanguard Index funds.

As a postscript to all of this: my seven Vanguard Funds are kicking butt -- doing much better than my New York muni bonds. I've written about these funds before. Here they are:

+ Vanguard International Value Fund (VTRIX)
+ Vanguard Total International Stock Index Fund (VGSTX)
+ Vanguard Global Equity Fund (VHGEX)
+ Vanguard 500 Index Fund Admiral Shares (not recommended) (VFIAX)
+ Vanguard Pacific Stock Index Fund Admiral Shares (VPADX)
+ Vanguard Emerging Markets Stock Index Fund Admiral Shares (VEMAX)
+ Vanguard Mid-Cap Index Fund Admiral Shares (VIMAX)

and while we're on index funds, don't forget EWA, which is iShares MCSI Australia. It's moving up strongly.

Ethanol will make a lot of people rich. But not me. I'm guessing this recent article from the Economist is truthful:

Castro was right

As a green fuel, ethanol is a good idea, but the sort that America produces is bad

IT IS not often that this newspaper finds itself in agreement with Fidel Castro, Cuba's tottering Communist dictator. But when he roused himself from his sickbed last week to write an article criticising George Bush's unhealthy enthusiasm for ethanol, he had a point. Along with other critics of America's ethanol drive, Mr Castro warned against the “sinister idea of converting food into fuel”. America's use of corn (maize) to make ethanol biofuel, which can then be blended with petrol to reduce the country's dependence on foreign oil, has already driven up the price of corn. As more land is used to grow corn rather than other food crops, such as soy, their prices also rise. And since corn is used as animal feed, the price of meat goes up, too. The food supply, in other words, is being diverted to feed America's hungry cars.

Ethanol is not much used in Europe, but it is a fuel additive in America, and a growing number of cars can use either gasoline or ethanol. It accounted for only around 3.5% of American fuel consumption last year, but production is growing by 25% a year. That's because the government both subsidises domestic production and penalises imports. As a result, refineries are popping up like mushrooms all over the midwest, which now sees itself as the Texas of green fuel.

Why is the government so generous? Because ethanol is just about the only alternative-energy initiative that has broad political support. Farmers love it because it provides a new source of subsidy. Hawks love it because it offers the possibility that America may wean itself off Middle Eastern oil. The automotive industry loves it, because it reckons that switching to a green fuel will take the global-warming heat off cars. The oil industry loves it because the use of ethanol as a fuel additive means it is business as usual, at least for the time being. Politicians love it because by subsidising it they can please all those constituencies. Taxpayers seem not to have noticed that they are footing the bill.

But corn-based ethanol, the sort produced in America, is neither cheap nor green. It requires almost as much energy to produce (more, say some studies) as it releases when it is burned. And the subsidies on it cost taxpayers, according to the International Institute for Sustainable Development, somewhere between $5.5 billion and $7.3 billion a year.

Ethanol made from sugar cane, by contrast, is good. It produces far more energy than is needed to grow it, and Brazil—the main producer of sugar ethanol—has plenty of land available on which to grow sugar without necessarily reducing food production or encroaching on rainforests. Other developing countries with tropical climates, such as India, the Philippines and even Cuba, could prosper by producing sugar ethanol and selling it to rich Americans to fuel their cars.

There is a brighter prospect still out there: cellulosic ethanol. It is made from feedstocks rich in cellulose, such as wood, various grasses and shrubs, and agricultural wastes. Turning it into ethanol requires expensive enzymes, but much research is under way to make the process cheaper. Cellulosic ethanol would be even more energy-efficient to produce than sugar ethanol and would not impinge at all upon food production. Eventually, it might even allow countries with lots of trees and relatively few people, such as Sweden and New Zealand, to grow their own fuel rather than import oil.

That is still some way off. In the meantime, America should bin its silly policy. If it stopped taxing good ethanol and subsidising bad ethanol, the former would flourish, the latter would wither, the world would be greener and the American taxpayer would be richer.

Ethanol is not going to solve the world's energy problems on its own. But its proponents do not claim that it would. Ethanol is just one of a portfolio of new energy technologies that will be needed over the coming years. Good ethanol, that is—not the bad stuff America is so keen on.

Don't open email attachments: I repeat: Don't open email attachments. There are some really nasty viruses floating around in emails with headings like "Worm Alert!", "Worm Detected," "Spyware Detected!", "Virus Activity Detected!", The email carries a ZIP file attachment posing as a patch necessary to ward off the bogus attack. The ZIP file, which is password protected -- the password is included in the message to further dupe recipients -- contains a variant of the "Storm Trojan" worm, which installs a rootkit to cloak itself, disables security software, steals confidential information from the PC, and adds it to a bot army of compromised computers.

Popular Mechanics loves compact fluorescents: They did an exhaustive double-blind test with people and machines in the May, 2007 issue and concluded:

The results surprised us. Even though the incandescent bulb measured slightly brighter than the equivalent CFLs, our subjects (i.e. people) didn't see any dramatic differences in brightness. And here was the real shocker: When it came to the overall quality of light, all the CFLs scored higher than our incendescent control bulb. In other words, the new fluorescent bulbs aren't just better for both your wallet and the environment, they produce better light.

Seatguru.com helps you find the least worst seat on your next trip. Pick an airline. Pick a plane it flies. And Seatguru will give you:

* Detailed seat map graphics.
* In-depth seat specific comments denoting seats with limited recline, reduced legroom, mis-aligned windows.
* Color-coding to help you find superior and substandard seats.
* In-seat power port locations.
* Galley, lavatory, Exit Row and closet locations.

Sample sliver of a SeatGuru airline cabin map:

I highly recommend SeatGuru.

The authentic Fire Truck
A firefighter was working on the engine outside the station when he noticed a little girl nearby in a little red wagon with little ladders hung off the sides and a garden hose tightly coiled in the middle.

The girl was wearing a fire fighter's helmet.

The wagon was being pulled by her dog and her cat.

The fire fighter walked over to take a closer look.

"That sure is a nice fire truck," the fire fighter said with admiration.

"Thanks," the girl replied.

The firefighter looked a little closer and noticed the girl had tied the wagon to her dog's collar and to the cat's testicles.

"Little Partner," the fire fighter said, "I don't want to tell you how to run your rig, but if you were to tie that rope around the cat's collar, I think it could go faster."

The little girl replied thoughtfully, " You're probably right, but then I wouldn't have a siren."

The prelude to mad, passionate love
Husband and wife are in bed together. She feels his hand rubbing her shoulder.

She: "Oh, that feels good."

His hand moves to her breast.

She: "Gee, honey, that feels wonderful."

His hand moves to her leg.

She: "Oh, honey, don't stop."

But he stops.

She: "Why did you stop?"

He: "I found the remote."

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads. Thus I cannot endorse any, though some look mighty interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
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