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9:00 AM EST, Tuesday, April 14, 2009. There are two approaches to owning a portfolio of muni bonds: Laddered and barbell. Laddered means you buy maturities for each year (or so). Barbell means you own half short-term and half long-term. Which philosophy you go with depends on what you think interest rates will do going forward. Several bond experts are going with the barbell approach today because they think interest rates may skyrocket soon.

This is from Bloomberg recently:

Federal Reserve Chairman Ben S. Bernanke is siding with John Maynard Keynes against Milton Friedman by flooding the financial system with money.

If history is any guide, says Allan Meltzer, the effort will end in tears. Inflation “will get higher than it was in the 1970s,” says Meltzer, the Fed historian and professor of political economy at Carnegie Mellon University in Pittsburgh. At the end of that decade, consumer prices rose at a year-over- year rate of 13.3 percent.

Bernanke’s gamble that the highest jobless rate in 25 years and the most idle factory capacity on record will hold down inflation is straight out of the late British economist Keynes. Should late Nobel-prize-winner Friedman’s dictum that “inflation is always and everywhere a monetary phenomenon” prove right, the $1 trillion or more in liquidity Bernanke has pumped into the financial system by expanding the Fed’s balance sheet may leave him to cope with surging consumer prices.

So far, investors and economic data both back up the Bernanke-Keynes view. The market in Treasury Inflation-Protected Securities as of April 6 indicated long-term inflation expectations of 2.5 percent, below the 2.8 percent average inflation rate of the past 10 years.

Figures to be published April 15 will probably show that the March consumer price index was unchanged from a year earlier, thanks to a steep decline in energy costs, according to economists surveyed by Bloomberg News. In February, the index rose at a year-over-year rate of just 0.2 percent.”

For mutual funds, it's not the return that counts. It's the assets under management. This is from today's New York Times DealBook:

For One Wall St. Chief, a Super Payout in 2008

Many Wall Street bosses got relatively meager payouts for 2008, but not Mario J. Gabelli, the powerful mutual fund manager known as Super Mario for his stock-picking prowess.

According to a proxy statement released late last week, Gamco Investors, Mr. Gabelli’s publicly traded investment firm, paid him $46 million last year, even as the value of his various funds sank with the turbulent market.

That’s considerably lower than the $71 million Mr. Gabelli took home in 2007 or the $81 million he was paid in 2002. Even so, the $46 million payout dwarfs the 2008 compensation of many other Wall Street chieftains, who generally got no bonuses for last year and saw the value of their stock-related pay collapse.

Crain’s New York Business suggests that Mr. Gabelli may be able to claim the title of the best-paid chief on Wall Street in 2008.

Gamco’s assets under management declined 33 percent to $20.2 billion from $31 billion in 2007, as the value of its holdings shrank and investors withdrew some of their money.

Total revenues generated off the funds in the form of fees came to $245 million in 2008, 16 percent less than in the previous year. Mr. Gabelli and his fund managers got $102 million in compensation, with nearly half going into Mr. Gabelli’s pocket.

For the year, the firm reported a $25 million profit.

Gamco’s stock fell 61 percent in 2008 but has been on a rebound recently, gaining 44 percent so far this year.

Though his majority ownership of a private company called Gabelli Group Capital Partners, Mr. Gabelli has near total control over Gamco.

Mr. Gabelli got no base salary, no bonus, no stock options and no restricted stock awards in 2008.

Instead, he receives 20 percent of the firm’s pretax revenues, which come from charging management fees to investors in Mr. Gabelli’s various funds. Mr. Gabelli also receives 10 percent of the firm’s pretax profits for the year, which netted him $2.4 million.

Kicking the butt, the Chinese/Korean way. I need to find a new printer for the next (25th) edition of my dictionary. Last year I printed it in Baltimore. The printer was late and "forgot" to include in his quote the cost of the boxes to ship the books! The total bill was $63,000.

Yesterday I went on the Internet and found a printing broker. You fill in his form with your specs. He sends your specs out to his book printers. They respond directly to you. Neat.

I filled in his form. Here are the responses I received:

1. TSE Worldwide Press in Rancho Cucamonga, CA emailed, "Good afternoon, I just reviewed the printing specifications for the title: Newton's Telecome Dictionary - 25th Edition, and was wondering if you have a budget in mind. This will help me to recommend you the most suitable printing specification that maximizes your cost-saving." ... In a second email, they wrote, "If you are interested in receiving a printing quote from us, please click the link below and fill out the form." They didn't call.

2. Kenyon Press of Sherburne, NY emailed me three questions, two of which had been answered in my original specs and the third being irrelevant. I did answer them and have heard nothing. They didn't call.

3. Doosan Printing in Korea sent a detailed quote on an Excel spreadsheet. $37,600.

4. Sunquest Printing of Canada and Shanghai (where they do the printing) sent a detailed quote in a PDF -- $34,000.

The bottom has fallen out of the book business. Printers are starving. Yet not one U.S. printer quoted or called (I had left my phone number). This is beyond depressing.

How stupid can you be? Last night I sent the president of our alarm monitoring note saying I wouldn't be needing his services for the time being. His response: He faxed me a form to fill in, asking for "the reason for discontinuation."

What should he have done? How about a cheery personal phone call? What is wrong with American business?

Go traveling NOW. My dear friend Amy just returned from Puerto Rico. Her casita was half off and she was upgraded.

View of casita. The place was deserted. The worst they've seen, according to locals.

.

View from casita.

Local beach.

This critter had the golf course to himself. Amy paid $65 for a round of golf. That included renting a cart. The normal price is north of $200. Discounts generally were in the 45% range.

Mexico is even cheaper. The drug problems have killed tourism. Literally.

A charming fairytale with a moral.
Once upon a time, a young lad was born without a belly button. In its place was a silver screw.. All the doctors told his mother there was nothing they could do. Like it or not, he was stuck with it.

All the years of growing up were real tough on him, as all who saw the screw made fun of him. He avoided leaving his house . . . And thus, never made any friends.

One day, a mysterious stranger saw his belly and told him of a monk in Tibet who could get rid of the screw for him. He was thrilled. The next day, he took all of his life's savings and bought a ticket to Lhasa.

After several days of climbing up steep cliffs, he came upon a giant monastery. The monk knew exactly why he had come. He told him to sleep in the highest tower of the monastery. The following day when he awoke, the screw would be gone.

During the night while he slept, a purple fog floated in an open window. In the mist floated a solid silver screwdriver. In just moments, the screwdriver removed the screw and disappeared out the window.

The next morning when the man awoke, he saw the silver screw laying on the pillow next to him. Reaching down, he felt his navel, and there was no screw there! Jubilant, he leaped out of bed . . . . And his butt fell off.

The moral to this is:

'Don't screw around with things you don't understand -- You could lose your ass.'

The New Concept Grocery Store.
Imagine the innovation, the brilliance, the entrepreneurial excitement when launching this new business. .

A new supermarket opened in Topeka , KS . It has an automatic water mister to keep the produce fresh. Just before it goes on, you hear the sound of distant thunder and the smell of fresh rain. When you pass the milk cases, you hear cows mooing and you experience the scent of fresh mown hay. In the meat department there is the aroma of charcoal grilled steaks with onions. When you approach the egg case, you hear hens cluck and cackle, and the air is filled with the pleasing aroma of bacon and eggs frying. The bread department features the tantalizing smell of fresh baked bread and cookies.

Friends who live in Topeka don't buy toilet paper there any more.

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 on this site. Thus I cannot endorse, though some look 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 Michael's business school tuition. Read more about Google AdSense, click here and here.