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8:30 AM EST Thursday, April 17, 2008: Happy days are not necessarily here again, despite yesterday's welcome 2+% gain. Normally I shy from forecasting, since it's a fool's game. But I fear for too many parts of today's economy -- for reasons I've bored you all with too many times.

The hardest aspect of this job of writing a column on investing is aligning what I do with what I recommend. As I grow older (and wiser?) I realize everyone has a different taste for, and style of, investing. To me, the "perfect" investment is one I control, i.e. a business I run. I don't have any of those at present. As a result, that puts me at others' mercy. To mitigate the risks there -- since most people are not good managers -- I spread my investments, which is also called diversification, or broad allocation.

This "strategy" stinks because I lose "the big rewards." How big? Check out this story from yesterday:

LONDON (Reuters) - Bets on a U.S. housing crisis earned hedge fund manager John Paulson $3.7 billion (1.9 billion pounds) in 2007, ahead of industry legend George Soros and 2006's highest-paid manager James Simons, according to Alpha Magazine.

Paulson, whose bet that investment grade mortgage bonds would be subject to default in record numbers came good in the subprime meltdown last summer, was one of five managers earning more than $1 billion, Alpha said in a note on Wednesday.

His earnings were more than double those of 2006's top earner -- mathematics professor-turned-investor James Simons, who founded Renaissance Technologies Corp -- who in 2007 earned $2.8 billion.

George Soros, whose Quantum Endowment Fund returned 32 percent last year, earned $2.9 billion.

The top 25 managers earned, on average, $877 million in 2007, up from $532 million in 2006.

This "may well prove to be the greatest display of individual wealth creation in any year in the modern history of finance", Alpha said in the note.

Did I predict the subprime meltdown? No. On the other hand, I did predict -- past columns are proof -- oil, silver, gold, commodities and Australian mining stocks. And had I bet the farm on them, I would have done far better in 2007 (though I'm not complaining about 2007).

Why didn't I? I figure two reasons. First, I'm not a gambler, a.k.a. a "bet the farm" kind of guy. I prefer "steady gains" (though I now realize they're mythical -- keep reading.) Second, I'd prefer to be doing other things, like writing books, writing this column, playing tennis, and being with the family. I can't be glued all day to a bank of computer monitors.

But --- and now comes the second revelation -- perhaps I don't have to be glued? Perhaps the idea is to read, observe, research, take a deep breath and place the BIG BET. And then step away from it and allow it run. I bet that's what Paulson, Soros and others do.

There's a mentality needed here that I don't know I possess -- or could learn. That's the ability to ignore the days when my bet is going wrong. The day silver plummets. The day FSLR dropped. The day oil collapsed. I'm learning the key is faith in myself, my researches and my bet. And most times that faith is not misplaced, says he immodestly.

And I'm learning that my erstwhile "brilliant" strategy of extensive diversification has its pitfalls, namely:

1. The more you have, the more you have to keep track of , to "manage," etc.

2. The more you have, the less research you do on each one, the more bad surprises will pop up. And -- what's weird -- is that those bad surprises hurt as much as if you had invested (and lost) millions.

I own a goodly portion of a magazine. It wasn't a big investment. It wasn't big enough to warrant taking over (with a partner I control 51% of the company). I tried to make occasional suggestions by long distance. Wrong! They're entrepreneurs. They don't listen. Yesterday, I received this email:

Hey, its not getting any better. I can’t even make payroll, nice economy. You said you could help me get the magazine ready (numbers etc.) to sell it or even take over or what ever. Just cant do it no more.

That hurt. I should never have invested. But when I did, it was an ultra-small amount and print magazines were booming. The hurt to my ego today is far larger, though it won't affect my lifestyle.

I think I'm moving to the "fewer, but bigger bets" strategy of investing. This morning I feel comfortable with it. It has lifted the burden of finding a brilliant new opportunity each waking day. That feels good. The only countervailing pressure is the pressure of a daily column. Will my readers be annoyed at not finding "The Opportunity du Jour." I'm begging your indulgence and understanding.

For now, I believe in oil, gold, silver and Australian mining stocks. And I'm on the hunt for bigger bets to fry. In today's market, I like big dividend payers. Let me have your thoughts.

Magazine covers are contrarian, allegedly. The day the Economist's great cover appeared last week, stockmarkets started rising.

John Mauldin wrote on his blog, InvestmentPostcards:

Magazine covers, especially as far as international publications are concerned, frequently get their timing wrong on “big picture” events. As such, covers are often used as contrarian indicators. Intuitively it does not seem that this will be the plight of the cover of the latest Economist, but let’s keep an eye on how events unfold.

On second thoughts, the magazine’s emphasis should perhaps have been on the price of the escargots going through the roof, together with food in general, rather than on the slowdown per se. Full marks in any event for a fabulous illustration.

Jack Welch unfairly criticized his successor. GE missed its earnings targets of three weeks earlier and Jack Welch slammed his successor Jeffrey Immelt. But the key reason, as Immelt pointed out, was that GE's earnings miss stemmed primarily from the credit crisis, which forced the company to record expenses to reduce the value of loans and prevented it from completing real-estate sales at the end of the quarter. And it all happened at the time we all got caught as the auctions failed for those auction rate securities.

I highlight GE's earnings miss because it's indicative of the credit crunch and how its effect on the economy and on corporate earnings is worsening, not improving. If you don't believe me, check out this morning's earning results from Merrill Lynch. Revenue down 69% and a first-quarter loss of $1.96 billion.

There is a theory on Wall Street that the financials are overstating their losses in their first quarter results. And that the next quarters will be rosy That theory has as much efficacy as trying to catch a falling knife.

Customer service at its finest. Excerpted from a Bloomberg piece yesterday:

Call Girls at Nursing Home Fuel Debate in Denmark (Update1)

April 16 (Bloomberg) -- When a male resident at Kildegaarden nursing home in Denmark made an indecent sexual proposal to a member of the staff, the home's director, Inger Marie Kristensen, told a nurse to telephone for a prostitute.

"There was a considerable change in his demeanor after the escort girl had paid him a visit,'' Kristensen said in an interview. "We do this for our clients just as we offer them other services that they need as human beings.''

Kildegaarden, located 100 miles (160 kilometers) west of Copenhagen in Skanderborg, has about 100 residents, including victims of Alzheimer's disease and strokes. Nurses arranged visits by call girls three times in the past three years. ...

Denmark is doubling spending to 80 million kroner ($17 million) over the next three years to get women out of the sex trade. The government estimates that 6,000 women work in the profession in the Scandinavian country of 5.5 million.

In a poll posted last week on the Web site of national broadcaster DR, 46 percent of 1,982 readers said nursing home staff should be able to organize visits by prostitutes, 45 percent were against the practice and 8 percent were undecided. ...

The Copenhagen-based Danish Sex-worker Association was established last month in a bid to protect the industry. The leader, who gives her name only as Susanne on the association's Web site, said prostitutes "often'' visit Danish elderly homes.

For Kristensen, residents at the Kildegaarden home have rights under the current laws, no matter how old they are. And Danes are getting older. According to the Danish government Web site, on Jan. 1, 2007, 715 people were 100 years of age or more.

"Basically this is a matter of respecting the elderly and their needs,'' she said.

I got my new Lenovo X61 Thinkpad yesterday. It's got a 2.4 GHz processor, 3 gigs of RAM and Windows XP (not Vista). The machine is fast, small and light -- the perfect traveling laptop. The keyboard is brilliant, the best of any laptop. And the best part of it is combining the red pointing stick along with the middle button between the left and right mouse controls. Hold that middle button down, your pointing stick becomes a scrollwheel. Brilliant. Awesome. I've been trying to convince Toshiba that we need one on their new laptops. (In vain, sadly. They're not listening. Big companies never do.)

One joke.

A three year old little boy was examining his testicles while taking a bath.

"Mama," he asked, "Are these my brains?"

His wise mother answered, "Not yet, my son. Not yet."

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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.

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