Previous Columns
8:30 AM EST, Monday, April 9: Why do I own bonds? Ten years of owning them has returned less than half what I've earned on equities. There's an old adage: "As you get older you need more bonds." But it's nonsense. No one needs bonds. I'm still thinking this through. Thoughts?

The U.S. economy continues to do spectacularly. U.S. industrial output rebounded in February, achieving its biggest gain since November 2005. Capacity utilization rose to 82.0%, the highest level since September. All the service companies (except for those idiots who lent housing money to deadbeats) seem to be doing well also. I'm optimistic for a nice positive year for equities in 2007.

Retirement, a scary word: I'm 64. All my friends are retiring. Some are forced retirements. The firm kicked them out because they had a reached the magic age when they were finally useful. Or they sold their business and they're not sure about starting another one. I've been at "retirement" for nearly ten years. Here are my retirement sanity tips.

1. Make sure you start each day with an "accomplishment." This column is my daily accomplishment. It begins my day on a "high." I got something done.

2. Make sure each day has a "reward." Tennis is my reward. I typically schedule a game at 2:30 PM. The tennis deadline means I have to complete all my tasklets and chores from 8:45 AM to 2:00 PM. Tasklets and chores include checking on new, old and potential investments. I get things done faster when I have a deadline. We all do.

3. Learn something. Learn computers. Learn photography. Learn flying. Learn a new language. Learn cooking. Add a skill you've admired in others.

4. Be wary about major projects. Like starting a new business or your own charity. Everybody and their uncle is starting their own private charity to repay the world for being good to them. It's not easy to raise money. Your friends are already tapped out with last year's charities.

5. Be careful not to confuse fantasy with reality. Don't talk about your nuttier fantasies -- e.g. climbing Everest -- with your friends and children. They'll think you've flipped and will no longer pay you any attention. I'm serious. Ideas are cheap. Credibility isn't. You don't want to get irrelevant as you get older.

6. Watch your psyche. When you worked, you were important. With retirement, your phone goes dead. You become a nobody. That's hard.

7. Don't get involved in other peoples' charities. Even if they listen to you (highly unlikely), you won't experience one-tenth the satisfaction you got from your old job. Understand their interest in you. They want your money, not your brains. Learn to say NO. See Wednesday. Click here.

8. Get healthy. Lose weight. Do exercise every day. Walking is not exercise. You need to sweat. You need to build those muscles.

9. Travel a little. But travel with a purpose. Walking around yet another pretty town is not satisfying. Even Paris can get boring.

10. Find a confidant in the same situation. Talking to your family about your concerns doesn't work. They're all too busy with their young lives. They will never understand how retirement can be stressful. They think it's the culmination of life's work, not the beginning of a new phase. Someone in the same situation as you will understand. A regular lunch is satisfying.

The 2007 Irving Kristol Lecture by Bernard Lewis. What does on in the middle east? Lewis is the pre-eminent scholar on the area. To read his latest lecture, click here.

Friday's column: I rushed to write a column on Friday. Two hours later I discovered it was Good Friday. Financial markets were closed. Hence nobody read my precious columns. Here are excerpts from Friday:

Mercedes' great investment: Daimler (i.e. Mercedes) bought Chrysler for $35 billion in 1988. Kirk Kerkorian has now offered to buy it for $4.5 billion in cash. Before his offer, Wall Street figured Daimler might get between nothing (give it away so long as someone else takes the liabilities) to between $5 billion and $7 billion. If Daimler sells it to Kerkorian. That means they will have lost 87% on that deal. I figure that's in line with what the company which bought my business has enjoyed also.

The problem with mergers and acquisitions is most don't work. There are two reasons:

1. Radically different management cultures. There's a huge difference between Mercedes and Chrysler. There's a huge difference between entrepreneurial Harry's business and the staid English public company that bought my business.

2. Huge changes in the business environment. In Chrysler's case, Americans have recently preferred fuel-efficient cars. Chrysler stayed with gas gusslers. And Mercedes forgot that Chrysler was no Mercedes. Chrysler didn't have the Mercedes brand. In my case, print died. Advertising of technology products switched to the web. There were ways of boosting revenues, but you have to be entrepreneurial. My buyer wasn't. They bought and sold media assets, a vastly different business to managing them.

The genius of Buffett. What faces the newspaper business? Writes Warren Buffett in his latest Berkshire Hathaway annual report (and quoted yesterday in the Wall Street Journal):

The economic potential of a newspaper Internet site -- given the many alternative sources of information and entertainment that are free and only a click away -- is at best a small fraction of that existing in the past for a print newspaper facing no competition. We are likely therefore to see non-economic individual buyers of newspapers emerge, just as we have seen such buyers acquire major sports franchises.

Always expect the unexpected: I've written about the unpredictability of predicting, and how diversification is the most potent weapon against unpredictability. This neat piece from the latest issue of Wired magazine:

From Wall Street to Washington we're constantly being told that the future can be forecast, that the world is knowable and that the risk can be measured and managed. Nassim Nicholas Taleb is having none of this. In his new book The Black Swan, the finance guru and author of the surprise hit, Fooled by Randomness argues that history is dominated not by the predictable but by the highly improbable - disruptive, unforeseeable events that Taleb calls Black Swans. The effects of wars, market crashes and radical technological innovations are magnified precisely because they confound our expectations of the universe as an orderly place. In a world of Black Swans, the first step is understanding just how much we will never understand. -- James Surowiecki.

Wired: If Black Swans are the crucial determining events in history, why do we think we can predict anything at all?

Taleb: After they happen, in retrospect, we think that Black Swans were predictable. We think that if we can explain why something happened in the past, we can explain what will happen in the future.

But with better models and more computational power, won't we get better at predicting Black Swans?

We know from chaos theory that even if you had a perfect model of the world, you'd need infinite precision in order to predict future events. With sociopolitical or economic phenomena, we don't have anything like that. And things are getting worse, not better, because of the growing complexity of the world dwarfs any improvement in sophistication or computational power.

So what do we do? If we can't forecast the really important things, how do we act?

You need to ask, "If the Black Swan hits me, will it help me or hurt me?" You cannot figure out the probability of a Black Swan hitting. But if you're in a business that's prone to negative Black Swans, like catastrophe insurance, I advise you not to take your forecasting seriously -- and to think about getting into a different business. You don't want to be a sucker. What you want are situations where you can have as much of the good uncertainty as possible, where nothing too bad can happen to you, and where you what I call free options. All of technology, really, is about maximizing free options. It's like venture capital. Most of the money you make is from things you weren't looking for. But you find them only if you search.

Is one of the strengths of the American system that, relatively speaking, it's more comfortable with uncertainty?

Yes. People here aren't afraid of failure. They're willing to trade the possibility of failure for the chance at a big upside. No other country is willing to do this. What America does best is produce the ability accept failure.

My son caught me feeding Winnie (his dog). I gave her the remains of my morning cereal. I'm forbidden to give her table food.

Winnie, begging for food, as usual.

My son was not pleased. He quipped, "There are no bad dogs, only bad owners." That's me!

The last golf joke
Last winter Fred met a woman while on vacation in the Keys and fell madly in love with her. On the last night of his vacation, the two of them went to dinner at the Ocean View and had a serious talk about how they would continue the relationship.

"It's only fair to warn you, I'm a total golf nut," Fred said to his lady friend. "I eat, sleep and breathe golf, so if that's a problem, you'd better say so now."

"Well, if we're being honest with each other, here goes," she replied. "I'm a hooker."

"I see," Fred replied, and was quiet for a moment. Then he said, "You know, it's probably because you're not keeping your wrists straight when you tee off."

The Irish Candle
Mrs. Donovan was walking down O'Connell Street in Dublin when she met up with Father Flaherty. The Father said, "Top o' the mornin' to ye! Aren't ye Mrs. Donovan and didn't I marry ye and yer husband two years ago?"

She replied, "Aye, that ye did, Father."

The Father asked, "And be there any wee little ones yet?"

She replied, "No, not yet, Father."

The Father said, "Well now, I'm going to Rome next week and I'll light a candle for ye and yer husband."

She replied, "Oh, thank ye, Father." They then parted ways.

Some years later they met again. The Father asked, "Well now, Mrs. Donovan, how are ye these days?"

She replied, "Oh, very well, Father!"

The Father asked, "And tell me, have ye any wee ones yet?"

She replied, "Oh yes, Father! Three sets of twins and 4 singles, 10 in all."

The Father said, "That's wonderful! How is yer loving husband doing?"

She replied, "E's gone to Rome to blow out yer candle!"

The Sun City Prenuptial Agreement
An elderly couple in their 80s were to marry. .

She: I want to keep my house.

He: That's fine with me.

She: And I want to keep my Cadillac.

He: That's fine with me.

She: And I want to have sex 6 times a week.

He: That's fine with me...Put me down for Fridays..

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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