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9:00 AM EST, Thursday, April 9, 2009. "Your muni bonds are down $59,000," Muriel said sadly.

"What the heck?" I yelped.

Muni bonds are bigger than stocks. But they trade much less actively. Sometimes my collection doesn't trade for days. If I own Citibank stock (God forbid) I can see what I'm worth by checking the price it's trading at. Not so for my bonds. When Deutsche Bank sends me a monthly statement or posts numbers on my account on-line, they're using creative numbers. They make the numbers using "matrix pricing." Nobody knows exactly how that works. The computers do it. But it's like looking at a bundle of similar duration bonds, checking their yields and then applying the yield number to all the "similar' bonds.

Bonds aren't really "similar." Here's yesterday's chart. You'd expect the riskier ones to be yielding more. And they usually do.

The real question is "Why do I care what my muni bonds are worth?" I would only care if intended to sell them. But, if I buy bonds, I don't intend to sell them, I intend to let them mature or be called. When I get the cash money from being matured or called, then, I can decide what do. And that -- if you read yesterday's column -- would be to buy new bonds.

There are two ways of buying a portfolio of bonds. You can buy a laddered portfolio. This means you have bonds maturing every year or so, going out as long as you want. Or you can buy a dumbbell portfolio. You own lots of very short-term bonds and the rest very long term. Neither portfolio will lose you money since the idea is not to sell, but to be redeemed into higher-yielding bonds. What you buy depends on how you feel interest rates will move in coming years.

Many of us believe inflation will skyrocket in coming years (as a result of all the "stimulus" money printing by the Fed). And we believe we could see yields as high as 9% on longer-term bonds. To achieve this, the price of bonds will fall dramatically. For us to take advantage, we'll need to have cash sitting around.

You should not pooh-pooh this projection. In the early 1980s 30-year, long-term muni bonds were yielding 15%. Inflation was rampant. Carter was in the White house. I don't think it will go that high now, but it could hit 8% to 9%. And that's triple tax-free. And since taxes are going up, that's very good.

After I sold my business in 1997, Todd said "Clip coupons. Go play tennis." It was good advice then. It's excellent advice now.

P.S. The way you figure what your bonds are worth: Call up and ask for three sales quotes.

What goes on with stockmarkets? A neat explanation is from Tuesday's newsletter from Richard Russell of Dow Theory Letters writes:

April 7, 2009 -- The market situation has seldom been more confusing. Many analysts are convinced that we are in a new bull market. Others (me included) believe we are in a bear market correction (rally).

Because of the confusion, I'm going to step out and make a few guesses (might as well, since nobody really knows what's going on).

(1) I believe that we're in a secondary (upward) correction of a bear market. I'm going to guess that this correction could rise further or at least last longer than most people are expecting. A bear market rally is supposed to convince the majority that a new bull market has started. The rally will often continue until a large number of investors are back on board, and then the bear will kill them as it fades away, leaving the new optimists high and dry and with losses.

(2) Gold is in a downward correction of its primary bull market. Gold may decline or stall until it convinces the majority of gold-fans that the gold bull market has died. Holders of "paper gold" and gold futures and options will be frightened out of their holdings. What we're experiencing now is the big correction that often occurs prior to the third speculative phase in gold. Holders of physical gold (coins, bars) will do best, since they will tend to hold on to their gold positions no matter what.

So what are the markets trying to do? They're doing what they always do, keep investors in the bear market and keep investors out of the gold bull market. Why would they do that? Because that's the very nature of markets. Markets tend to thwart the majority. And that's logical and self-evident. If markets existed to make money for the majority, then most market participants would be millionaires, and we know that sadly, that is not the case.

Markets can be compared with gambling at Las Vegas. When you gamble at Vegas, you are bucking the house odds. Which is why if you play long enough at Vegas, you will always lose your money. Vegas is stacked that way. Las Vegas is constructed to separate players from their money. The stock market is a bit classier. When you buy stocks, you are at least buying something. It feels good to say, "I bought 500 shares of Johnson & Johnson."

When you put your money down at Las Vegas, you are not buying anything, but with a slim chance (the odds are against you) of winning more than you put down. Las Vegas is one of the few places where you pay your dollars, and are guaranteed to receive NOTHING of any value. "Gambling is a tax on people who don't understand money," that's my favorite adage about gambling. Investing in the stock market is a long-term tax on people who want something (profits) without doing any real work for those imaginary profits.

Today is the first day of Jewish Passover. Part 1.
An elderly man in Miami calls his son in New York and says, "I hate to ruin your day, but I have to tell you that your mother and I are divorcing. Forty-five years of misery is enough."

"Pop, what are you talking about?" the son screams.

"We can't stand the sight of each other any longer," the old man says. "We're sick of each other, and I'm sick of talking about this, so you call your sister in Chicago and tell her." And he hangs up.

Frantic, the son calls his sister, who explodes on the phone, "Like heck they're getting divorced," she shouts, "I'll take care of this."

She calls her father immediately and screams at him, "You are not getting divorced! Don't do a single thing until I get there. I'm calling my brother back, and we'll both be there tomorrow. Until then, don't do a thing. Do You Hear Me?" And she hangs up.

The old man hangs up his phone and turns to his wife. "Okay," he says," They're both coming for Passover and paying their own airfares.

Today is the first day of Jewish Passover. Part 2.
Moses is leading the Israelites away from Egypt to the Promised Land. He arrives at the Red Sea. Things look bleak. In the distance the Egyptians are gaining. In front is the Red Sea.

He calls for Vice President of Engineering. "Build me a bridge."

VP Engineering: "Boss, I'd love to. But look around. There are no trees. No nothing. We're in a desert."

Moses calls for his VP sales. "Go rush back to the Egyptians. Work a deal."

VP Sales, an hour later: "Sorry, boss. No deal. They want us dead. End of story."

Finally, Moses calls for VP Public Relations. "What can you do for me?"

VP PR thinks and says, "Here's the answer, Moses. You stand on this rock. You lift your hands to the sky and you intone, 'God, make the Red Sea part.' It will part. You will take the Israelites through the gap. You will see another big rock on the other side. You will climb on it. When you see the Egyptians in the Red Sea, you will hold your hands to the sky and you will say, 'God, make the Red Sea come together.' The Red Sea will come together. All your enemies will be drowned. And you can proceed peacefully with your people to the Promised Land."

Moses looks quizzically and asks, "This is going to work?"

VP Public Relations, "Boss, I have no idea. But, if it does, I'll get you three pages in the Old Testament."

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.