Previous Columns
7:30 AM EST, Thursday, January 22, 2009: Yesterday was the most boring, most unrewarding day in my entire life. I spent the day figuring out what to do with $5 million in cash. The money was sitting there 100% idle. The first thing I learned is there are people who spend their entire lives managing cash. I can understand why. Managing cash is hugely complicated, with lots of horrid traps. And the picture changes by the hour. The biggest trap happened earlier this year when the Auction Rate Preferreds market locked up $360 billion of "cash equivalent" money and turned everyone (including me) off anything that smells of a tinge of risk and/or complexity.

By the end of the day, I did learn some useful things

1. It's very useful to draw up a spreadsheet called cash. Put up three headings -- Where the cash is, How much we have and what % interest we're earning on it. Most of us have squirreled away cash in the past year, but haven't managed it properly.

2. All my friends (all of whom are scared) "will only do FDIC-insured stuff today." They'll do treasuries. They're afraid of muni bonds. They're afraid of corporate bonds. And they're afraid of banks. They love the U.S. government.

3. You aren't going to earn much for cash. But there are huge differences between "nothing" and "little." You earn "nothing" when you leave your money in the money market fund your broker put you in. That miserable sink hole will pay you less than one half of one per cent interest a year, like maybe 0.48%. Treasuries can be even worse.

4. The yield curve is screwy. I always thought the further out you went, the more you got paid. Wrong. Stuff a year out presently pays more than stuff two years out. I don't know why. I guess someone is making guesses on where interest rates are going. Personally, I think they're going up -- but not for a year or two.

5. There's remarkably little consistency. You'd think that with the Internet, every bank would be offering the exact same rates on FDIC-insured accounts. But they're not. Chase is paying me 0.75% on a savings account. But the Park Avenue Bank is paying me 5.10% on a 12-month CD. And there are a bunch of banks, like Sovereign and Wells Fargo which have high "promotion" rates. As I called around yesterday, I heard a lot of talk from bankers that "we need to build up our capital. Hence we're paying high interest."

6. You can bargain with bankers -- even with as little as $100,000. Another ten basis points here and twenty basis points there can add up to some nice meals and maybe a weekend away.

One useful place is ETRADE -- if you can find your way through their totally awful site. Here's a good beginning -- their Quick Picks. It's not comprehensive, but it's what they offer. I always thought ETRADE was just for stocks. But you can buy everything, from bank CDs to treasuries to ridiculously high-yielding corporate bonds.

If you click on the 1yr CD figure of 2.70 in the above chart, you get a chart that looks like this. The yields are not brilliant, but it's neat to know you can get CDs at banks all over the U.S. by just going to one place, namely ETRADE.

Watch out for your credit card. If I am late with paying my Citibank Visa they will charge me a minimum of 16.99% a year. If I get a cash advance -- God forbid -- they'll now hit me for a minimum of 21.99% a year. If I buy something overseas - whether in U.S. dollars or a foreign currency -- they will charge me an extra 3%. This is the thanks Citibank gives me for getting all my free TARP money?

How to automate my Inviolate Stop Loss Rule. In the old days when we bought stocks, I insisted that you adhere to my 15% stop loss rule. Should the stock fall 15% from any point it reached, then sell it. Many people don't like this rule because they think the stock will promptly bounce 20% and they'll have lost the profits. These are the same people who also believe in Buy and Hold. I don't. I've done major research and proven that stop losses do work. They protect your gains. They limit your losses. And they especially limit your losses when markets are weak, like they've been in the last 15 months.

It's not easy to figure when your stop losses should kick in. Remember they're trailing. They don't start from where you bought the stock. They start from the last highest point. No online broker offers automated stop losses. But there are now two services that offer the beginnings of automating the process -- Alerts4All and SmartStops.net. I haven't spent a lot of time with either service, though I did meet with the principals of Alerts4All -- and they're very impressive.

Forbes wrote a very stupid article on these services called Monday Morning Quarterbacks. I'm not a big Forbes fan.

Cable Bill High? Phone Costs Up? Now, Let's Talk. Nice idea From the Wall Street Journal. (I promise, this works. I've tried it.):

Frustrated with his hefty and mounting monthly bill for TV, Internet and phone service, Alan Weinkrantz of San Antonio decided to call his provider, AT&T, shortly before Christmas to ask for a discount.

"Times are tough, and I don't think I can keep paying these rates," Mr. Weinkrantz says he told an AT&T representative. A communications-industry consultant who keeps a close eye on the space, Mr. Weinkrantz says he hoped for a reduction of about 10% to his $159 monthly bill.

To his surprise, AT&T reduced his bill to $94 a month, a drop of almost 50%, for a one-year period. "I was very surprised," Mr. Weinkrantz says. An AT&T spokesman declined to comment on the specific bill but said that "we work hard to give our customers the services they need at the best price."

Australian Open Tennis continue. The huge time difference between us and Australia makes this ideal for TiVo. M = Men, W = Women, D = Doubles. All times EST.

Jay Leno on the Inauguration.
+ John McCain said he was so moved by today's events, he suspended his campaign again.

+ Vice President Cheney pulled a muscle in his back. Did you see him in the wheelchair today? You would think being in a wheelchair would make Cheney more sympathetic, but it made him look kind of evil.

+ Every single TV network was covering the inauguration, except Fox. They're still doing the recount.

+ It was so cold in Washington, it felt like Hillary's inauguration.

+ It was so cold, Al Gore led a prayer for global warming.

+ By the end of the inauguration, everybody's face looked like Nancy Pelosi.

David Letterman's crisis.
He won't have W. to kick around any longer. As a farewell gesture, Letterman put together a video of many of Bush's flubs. It's very funny.

Conan O'Brien on the Inauguration
+ All the living ex-presidents attended the swearing-in ceremony. But did you see this? Bill Clinton got the biggest response from the crowd. Did you see that? Yeah. Yeah, apparently, thousands of women yelled, 'That's him, officer!

+ Very cold today in Washington. Yeah. In fact, with the wind chill, President Bush's approval rating reached minus 13.

+ Officials at the White House say that President Bush completed his last piece of official business in the Oval Office at 6:00 am this morning. Bush says it should take Obama weeks to find where he hid the dead fish.

+ Now, people who went to elementary school with Barack Obama say that they remember him as a chubby boy named Barry. And folks, even as we speak, those people's tax returns are being audited.

This morning 'm off to Key Biscayne for a weekend of warmth, tennis and being nice to my bride, Susan.


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.