Previous Column
8:30 AM Tuesday, January 24, 2006: Emerging (also called developing) economies now make more than half the global total, and are growing fast according to the latest Economist.



This makes me less concerned about my overseas Vanguard funds -- International Stock Index Fund (VGTSX), Pacific Stock Index Fund Admiral Shares (VPADX) and Emerging Markets Stock Index (VEIEX) -- which are still underwater after last week's Asian meltdown. Several readers have written, "Don't worry. These are the long-term." Thanks for the kind words.

Another dumb merger: If Disney buys Pixar, they'll fight with Steve Jobs. He'll say "forget it," walk away and start something else. Meantime Disney will be stuck with a $7 billion white elephant -- that's what it's paying for Pixar. How can I be so sure of what will happen? Simple. Steve is an entrepreneur, one of the very best. Entrepreneurs do things by intuition. Big companies do things by market research, by committee, by structure, etc.

Steve put $60 million into Pixar. With the takeover that has turned into $3.5 billion. There's no way he cares about making that $3.5 billion $3.6 billion, when he can take $100 million, start something new and turn it into another $3.5 billion. Disney management is nuts. Stay away from its stock.

More on Qualified Personal Residence Trusts: Estate planning gives gruesome a whole new meaning. I look at estate planning every few years. I remember years ago being visited by a bunch of "estate planners" who wanted only to sell me expensive insurance that paid the estate taxes when I croaked. They wanted the high commission on the insurance. I figured quickly their insurance was a totally lousy investment. Better to build my own net worth and have the additional net worth pay for the taxes on the previous net worth. Comments from two readers on yesterday's piece on Qualified Personal Residence Trusts (QRPTs).:

+ Did 15 year QPRTs years ago with the kids...only 8 more years to survive ;-)
One suggestion if you proceed...(know you also have a son and daughter)
We set things up so that should our son or daughter be deceased the other
child becomes the trustee. We love our daughter/son in law but there
is a level of comfort in having our children be our landlords :-D

+ My father spent his whole life trying to legally avoid taxes. Among other things, he and my mother set up a living trust to help limit estate taxes. Ironically he died December 23rd 2003, eight days before the exemption went from 1 to 1.5 million. Since then we have paid the lawyers $100,000 to handle the intricacies of the trust. When my mother dies it'll probably be another $100,000. My siblings, who always got along fine previously, have now descended into the abyss of not speaking to each other because of arguments over how the real estate will be split up. The lawyers love this stuff...constantly coming up with complex plans to avoid taxes while padding their own wallets. We finally just said NO MORE and finalized a plan. Now it all hinges on whether my 93 year old mother lives until 2011 (when the estate exemption drops), in which case it'll cost us a lot of money. I can tell you that it's no fun to think thoughts like, "Gee I hope mom dies on or before 12/31/10." But that's what happens when your focus is all about planning the best death outcome. Anyway, just wanted to mention that it's not all a bed of roses.

A $220 Million Payday: From The American Lawyer

Lloyd Constantine represented Wal-Mart, Sears, Limited Brands and other merchants in an antitrust suit against Visa/Mastercard. The parties settled, and Constantine and his co-counsel netted attorney fees of $220 million -- much less than the $650 million requested. Constantine took the trial court's denial of his fee request personally, because he sees his request as reasonable under the facts and the law. But he's also aware that, in this instance, any complaining may appear just a tad unseemly.

Please buy this $10 gadget: It's called Drive Alert. It makes a noise when you you start to nod off. It may save your life. I wrote about a few days ago. Click here.

Mark Lipton , a reader, emailed me:

just bought one of these for my wife. Did I ever tell you about 3 months ago, she feel asleep in the middle of the day driving home from the Berkshires? She was in the car with my daughter. Here is a picture of the car. The car was totaled, every airbag went off. They hit every tree on the Taconic before stopping. THEN, when they stopped, my wife Sabrina turned to my daughter Miranda and said “are you OK”? Miranda (7 at the time) said “yes, can I take off my seatbelt now”? and they walked out of the car. Sure there were some bruises....but for the most part......nothing but good luck. I keep the paper ID bracelets that the hospital gave them on my desk as a reminder of how lucky we all were that day.

The poor Poles:
I wrote, "The whole thing reminds me of the Polish comedian whose success was bad timing."
A reader replied, "More likely the one who won the Polish Lottery....A Dollar a Year for a Million Years!"

Time to cut the reading: An experiment? Stop reading the New York Times and the Wall Street Journal. Read the Economist. Scan Investors' Business Daily. The Economist does a great job summarizing the week's news in small bite sizes. IBD has some interesting stock ideas. Moreover I'm sick of piling old newspapers and schlepping them to the trash.

Another old person joke: (Why do I like these?)
A couple in their nineties are both having problems remembering things. They decide to go to the doctor for a checkup.
The doctor tells them that they're physically okay, but they might want to start writing things down to help them remember. Later that night, while watching TV, the old man gets up from his chair.
His wife asks, "Where are you going?"
"To the kitchen" he replies.
"Will you get me a bowl of ice cream?"
"Sure."
"Don't you think you should write it down so you can remember it?" she asks.
"No, I can remember it."
"Well, I'd like some strawberries on top, too. You'd better write it down because you know you'll forget it."
He says, "I can remember that! You want a bowl of ice cream with strawberries."
"I'd also like whipped cream. I'm certain you'll forget that, so you'd better write it down!" she retorts.
Irritated, he says, "I don't need to write it down, I can remember it! Leave me alone! Ice cream with strawberries and whipped cream - I got it, for goodness sake!" Then he grumbles into the kitchen.
After 20 minutes the old man returns from the kitchen and hands his wife a plate of bacon and eggs.
She stares at the plate for a moment and says - "Where's my toast?"

Harry Newton

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.
Go back.