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8:30 AM EST Thursday, January 24, 2008: European markets are up 4-5% today. Yesterday they were down that much. The theory is that one rogue trader lost five billion Euros (about $7.25 billion) trying to guess the market short-term, i.e. from one day to the next. His position caused the markets to fall one day and rise the next, or something like that.

His actions give new meaning to the oldie: What's the guaranteed way to make a small fortune? Obviously there's only one way: start with a large fortune.

When in doubt, stay out. Playing today's volatile markets is too hard -- no matter how tempting. First item:

Eons ago, I put in an order to buy 5,000 shares of EWA at $25. The order was "good till cancel." Never in my wildest dreams did I figure that EWA would reach $25. It dropped, opening one day much lower than my $25. The rule was if it goes below $25, the next tick is mine. The next tick happened to be $23.60, which I got filled at. Which then bounced. What a genius.

Not so genius was buying 250 Apple right before its earnings announcement, which the market clearly didn't like.

I sold them around $134. It dropped further, then bounced. This is a fool's game even looking at these markets. Good rule: don't buy or sell during earning season.

Will the mess ever end? The major reason NOT to be in this market is the continuing uncertainty. From today's New York Times:

Next on the Worry List: Shaky Insurers of Bonds

Even as stocks ended five days of losses with a surprising recovery on Wednesday, officials began moving to defuse another potential time bomb in the markets: the weakened condition of two large insurance companies that have guaranteed buyers against losses on more than $1 trillion of bonds.

Regulators fear a possible chain of events in which the troubled bond insurers, MBIA and Ambac, might be unable to keep their promise to pay investors if borrowers default on their debt.

That could leave the buyers of the bonds — including many banks and pension funds — on the hook for untold billions of dollars in losses, shaking confidence in the financial system. ...

For the full article, click here.

"For $25, anybody can sue anyone in California.": A lawyer said this to me yesterday. Most people sell by stressing the benefits. "The gas mileage is low." "You'll save money." "You'll be more efficient," etc. Lawyers are the only people who don't stress benefits. They sell fear. "If you don't do what I tell you to do (at $350+ an hour) you'll go directly to jail, you won't pass Go and you won't collect $200.

The whole "fear" sale drives me wild, since it slows down what you're trying to do and sharply increases the cost. Often things get slowed down so much, that everyone's enthusiasm is drained and nothing gets done. Except the lawyers get paid.

My solution is to ask for a quick briefing on the law relating to what we're proposing to do. Then do it. Don't pass every single word by the lawyers.... Now you're thinking: Harry's past week has been in lawyer quagmire. You're right.

Funny thing, I've been writing about business since 1960. I've been nasty to all sorts of honest and dishonest people. I've put people in jail. I've published millions of pages of magazines and books. I've never been sued. Never. Ever. Had I passed all those words by the lawyers, not one of them would have seen the light of day. (Please do not email me saying that would have been "a good thing." Ha. Ha.)

Dumb Outlook: Sometimes emails "stick" in my outbox. The only solution I've found is to close Outlook, then open it. With luck, it will then send the stuck messages. Sometimes it takes several opening and closings. I don't know what the problem is.

New disease: Electile Dysfunction:
The inability to become aroused over any of the choices for president put forth by either party in the 2008 election year.

How to find the wife:
An older man approached an attractive younger woman at a shopping mall.

"Excuse me; I can't seem to find my wife. Can you talk to me for a couple of minutes?"

The woman, feeling a bit of compassion for the old fellow, said, "Of course, sir. Do you know where your wife might be?"

"I have no idea, but every time I talk to a woman as attractive as you are, she seems to appear out of nowhere."

Blatant racial discrimination
A class of five-year old school children return to the classroom after playing in the playground during their break time.

The teacher says to the first child "Hello Becky, what have you been doing this playtime?"

Becky replies "I have been playing in the sand box".

"Very good," says the teacher. "If you can spell 'sand' on the blackboard, I will give you a biscuit."

Becky duly goes and writes 's a n d' on the blackboard. "Very good," says the teacher and gives Becky a biscuit.

The teacher then asks, "Freddie, what have you been doing in your playtime?" Freddie replies "Playing with Becky in the sand box."

"Very good," says the teacher. "If you can spell 'box' on the blackboard, I will also give you a biscuit."

Freddie duly goes and writes 'b o x' on the blackboard. "Very good," says the teacher and gives Freddie a biscuit.

Teacher then says, "Hello Mohammed, have you been playing in the sand box with Becky and Freddie?"

"No," replies Mohammed, "I wanted to. Every time I went near them they threw sand at me and called me nasty names."

"Oh dear," says the teacher. "That sounds like blatant racial discrimination to me - I'll tell you what, if you can spell 'blatant racial discrimination' I will give you a biscuit."

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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