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9:00 AM EST, Thursday, January 3, 2008: Oil hit $100, despite easing worldwide economies. Oil is now a currency, like the dollar. Unlike the dollar, however, it appreciates. If you were an oil country would you sell your oil today for declining dollars or leave some of it in the ground for "a rainy day"? Hence, my prediction on oil continuing to go up and up. And taking with it food, the cost of living and inflation. Not a good time for many American households. Hence yesterday's yuchy stockmarket opening to 2008 -- Dow down 220 points (1.7%).

What the heck is an index fund? I thought it was one that mimicked an index. Wrong. Apparently there are "index" funds that are actively-managed, Yesterday's piece on Dimensional Fund Advisors (D.F.A.) produced an avalanche of emails -- most saying that D.F.A.'s promotion was a lot better than its performance.

There are now more "index" funds than there were people in Times Square celebrating New Year (see below). Vanguard's Emerging Markets Stock closed 2007, up 38.9%, while its Precious Metals & Mining closed 2007, up 35.6%. As they say in Australia, that's better than a slap in the belly with a cold fish.

Two bargains abound: financials and housing stocks. Many believe that when things look the darkest, they are the brightest. My brain has problems with dark and light. I currently live by three mantras:

"Stay away from falling knives."

"When in doubt, stay out."

"Cash is king."

How to play commodities. My commodities fund was up 22.76% in 2007, less after fees. The fund allocates its money among commodities. The weighting is the fund's skill (a.k.a. bet). What's amazing are the variations on ROI by commodity. Check this out:

Let’s Just Say, It Was Crowded. Excerpts from a wonderful piece in yesterday's New York Times:

.How many people rang in the new year at Times Square on Monday night? The simple answer is: One heck of a lot. The complicated answer is: Perhaps only the Police Department knows for sure, and it won’t tell you.

“We have stopped providing official counts” of large public gatherings “because no one was ever satisfied with them,” said Paul J. Browne, the department’s deputy commissioner for public information. “Whatever the count was, it was usually never enough for whatever group was involved.” ...

Jeffrey A. Straus, the president of Countdown Entertainment, the company that organizes the ball drop in coordination with the Times Square Alliance, estimated that Monday night’s crowd totaled at least one million people. ...

Mr. Straus said that for many years the police shared its estimates with the organizers. The last time the police provided a number was Dec. 31, 2000, he said, when the estimate was also one million people. ...

A chart printed in The New York Times in 1993 showed that from 1986 to 1991, police estimates of Times Square attendance on New Year’s Eve ranged from about 300,000 to about 600,000.

The one major exception was Dec. 31, 1999, for the countdown to 2000. Rudolph W. Giuliani, who was mayor at the time, said that the crowd was “pushing two million.”

That prompted an analysis by The Times, which found reason for skepticism. ...

Paul Wertheimer, the president of Crowd Management Strategies, a Los Angeles-based consulting firm, said that many police agencies across the country became reluctant to reveal crowd-size estimates after the Million Man March in Washington in 1995, which was organized by the Nation of Islam. The National Park Service estimated that the march drew 400,000 people. A furor ensued when the organizers insisted the number was far larger. A year later, the park service said it would no longer make crowd estimates. ...

Mr. Straus, the event organizer, acknowledged that calculating the number of people packed into Times Square on New Year’s Eve can feel a little like guessing the number of jelly beans in a jar.

“It’s an art, not a science,” he said. “And at the end of the day, does it really matter? It’s a lot of people.”

Great theater, now on Broadway:

THE HOMECOMING is an edgy and compelling tale of lust, seduction and deception, telling the story of a dysfunctional family that welcomes the homecoming of its estranged brother and competes for the attention of his dangerously alluring wife. If you loved Ian McShane as Al Swearengen in Deadwood, you'll love him in this play. We went last night. It was the best theater we've seen in eons. If you're coming to New York, get yourself tickets. Good news: Your own family will look sane after you've seen this one.

The funeral stone.
Sam died. His will provided $30,000 for an elaborate funeral. As the last guests departed the affair, his wife, Sarah turned to her oldest and dearest friend. "Well, I'm sure Sam would be pleased," she said.

"I'm sure you're right," replied Jody, who lowered her voice and leaned in close. "How much did this really cost?"

"All of it," said Sarah . "Thirty thousand."

"No!" Jody exclaimed. "I mean, it was very nice, but $30,000?"

Sarah answered, "The funeral was $6,500. I donated $500 to the synagogue. The whisky, wine and snacks were another $500. The rest went for the Memorial Stone."

Jody computed quickly. "$22,500 for a Memorial Stone? My God, how big is it?"

"Two and a half carats."


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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