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8:30 AM EST, Thursday, June 7: The theory of unintended consequences says stuff happens you can't predict. Read today's paper and see how many things happened you couldn't predict. Unintended consequences is the reason for our key investment philosophy -- broad diversification. Among my fattest returns this year (to end May): three Vanguard index funds (all over 12%): Vanguard US - Mid-Cap Index Fund; Vanguard US- Global Equity Fund; and Vanguard U.S.- Emerging Markets Stock Index. Two of my hedge funds did better. But my commodities fund did poorly, under 7%.

Key skills for all of us:

1. What are today's five most important things to accomplish? Write them down in order of difficulty. Do the most difficult first. That will set you on a high for the day and make the rest seem trivial. I learned that from the founder of MCI, William G. McGowan.

2. Practice discipline in reading. Some things require studying. Some require skimming. You can "read" that mountain of papers. Search for key concepts. Tables of contents are enormously useful. Only 1% of the words have a new idea. Speed reading means reading headlines, introductions and conclusions. You don't need to read from front to back.

3. Practice decision-making. Write the pros and the cons down. Don't do anything you have doubts about. That especially applies to investing.

4. Learn basic technical skills -- touch-typing, computers and how office and home gadgets work. You don't need a plumber if the sink is blocked, or your computer locks up. I have a folder on my computer called "techninfo." I dump everything I learn and all the electronic instruction kits. I can easily find solutions.

5. Learn something that gives you enormous short-term pleasure. Tennis works for me.

6. Send your kid to the one month mini-MBA program that teaches serious financial skills. My son Michael did it and loved it.

Why building costs have skyrocketed: Steve Herbert emails:

China's huge growing dependency on U.S. resources (ie: materials to manufacture steel, glass) is one of the causes of escalating costs in that area. Those products require extreme heat for the manufacturing process - wouldn't that mean the chain to produce the energy to make the heat basically comes down to oil/electricity? We are in the ngineering/contracting business in Hawaii, and by the time those costs are passed down to us, it's prohibitively expensive to build
anything. We pay dearly to live in paradise - but I wouldn't have it any other way!

Are you earning 5% on your cash? Sovereign Bank is paying me 5.19% APY on CDs that last a week, and which I renew each week. Two things amaze me:

1. How much cash people have sitting around in brokerage accounts, bank accounts, etc. that earn basically nothing.

2. How few banks, brokers, etc. offer high-yield accounts. According to SmartMoney.com, "Of the 10 biggest U.S. banks, only three — Citibank, HSBC and Washington Mutual — offer high-yield savings accounts. Customers must apply for and maintain these accounts online, which cuts costs on everything from paper to personnel, thus allowing the bank to offer an extremely competitive rate of 5% or more. The rest, including Bank of America, Chase, Wachovia and Wells Fargo, offer a paltry APY of 0.10% to 0.15%."

Last night's play:


Fost-Nixon is a play by the British screenwriter and dramatist Peter Morgan. It covers a the series of televised interviews that Richard Nixon granted David Frost in 1977. The interviews ended with a tacit admission of his guilt in the Watergate scandal. The acting is great. It's playing to full houses. But I found the play not engrossing, somewhat tedious and entirely predictable. There are far better things to see on Broadway, including

French Open Tennis TV Schedule: The tennis has become truly engrossing. That's the key reason I've not been finding new investment ideas. There's a six hour time difference to EST and nine hours to PST. Tennis is basically on three channels -- ESPN2, NBC and the Tennis Channel (455 on Time Warner).