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9:00 AM EST, Monday, June 1, 2009. Increasingly there is talk about impending hyperinflation. It's not "a bet the farm" certainty. But it is worth protecting against. We've talked about gold, silver, oil and some commodities as hedges. Think also scarce beautiful assets. I bought a little land over the weekend. It's beautiful land. It can't be made cheaper in China or India.

Nicholas Taleb of Black Swan fame has made big money takes long cheap bets on improbable events, with long odds. When they happen, he's in the money big-time. This piece from Bloomberg is interesting:

MAY 31, 2009, 5:55 P.M. ETNew Universa 'Black Swan' Fund to Make Bets on Hyperinflation

A hedge fund firm that reaped huge rewards betting against the market last year is about to open a fund premised on another wager: that the massive stimulus efforts of global governments will lead to hyperinflation.

The firm, Universa Investments L.P., is known for its ties to gloomy investor Nassim Nicholas Taleb, author of the 2007 bestseller "The Black Swan," which describes the impact of extreme events on the world and financial markets.

Funds run by Universa, which is managed and owned by Mr. Taleb's long-time collaborator Mark Spitznagel, last year gained more than 100% thanks to its bearish bets. Universa now runs about $6 billion, up from the $300 million it began with in January 2007. Earlier this year, Mr. Spitznagel closed several funds to new investors.

Unlike last year's sudden market implosion, inflation isn't an unimaginable event that few currently anticipate. In fact, many fear inflation right now amid government efforts to goose the economy. Universa's bet, however, is that inflation will reach levels few expect.

By opening the inflation fund, Universa is trying to capitalize on a wave of investor demand for its products, which when they're right can protect investors from extreme market moves.

The new strategy, designed by Mr. Spitznagel, aims to post big gains if inflation and interest rates take off as they did in the 1970s. Universa will invest in options tied to commodities such as corn, crude oil and copper, as well as options on stocks such as oil drillers and gold miners.

"We think these things are going to see massive volatility," Mr. Taleb said in an interview.

The fund will also bet against Treasury bonds, which tend to weaken in inflationary environments. Last week, Treasury yields shot to their highest level since November as prices fell on inflation concerns. Oil topped $66 a barrel. Gold is creeping nearing $1,000 an ounce.

The minimum investment in the firm's other funds has been $25 million, though it rarely accepted investments less than $100 million, a person familiar with the fund says. Similar standards will likely apply to the new fund, called the Black Swan Protection Protocol-Inflation, according to the person.

Mr. Taleb doesn't have an ownership interest in the Santa Monica, Calif., firm, but he has significant investments in it and helps shape its strategies.

The term "black swan," which has become a market catchphrase in the last few years, alludes to the once-widespread belief in the West that all swans are white. The notion was proven false when European explorers discovered black swans in Australia. A black-swan event, according to Mr. Taleb, is something that is extreme and highly unexpected.

For the new inflation fund, there are risks.

As investors, Messrs. Spitznagel and Taleb have a mixed track record. The two managers wound down their Empirica Capital fund in 2004 after several years of lackluster returns.

Also, some investors are worried not about inflation but about deflation and its pernicious effects were the economy to remain stalled.

David Rosenberg, chief economist at Gluskin Sheff, a Toronto wealth-management firm, believes inflation won't take hold until consumer spending rebounds, which he thinks could take years. Says Mr. Rosenberg: "Not until the household sector expands its balance sheets are we likely to see the re-emergence of inflation on a sustained basis."

Mr. Taleb said any deflation would be matched by an aggressive move by governments to stimulate their economies, leading inevitably to an uncontrollable surge in prices.

Short Moody's? David Einhorm is shorting Moody's, allegedly. I think it's a great idea. I ran Bloomberg's story on Friday. I'm still mulling the dynamics of this one. I've been researching Moodys. There's no much. There's a Standard & Poor's piece, which rates Moody's a "hold," which in my book means SELL. Read it here.

The weekend's "Business in America" speical report is wonderfully positive. Please read it.

Some excerpts:

+ The pain will eventually end. American business will regain its shine. Many firms will die, but the survivors will emerge leaner and stronger than before. The financial sector’s share of the economy will shrink, and stay shrunk for years to come. The importance of non-financial firms will accordingly rise, along with their ability to attract the best talent. America will remain the best place on earth to do business, so long as Barack Obama and the Democrats in Congress resist the temptation to meddle too much, and so long as organised labour does not overplay its hand.

The crisis will prove hugely disruptive, however. Bad management techniques will be exposed. Necessity will force the swift adoption of more efficient ones. At the same time, technological innovation will barely pause for breath, and two big political changes loom.

Mr Obama’s plan to curb carbon dioxide emissions, though necessary, will be far from cost-free, whatever his sunny speeches on the subject might suggest. The shift to a low-carbon economy will help some firms, hurt others and require every organisation that uses much energy to rethink how it operates. It is harder to predict how Mr Obama’s proposed reforms to the ailing health-care system will pan out. If he succeeds in curbing costs—a big if—it would be a colossal boon for America. Some businesses will benefit but the vast bulk of the savings will be captured by workers, not their employers.

In the next couple of years the businesses that thrive will be those that are miserly with costs, wary of debt, cautious with cashflow and obsessively attentive to what customers want. They will include plenty of names no one has yet heard of.

+ The competition among the fast-food chains is exuberantly vicious. Burger King produces edgy advertisements in the hope that people will pass them around online. Earlier this year it offered users of Facebook, a social-networking website, a free Whopper burger if they would dump ten of their online friends. Facebook soon shut down the promotion, but not before Burger King was able to claim that the public’s love of its flame-grilled product was “stronger than 233,906 friendships”.

+ Despite the gloom, there are several reasons for believing that American business retains its underlying dynamism. First, one can listen to what businesspeople say. They may be feeling wretched this year, but few doubt that things will get better. Bill Green, the boss of Accenture, a consultancy, predicts that America will come out of the recession “much earlier” than other parts of the world. He talks constantly to other chief executives around the world, he says, and their consensus is that America will begin to recover later this year or in early 2010. They give three reasons. The recession started earlier in America than elsewhere. The government’s stimulus package is likely to work. And “they believe that we have a natural competitive streak—that people are going to want to get back in the game.”

Second, one can look at America’s admirable record of dealing with turmoil. A study by the Ewing Marion Kauffman Foundation, a think-tank that studies entrepreneurialism, found that America’s high rate of economic “churning” boosts productivity and hence material well-being. Between 1977 and 2005 some 15% of all American jobs were destroyed each year as firms closed or cut back. Thanks to the expansion of successful firms and the entry of new ones, however, many more jobs were created than destroyed. Start-ups (ie, firms less than five years old) provided a third of the new jobs during this period.

And the Economist's conclusion, titled "The spirit of enterprise,"

+ When the crisis ends, America will still be the best place in the world to do business, says Niall Ferguson of Harvard University. Unlike in parts of the developing world, its political stability is not in doubt. American innovation continues apace, just as it did during the Depression of the 1930s (which saw the invention of nylon, canned beer, the photocopier and the drive-in cinema) and the stagflation of the 1970s (Post-it notes, bar codes, the microprocessor). Not only is America’s market the largest, but that market is homogeneous: a firm that works in one state can probably work in any other. “I laugh when people talk about diversity here,” says Mr Ferguson. And America has economic policy levers commensurate with its size: the European Union has no central treasury to compare with America’s, and America’s central bank has acted more aggressively to tackle the crisis because it can.

Finally, there is that gung-ho spirit of enterprise. “I think people will be surprised how quickly [business] will pick up when it does,” says Mr Sorenson of Marriott hotels. One can discount his words, of course. Business people are by nature optimistic, especially in America. But their optimism can be self-fulfilling.

You can read the entire 18-page report on the Economist's web site.

Seriously dumb idea: The New York Times is raising its prices. When you're losing customers (readers), isn't the right move to drop prices? What do I know?

A way to check for viruses. Someone emailed me an attachment. I didn't recognize the sender. But may the attachment had a great joke? Before I opened it, I emailed the sender, "Is it OK to open the attachment?" A minute later, I got my answer, "Delivery to the recipient failed." It was a virus. yuch.

French Tennis Open 2009 TV Schedule -- US broadcast times. Nadal is out. Federer is still in. Fortunately for them all, they've never come up against me. Well, maybe.

Monday, June 1 - RD. of 16
5:00 am - 12:00 PM: French Open Round of 16 - TENNIS CHANNEL (HD) - LIVE
12:00 PM - 6:30 PM: French Open Round of 16 - ESPN2 + ESPN2 HD - LIVE and tape
6:30 PM - 5:00 AM: French Open “Tonight” show - TENNIS CHANNEL (HD) - tape

Tuesday, June 2 - QUARTERS
8:00 am - 12:00 PM: French Open Quarterfinals - TENNIS CHANNEL (HD) - LIVE
12:00 PM - 6:30 PM: French Open Quarterfinals - ESPN2 + ESPN2 HD - LIVE and tape
6:30 PM - 5:00 AM: French Open “Tonight” show - TENNIS CHANNEL (HD) - tape

Wednesday, June 3 - QUARTERS
8:00 am - 12:00 PM: French Open Quarterfinals - TENNIS CHANNEL (HD) - LIVE
12:00 PM - 6:30 PM: French Open Men’s Quarterfinals - ESPN2 + ESPN2 HD - LIVE and tape
6:30 PM - 5:00 AM: French Open “Tonight” show - TENNIS CHANNEL (HD) - tape

Thursday, June 4 - SEMIS
5:00 am - 8:00 AM: French Open Men’s Doubles Semifinals - TENNIS CHANNEL (HD) - LIVE
8:00 am - 1:00 PM: French Open Women’s Semifinals - ESPN2 + ESPN2 HD - LIVE
1:00 PM - 6:30 PM: French Open Women’s Semifinals - TENNIS CHANNEL (HD) - tape
6:30 PM - 5:00 AM: French Open “Tonight” show - TENNIS CHANNEL (HD) - tape

Friday, June 5: - SEMIS
5:00 am - 10:00 AM: French Open Women’s Semifinals - TENNIS CHANNEL (HD) - tape
10:00 am - 1:00 PM: French Open Men’s Semifinals - NBC - LIVE
4:00 PM - 11:00 PM: French Open Men’s Semifinals - TENNIS CHANNEL (HD) - tape
11:00 PM - 6:00 AM: French Open Men’s Semifinals - TENNIS CHANNEL (HD) - tape

Saturday, June 6: - FINAL
9:00 am - 12:00 PM: Women’s FINAL - NBC - LIVE

Sunday, June 7: FINAL
9:00 am - 2:00 PM: Men’s FINAL - NBC - LIVE

Brilliant advertising (if it's real)

Logical deduction.
Sherlock Holmes and Dr Watson go on a camping trip. After a good dinner and a bottle of wine, they retire for the night, and go to sleep.

Some hours later, Holmes wakes up and nudges his faithful friend. “Watson, look up at the sky and tell me what you see.”

“I see millions and millions of stars, Holmes” replies Watson.

“And what do you deduce from that?”

Watson ponders for a minute. “Well, I can see that God is all powerful, and that we are a small and insignificant part of the universe.
But what does it tell you, Holmes?”

Holmes is silent for a moment.

“Watson, you idiot!” he says. “Someone has stolen our tent!”

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.