Coffee, ice cream, and wine

From a Yahoo! News story: "NEW YORK – Starbucks Corp. said Thursday it is wiping its name from one of its Seattle-area stores and adding alcohol to the menu. The Seattle-based gourmet coffee chain said it is changing the name of one of its existing stores in its hometown to a name that reflects the neighborhood location. The store will be called 15th Avenue Coffee and Tea. It will open next week and will serve coffee and tea as well as wine and beer." If it's not terribly expensive, I'll stop in regularly. I will let them know Canadian beer is my favorite. They should also hire waitresses like this wholesome young woman, no?

Church and State again

Well, now the saga between the pope and the newly re-instated bishop and the Jewish council in Israel has escalated to include the German government. Whatever happened to separation of Church and State? The pope has even asked the wayward bishop (in Argentina) to recant, which I'm sure he won't do. This will get dicey for sure, though the Vatican is very good at diplomacy. (See post of January 28 - Bishops and Rabbis)

Ken Fisher

Ken Fisher has written a book - it's titled The Ten Roads to Riches. Here they are:

1. Start a successful business—the richest road! 2. Become the CEO of an existing firm and juice it—a very mechanical function. 3. Hitch to a successful visionary’s wagon and ride along—it’s high value-added. 4. Turn celebrity into wealth—or wealth into celebrity and then more wealth! 5. Marry well—really, really well. 6. Steal it, legally—no guns necessary! 7. Capitalize on other people’s money (OPM)—where most of the mega-rich are. 8. Invent an endless future revenue stream—even if you’re not an inventor! 9. Trump the land barons by monetizing unrealized real estate wealth! 10. Go down the Road More Travelled—save hard, invest well—forever!

Good luck.

Microsoft shares

As I've been saying for many weeks now, buying is fun.... This is an abbreviated article from an everyday investor newsletter. Enjoy....

By Porter Stansberry: As longtime readers of my advisory can tell you, I haven't been bullish on the stock market in years. In fact, for the last couple years, I've been warning that stocks, in general, were vastly overpriced. Investors were too complacent. They had too little fear. It turns out that was very close to a huge top in asset prices. Stocks, bonds, commodities, foreign currencies all peaked over the next several months. It was easy to see this peak coming with three key points: the number of stocks trading at reasonable prices, the amount of insider buying in the stock market, and the spread between emerging-market bonds and U.S. Treasury bonds. Reviewing these key data points today shows we're building an important bottom in stock prices. And it's why I'm telling everyone I know that this is one of the great buying opportunities of the last 30 years. Looking through the list of cheap stocks, several great businesses jump out: ExxonMobil, Wal-Mart, Microsoft, Johnson & Johnson, McDonald's, etc. Any reasonable evaluation of the market would find plenty of safe and cheap stocks... thousands more than you would have found a year ago at the market's peak. What about insiders? Brian Heyliger covers insider buying and selling for my firm Stansberry Research. He follows corporate insiders on a full-time basis. Throughout this bear market, the ratio of buys to sells has been steadily increasing. In June, the ratio was in the high thirties – anything over 35% is bullish. But since then, the ratio doubled, hitting 63% in October... a level I've never seen before. What about that lack of fear? My favorite measure of fear is the spread between emerging-market debt and U.S. Treasury debt – the so-called "risk spread." Institutional investors consider U.S. Treasuries a "risk-free" asset. Emerging markets have much lower credit ratings, higher inflation, and a much greater risk of defaulting on their debts. Investors normally demand much higher interest rates from emerging-market economies. But... in big bull markets, near the very top, investors become so complacent, they begin to assume holding emerging-market debt is tantamount to holding U.S. Treasuries. Looking back historically, you can see this spread is a great indicator of global tops and bottoms in stock prices. In about a year, we've moved from a period of complete complacency to absolute terror. Paradoxically – and this is hard for most people to understand – you want to be a buyer of equities when everyone else is panicking. None of these factors mean that stocks have to go up or that they will. No one can predict the future – but you don't have to be perfectly right to do very well in the market. Yes, our economy is struggling right now with huge problems. Enormous risks threaten America's leadership in the world, the dollar's status as the world's reserve currency, our energy supplies, the rule of law in this country, etc. But all of these risks – all of them – existed a year ago, when stocks were almost 100% higher, on average. And all of these risks will exist 10 years from now, when stocks have gone up three or four times from their averages now. To do well as an investor, you have to buy when stocks are cheap. And stocks only get cheap when most investors are afraid. So you have two choices: You can r refuse to invest in stocks, or you can learn to buy stocks heavily when their prices offer you a reward for taking smart risks. That moment is right now. END OF ARTICLE

You might recognize the lady at the left - she didn't need to buy stocks, she used to own Monaco.

Don't panic

A few ideas that parallel mine - from people who know a lot more than I do. Enjoy!!

By Dr. Steve Sjuggerud: Some call legendary money manager Jeremy Grantham a "superbear." Back in 1998, when stocks were soaring, Grantham made a prediction: Stocks will lose 1.1% a year over the next 10 years. Investors, expecting 20%+ returns a year, took their money out of his fund. He wasn't promising enough compared to his peers. In hindsight, Grantham was exactly right. (It took 10 years and three days to equal his prediction.) Whenever Grantham writes something or grants an interview, I pay attention. He's one of Wall Street's few independent thinkers. I think guys like Grantham are always worth reading. I may not always agree. But I value their opinions because I believe they're not sugarcoating anything. Grantham has been quite vocal lately, in the Wall Street Journal, Barron's, The Economist, and most tellingly in his quarterly letter to shareholders. In his letter, Grantham explains he's optimistic about stocks: "For an unparalleled 20 years, global equities, especially U.S. equities, have been overpriced. Now, finally, they are cheap and likely to get cheaper. Likely, I believe, to set up a once-in-a-lifetime investing opportunity (or maybe twice in a long career)." Ever humble, Grantham says he suffers from the Value Investor's Curse: "I said as far back as 1999, while suffering from selling too soon, that my next big mistake would be buying too soon." Grantham thinks the economy still has a ways to fall. In a Wall Street Journal interview, he said, "We are in the teeth of the biggest financial crisis since the Depression and the early days of the broadest economic slowdown since 1982."
But Grantham is quite OK with being a bit early buying stocks. He's a long-term investor. Every quarter, Grantham publishes his seven-year forecast for the investment returns on all major asset classes. In this quarter's forecast, Grantham expects high-quality U.S. stocks and stocks in emerging markets to return more than 10% a year over the next seven years, under a good manager. While everyone was bullish a decade ago, independent thinker Jeremy Grantham was practically the lone superbear – to the detriment of his firm. But he was right.
Now, "the crowd" is scared. And Grantham is nearly alone (except for Warren Buffett) in buying stocks. I'll put my money on Grantham and Buffett over the crowd any day. At current prices, stocks could earn you double-digit annual returns over the next seven years if Grantham is right. Here's hoping he is..." END OF STORY

I don't think the market can go any lower, considering it's been hovering around 8500 for two months or so. Just make sure you invest conservatively then take the rest of the day off - go to the beach - but take your cell phone with you.

GEVALIA

I just got a sample package of Gevalia Coffee in the mail - this is the third one in about two years. Along with the sample was included an offer of a free coffeemaker if I will subscribe to their service. I was turned down for this great offer twice before because I had already been a member many years ago - I dropped out after about eight months. This offer is evidently for first timers only. As far as I can tell, the offer does not say that but, if it does, it's in very, very fine print. Folgers is good coffee too. So is Hills Brothers. So is Starbucks. I won't send the Gevalia offer in because I know they'll catch it and I'll be left out again. With all the sophisticated databases around you would think my name could be found on their strike out list before they send the offer and not after. Oh well, I'll drink the sample anyway.