Saturday, March 3, 2012

Review of Barron's, Dated 5 March

At 7-11 today, I looked down at the stack of Barron's placed with the other newspapers and noted that this week's issue has as its "Cover Story" the latest "PENTA" special section.  I believe that PENTA is done every three months.

"PENTA: Trusted Advice For Families With Assets Of $5 Million Or More"

I kid you not!  Now I don't know about you, but WE ain't there!

Actually, I was pasted once there at ZH good & hard by reviewing a PENTA issue once.  How could I glorify the Really, Really Rich (RRR)!  How could I report in what the RRR are doing, what kind of advice they get, etc!  How dare me!  "Lifestyles of the Rich and Famous"  I posted back not to shoot the messenger...

PENTA's cover offers up a picture of a haughty-looking couple at work in the yard planting trees with leaves of money...  The cover story is "Where To Put Your Money".  The first story is "Best Places for Second Homes", and looking at the 20 towns reviewed, I think that PENTA really is aiming more at families with over, say, $20 million...  The Hamptons, New York.  Kauai, Hawaii.  Palm Beach.  Martha's Vineyard.  ALL the way to Scottsdale, Arizona.

Also in PENTA was a story about Hyundai's latest luxury car!  Yo, a Korean bearing buyer BETTER read that one!  "Luxury, Korean-Style -- Hyundai runs with the big dogs...and almost stays up with them"  A $60,000 Hyundai Equus Ultimate.  Author Richard Rescigno says it's a pretty good car, but they will not be putting Lexus and Mercedes out of business.  Hey, it's got a fridge in the back console between the seats.

"Drop-Dead Watches" is the second time I have seen PENTA write about high priced watches.

Blog readers might want to check out the "Elite Credit-Card Fight" (JP Morgan Palladium Visa vs. American Express Centurion).  Hey, you get worldwide access to airport lounges...

I tried without success to read the cover story article by Karen Hube ("Seeding the Next Fortunes", with the haughty couple), but I was lucky to find one line in all the text about what guy says to put all that money.

"Mysterious gold is, in contrast, mapping its own course."

Well we know that Ms. Hube got that one right!  Probably the meatiest part of the article was her large table of what 40 of the largest wealth management firms suggest re allocating one's assets.  Oh, very roughly the average would be 40% stocks (mostly in the USA),  fixed income / high yield about 35%, alternative investments (real estate, commodities, hedge funds and private equity  -- note that gold did NOT get its in own column...) about 20% and cash about 5%.

In case you simply MUST have to avoid taking those pesky flights with, you know, the lower classes there is an article about more ways to fly private, I skipped it.

Suzzanne McGee writes that Citi has tossed out wealth management for almost all of its customers when they sold Smith Barney (old stock broker company) to Morgan Stanley.  Now, Citi has a super-duper wealth management services unit, but only if you have a minimum of $25 million...  GEEZ, these numbers keep going up!

In case there are readers out there worried about what their trust fund managers are doing, well, now there are "Trust Protectors", a kind of watchdog for the wishes of the founder of the trusts and their beneficiaries.  Hey, maybe some of you might need to know this kind of stuff!

The final article in PENTA is their suggestions as to what to sell and when to avoid the Capital Gains Tax hike coming on January 1, 2013.  This is actually useful information.  If you have assets that have had a big run-up in price, you can lock in your tax rate at 15% before it goes to 23.8% next year...  Does that seem to be a formula for a market meltdown as sellers dump their stocks now to pay less tax than in the future, hmm...

LOTS of pretty ads for Cartier & Piaget watches, wealth management companies, etc.


OK, whew, done with reviewing what the rich guys get to think about, and we proles can get down to business plowing through the rest of Barron's!

Alan Abelson ("March Madness") does not think much good of Greece's apparent default triggering CDS payments.  It's not a credit event they declared.  Sort of like if the insurance companies had declared that Hurricane Andrew was not a natural disaster, and so they would not pay up on their insurance claims.

Nor does he think much about Ben Bernanke (who DOES think well of B.B. today?).

Alan's "old friend" Doug Kass (Seabreeze Partners) thinks that American Express (ticker: AXP) is a short...


Michael Santoli ("Streetwise") writes that spun-off companies are often great speculations after they get sold by share-holders not interested in them.  I have seen this theme mentioned before (elsewhere).  And yet it may be true, in that the cast-offs are often poorly understood by the larger investment community.  It's an idea worth looking into, equity fans!


"He Said:"

"I'll be damned if we don't have record profits for the next year or two."

JPMorgan Chase CEO Jamie Dimond

THAT is a very telling comment on so many levels (just by starting with MF Global's customers money...), the arrogance of that guy...  I'll be damned if THAT's not incredible!

On the same page is a short column on Lady Gaga and Madonna both coming out with new perfumes soon.  I can't make this stuff up...


"Follow-Up" (their sort-of self-criticism much favored by Chairman Mao) is titled "Buffet Mystique Hasn't Boosted Berkshire", 'nuff said...


Miriam Gottfried writes that Tiffany (TIF) should be a good investment in her piece "A Gem of an Investment".

On the next page is Michael Santoli writing about Verisk Analytics (VRSK) who has a near monopoly (something I really would love if I had one, hey, we're sort-of working on it in Peru) on insurance data and analytics.  VRSK is worth almost $8 billion, and I had never even heard of them, and I try to pay attention to this stuff!  Math and statistics!  But, Warren Buffett (WHEN is that guy just going to go away and not pester us anymore with his folksy wisdom, grrr....) is a major shareholder.  This actually seems like it might be a GOOD speculation though.


Leslie P. Norton writes about getting income from REITs (Real Estate Investment Trusts).  She has three experts discussing this subject.  A weighted average of all the different kinds of REITs shoes a current average of a 3.2% yield, with some capital appreciation possibilities thrown in.


Jim McTague ("D. C. Current") writes about upcoming Super Tuesday and what that will mean for the GOP contenders.  Famed political observer Larry Sabato (U of VA) thinks that Super Tuesday will be a draw (except that Mitt will win VA), and so perhaps none of those behind Mitt drop out.  A big factor on Tuesday may be if former Gingrich supporters go to Santorum.  If they do (and Santorum wins Georgia, Tennessee and Oklahoma), then the fight goes on.  "Advantage: Obama."


Tiernan Ray ("Technology Week") thinks tech stocks will mostly go up.  Hey, could be, especially IF we are in a real recovery [ed. note: BIG IF].


Consol Energy (CNX, a coal and natural gas producer) and Analog Devices (ADI) both got bullish reviews in separate articles.


"Other Voices" Guest Author J. T. Young says it's "Advantage: Republicans" because a lousy economy is usually bad for an incumbent.  We'll see.


Editor Thomas Donlan laments the fact that banks all over the world are shoveling money into our systems...  And how neither the R Team nor the D Team wants to do anything about it.  It looks like to VOTERS (that's us!) prefer "Benbucks and hollow budgets."  Yeah, I hear you Tom...


I will again keep my remarks short re the Market Week section.  Vito J. Racanelli writes at the end of his column ("The Trader") that the oil tanker companies might be worth buying in anticipation that the current glut will go away in the next year or two.  VERY FEW new ships are being built, and the banks do not want to finance them...


"Commodities Corner" is about coffee this week!  When I first started out in business it was as a niche coffee importer (just me!) bringing up coffee from Peru ("green coffee" -- unroasted coffee beans are a greenish color). It looks like coffee prices will be going up...

Sidebar: At Starbucks I always wondered why their largest size was a "Venti" and not the expected "Grande".  It wasn't until my FIRST Italian class that I made the connection...  "Venti" means "20" in Italian, and the Venti and Starbucks is 20 ounces...


The Classifieds had a couple of interesting items.  AVVIA Solar ("powered by Silfab") is a leading European manufacturer of solar panels and similar and is looking for green-minded entrepreneurs to join their distribution network in the USA.  A big ranch for sale in Montana (with mineral rights).  The latter set off a wasted hour for me..., looking at ranchland for sale in Wyoming, Montana and Idaho...


If this is the company I think it is (auto & truck transmission maker Allison Transmissions), Allison Transmission Holdings  will be IPO-ing soon, this is the largest company on the block this week.


Ah, those slimy guys at the Fed just do not want to fess up!  The Fed Total was down $9.2 billion (a tiny 0.003%).  These guys are clearly looking to kick THAT HEADLINE down the road: "The Fed now holds $3 trillion..."

Monetary Base: up 1.8% (hmm, seems kind of high)
Currency in Circulation: up 2.2% (that seems pretty high for a week to week change)
M1 and M2 were practically unchanged

I am pleased to report once again that The Mighty Peruvian Sol kicked the dollar's butt again (well by 0.05%), but a win is a win!


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