Mendocino

We just spent four days in Mendocino.  Katherine was taking a watercolor workshop there.  This photo shows the garden in front of the Inn where we stayed.  I have difficulty capturing the essence of Mendocino in photographs so this will have to suffice for now.

We could see that the economy has taken its toll on the town.  Along Main Street there were a number of vacant stores.  Even though the summer music festival was in full swing, it was easy to get restaurant reservations.  Several inns that were the cream of the crop in earlier years have failed.  (That may be due to bad management though.)

Nevertheless, the town is as attractive as ever.  The restaurants were as good as ever.  (I suspect that some that we avoided were as bad as ever.)

Stock Market Reappraisal

We have had a great rally since March 2009, but four months ago I said that I was becoming cautious and taking some money off the table.  Since then the market declined and the general mood became dark.  Porter Stansbury is warning of "the end of America" and recommending that investors hold nothing but gold and cash.  There is a great deal of worry about a "double dip".  Congress can not manage the budget.  Etc., Etc.

Well, two weeks ago this pessimism seemed to be getting out of hand. How can we have reached a major market top with so many people pessimistic?  Major tops are usually reached when there is a feeling of euphoria.  While market averages have peaked, the cumulative advance/decline line keeps going up.  At major tops it is the other way around.  So I began buying and by the end of the week I was fully invested again.  Then we flew to New York and while we were there the market advanced every day.

While I am fully invested, I am very cautiously invested.  I am heavily weighted in stocks that pay a significant dividend.  I have tried to minimize my exposure to a decline in the purchasing power of the dollar by investing in foreign countries, particularly Canada, and in US blue chips that do a major business overseas.  I have tried to invest in uncorrelated asset classes, but that is not as easy to do as it sounds.  All my positions are long term investments.  Time is on my side and I want to be able to travel to remote places without having to check to see how the market is doing.

Incidentally, I see little signs that remind me of the 1970s.  Silver is popular again.  Investors have purchased Iowa farmland and driven the price to outlandish levels.  Rare postage stamps are an investment again.  Real estate is becoming a popular investment as an alternative to stocks.

If you follow this blog (and nobody does), do not count on me to inform you if I change my investment view in the future.

Book of Mormon

While in New York City this last week, we saw Book of Mormon, an amazing musical that manages to be raunchy, irreverent, and uplifting at the same time.  We loved it.  The audience loved it.  We were laughing from the opening number to the finale.  I will not even try to describe it.  Read the intelligent reviews in the New York Times, the New Yorker, or whatever.  Better yet, withdraw your life savings to buy tickets, fly to New York, and see it.