Sunday Morning Coffee

Just a few odds and ends this morning as I've got an incredibly busy week coming.

First up is from a profile in Barron's of a fund called the Goldman Sachs Technology Tollkeeper (GITAX). Here is a quote from one of the managers.

"We would rather own the tollkeeper than the bridge builder," says portfolio-manager Scott Kolar, 38. "Even if traffic doesn't grow, it can raise the price. That allows it to grow year after year without deploying more capital."

This line of thinking applies to actual toll road companies. This is a niche I've been interested in for several years now but unfortunately the space is too thinly traded for us to do any across the board activity. I own one of the Chinese toll road companies for a couple of clients and in one of my IRAs. These stocks are very capable of going down but the ones I've looked at seem to have steady businesses.

As far as the fund itself it is an actively managed fund with a very narrow mandate. This type of fund can work in a narrow based portfolio. GITAX will always be a proxy for some specific niche in the tech sector as opposed to a broadly managed fund which might be heavy in tech today but six months from now might own no tech, having loaded up on something else creating an unintended lopsided bet in a portfolio. To be clear I am not recommending the fund just pointing it out as an example of something I've talked about before.

Barron's also had an interview with Carson Block from Muddy Waters Research. If the name is unfamiliar he has made a name for himself calling shenanigans on a few Chinese companies that are reverse mergers. One example is a company called China Media Express Holdings (CCME). The company has an installed base of TV monitors installed on city buses and sells advertising on those monitors. Read the article but essentially not too many people in China know the company or have seen the monitors on the buses. Oops.

The story with many of these companies sounds great but these are much dicier than regular Chinese companies. You may think regular Chinese companies are unreasonably dicey, some folks do, I am not that worried, but I am telling you the reverse mergers are dicier still.

Lastly James Altucher had a post on his blog about living longer that was a long list of dos and don'ts with some interesting things that I had not thought of before. Included in the list was don't drink soda which I've mentioned occasionally for years now. It was a long post, well worth reading, but I would say the focus was preventative. Things like stress, poor diet and bad habits cause all sorts of problems for people and so James explored ways to minimize or eliminate these things from our lives. He gave an interesting example that captures the essence of column; if you knew you were going to die on December 15, 2020 in Springfield, IL you'd probably make sure you weren't in Springfield on December 15, 2020.

I am very big on reducing or eliminating stress. We've structured our life to avoid several different types of stress. Not having to deal with daily commuter traffic removes a lot of stress and more related to the topic of this web site living well below your means reduces many types of financial stress. You don't have to worry about large debt payments when you don't have debt. You don't have to worry about a large mortgage payment if you don't have a large mortgage and so on.

I would add a couple of things to James' to do list. One would be to get involved volunteering for something. This can give much more meaning to life and ideally would be a stress reliever from other things in your life (like your 9-5). The other thing would be to get a dog or two; they are great companions and sources for both humor and stress relief.