First, reaction to the Geodesic Oversight Dome (wherein satellites can read lips, as in, “Please G.O.D., help me — I’m drifting out to sea”):

Bill Coppedge: ” I hope it’s not a cloudy day!”

Dana Dlott: “You can’t beat the laws of physics. The ability of a space telescope to resolve features is proportional to the size of the mirror. Super spy satellites look like the Hubble Space Telescope pointed down instead of up. The mirror is 8 feet in diameter. That is about all that can fit in the Shuttle cargo bay. From 150 miles up, this mirror can (under perfect atmospheric conditions) resolve something like 6 cm, which might or might not be barely enough to read a license plate on a perfect day when it was pointed upward. (Maybe this works if the license plate is “1” or “x”). To read lips, you would need resolution of 1mm I would guess. That means the mirror has to be 500 ft across. When they start building space shuttles 500 feet across it’s time to worry. You might be able to have a smaller shuttle and assemble the mirror in space, maybe. It would be so big everybody could look up and see it even in the day.”

I can live with that. I’m more worried about the clouds.

Mike Duffy: “Too much Jack Daniels on the Cheerios this morning?”

And now a word from Dorothy Mallonee, who bought Amazon when I told her not to and watched it climb tenfold. (Not for nothing is this column free.) Did she still own it, I wondered?

“Yep, still own 800 shares of AMZN. I’ve ridden it down from the high at the first of the year. Will I sell it? Well, um, er, uh, yeah, sometime.

“This experience has helped convince me that my new full-service broker may be right: He’s pitching professional money management to me, and giving me what sounds like a pretty good deal on the fees, about 2% annually, inclusive of brokerage fees. The two organizations we’re leaning towards: Roxbury in Santa Monica, CA, with a Large Cap Growth philosophy, and Davis in NY with a Large Cap Value philosophy. Neither has a high churn rate, both are well-established. I’ve visited both in person. How ’bout a column on professional money managers? My wire house, Prudential Securities, has arrangements with a number of them by which a client can get in for $100k — much, much less than the normal minimum investment these organizations require of their private clients.

“AMZN, hey, it’s worth $100+/share, right, cuz it once traded at that price? I know, I shouldn’t be allowed out of the house unsupervised, but AMZN has been a ton of fun, and I’ve always regarded it as a pure speculation, as you will recall! Even if I end up having to dump it at the behest of Roxbury or Davis, my cash basis is about $11/share and, because of my husband’s death, my basis for capital gains tax is about $55/share.”

Wait, Dorothy! In a world where one might reasonably expect 5% or 6% a year after tax (I don’t think the next 18 years are going to be like the last 18), a 2% hit — especially as it may not be deductible — is just a terrible handicap.

And heck, you tripled your money with Amazon. You think a pro can do better than that?

Over the long run, most pros will do about as well as the market as a whole, less their (in this case huge) fees.

Why not sell at least some of your Amazon here for a tax loss? (When Dorothy’s husband passed away, she was able to boost the basis of all the stocks she inherited to the value as of his death. So even though she’s tripled her money in AMZN, she’d actually get to declare a loss if she sold.) If AMZN goes way down — it’s still valued at three times American Airlines — you can be glad you sold some. If it goes way up, you’ll have tripled your money on some of it (with a tax-loss, no less), and made an even bigger profit on the rest.


Comments are closed.