Monday, June 27, 2016

1932: A Bank Advertises Free Investment Adivice

From the January 20, 1932 issue of The New York Times:

The correct advice, of course, would have been "Don't buy, SELL!" After the Crash of '29, the Dow rebounded by 30% in 1930. Then stocks began to slide toward oblivion. By the summer of 1932 the Dow would be 89% below its pre-Crash high. To recover from such a loss, one would have to watch one's portfolio go up by 825%.

Wednesday, June 22, 2016

Monetizing the House, the Old-Fashioned Way

Sarah Purcell's house
When Sarah Wentworth Purcell's husband died in 1776, she became a gentlewoman in reduced circumstances. To generate income she took in roomers.  Today, writes Amy Zipkin in The New York Times, Airbnb and other rental sites enable retirees, predominantly women, to monetize their homes in the same way. (Yes, everything old is new again.)

Short-term rentals generate extra money without requiring the homeowner to take on new debt. No home equity loan. No reverse mortgage. In addition:

Rentals may allow the homeowner to remain in a house tbat's otherwise unjustifiably large for an empty nester. Arranging rentals keeps the homeowner healthily active. And the homeowner meets a stimulating stream of new people, perhaps including visitors from around the world. She might even get to know someone who's about to become famous.

Sarah Purcell did. In 1777 one of her roomers was a Scot waiting for his ship to be built nearby. The ship was the Ranger, and John Paul Jones became our nation's first navel hero.

Sarah's home still stands in Portsmouth, New Hampshire, now known (sorry, Sarah) as the John Paul Jones House.

Wednesday, June 15, 2016

$10 Million is the New $5 Million

If $5 million is the new million, other measures of wealthiness also need adjusting.

Sure enough, this year JP Morgan raised the threshold for obtaining its Private Bank services from $5 million to $10 million. Bessemer Trust and others already have a $10-million minimum.

Most private banking clients at Morgan won't be effected. They have over $10 million. Half have $100 million or more.

Although most of us would happily settle for $10 million, it ranks low on today's wealthiness scale. The average S&P 500 CEO makes more than that every year. Certainly someone who used to have $100 million and lost all but $10 million doesn't feel rich.

Friday, June 10, 2016

A Better Store of Value?

Monets and Warhols stowed in free-port warehouses serve as stores of value for the world's superrich. But where's the fun in owning art you can't look at?  Rare stamps have long served as a superior form of tangible wealth – easy to store, easy to hide, easy to carry across national borders.

Stamps have a parallel quality to fine art," says Charles Hack, who collects both. Like art, rare stamps sometimes have noteworthy provenances.

The inverted Jenny, for example. This now-famous stamp was the Bureau of Printing and Engraving's second attempt to print postage in two colors, The first try hadn't gone well. Printing of the Jenny apparently went better, except for mishaps where the plane was printed upside down.

Colonel Green
Purchased by a prescient collector for face value, a sheet of 100 inverted Jennies passed to Colonel Edward H.R. Green, son of Hetty Green, The Witch of Wall Street. After numbering the stamps in pencil, 1 to 100, the Colonel separated the sheet into 25 sets of four.

In May one of the inverted Jennies sold for $1.35 million. Another, shown above, recently turned up in a stamp collection that an Irishman inherited from his grandfather. Thanks to Green's numbering, it was identified as one of a set of four stolen from an American Philatelic Society convention over 60 years ago.

Instead of a seven-figure bonanza at auction, the Irishman has to settle for a $50,000 reward.

Wednesday, June 08, 2016

Can Wall Street Be Saved From Itself?

Sitting around waiting rooms needn't be time wasted, it's a chance to catch up with last month's magazine articles. Did you miss this Time cover story, based on Rana Foroohar's Makers and Takers: The Rise of Finance and the Fall of American Business? Take a look. We may be hearing some of its themes repeated during the election campaign.

Even staunch believers in unfettered capitalism may nod in agreement with observations such as
An IPO—a mechanism that once meant raising capital to fund new investment—is likely today to mark not the beginning of a new company’s greatness, but the end of it. According to a Stanford University study, innovation tails off by 40% at tech companies after they go public, often because of Wall Street pressure to keep jacking up the stock price, even if it means curbing the entrepreneurial verve that made the company hot in the first place. 

So that's why Yahoo is for sale

Merrill Anderson's corporate website has been hosted by Yahoo ever since we created it. They had a division that catered to small business--they handle our corporate e-mail also.  They generally provided acceptable service.

Until last week.

Our website went down without explanation.  Getting through to a person there takes 2 hours on hold.  Initially they said our site was infected with malware and their engineers were working on it. No explanation as to how they allowed the malware in the first place.  They promised that the site would be back up in 24 hours.

This week the story changed.  They are offering to do nothing at all, we are on our own for finding and removing the malware.

So we're assessing our alternatives.  My understanding is that the small business division we work with was spun off by Yahoo some time ago.  The successor company is obviously interested only in collected fees from existing customers, not expanding or improving the services.  Your suggestions for a successor are welcome.

In the meantime, if you need to learn more about Merrill Anderson's products and services, contact Sirvydas Vebra at, or call us at 203.377.4996.

PS.  Because this blog is hosted by Google, I'm pretty confident that we won't have a problem with it.