Harry Newton's In Search of The Perfect Investment
Technology Investor. Harry Newton
AM EST, Tuesday, August 4
2009. I sound like a cracked record: Stay away from
strange products Wall Street invents. Wall Street"s business is making up
products and selling them to you for the fees it makes on the sale. Wall Street
is not interested in whether the product is actually going to make you money in
the long-run or the short-run, or any run. They're interested only for fees. Have
I made myself sufficiently clear?
The latest disaster
are all those inverse and leveraged ETFs. Remember all those double and triple
leveraged up and down ETFs? I've written about how totally awful they are. The
index they're covering goes down and they go up. Or vice versa. They work for
a day or two, but after that they totally screw up and lose you money -- though
you were right. There's a reason for this. Apparently the issuers recalibrate
them (or something) every day. See below for more.
is down today, but that's because it announced a secondary. I have
no doubts it will climb back again in coming weeks.
along for the ride:
No one knows how long this ebullient market will last. Most people
I know are going along for the ride, ready to pull the trigger should signs
of weakness appear.
money. This truly sucks. Money market funds -- those your broker
(live or online) dump your spare cash into -- are paying less than one quarter
of one per cent a year. That's miserable. The most you can get from a FDIC-insured
bank CD is 2% for 12 months. That's miserable also but better than a slap in
the belly with a cold fish.
is from Investment News:
answers from firms selling inverse and leveraged ETFs
Massachusetts regulator subpoenaed Edward D. Jones, Ameriprise, LPL and
regulators sent subpoenas to four brokerages on Friday asking about their
sales practices relating to inverse and leveraged exchange traded funds weeks
after Edward D. Jones, Ameriprise, LPL and UBS restricting the sale of the
products or stopped selling them altogether.
The four firms
are Edward D. Jones & Co. LP of St. Louis, Ameriprise Financial Inc. of
Minneapolis, LPL Investment Holdings Inc. of Boston and UBS Financial Services
Inc. of New York.
is that [inverse and leveraged ETFs] are, or can be, very volatile funds,
very risky, and that they are being offered to investors who arent sophisticated
and may not be aware of the risks they are getting into, said Brian
McNiff, a spokesman for Secretary of the Commonwealth William F. Galvin.
of Newton, Mass., ProFund Advisors LLC of Bethesda, Md., and Rydex SGI of
Rockville, Md. the primary providers of inverse and inverse ETFs
also received letters from Mr. Galvin asking for similar information, Mr.
investigation comes after the Financial Industry Regulatory Authority Inc.
of New York and Washington warned brokers last month that inverse and leveraged
ETFs typically are unsuitable for retail investors who hold them
longer than a day.
its position on such ETFs in a podcast on July 13 in which it said member
firms could recommend that a retail investor hold such ETFs for longer than
one day, provided a suitability assessment is conducted with respect to such
an investor and the ETF.
But that didnt
stop Edward D. Jones, Ameriprise, LPL and UBS from restricting the sale of
leveraged and inverse ETFs, or stopping their sale all together.
such as Morgan Stanley Smith Barney of New York are contemplating restrictions,
and last week Charles Schwab & Co. Inc. of San Francisco issued a warning
to clients who buy them.
7 moves closer to reality: I haven't tried
Windows 7. I won't until Microsoft releases its first bug fix. Here's ComputerWorld's
Even after extensive testing of the various pre-release versions of Windows
7, I still don't know whether its virtues outweigh its pain points overall.
For Vista users, upgrading to Windows 7 is a no-brainer; the new OS handily
fixes the worst of Vista's mistakes. My advice to them: upgrade early and
For XP users,
however, it's not so clear. You'll be getting some nifty and useful new features,
but you'll also be giving up the way you've been used to working for the past
Windows 7 may
be a far, far better upgrade than Vista ever was before, but in the end, you
have to answer this honestly: Is this the best of times or the worst of times
to take on an unfamiliar interface? Only you can answer that question.
I don't use Vista.
I never have and I never will. I use XP which is reliable and painless. For
ComputerWorld's piece, which is headed Windows 7: Four reasons to upgrade,
four reasons to stay away, click here..
your next vacation: Rent this place:
Built from a salvaged 727.
The master bedroom.
the view from the balcony.
The place is in
Costa Rica. It costs $400 or $500 a night, depending on the time of year. Take
her here and propose. For more, click here.
The emergency landing in Miami of a Houston-bound flight a few days ago due
to turbulence that put four passengers in serious condition highlights a hidden
threat of flying -- namely clear air turbulence. Stay buckled. That seat belt
could save your life -- even without a crash. Read more.
It Seems, Can Make You Ill. This is from today's New
York Times. It's fascinating stuff. Now you know what ails all your friends.
tend to be healthier than single people. But what happens when a marriage
shows that when married people become single again, whether by divorce or
a spouses death, they experience much more than an emotional loss. Often
they suffer a decline in physical health from which they never fully recover,
even if they remarry.
And in terms
of health, its not better to have married and lost than never to have
married at all. Middle-age people who never married have fewer chronic health
problems than those who were divorced or widowed.
from a national study of 8,652 men and women in their 50s and early 60s, suggest
that the physical stress of marital loss continues long after the emotional
wounds have healed. While this does not mean that people should stay married
at all costs, it does show that marital history is an important indicator
of health, and that the newly single need to be especially vigilant about
stress management and exercise, even if they remarry.
spouse is getting sick and about to die or your marriage is getting bad and
about to die, your stress levels go up, said Linda Waite, a sociology
professor at the University of Chicago and an author of the study, which appears
in the September issue of The Journal of Health and Social Behavior. Youre
not sleeping well, your diet gets worse, you cant exercise, you cant
see your friends. Its a whole package of awful events.
The health benefits
of marriage, documented by a wealth of research, appear to stem from several
factors. Married people tend to be better off financially and can share in
a spouses employer health benefits. And wives, in particular, act as
gatekeepers for a husbands health, scheduling appointments and noticing
changes that may signal a health problem. Spouses can offer logistical support,
like taking care of children while a partner exercises or shuttling a partner
to and from the doctors office.
But in the latest
study, researchers sought to gauge the health effects of divorce, widowhood
and remarriage in a large cohort of people over time.
Among the 8,652
people studied, more than half were still married to their first spouse. About
40 percent had been divorced or widowed; about half of that group were remarried
by the time of the study. About 4 percent had never married.
Over all, men
and women who had experienced divorce or the death of a spouse reported about
20 percent more chronic health problems like heart disease, diabetes and cancer,
compared with those who had been continuously married. Previously married
people were also more likely to have mobility problems, like difficulty climbing
stairs or walking a meaningful distance.
led to some improvement in health, the study showed that most married people
who became single never fully recovered from the physical declines associated
with marital loss. Compared with those who had been continuously married,
people in second marriages had 12 percent more chronic health problems and
19 percent more mobility problems. A second marriage did appear to heal emotional
wounds: remarried people had only slightly more depressive symptoms than those
The study does
not prove that the loss of a marriage causes health problems, only that the
two are associated. It may be that people who dont exercise, eat poorly
and cant manage stress are also more likely to divorce. Still, researchers
note that because the effect is seen in both divorced and widowed people,
the data strongly suggest a causal relationship.
One reason may
be changes at the cellular level during times of high stress. In an Ohio State
University study, scientists analyzed blood samples of people undergoing the
stress of caring for a loved one with Alzheimers disease. The research
focused on telomeres, which insulate and protect the ends of chromosomes;
with aging, telomeres shorten and the activity of a related enzyme also declines.
a control group, the Alzheimers caregivers showed telomere patterns
associated with a four- to eight-year shortening of life span. Dr. Waite said
the stress of divorce or widowhood might take a similar toll, leading to chronic
health and mobility problems.
None of this
suggests that spouses should stay in a bad marriage for the sake of health.
Marital troubles can lead to physical ones, too.
In a series
of experiments, scientists at Ohio State studied the relationship between
marital strife and immune response, as measured by the time it takes for a
wound to heal. The researchers recruited married couples who submitted to
a small suction device that left eight tiny blisters on the arm. The couples
then engaged in different types of discussions sometimes positive and
supportive, at other times focused on a topic of conflict.
After a marital
conflict, the wounds took a full day longer to heal. Among couples who exhibited
high levels of hostility, the wound healing took two days longer than with
those who showed less animosity.
argue that if you cant fix a marriage youre better off out of
it, said Janice Kiecolt-Glaser, an Ohio State scientist who is an author
of much of the research. With a divorce youre disrupting your
life, but a long-term acrimonious marriage also is very bad.
A boy and his date were parked on a back road some distance from
town, doing what boys and girls do on back roads some distance from town.
Things were getting
hot and heavy, when the girl stopped the boy.
should have mentioned this earlier, but I'm actually a hooker and I charge $20
for sex," she said.
The boy just looked
at her for a couple of seconds, but then reluctantly paid her, and they did
After the cigarette,
the boy just sat in the driver's seat looking out the window.
we going anywhere?" asked the girl.
should have mentioned this before, but I'm actually a taxi driver, and the fare
back to town is $25."
+ "I don't think he's a racist. I don't.
I think he's a cop. Seriously. But there was one little awkward moment when
he arrived at the White House and got out of the car and he threw Obama the
keys." -- Bill Maher
Obama, Professor Gates, and Officer Crowley had their beer summit. And the big
surprise was they were joined by Vice President Biden. That was the surprise,
yeah. The highlight of the evening was when Officer Crowley told Biden, 'You
have the right to remain silent.'" --Conan O'Brien
+ "They had
the big beer summit earlier tonight at the White House. President Obama had
a beer with Harvard Professor Henry Louis Gates and the policeman who arrested
him. The meeting got off to a rough start when a neighbor called the police
to say Gates was breaking into the White House." --Conan O'Brien
"Some people have misunderstood this concept of trading old for new. For
example, today, South Carolina Governor Sanford tried to drop off his wife"
Nancy Pelosi accused insurance companies of deliberately trying to kill the
health care bill. Pelosi was so angry that she started arranging her face into
a scowl." --Jimmy Fallon
moved my cheese?
"It's been reported that Larry King has opened a Twitter account. Yep.
So far his tweets have been, 'My name's Larry,' 'I like pie' and 'Who moved
the toilet?'" --Conan O'Brien
final word on Sarah
"No longer governor of Alaska, so whenever she waves at Russia, nobody
waves back." --David Letterman
This column is about my personal search for the perfect
investment. I don't give investment advice. For that you have to be registered
with regulatory authorities, which I am not. I am a reporter and an investor.
I make my daily column -- Monday through Friday -- freely available for three
reasons: Writing is good for sorting things out in my brain. Second, the column
is research for a book I'm writing called "In Search of the Perfect
Investment." Third, I encourage my readers to send me their ideas,
concerns and experiences. That way we can all learn together. My email address
is . You can't
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