Harry Newton's In Search of The Perfect Investment
Technology Investor. Harry Newton
AM EST, Tuesday,
June 16, 2009. A week away and I feel I've returned
to a far more complicated world. Yesterday I was worried about serious inflation
and I recommended owning hard assets. That means gorgeous land, commodities,
miners, etc. A day later, I'm still mulling the specifics.
used to own a fund called
Strategic Commodities Fund. Last year I cashed out, figuring commodities
would not do well in a recession. I was right. But I should have jumped back
in this year. Look at their results this year:
YTD (To end May, 2009) 14.55%
Who could have
predicted a 15% rise in a broad commodities fund in the middle of a recession?
Ditto for oil, now over $70 -- doubled in price in 2009. Why? Speculation?
Genuine demand? Supply reduction by producers. A little of each, I suspect.
king while I mull.
Street is a product machine. This is the
essence of understanding Wall Street. It creates products. It sells them to
us. If we buy them, it makes an instant fee. If the product loses us money,
that's our problem. Wall Street will have moved onto something else. Unlike
a normal "manufacturer" nothing from Wall Street carries any sort
of warranty. If the wheels fall off, it's your problem.
there was a product called auction rate security (ARS). That product was created
as an alternative to money market funds -- and marketed as "cash-equivalent."
The big difference was that brokers and their firms got paid a fee (also called
a commission) if they put their clients into an ARS, but no fee if they put
them into a money market fund. But auction rate securities relied on regular
auctions for their liquidity. In February of last year, virtually all the
auctions failed. And ARS securities became thoroughly illiquid -- which meant
an investor couldn't get their money out. Eventually most investors did get
their money back -- but only after state regulators heavied the big brokerage
Wall Street is trying to replace last year's kaput auction rate securities
with a new version. There won't be any auctions. But the borrowers will have
seven to 12 months to figure out how to redeem your investment and give you
your money back. The Wall Street Journal did a piece on these new securities
and ran this chart. I recommend that you not touch these new securities with
a thousand foot pole.
+ Before you buy anything, go to eBay
and Shopping.com. Go several
times. Prices change. Most new electronics -- like cameras -- drop in price
a about a month after introduction.
+ Every time
you buy something these days, you give them your email address. I returned
to an avalanche of junk email yesterday, including one from Park 'N Fly extolling
their parking virtues. I spent 15 minutes yesterday and unsubscribed myself
from about 30 lists.
+ My wife Susan bought herself a BlackBerry Curve. Yesterday we had a disaster.
She wasn't receiving all her emails on her BlackBerry, but she was on her
laptop. Solution: Turn off the laptop when you want messages on your BlackBerry.
Reason: When the laptop grabs a message from the mail server, it erases that
message. And the BlackBerry misses it. The BlackBerry doesn't erase the message
on the server. The Curve has one big advantage: it has the only ringer
on any BlackBerry phone anyone over 40 can hear. Personally I'm eyeing the
new Apple iPhone 3G S, available this Friday. The new iPhone
blows away any and all BlackBerries -- but you must be comfortable with its
"keyboard." It does not have a physical keyboard with real (though
tiny) buttons, like all BlackBerries.
suggestion: From reader Mike Barto:
+ With regard
to your hiking recommendations, theres a $3 must have for any first
aid kit. Theyre called Moleskins. You can get them at any pharmacy.
With hiking, especially downhill on what we call toe-eaters,
someone in the group will get a blister somewhere on their foot. We always
pack dry socks and moleskins. I cut them to just cover the blister and have
nice rounded edges using my Swiss army knife scissors (another must have).
The smaller they are, they seem to be more comfortable, and rounded corners
keep them from peeling up. They are incredibly effective, often rendering
a nasty blister unnoticeable throughout the rest of the hike.
version is available most everywhere and they work great, but I
usually look for the old non-padded version to save on bulk in my small
first aid kit.
on Yellowstone Club. From a reader:
you only needed a net worth of $3 million, not billion, to join the Yellowstone
Club. I was invited, several times, and we actually considered it, but were
able to restrain ourselves. I am surprised you never got an invitation?
Of course, I am in Colorado, so maybe it was a geographical thing. We restrained
ourselves because of our family's motto: "Live simply."
how bad is the economy? It's so bad...
+ CEO's are
now playing miniature golf.
+ Even people
who have nothing to do with the Obama administration aren't paying their taxes.
+ Parents in
Beverly Hills have fired their nannies and learned their children's names.
+ A truckload
of Americans got caught sneaking into Mexico .
+ Motel Six
won't leave the light on.
+ The most highly-paid
job in the U.S. is now jury duty.
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
click on my email address. You have to re-type it . This protects me from
software scanning the Internet for email addresses to spam. I have no role
in choosing the Google ads on this site. Thus I cannot endorse, though some
look interesting. If you click on a link, Google may send me money. Please
note I'm not suggesting you do. That money, if there is any, may help pay
Michael's business school tuition. Read more about Google AdSense,
here and here.