Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Wednesday, April 20, 2005: It's
too quiet. Markets don't decline in straight lines. After every decline, a bunch
of people move in and buy, thinking they've picked bottom. They're usually wrong
and the market falls some more. There is much concern out there that earnings
growth is slowing, though occasionally there is surprisingly strong news -- e.g..Intel,
Yahoo and EMC. We're in earnings season. We'll hear more. Much of it
won't be pretty. I remain cautious. The stockmarket remains the place not to have
Fortune Magazine has a reporter and a photographer
in Phoenix. They're looking
to take pictures of busloads of California investors rushing in to buy 30 to
40 houses in a frenzied afternoon. Nothing with dissuade the Fortune
team from their mission, which also includes proving that Arizona is one gigantic
real estate bubble that's about to burst with disastrous implications. My friends
asked the reporter: "Do you personally own real estate?" Answer:
No. "Have you considered owning it?" Answer: No.
Fortune's reporter lives in a rented apartment in New York City.
reporters approach stories with their minds already made up. The "facts"
are for confirming their conclusions. Business reporters are no different. Most
have no business skills. Anyway what should they? They're employed for their
writing skills, not their business skills -- despite what they write about.
If they did have business skills -- the magazines couldn't afford to employ
I ran magazines I helped (read forced) about 12 reporters and other employees
buy houses and apartments. They all have done well. All showed major
capital appreciation over the years. For example, we bought one townhouse on
foreclosure for $96,000 around 1996. Freddie's now selling it for $324,000.
Another one we bought for $145,000 is now worth around $325,000. I believe having
a bout with capitalism makes one a better business reporter. Fortune Magazine
clearly doesn't buy into this philosophy.
story isn't out yet. It will be interesting to see how negative on real estate
it is. Remember, Fortune is also the magazine that fell in love with
money continues to pour into real estate: All my real estate investments
are through syndications, so far. One of my syndicators of office property had
a conference call yesterday and confirmed:
+ Prices are high.
+ Cap rates are high.
+ Office rents are recovering, which helps. There is positive net absorption
+ Interest rates remain favorable for borrowing.
+ The 70s, 80s and 90s "busts" all had heavy speculative office building
construction. There's little of it at present, except in Washington, D.C.
+ New York is really expensive. My syndicator told how he bid on 30-40 deals
in New York City in the past several years, but got outbid on all of them.
+ He looks carefully each year at 100 deals, bids on 20, ends up buying one.
+ Though today's market is "more challenging than ever," it
is possible to find real estate deals that have "slipped through the cracks."
For more on real estate as an investment, see yesterday's column. Click
Married With Problems? Therapy May Not Help. I
found this piece from the New York Times yesterday totally fascinating:
"Each year, hundreds of thousands of couples go into counseling in an
effort to save their troubled relationships. But does marital therapy work?
Not nearly as well as it should, researchers say. Two years after ending counseling,
studies find, 25 percent of couples are worse off than they were when
they started, and after four years, up to 38 percent are divorced.
Many of the
counseling strategies used today, like teaching people to listen and communicate
better and to behave in more positive ways, can help couples for up to a year,
say social scientists who have analyzed the effectiveness of different treatments.
But they are insufficient to get couples through the squalls of conflict that
inevitably recur in the long term.
At the same
time, experts say, many therapists lack the skills to work with couples who
are in serious trouble.
Unable to help
angry couples get to the root of their conflict and forge a resolution, these
therapists do one of two things: they either let the partners take turns talking
week after week, with no end to the therapy in sight, or they give up on the
couple and, in effect, steer them to divorce...."
For the full article,
The New Pope. I'm not Catholic. I
don't understand the whole notion of having a head of a religion to lay down
what I should believe. To me, religion is a very personal thing. Still I found
these words from today's Wall Street Journal online to be totally fascinating:
"Some of those who know the 78-year-old cleric tell the Times that Benedict
knows he may have a short papacy and that he intends to move quickly to put
his own stamp on the church and to reverse its decline in the secular West.
He is already known for speaking out against what he has called "cafeteria
Catholics," who disregard, for example, the ban on artificial birth control.
But the choice of Benedict to lead the fight against secularism and "moral
relativism" carries risks, The Wall Street Journal says: "While Pope
John Paul II's personal warmth smoothed the edges of traditionalist messages
-- no birth control, no marriage for priests, no ordaining of women -- the former
Cardinal Ratzinger will be pushing the same philosophy without the same deep
wellspring of charisma." On the same note, Newsweek contributing editor
and practicing Catholic Melinda Henneberger says that while she was overcome
with emotion and burst into tears the first time she saw John Paul, as Benedict
stepped onto the loggia last night, "I only wanted to cry. The joke already
making the rounds in Rome tonight was that while John Paul's first words at
his installation were, 'Be not afraid,' the first from Benedict will be, 'Be
afraid. Be very afraid.' "
Reader Alex Rohwedder recently sent me an excerpt from the bible, namely Matthew
23 verses 1-12. It reads:
"Then Jesus said to the crowds and to his disciples, "The teachers
of religious law and the Pharisees are the official interpreters of the Scriptures.
So practice and obey whatever they say to you, but don't follow their example.
For they don't practice what they teach. They crush you with impossible religious
demands and never lift a finger to help ease the burden.
they do is for show. On their arms they wear extra wide prayer boxes with Scripture
verses inside, and they wear extra long tassels on their robes. And how they
love to sit at the head table at banquets and in the most prominent seats in
the synagogue! They enjoy the attention they get on the streets, and they enjoy
being called `Rabbi.' Don't ever let anyone call you `Rabbi,' for you have only
one teacher, and all of you are on the same level as brothers and sisters.
And don't address anyone here on earth as `Father,' for only God in heaven is
your spiritual Father. And don't let anyone call you `Master,' for there is
only one master, the Messiah. The greatest among you must be a servant. But
those who exalt themselves will be humbled, and those who humble themselves
will be exalted."
to inherit a small fortune:
Soon his wealthy father would die and Robert would inherit a fortune.
Robert decided he needed a woman to enjoy it with. So he went to a singles bar
and he searched until he spotted a woman whose beauty took his breath away.
I'm just an ordinary man," he said, walking up to her, "but within
a month or two, my father will pass and I'll inherit over 20 million dollars."
The woman went
home with Robert, and four days later she became his stepmother.
Men will never
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 .
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