Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM EST, Monday, April 30: This
is brilliant. It comes from a late-2006 quarterly report of an impressive fund
whose name I'll tell you tomorrow (if they allow me). It sums up their philosophy
(and mine also). Read and enjoy:
As always, the
world continues to offer enough variety to support both pessimistic and optimistic
views. Most recently, the pessimists have focused on the violent and ongoing
reorganization of a geographic region most recently called "Iraq";
ongoing North Korean provocations; congressional sex scandals; a decline in
US housing activity; the Amaranth implosion; global warming; and many other
real or media-ntensified events.
to work a bit harder to feed their enthusiasm, as many of the existing advantages
enjoyed by the developed world (and increasingly, by the fast-growing developing
world) are taken for granted and rarely highlighted in the prevailing 24-hour
media cycle. Trends like expanding global trade, longer life expectancies,
more leisure time, the spread of democracy, and reductions in urban crime
often occur in a non-spectacular way. However underreported and overlooked
these social and economic developments may be, optimists point out that, on
a relative basis, the current era marks one of the most benign in recent history.
In support of this view, we would point you to Niall Ferguson's bestselling
book, The War of the World: History's Age of Hatred, in which he contrasts
how fortunate we've been over the last few decades compared to the atrocities
humans initiated, and suffered, over most of the 20th Century, including both
World Wars; genocides in Russia, Cambodia, Armenia, and Nazi occupied Europe;
and a slew of ancillary wars fought in regional theaters. In addition, the
rate of technological breakthrough continues accelerating as new discoveries
frequently are a direct function of previous work, and the pyramid for future
research broadens and deepens. Generally speaking, we view the long-term effects
of the spread of capitalism and democracy as positive for the globe, but especially
for the most skilled practitioners here in the United States. As mentioned
previously, we believe that the rate of technological breakthrough is accelerating
-- the power of compounding -- providing global citizens better access to
information, and hence empowerment. It's far from a perfect world, and the
march towards wholesale social betterment will not be without interruptions,
but we are optimists when it comes to the human race, and hence, the investment
Toyota Tundra appears: I'm at my construction
site, also called our family's potential new house. It's always been a parking
lot for Ford and GM trucks, mostly Ford of the F-series, which are the biggest-selling
truck, with over 750,000 sold last year. The F-series is keeping Ford semi-afloat,
a polite term for the mess it's in.
a Toyota Tundra suddenly appears, an alien species. I beetle over to the owner.
Why? Two reasons she tells me: "Toyotas last forever. It has some really
cool features." I go on Toyota's web site. Even I'm impressed. And what
do I know about things like "tailgate assist" or an "integrated
towing hitch receiver"? But I do love the backup camera. Makes connecting
to a trailer by yourself real easy. I read somewhere that before they built
the latest Tundra, they had a team of engineers visit trucker owners all over
the country, study their lives and ask them what they'd really like in
a truck. This is such a change from the arrogance of most car makers. I remember
asking the lead salesman at Mercedes' Manhattan showroom if the company had
ever asked him what his thousands of customers had said or complained about
their cars? He replied, "No. They never listen." He recommended that
I not bother writing my list of suggestions, like decent cupholders.
to buying or selling car stocks -- I have zero clue. Toyota is down to $122
from a peak of $138 in March. GM is down to $31.50 from a peak in February of
$37. Ford is $8, slowly dropping. I think Toyota will be higher and both GM
and Ford will be lower. But I'm not gambling with these companies. As John Maynard
Keynes, the economist who made a fortune in the market, said:
can stay irrational longer than you can stay solvent.
A man is walking down the street when a beautiful woman appears out
of nowhere, right in front of him. She is completely nude and has green skin.
Stunned, the man starts to speak to her. "Excuse me, but you just popped
out of thin air. How did you do that?"
says the woman, "I'm from Andromeda, in what you call 'outer space'."
"Andromeda?!" says the man, "Wow! Do all the women on Andromeda
have green skin like you?"
replies the woman, "everyone is green on Andromeda."
The man continues
to stare and speak. "Excuse me for asking, but I can't help noticing that
you have 12 toes on each foot. Here on Earth we all have five toes on each foot.
Do all Andromedans have 12 toes on each foot?"
do," replies the woman.
may I ask you one more question?"
The woman nods.
"I also can't help noticing that on each of your hands you have seven fingers,
and on each finger is a very large diamond. Here on Earth, diamonds are very
rare and valuable. Do all Andromedan women have large diamonds on their fingers?"
the woman answers, "not the shiksas."
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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