Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Wednesday, April 6, 2005: When
a company does everything it says it will -- including introducing new products,
boosting sales and becoming profitable -- and the stock still craters, you've
got to wonder. The company is TriPath Imaging (TPTH).
I have an inviolate rule -- 15% down and I sell. I have violated this
rule with only one stock -- TriPath Imaging (TPTH). So far, I've been
wrong. Grossly wrong. Yesterday it became truly painful. I called around --
analysts, big stockholders and management. My findings: No internal business
reason for the decline. No heavy selling of the stock. Volume has been light.
Just basic Wall Street disinterest. One large stockholder called it "Small
cap hell." He explained, "If TriPath were a private company,
We'd all be very pleased with the business's progress. We wouldn't see the daily
gyrations in the stock. We'd be happy."
The only complaint I found: "They don't do enough to promote the stock."
In explanation, "Companies shouldn't be run by engineers or doctors."
I spoke to management about this. They've tried a multitude of public relations
strategies. They're willing to try more. I offered to help. They actually seemed
interested. They pointed out that the 10-K annual report they filed last week
is extensive -- it is -- and discusses the business in great detail, which it
does. It tells more about the business than most 10-Ks of most companies do.
This is to their credit. The management put a lot of work into this document.
Best of all, financials are strong. Sales are up strongly. Margins are up. R&D
is up. TriPath is profitable. They're winning new contracts. I like the management.
I like what they're doing. Frankly, I think TriPath is a bargain at these depressed
prices -- but if you "read" the chart, the stock could fall further.
I don't like catching falling knives.
You can read the 10-K yourself: Click
here. I'm personally staying with this one, though right now I look (and
feel) like a total idiot.
books you must read: Thomas Friedman's new book is not about politics.
It's about business, about globalization. He begins the book talking about "The
Ten Forces That Flattened The World." They are:
1. 11/9/89. The
fall of the Berlin Wall.
2. 8/9/95. Netscape goes public. Introduction of the browser, which made the
Internet useful for us all.
3. Work flow software. Have your application talk to mine.
4. Open-sourcing. Linux, etc.
5. Outsourcing. Getting China to make your goods.
6. Offshoring. When a company takes one of its factories operating in Canton,
Ohio and moves the whole factory offshore to Canton, China.
7. Supply-chaining. Organizing to get goods from everywhere to where they're
meant to be, e.g. what Wal-Mart does so well.
8. Insourcing. One company taking over the integral tasks of another. UPS is
the example Friedman mentions. It repairs Toshiba laptops. Toshiba no longer
9. In-forming. Google, Yahoo!, MSN web search, etc.
10. The Steroids. Digital, mobile, personal and virtual. Technology to do all
it from anywhere wirelessly.
Friedman is an optimist. This new book (it was released yesterday) paints a
strongly optimistic and positive picture for what's happening businesswise in
our world. The best news, to my mind, is that companies which are part of each
other's global supply chain don't mess with each other politically. There's
too much at stake.
Jim Cramer made millions for himself and his investors with the hedge fund he
and his wife founded and ran for many years. This is his first book which attempts
to discuss how he actually made the money. He talks about the art of
investing, his stockpicking rules, his use of options, etc. He explains "throughout
this book, I tell you things your brokers don't want you to know and your financial
advisors are praying you never find out about how Wall Street really works."
Both Cramer and
Friedman have gigantic egos, enormous drive and great discipline. Their books
are out. My "In Search of the Perfect Investment" book lags,
though the good news is that my latest dictionary is out (1,000-pages and all)
and it's garnering great reviews. Click
here. Click on the book to buy a copy.
latest favorite cartoon
Redneck Story - 1
Billy Bob and Luther were talking one afternoon when Billy Bob tells
Luther, "Ya know, I reckon I'm 'bout ready for a vacation. Only this year
I'm gonna do it a little different.
The last few years,
I took your advice about where to go. Three years ago you said to go to Hawaii.
I went to Hawaii and Earlene got pregnant. Then two years ago, you told me to
go to the Bahamas,and Earlene got pregnant again. Last year you suggested Tahiti
and darned if Earlene didn't get pregnant again."
Luther asks Billy
Bob, "So, what you gonna do this year that's different?"
Billy Bob says,
"This year I'm taking Earlene with me."
story -- 2
Bubba applied for an engineering position at a Lake Charles refinery.
A Yankee applied for the same job and both applicants having the same qualifications
were asked to take a test by the manager. Upon completion of the test, both
men only missed one of the questions.
The manager went
to Bubba and said: "Thank you for your interest but we've decided to give
the Yankee the job."
Bubba asked: "And
why are you giving him the job? We both got nine questions correct. This being
Louisiana, and me being a Southern boy I should get the job!"
The manager said:
"We have made our decision not on the correct answers, but rather on the
one question that you both missed."
Bubba then asked:
"And just how would one incorrect answer be better than the other?"
The manager replied:
"Bubba, it's like this, on question #4 the Yankee put down "I don't
know." You put down, "Neither do I."
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
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role in choosing the Google ads. Thus I cannot endorse any, though some look
mighty interesting. If you click on a link, Google may send me money. That money
will help pay Claire's law school tuition. Read more about Google AdSense,
here and here.