Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM EST Wednesday, August 2, 2006: Many
of my friends are ecstatic that things are so awful in the stockmarket. They
believe when blood is flowing in the streets and everyone is despairing of the
stockmarket ever going up again, then and only then will be the perfect
time to buy. Sadly (or happily), we're not there, yet.
But we're getting
close. Inflation continues and The Wall Street Journal reports today,
The Journal continues:
rise in prices is posing a threat to spending, and that may leave the Fed
little choice but to keep raising interest rates when it meets next week,
even as Fed critics say higher borrowing costs will choke the economy."
already seen plenty of evidence that higher prices, especially for gasoline,
in recent months have cut into consumer spending, which is the biggest
driver of U.S. economic growth. The Fed's own Beige Book and other economic
reports have suggested expanding activity for some businesses, especially manufacturers,
is making up some of the difference. Yesterday, a survey of purchasing managers
by the Institute for Supply Management suggested manufacturing activity continues
to expand but that inflation is a looming threat there as well. The ISM
manufacturing index rose to 54.7 in July from 53.8 in June, describing a greater
pace of expansion based on a big jump in new orders, as well as increases in
inventories and hiring, ... But the ISM survey also showed faster growth
in prices paid, and Norbert Ore, who oversees the index, acknowledged that
"there are a lot of pockets of strength in the economy right now, but the
biggest problem manufacturers face is costs they're incurring from additional
rises in energy and commodity prices." This could mean producers will have
to pass on these costs to customers.
Where does that
leave us all?:
1. Cash remains king. The good is news is that all the usual places --
from bank savings accounts, time deposits to bonds -- are paying more. It's
less painful to hold cash.
2. Shorting still makes sense. Especially among some still-overpriced
3. Check on what you still own: How will the companies you own
perform in a time of higher prices and lower demand? Do your companies sell
products that people want when times are tough. An obvious example: No sense
owning an SUV maker when a small car maker is going to do a lot better. And,
Toyota edged past Ford to be the U.S.'s second largest car maker.
is on the private equity binge: From Lehman Brothers to Citigroup
to mutual funds... one prays there's sufficient opportunities. The key to success,
it seems to me, is aligning the interests the interests of the managers to the
fund and making sure they're in for the long-haul. The key is the managers must
have mega skin in the fund long-term.
Pick up the phone: Speaking on the phone
works. You can discuss things. You don't have to wait for a reply. The phone
is a great invention. Even better, most people don't record their conversations
-- so you don't have to call everyone up and say "Erase all those calls
when we talked about things we shouldn't have." A nice lady called Ann
Winblad of venture firm Hummer Windbad, is in hot water because she allegedly
erased emails she shouldn't have. Her troubles are courtesy copyright infringement
litigation she's part of. The worst thing is don't send an email telling everyone
to erase all the old incriminating emails. Apparently that's what she did. Use
the phone! Dah!
not to buy an HP printer or scanner: I was reminded yesterday of
just how awful, clumsy, stupid and agonizing HP's software actually is. I installed
one of their scanners on a new laptop. It took far too long. It was far too
difficult. No mortal should be put through what I had to go through. And I had
detailed instructions I'd written from the last time on how to do the installation.
Pity the poor sod who has to install HP stuff from scratch.
Iraq is a continuing serious mess:
If Iraq were an investment, we would have sold it
by now. Latest:
+ Gunfire, explosions and kidnappings yesterday rose to what the
Los Angeles Times called "a withering pace," killing at least 60 people,
including many police officers and soldiers, and intensifying anger at the American
military and Prime Minister Nouri al-Maliki for not stemming the bloodshed.
+ A Bush administration watchdog agency said the corruption that has plagued
Iraq's reconstruction -- described by U.S. officials as the "second insurgency"
-- is getting worse, playing havoc with U.S. reconstruction efforts and further
undermining public confidence in the Iraqi government, The Wall Street Journal
reports. The special inspector general for Iraq reconstruction said in a quarterly
audit that the Iraqi government estimates corruption costs the country
at least $4 billion a year.
+ The Journal
of the American Medical Association published a new study that found higher
rates of neuropsychological problems among soldiers who returned from Iraq.
These soldiers had more difficulty concentrating and with verbal learning, as
well as increased memory lapses. The study said that even when taking into account
head injuries and stress and depression symptoms, the effects of deployment
in Iraq remained statistically significant.
watch this movie on radical Islam: It comes
from an organization called Honest Reporting which was founded in 2000 by a
group of students in England and has since grown to one of the largest Israel
media advocacy groups in the world. The movie -- one hour and 17 minutes
of it -- flips between actual clips of Muslim leaders talking Jihad and their
mission to eradicate Jews, the West and America and clips of academics
explaining the significance. Update: When I wrote this article on August 2,
2006, The movie is on no longer on Google video. And it's not clear how you
The Force Be With You!
More than 70,000 people in Australia declare that they are followers
of the Jedi faith, the "religion" created by the Star Wars films.
The government there has officially accepted it as such.
your wedding anniversary
Ed was in trouble. He forgot his wedding anniversary. His wife was really MAD.
She told him "Tomorrow
morning, I expect to find a gift in the driveway that goes from 0 to 200 in
6 seconds. AND IT BETTER BE THERE!"
The next morning
Ed got up early and left for work. When his wife woke up, she looked out the
window and sure enough there was a small box gift-wrapped in the middle of the
driveway. Confused, the wife put on her robe and ran out to the driveway, and
brought the box back in the house. She opened it and found a brand new bathroom
for Ed have been scheduled for Friday. His wife never did have a sense of humor.
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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