Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Monday, August 22, 2005: My
latest best investment was Friday's one-day, $2,200 checkup at Scripps Center
for Executive Health in San Diego. From 7 AM to 4 PM, I was prodded, poked,
treadmilled, blood tested, skin-checked, head-checked, talked to, listened to...
and finally massaged. It was fabulous. They call it The WholePersonal Examination.
That it was. The focus was on early detection and prevention. They told me how
much weight I should lose, how I should change my diet, how I should change
my working life, which protective skin cream to use, how I could fix my back,
how I should improve my exercise, which tests I should get regularly, and dozens
more suggestions, which I'm just writing up. I can't
give you all the recommendations they made, since I'm still awaiting my final
blood test results which I get this morning. But, to repeat, it was a fabulous
day and one that will reap rewards for the rest of my life. Highly recommended.
For more, click
Are we running out of oil? This
was the cover of Sunday's New York Times:
There are two schools of thought: Oil is and will remain plentiful. Oil has
peaked. I belong to the "oil has peaked" theory. Several implications:
1. Oil will continue to rise long-term. It may easily touch over $100 a gallon
in the next few years.
2. All of us should prepare for that time by doing obvious things -- like not
driving gas guzzlers , insulating our houses better, investigating alternative
energy sources -- wind, photovoltaic cells, sun-driven hot water heating, etc.
3. Long-term all of us should re-arrange our lives to minimize our exposure
to high-priced and potentially scarce oil. For example by moving back to the
4. We need to investigate investment opportunities in areas and industries which
now become profitable in our new world of permanently (and much) higher oil
prices, e.g. Canadian tar sands.
Excerpts from the Times' article:
+ In the past
several years, the gap between demand and supply, once considerable, has steadily
narrowed, and today is almost negligible. The consequences of an actual shortfall
of supply would be immense. If consumption begins to exceed production by
even a small amount, the price of a barrel of oil could soar to triple-digit
levels. This, in turn, could bring on a global recession, a result of exorbitant
prices for transport fuels and for products that rely on petrochemicals --
which is to say, almost every product on the market. The impact on the American
way of life would be profound: cars cannot be propelled by roof-borne windmills.
The suburban and exurban lifestyles, hinged to two-car families and constant
trips to work, school and Wal-Mart, might become unaffordable or, if gas rationing
is imposed, impossible. Carpools would be the least imposing of many inconveniences;
the cost of home heating would soar -- assuming, of course, that climate-controlled
habitats do not become just a fond memory.
+ Although oil costing more than $60 a barrel hasn't caused a global recession,
that could still happen: it can take a while for high prices to have their
ruinous impact. And the higher above $60 that prices rise, the more likely
a recession will become. High oil prices are inflationary; they raise the
cost of virtually everything -- from gasoline to jet fuel to plastics and
fertilizers -- and that means people buy less and travel less, which means
a drop-off in economic activity. So after a brief windfall for producers,
oil prices would slide as recession sets in and once-voracious economies slow
down, using less oil. Prices have collapsed before, and not so long ago: in
1998, oil fell to $10 a barrel after an untimely increase in OPEC production
and a reduction in demand from Asia, which was suffering through a financial
crash. Saudi Arabia and the other members of OPEC entered crisis mode back
then; adjusted for inflation, oil was at its lowest price since the cartel's
creation, threatening to feed unrest among the ranks of jobless citizens in
+ Without the
ability to flood the markets with oil, the Saudis are resorting to flooding
the market with promises; it is a sort of petro-jawboning. That's why Ali
al-Naimi, the oil minister, told his Washington audience that Saudi Arabia
has embarked on a crash program to raise its capacity to 12.5 million barrels
a day by 2009 and even higher in the years after that. Naimi is not unlike
a factory manager who needs to promise the moon to his valuable clients, for
fear of losing or alarming them. He has no choice. The moment he says anything
bracing, the touchy energy markets will probably panic, pushing prices even
higher and thereby hastening the onset of recession, a switch to alternative
fuels or new conservation efforts -- or all three. Just a few words of honest
caution could move the markets; Naimi's speeches are followed nearly as closely
in the financial world as those of Alan Greenspan.
+ 'You look
at the globe and ask, 'Where are the big increments?' and there's hardly anything
but Saudi Arabia,'' he said. ''The kingdom and Ghawar field are not the problem.
That misses the whole point. The problem is that you go from 79 million barrels
a day in 2002 to 82.5 in 2003 to 84.5 in 2004. You're leaping by two million
to three million a year, and if you have to cover declines, that's another
four to five million.'' In other words, if demand and depletion patterns continue,
every year the world will need to open enough fields or wells to pump an additional
six to eight million barrels a day -- at least two million new barrels a day
to meet the rising demand and at least four million to compensate for the
declining production of existing fields. ''That's like a whole new Saudi Arabia
every couple of years,'' Sadad al-Husseini, a former Aramco executive said.
''It can't be done indefinitely. It's not sustainable.''
for one, doesn't buy that approach (taxing gas more). ''Everybody is looking
at the producers to pull the chestnuts out of the fire, as if it's our job
to fix everybody's problems,'' he told me. ''It's not our problem to tell
a democratically elected government that you have to do something about your
runaway consumers. If your government can't do the job, you can't expect other
governments to do it for them.'' Back in the 70's, President Carter called
for the moral equivalent of war to reduce our dependence on foreign oil; he
was not re-elected. Since then, few politicians have spoken of an energy crisis
or suggested that major policy changes are necessary to avert one. The energy
bill signed earlier this month by President Bush did not even raise fuel-efficiency
standards for passenger cars. When a crisis comes -- whether in a year or
2 or 10 -- it will be all the more painful because we will have done little
or nothing to prepare for it.
To read the Times'
weekend reading conclusions:
+ The VIX does not correlate strongly with
movements in share prices. It's safe not to worry about today's low VIX.
+ Brokers, analysts, investment bankers, auditors and now, proxy advisory services
offer advice tainted by the money they often get from their clients -- the companies
whose stocks they are advising to buy or sell.
+ Robert Shiller, Yale economist, famous for his stockmarket book "Irrational
Exuberance" published in 2000 now believes that the housing craze is
another bubble destined to end badly.
A guy had been depressed for months. His friends finally convince
him to see a psychiatrist.
He entered the
office, lay on the couch, spilled his guts for an hour. Finally, he waited for
the psychiatrist's comments.
nodded and said. "I think your problem is low self-esteem. It is very common
his wife, and mother-in-law went on vacation to Jerusalem. While they were there,
the mother-in-law passed away. The undertaker told them, "You can have
her shipped home for $5,000, or you can bury her here in the Holy Land for $150."
The man thought about it and told him he would just have her shipped home.
The undertaker asked, "Why would you spend $5,000 to ship your mother-in-law
home, when it would be wonderful to be buried here and you would spend only
The man replied, "Long ago a man died here, was buried here, and three
days later he rose from the dead. I can't take that chance."
professor in darkest Africa
is sent to darkest Africa to live with a primitive tribe. He spends years with
them, teaching them reading, writing, math, and science.
One day the wife of the tribe's chief gives birth to a white child.
The members of the tribe are shocked, and the chief pulls the professor aside
and says, "Look here! You're the only white man we've ever seen and this
woman gave birth to a white child. It doesn't take a genius to figure out what
The professor replied, "Chief, you're mistaken. What you have here is a
natural occurrence... what we in the civilized world call an albino! Look at
that field over there. All of the sheep are white except for one black one.
Nature does this on occasion."
The chief was silent for a moment, then said, "Tell you what. You don't
say anything more about the sheep and I won't say anything more about the baby."
+ Manhattan Pharmaceuticals: Click
+ NovaDel Biosciences appeals. Click
+ Hana Biosciences appeals. Click
+ All turned on by biotech. Click
+ Steve Jobs Commencement Address. The text is available:
Click here. The full audio is available. Click
+ The March of the Penguins, an exquisite movie. Click
+ When to sell your stocks. Click
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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