Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Wednesday, August 3, 2005: Off
today to check on an office building in White Plains that's being syndicated.
My commercial real estate is performing as expected. Most investments are paying
their forecast dividends -- typically around 9%. A couple of properties are
on hold as they spruce up for a sale. Rents are rising, albeit slowly. Building
prices continue to rise ahead of rents, thus making office buildings more expensive
and yielding less. Increasingly this area of investing is betting that the price
of office buildings will continue to rise strongly. My syndicators are avoiding
the pricey cities like New York and Washington and looking at less pricey cities,
like ST Louis and White Plains.
late, the hot "perfect" investment has been Nasdaq stocks, including
TriPath Imaging (which reports tomorrow) and Whole Foods which continues to
rise -- perhaps because, once again, I ate every meal from there yesterday.
caught fire yesterday. Lots of rumors, but nothing of substance. The company
is simply too large to be a big growth company. They've become far too slow
and far too bureaucratic. Last year its earnings grew 7% last year. This year
they may grow at 11%. Their dividend yield is 1.24%. They're likely to raise
the dividend, but not to a point where the stock becomes attractive on the payout.
Personally I wouldn't touch the thing with a ten foot barge pole.
How to mismanage your country: King
Fahd died this week after 23 years as absolute monarch of Saudi Arabia. During
his semi-horrible rule...
+ Unemployment for those under 30 reached 25%.
+ Per capita income is less than $7,000, having peaked in 1981 at the equivalent
+ Despite sitting on the world's largest pool of oil, the kingdom has run a
budget deficit for 21 of the last 22 years.
+ More than 20% of the annual budget goes to the military, while the share spent
on education and health steadily has declined.
+ Corruption is endemic. Fahd refused to touch it.
+ Billions of state money went to rebuild the great mosques of Mecca and Medina.
Fahd regarded the work as the most important achievement of his life.
+ Vast amounts of Saudi money were sent to establish mosques to preach wahhabism,
a particularly restrictive and puritanical form of Islam.
+ Islam is the state religion and all citizens must be Muslims.
+ Public and private practice of any non-Muslim religion is restricted. Non-Muslims
can be arrested, lashed, or deported for any religious activity that attracts
the attention of the government.
+ The wearing of non-Muslim religious symbols remains restricted.
+ The printing, possession, importing, or distribution
of any non-Muslim religious material remains banned.
Holders of an Israeli passport or passports with Israeli stamps in them cannot
gain admission to the Kingdom.
+ 15 of the 19 terrorists on 9/11 were Saudis.
+ The demands for money and more money of the ever-expanding royal family are
Fahd was the oldest of the seven sons of the favorite wife of Saudi Arabia's
founder, Ibn Saud, who had 22 wives. By contrast, Fahd, who just died, had only
five wives, six sons and four daughters.
good is Cramer? Alan Saracevic of the San Francisco Chronicle concludes:
(as I do) Cramer's is good entertainment. He concludes : say watch the show. For
every time he slams a Dell keyboard on the desk to prove the worth of the company's
products. For every time you swear he's going to stroke out. But not for advice
on your college savings plan."
he says at the top of each show: "Other people want to make friends....
I just want to make money."
is he giving people good advice? Like any stock picker, it's a mixed bag.
Let's take a look at some of his recent stock-of-the-week picks, provided
by viewers of "Mad Money" on the unaffiliated Money Talk personal
finance Web site (www.money-talk.org).
On April 11, he picked Apple. At the time, it was trading at $43. On Friday,
it closed at $42.65.
On April 18, he chose Pfizer. On that day, it was at $27.75. It closed Friday
On April 28, it was Google. Then: $220. Friday's close: $287.76.
On May 2, he picked Constellation Brands Inc. At the time, it was trading
at $27. It closed at $27.40 on Friday.
On May 9, it was the PNC Financial Services Group. Back then it was at $54.50.
On Friday, it closed at $54.82.
there you have it. Nothing great, other than Google, which my 4-year- old
could have picked. But no train wrecks, either.
Cramer was pumping
Canadian tar sands oil stocks last night. I asked a friend who follows them.
His reply early this morning, "Very long reserve lives, very capital intensive.
If oil stays high, they will be great stocks. A few of of stocks have some oil
sands exposure, and I had been looking at a 130 page report on the sector, when
the takeover knocked prices out of whack yesterday, all up 10% or more. Where
was Cramer BEFORE they all jumped yesterday? The guy is nothing but a mo-mo
player, pumping whatever is hot. Theyre still running promos of his show,
where he shouts commodities are dead from a few months ago, in reality
commodity stocks are hitting new highs."
is very sick:
Two Middle Eastern mothers are sitting in the café chatting over
a pint of goat's milk. The older of the moms pulls out her bag and starts flipping
through pictures and reminiscing. . .
my oldest son, Mohammed. He would be 24 now."
The other mom
replies, "I remember him as a baby."
Mom says, "He's
a martyr now."
"Oh, so sad,
Mom flips to another
picture. "And this is my second son, Kali. He would be 21."
"Oh I remember
him. He had such curly hair when he was born."
Mom sighs, "He's
a martyr, too."
me" says the second mother.
is my third son. My beautiful Ahmed. He would be 18," Mom whispers.
says her friend enthusiastically, "I remember when he first started school."
"He's a martyr
also" Mom says, with tears in her eyes.
After a pause
and a deep sigh, the second Muslim mother looks wistfully at the photos and
up so fast, don't they?"
+ 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 .
You can't click on my email address. You have to re-type it . This protects
me from software scanning the Internet for email addresses to spam. I have no
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.