Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
9:00 AM EST, Tuesday, December 18, 2007: The
market ails, as economic stats continue to show the economy weakness. Yesterday's
80% declining on the big board; only 20% rising. Huge numbers of stocks hitting
new lows. Not a good place to be, though today we may see a "dead cat bounce."
A little ray of
hope: my insurers seem to be coming back. Ambac rose 17% yesterday to $26.66.
MBIA rose 3.4% to $28.54. And SCA rose 9.5% to $4.51. I still favor a small
investment, spread amongst these three. Here's a link to my column of
Capital One continues its decline. Consumer credit has ballooned and the quality
has progressively worsened.
I have a sinking feeling about Moody's Corp, the big rating agency that has
screwed up so badly. A reader, Howie, writes, wait till the lawyers get a hold
of them. Think of the HUGE conflicts of interests these rating agencies have
where they are paid by the folks they are rating.
much spam should you expect? It was an ugly
meeting. "I'm getting 25 spam emails a day on my BlackBerry. I don't want
to deal with them. It's your job to get rid of them," I was told. I wanted
to laugh. 25 a day is few and easy to erase. But...
is an ongoing battle. Spam filters can work. Tighten them. You'll lose emails
you want. Since midnight last night, my spam filter caught 10 emails. Nine of
them were not spam. I wanted them. Viagra is spelled so many different ways
because filters don't catch all the iterations. The bottom line is spam works.
Someone is buying all that Viagra. It's an ongoing battle, part of our new milieu.
Panky on Wall Street: From today's Wall
Actions Are Subject of Inquiry
Federal criminal prosecutors investigating the collapse of two internal hedge
funds at Wall Street firm Bear Stearns Cos. are examining whether a Bear executive
improperly withdrew money he had invested in one of the funds while making
optimistic forecasts about the portfolio's prospects, people familiar with
the matter say.
the two funds began imploding in April, fund manager Ralph Cioffi moved about
$2 million of his own money from the riskier of the two hedge funds into another
internal fund with a separate investment strategy, these people say.
move effectively lowered his exposure to the riskier of the two failed funds
when it was on the brink of significant declines, these people say. No other
senior Bear executive invested in the funds, according to people familiar
with the matter. A spokeswoman for Bear declined to comment.
fund investors not long after the money transfer, Mr. Cioffi and a
fellow fund manager still were publicly bullish about their two main funds,
High-Grade Structured Credit Strategies Fund and a riskier sister fund.
As late as April
25, when they held an investor conference call, the two managers were telling
investors that the amount of money investors were attempting to withdraw was
lower than the amount of new money coming in, according to a lawyer
representing investors who lost money in the funds.
theme was that the investor redemptions were a lot less than the fresh investments,"
contends Ross Intelisano, a plaintiff attorney whose clients lost approximately
$80 million when the Bear funds collapsed in late July. "That's what
kept people in."
reported yesterday that prosecutors were examining whether Bear Stearns insiders
associated with the funds were pulling money out of the portfolios before
this year's mortgage-market turmoil. The Wall Street Journal reported
the existence of the criminal probe in October.
Before he removed
the $2 million, in February or March, Mr. Cioffi had invested about $6 million
in the riskier of the two High-Grade funds, say the people familiar with the
matter. But after moving part of that investment into a third fund within
Bear Stearns Asset Management, as Bear's money-management arm is known, Mr.
Cioffi's remaining exposure in the riskier High-Grade fund was $4 million,
these people added.
unit of the U.S. Attorney's office in Brooklyn began examining the failing
Bear funds during the summer, people familiar with the matter have said. Alongside
investigators from the Securities and Exchange Commission, which is conducting
a civil probe, criminal prosecutors are examining whether the High-Grade fund
and its riskier sister fund were properly sold and managed. The funds, which
have filed for bankruptcy protection, wiped out $1.6 billion in investor
There are two
lessons here. First, it's not always easy to figure out what your favorite hedge
fund is doing. Hedge fund docs are generally written so vaguely as to allow
them to do anything, including borrowing money to bet heavily on on bonds backed
by subprime mortgages. The extent of a hedge fund's riskiness is often not apparent.
By the time, you as an investor do find out, it's too late.
Second, it takes
time to get your money out of hedge funds. There are long periods your money
is locked up for. Often, the fund manager may arbitrarily limit how much you
can take out and limit in what form you can take out in -- .e.g. not cash, but
stock or bonds in a totally illiquid bond or equity.
females should avoid a girls night out after they are married....
The other night I was invited out for a night with the "girls."
I told my husband that I would be home by midnight, "I promise!" Well,
the hours passed and the margaritas went down way too easily. Around 3 a.m.,
a bit loaded, I headed for home. Just as I got in the door, the cuckoo clock
in the hallway started up and cuckooed 3 times. Quickly realizing my husband
would probably wake up, I cuckooed another 9 times. I was really proud of myself
for coming up with such a quick-witted solution, in order to escape a possible
conflict with him.
(Even when totally
smashed... 3 cuckoos plus 9 cuckoos totals 12 cuckoos =MIDNIGHT!)
The next morning
my husband asked me what time I got in, I told him "MIDNIGHT"... he
didn't seem pissed off in the least. Whew, I got away with that one! Then he
said "We need a new cuckoo clock."
When I asked him
why, he said, "Well, last night our clock cuckooed three times, then said
"oh shit." Cuckooed 4 more times, cleared its throat, cuckooed another
three times, giggled, cuckooed twice more, and then tripped over the coffee
table and said "oh shit" again.
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
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