Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Thursday, December 22, 2005:
GM short doing well. Down 4.2% yesterday. More to come -- unless Toyota
buys GM. And pigs will truly fly. Michael and I are off on a one-week bonding
trip to Copper Mountain. He'll ski. I'll watch. I'm writing this column on a
bus from Newark's long-term (aka economy parking lot) and uploading it via Verizon's
Broadband Access service -- while I'm on the moving bus. Ain't technology
started my list of "Investment Things I learned in 2005." I
hope some of you will email me your list. Here's my preliminary list:
Family is number one. They provide far more joy than any humble GM short
2. My own health is number two. I hate exercise. But I love tennis and
bicycling, which I don't consider "exercise." Everyone has to find
their own physical pleasure.
3. Capital preservation is the most important investment goal. It takes
many 10% a year gains to get back the money you completely lost. My mantra now
is "When in doubt, stay out." Sadly, you'll also forgo great
gains. Don't flagellate yourself with "Coulda, Shoulda, Woulda."
I'm the master of brilliant investment decisions I almost made. I'm learning
to stop rebuking myself for my dumbness. It's hard. The evidence is so strong.
4. Control is key. I've made a thousand times more money with investments
I've had some control over than deals I hand them my money and pray. Sadly,
when you've made your money with the business you just sold, you have to find
something to do with your gains. Start with sticking all the money in muni bonds
and treasuries. Avoid the temptation to play angel. Absent the temptation, you
wouldn't be reading this column. I'd be on the beach. Not me. Dumb.
5. Constant learning is next. My first love was technology. My new love
is investing. I thought I could learn this stuff quickly. Wrong. I'm seven years
into it full-time. I figure I have another 30 to go. By then, I'll be truly
6. Nothing is predictable. Well, not true. You can see that Whole
Foods is making it and GM isn't. But gold at $800 or $400? When in
doubt, stay out. Be diversified. That way you bet on everything. Well, not everything.
But things that make sense to you.
7. Some investments take a long time. At one point my private equity/leveraged
buyout fund was down 50%. Now it's up 22%. But that took four years. In those
years, I rode a rough emotional rollercoaster.
8. Due diligence is necessary, but not foolproof. The best researcher
is you. Don't rely on anyone else. Check out whatever anyone tells you before
you commit your money. Their ten years of happy experience is no guarantee that
your ten years will be happy.
9. Nobody listens. Nobody. I've tried with the New York Times, TiVo.
Toshiba, etc. But, once every blue moon I find somebody.... Remember they have
your money. They can and do with it what they will. And it most likely won't
agree with what you believe.
10. Rebooting works for everything. Turn
it off. Wait for 30 seconds. Then turn it on again. Bingo, it will work.
Google searches in 2005: I don't make this
--Top Gainers of 2005
-- Top Searches in 2005
- Top Searches in 2005
| 1 Myspace
7. Sky News
8. World of Warcraft
9. Green Day
10. Leonardo da Vinci
2. Hurricane Katrina
4. xbox 360
5. Brad Pitt
6. Michael Jackson
7. American Idol
8. Britney Spears
9. Angelina Jolie
10. Harry Potter
2. digital camera
3. mp3 player
4. iPod mini
8. iPod shuffle
9. computer desk
10. iPod nano
Leaving town: Unplug
anything and everything that responds to a remote. That includes all all your
TVs and cable boxes. Those things use huge amounts of electricity even when
Road to Self-Renewal: John Gardner had a very
productive public and private life. He gave this speech in April 1993. It's
right up there with Steve Jobs' Commencement Address. Click
It is a puzzle
why some men and woman go to seed, while others remain vital to the very end
of their days. And why some people stop learning and growing. ...
If we are conscious of the danger of going to seed, we can resort to countervailing
measures. You don't need to run down like an unwound clock. And if your clock
is unwound, you can wind it up again. You can stay alive in every sense of
the word until you fail physically. ...
We build our own prisons and serve as our own jail keepers... Sometimes people
cling to the ghosts with something almost approaching pleasure, but the hampering
effect on growth is inescapable. As Jim Whitaker, who climbed Mount Everest,
said, "You never conquer the mountain. You only conquer yourself."
The more I see of human lives, the more I believe the business of growing
up is much longer drawn out than we pretend. If we achieve it in our 30s,
even our 40s, we're doing well.
There's a myth that learning is for young people. But as the proverb says,
"It's what you learn after you know it all that counts." The middle
years are great, great learning years. Even the years past the middle years.
I took on a new job after my 76th birthday and I'm still learning.
Learn all your life. Learn from your failures. Learn from your successes.
When you hit a spell of trouble ask, "What is it trying to teach me?"
The lessons aren't always happy ones, but they keep coming.
We learn from our jobs, from our friends and families. We learn by accepting
the commitments of life, by playing the roles that life hands us (not necessarily
the roles we would have chosen). We learn by growing older, by suffering,
by loving, by taking risks, by bearing with the things we can't change.
The things you learn in maturity aren't simple things such as acquiring information
and skills. You learn not to engage in self-destructive behavior. You learn
not to burn up energy in anxiety. You discover how to manage your tensions.
You learn that self-pity and resentment are among the most toxic of drugs.
You find that the world loves talent but pays off on character.
You come to understand that most people are neither for you nor against you;
they are thinking about themselves. You learn that no matter how hard you
try to please, some people in this world are not going to love you, a lesson
that is at first troubling and then really quite relaxing. ..
You learn the arts of mutual dependence, meeting the needs of loved ones and
letting yourself need them. You can even be unaffected - a quality that often
takes years to acquire. You can achieve the simplicity that lies beyond sophistication.
Of course failures are a part of the story, too. Everyone fails. When Joe
Louis was world heavyweight boxing champion, he said, "Everyone has to
figure to get beat some time." The question isn't did you fail, but did
you pick yourself up and move ahead. And there is one other little question:
"Did you collaborate in your own defeat?" A lot of people do. Learn
One of the enemies of sound, lifelong motivation is a rather childish conception
we have of the kind of concrete, describable goal toward which all of our
efforts drive us. We want to believe that there is a point at which we can
feel we have arrived. We want a scoring system that tells us when we've piled
up enough points to count ourselves successful.
So you scramble and sweat and climb to reach what you thought was the goal.
When you get to the top you stand up and look around, and chances are you
feel a little empty. Maybe more than a little empty. You may wonder whether
you climbed the wrong mountain.
But the metaphor is all wrong. Life isn't a mountain that has a summit. Nor
is it, as some suppose, a riddle that has an answer. Nor a game that has a
Life is an endless unfolding and, if we wish it to be, an endless process
of self-discovery, an endless and unpredictable dialogue between our own potentialities
and the life situations in which we find ourselves. ...
There's something I know about you that you may or may not know about yourself.
You have within you more resources of energy than have ever been tapped, more
talent than has ever been exploited, more strength than has ever been tested,
more to give than you have ever given. ..
It isn't possible to talk about renewal without touching on the subject of
motivation. Someone defined horse sense as the good judgment horses have that
prevents them from betting on people. But we have to bet on people, and I
place my bets more often on high motivation than on any other quality except
judgment. There is not perfection of techniques that will substitute for the
lift of spirit and heightened performance that comes from strong motivation.
The world is moved by highly motivated people, by enthusiasts, by men and
women who want something very much or believe very much. ...
For many, this life is a vale of tears; for no one is it free of pain. But
we are so designed that we can cope with it if we can live in some context
of a coherent community and traditionally prescribed patterns of culture.
Today you can't count on any such heritage. You have to build meaning into
your life, and you build it through your commitments, whether to your religion,
to an ethical order as you conceive it, to your life's work, to loved ones,
to your fellow humans. Young people run around searching for identity, but
it isn't handed out free anymore - not in this transient, rootless, pluralistic
society. Your identity is what you've committed yourself to.
It may just mean doing a better job at whatever you're doing. There are men
and woman who make the world better just by being the kind of people they
are. It matters very little whether they're behind the wheel of a truck or
running a country store or bringing up a family. ...
We cannot dream
of a Utopia in which all arrangements are ideal and everyone is flawless.
Life is tumultuous - an endless losing and regaining of balance, a continuous
struggle, never an assured victory. Nothing is ever finally safe. Every important
battle is fought and refought. You may wonder if such a struggle, endless
and of uncertain outcome, isn't more than humans can bear. But all of history
suggests that the human spirit is well fitted to cope with just that kind
of world. ...
is not something you stumble across, like the answer to a riddle or the prize
in a treasure hunt. Meaning is something you build into your life. You build
it out of your own past, out of your affections and loyalties, out of the
experience of humankind as it is passed on to you, out of your own talent
and understanding, out of the things you believe in, out of the things and
people you love, out of the values for which you are willing to sacrifice
something. The ingredients are there. You are the only one who can put them
together into that unique pattern that will be your life. Let it be a life
that has dignity and meaning for you. If it does, then the particular balance
of success or failure is of less account.
more racist jokes.
A little old lady is walking down the street,
dragging two plastic garbage bags with her, one in each hand. There's a hole
in one of the bags, and every once in a while a $20 bill is flying out of it
onto the pavement.
a policeman stops her...."Ma'am, there are $20 bills falling out of that
bag..." "Oh!, No! " says the little old lady....."I'd better
go back and see if I can still find some. Thanks for the warning!"
not so fast," says the cop. "How did you get all that money? Did you
says the little old lady. "You see, my back yard backs up to the parking
lot of the football stadium. Each time there's a game, a lot of fans come and
pee in the bushes, right into my flower beds!"
"So, I go
and stand behind the bushes with a big hedge clipper, and each time someone
sticks his little thingie through the bushes, I say: $20 or off it comes!"
a bad idea!" laughs the cop. "OK, good luck! By the way, what's in
the other bag?"
says the little old lady, "not all of them pay up"....
+ Dumb reasons we hold losing stocks. Click
+ How my private equity fund is doing. Click
+ Blackstone private equity funds. Click
+ 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 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
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