Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Friday, December 9, 2005: Travel.
Ask questions. People are overjoyed to talk about their investment successes
and (if you push them) their failures. This week's trip brought highlights:
+ 1031 tax-free
exchanges are beyond wonderful. Buy a piece of property. Fix it. Sell for
more. Buy another bigger piece. Sell it for more. Never pay taxes -- so long
as you follow the IRS's 1031 rules. And when you're through and want to retire,
sell everything and put the proceeds in a real estate investment trust. You'll
never pay taxes. With every other asset you mess with -- stocks, bonds, paintings
-- the only question is long-term or short-term taxes. But you pay taxes. With
1031 real estate changes, you may never pay taxes -- or pay them so far out
that you'll never notice them.
+ IRAs can hold far more than stocks and bonds. They can hold real estate.
They can lend on mortgages and trust deeds. They can own bits of limited liability
companies (i.e. normal private companies). The reason all our IRAs today hold
only stocks and bonds is that our stockbroker set them up. And guess what he
+ Expensive real estate is easing. Now is a good time to buy that 10,000
square foot house you always wanted. There are bargains. (No kidding about the
10,000 square feet. I stayed in one in Rancho Santa Fe. It's as close to Paradise
as anyone deserves to be.) As a reflection of high-end easing, Toll Brothers
warned. They make McMansions.
+ Entry-level remains in high demand, what with babies and immigration. But
you got to move to newer, cheaper places like Arizona and Nevada. That's our
latest home building playground. We're looking at selling house between $225,000
and $250,000. A family earning $50,000 to $60,000 a year can afford that. They'll
also accept the longer commute -- for a while, until the jobs move to them.
+ No one on the west coast talks about the stockmarket.
They don't like it. And they'll tell you how real estate has always done
better for them.
are the greatest animals ever invented. Typically they're ex-Wall Street
types who got jack of Wall Street and went looking for something better. Often
they found it in real estate, which is far larger than the the stockmarket,
but gets far less media attention. Your Search for the Perfect Investment
should be to find bird-dogs. The best way to find them is to ask everyone you
meet and then go major due diligence. More about this important subject another
your own instincts. When Kirk Kerkorian bought shares in GM, I thought
I was an idiot recommending shorting the stock. I thought he saw something I
didn't. And maybe he did. But for now, the company is oozing nothing but bad
news and the stock is cratering. It remains a great short. Try Harry's New Game:
Spot the GM car. On your way out today, try to spot a GM car. There are very
few of them on the road.
TiVo is probably a good short, also. My friend
Seth just got a TiVo-like DVR from his cable company (RCN) for $8.95 a month.
Says Seth, "Thus far it has been great, although I cannot type in a key
word like "tennis" and have it record everything, I can record just
about anything else I program." In contrast, TiVo charges as much as $12.95
a month. Admittedly, today TiVo can do more than a cable TV DVR box. But that's
today. Sadly, TiVo lacks the money and the management mindset to perceive the
threats and to leap ahead.
is phenomenal: New York to San Diego and return.
Left on time. Arrived on time. Turned the plane around in San Diego in an incredible
45 minutes. Professional. Courteous. Full plane, as usual. I wish I could recommend
the stock. But, with high fuel costs....
How can you afford NOT to travel?
NY to San Diego round-trip on JetBlue for $225. Delta' s Song has Florida, California
and Vegas JetBlue prices. Airline pricing makes zero sense, given fuel costs....
am I not excited this morning about living in New York?
In San Diego this week, I awoke to blue skies and 70 degree temperatures. This
morning in New York, I awake to fist-size snowflakes falling out of a dark gray
sky. So much for biking to tennis.
Silly Thoughts to Ponder:
Number 9 - Life is sexually transmitted.
Number 8- Good health is merely the slowest possible rate at which one can die.
Number 7- Men have two emotions: Hungry and Horny. If you see him without an
erection, make him a sandwich.
Number 6- Give a person a fish and you feed them for a day; teach a person to
use the Internet and they won't bother you for weeks.
Number 5- Some people are like a Slinky.....not really good for anything, but
you still can't help but smile when you see one tumble down the stairs.
Number 4- Health nuts are going to feel stupid someday, lying in hospitals dying
Number 3- All of us could take a lesson from the weather. It pays no attention
to criticism .
Number 2- Why does a slight tax increase cost you two hundred dollars and a
substantial tax cut saves you thirty cents?
Number 1- In the 60's, people took acid to make the world weird. Now the world
is weird and people take Prozac to make it normal.
+ 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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