Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Monday, February 20, 2006, Presidents' Day.
Same column as Friday:
I have a small account at UBS. My UBS broker invited me to hear El Paso Corp.
(EP) present yesterday at the firm's "2006 Natural Gas & Electric
Utilities Conference." The setting was grand. The Hotel Pierre on Fifth
Avenue. El Paso had the preferred luncheon spot. Their presentation impressed
someone -- their stock rose 5.6% yesterday.
walked out with an uncomfortable feeling. Was I listening to a presentation
by a company UBS analysts liked (they said they did)? Or was I listening to
presentation by a company whose UBS investment bankers were pitching? El Paso
talked about a $500 million equity raise this summer. And clearly UBS (and every
other I-banker in town) wanted that business.
is not shy about its ambitions. They gave us attendees an impressive spiral
bound booklet with facts, figures and their analysts' conclusions about natural
gas and electric utilities. And there, right on the cover, was a 3 1/2"
x 4" sticker with the following words:
I checked the research.
It was favorable.
does and seeks to do business with companies covered in its research reports.
As a result, investors should be aware that the firm may have a conflict of
interest that could affect the objectivity of this report. Investors should
consider this report as only a single factor in making their investment decision.
Customers of UBS in the United States can receive independent, third-party
research at www.ubs.com/independentresearch.
The lunch was great. I met some nice people and came home with three UBS pens.
fast a climb" were the words on the Yahoo! message board. And
boy were they right.
1. There's no such thing as a long-term holding. Movements these days
-- especially in hot stocks -- are too volatile. You have to watch each stock
2. On pullback of the intensity as yesterday's in ORA, you have to sell.
And sell instantly. And ask why later. In this case, there was no news, no rumors,
nothing. Just a bunch of daytraders and hedge funds who figured ORA had risen
too much, too fast.
3. It would be nice to predict the peak. But it's not possible. You could
set some targets for your profits and get out when you reach them. But, with
both ORA and VPRT, you would probably have guessed low.
4. The best strategy is to ride the tornado, then dump on weakness. Be
happy for the profits you made.
(VPRT) and Ormat Technologies (ORA) are profitable, but overpriced.
I've mentioned both here. Hopefully some of you rode their tornado up and made
a few shekels. Now is the time to look elsewhere, while they pull further back
-- which I'm guessing they will do. El Paso, by contrast, is not profitable.
And its chart shows a very different pattern:
At 85 years of age, Wally married Lou Anne, a lovely 25 year old.
Since her new
husband was so old, Lou Anne decides that after their wedding she and Wally
should have separate bedrooms. She is concerned her new aged husband may overexert
himself if they spend the entire night together.
After the wedding
festivities Lou Anne prepares herself for bed and the expected "knock"
on the door. Sure enough the knock comes, the door opens and there is Wally,
her 85 year old groom, ready for action.
They unite as
one. All goes well, Wally takes leave of his bride, and she prepares to go to
After a few minutes,
Lou Anne hears another knock on her bedroom door, and it's Wally. Again he is
ready for more "action".
Lou Anne consents for more coupling. When the newlyweds are done, Wally kisses
his bride, bids her a fond Good Night and leaves.
She is set to
go to sleep again, but, aha you guessed it - Wally is back again, rapping on
the door, and is as fresh as a 25-year-old, ready for more "action".
And, once again they enjoy each other.
But as Wally gets
set to leave again, his young bride says to him, "I am thoroughly impressed
that at your age you can perform so well and so often. I have been with guys
less than a third of your age who were only good once. You are truly a great
embarrassed, turns to Lou Anne and says:
mean I was here already?"
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
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