Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Tuesday, February 21, 2006: Forget
money (for now). The more exercise you do, the healthier you are. Six hours
on the tennis court playing singles over the weekend. And I feel like a hundred
million dollars -- one million not being what it used to be.
David Swensen does it: Excerpts from a Bloomberg
about alternative investments: I'm putting more
money into Strategic Commodities Fund this morning. Strategic buys a broad
range of commodities -- from oil to aluminum. Last year the fund achieved 26%
returns by betting that everybody wants more commodities to improve their standards
of livings -- especially China and India. If you'd like to know more on this fund,
David Swensen has performed very well: For the
fiscal year ended on June 30, he generated a 22.3 percent return on Yale's
$15.2 billion endowment. Over the long term, his record is equally compelling:
an annualized return of 16.1 percent since 1985 and a 17.3 percent
return for the past 10 years. From January 1990 to June 2005, U.S. hedge funds
had an average annualized return of just 14.07 percent, according to
the Hedge Fund Research of Chicago Index.
Swensen, who also teaches graduate and undergraduate classes on investing
at the university, has nurtured dozens of protégés over the
years, and many of them now populate top investment firms and head up endowments
at other schools. I think it would be impossible to overstate his importance,
says Andrew Golden, president of Princeton University Investment, who interned
with Swensen and then worked in the Yale investment office for four years.
He has had an effect on large and even medium-size endowments....
Among Swensens most influential doctrines, Golden, 46, says, is that
university investment managers shouldnt be afraid to take positions
in so-called alternative areas such as hedge funds, private equity and
real estate. Most endowments dont invest as heavily in such fields
as Yale, which, Swensen says, has almost 70 percent of its assets in
alternatives. Still, Golden says, most hold more now than they did before
Swensen came along. Its because of Davids willingness to
push good ideas further that I no longer know what an alternative investment
is, Golden says.
your eyes open , idiot:
I was in Home Depot recently buying fluorescent
bulbs. Their sales people were genuinely helpful. They had what I wanted. I
even bought some things I didn't want. The store was impressive. And housing
has been booming. So why didn't I check the company's stock out? Today Home
Depot announced that its latest fourth quarter profit rose 23%. Dah!
Keep your eyes open, you idiot!
The charm (or otherwise) of investing in private companies:
Best conversation of the weekend. A bank president and
successful investor explained in gruesome detail why he had given up investing
in private companies:
1. The management usually confuses marketing with sales. "Forget the marketing,"
says my friend, "bring me some cash sales."
2. Few of the other board members read the board materials, leaving my friend
to ask the hard questions.
3. Few of the other board members take the management to task for dumb decisions.
4. Since most management are in love with their own ideas and products, the
odds of long-term success are very low.
5. Managed money, of late, has returned more consistent
and higher returns.
Verizon Broadband Access sings again: My
son stuffed our our Verizon PC card into his laptop and carried it this past
long weekend to remote places. It worked beautiful. He couldn't sing its praises
This morning I emailed Ivan Seidenberg, Verizon's CEO:
been in telecom for 35 years. The most exciting product I've seen in all those
years is Verizon's Broadband Access product.
Pop a card into your laptop and, bingo, you have high-speed Internet and email
access virtually everywhere. I've used it on buses, planes, cars and trains
and in remote towns. You ought to be hyping the heck out of this product.
It is genuinely thrilling.
Dual Core machines: Intel is upgrading PC chips
to dual core. This makes them much faster -- especially if you're running several
programs simultaneously -- like doing a spreadsheet and playing Internet music.
The speed hike gives you a persuasive reason to upgrade your PC -- desktop or
laptop. But don't buy the first dual core machine you see. There are six
dual core processors. You want the fastest -- the one with the 2.16 GHz clock
speed. Some PC makers (such as Toshiba) have not yet announced machines
with the fastest processor. It's worth waiting. Even better news is that these
new, faster top-of-the-line laptops are much cheaper than the previous
top-of-the line models. I suspect that's because competition has forced Intel
to reduce its high prices. God bless competition.
airline to fly during a snow storm? When storms
disrupt travel, some airlines are more aggressive than others. American and
United, according to the Wall Street Journal, are quick to cancel flights, while
Continental and JetBlue stay aloft longer.
Dry hands again. Six hours of tennis on
the weekend and my right hand is cracked, dry and bleeding. There are two solutions
-- New Skin to seal the tears and No-Crack to soften my skin and
deflect my wife's comments about my ugly hands.
people have died over the Danish Mohammed cartoons: If
you want to see what all the fuss is about, Click
Meanwhile, the worst Danish joke ever
Ole Vas working at the fish plant up nort in Duluth vhen he accidently
cut off all ten of his finkers. He vent to da emergency room in the Clinik and
vhen he got dar da Norsky doctor looked at Ole and said, "Let's have da
finkers and I'll see vhat I can do."
Ole said, "I
haven't got da finkers."
you mean, you hafen't got da fingers?" he said. "Lord-it's 2006! ve's
got microsurgery and all kinds of incredible techniques. I could hafe put dem
back on and made you like new! vhy didn't you brink da finkers?" To vhich
"How da fock
vas I suppose to pick dem up?
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. Please note I'm not suggesting
you do. That money, if there is any, may help pay Claire's law school tuition.
Read more about Google AdSense, click
here and here.