Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Friday, February 24, 2006: There
are three ways looking at the "yield" you get from a muni bond. This
is an actual example from a buy I made yesterday. It is a NY State Thruway --
AAA/AAA bond, maturing in 2018.
Yield to maturity 4.08%.
2. Yield to call 3.88%.
3. Current yield 4.60%.
bonds have a potential "call date," this one in 2015. If interest
rates are lower n 2015, the Thruway will buy my bonds back and issue ones with
a lower interest rate. The current yield is physically what I'm getting in cash
each year -- not taking into account the value of the bonds at maturity or at
call. The current yield assumes that in 12 years (or whatever the maturity of
the bond is), I'll be dead and someone else will worry about the principal.
Meantime, I can live on the 4.6% interest.
whether it's 4.08% or 4.60%, the return on these bonds sucks. I'd be far better
off in equities, real estate, hedge funds or whatever. The issue is not the
miserable return, it's safety, diversification and comfort. If the world collapses
tomorrow, I can live on the interest of these bonds. Nothing else I have pays
cash as consistently. And cash is as good as money.
These rates are also triple tax-free. No federal, state or city taxes. Which
means effectively, they're a little higher.
reader highlighted Nuance Communications: It
has gone up.
The reader pointed out two weeks ago, Nuance bought Dictaphone and on February
8, Nuance said:
is the bigger it gets, the more money it loses. If Nuance ever cut its outrageously
high R&D, it would earn some money. The chart is definitely interesting.
Communications Inc., a maker of speech-recognition software, will buy Dictaphone
Corp. for $357 million to expand in health care and speed the automation of
patient information dictated by doctors.
speech-recognition systems to the health-care industry, Burlington, Mass.-based
Nuance said in a statement.
to eliminate most manual transcriptions of patient information by implementing
Stratford, Conn.-based Dictaphone's speech-recognition capability. Dictaphone
has dictation and transcription software systems in more than 4,000 hospitals
and outpatient facilities, serving about 400,000 doctors, the statement said.
The deal will
add $80 million to $85 million in revenue in the 2006 fiscal year, and $180
million to $200 million in the 2007 fiscal year. It will generate cost savings
of $20 million to $25 million a year, according to Nuance."
CHECK. CHECK. IBM had "Think." I have "CHECK."
+ A lawyer asked to send him an important fax yesterday afternoon. He emailed
me this morning saying he hadnt received it and thus things were slowing
down. He checked his fax machine. It was out of paper.
+ Brokerage statements are often wrong, usually in their favor. Check.
+ I once received a new laptop with 2 gigabytes of memory in two slots, each
of one gigabyte. Turned out many months later when I checked, only one of slots
was working and I really only had one megabyte.
+ Set up a CHECKlist for all your tasks and follow it. I have a list of six
tasks I need to do when I've written this column, including spellcheck and backup.
Some days I "forget." Stupid, lazy.
+ Check that when you announce a new product, you can actually deliver it. Toshiba
announced a new laptop, the Tecra M5 a few weeks ago. I got excited and tried
to buy it yesterday. No luck. The company won't even take order for it for another
month or so. (I kid you not. It's that vague.)
This makes me very sad. From
this morning's New York Times:
Feb. 23 After a day of violence so raw and so personal, Iraqis woke
on Thursday morning to a tense new world in which, it seemed, anything was
on Wednesday was the closest Iraq had come to civil war, and Iraqis were stunned.
In Al Amin, a neighborhood in southeast Baghdad, a Shiite man said he had
watched gunmen set a house on fire. It was identified as the residence of
Sunni Arab militants, said the man, Abu Abbas, though no one seemed to know
for sure who they were.
were shocked," said Abu Abbas, a vegetable seller, standing near crates
of oranges and tomatoes. "We saw it burning. We called the fire department.
We didn't know how to behave. Chaos was everywhere."
Of the seven
men inside, at least three were brought out dead, said Abu Abbas, 32, who
said it would be dangerous to give more than his Iraqi nickname.
different on Thursday morning. A Shiite newspaper, Al Bayyna al Jadidah, used
unusually angry language in a front-page editorial: "It's time to declare
war against anyone who tries to conspire against us, who slaughters us every
day. It is time to go to the streets and fight those outlaws."
sillier and sillier:
D.C. - A white house source stated that Congress is considering awarding Vice-President
Dick Cheney the Medal of Freedom, the national highest civilian commendation,
for his act of bravery in shooting an attorney. The source was quoted to say
" All Americans have wanted to shoot a lawyer at one time or another
and Cheney actually had the balls to do it". In a related story, the
Texas Parks and Wildlife Department, which issues hunting licenses, said that
it will start requiring hunters, wishing to bag a lawyer, to have the new
"lawyer's stamp" on their hunting license. Currently Texas hunters
are required to carry stamps for hunting birds, deer, and bear, at a cost
of $7 annually. The new "lawyers stamp" will cost $100, but open
season will be all year long. The department further stated that although
the "lawyers stamp" comes at hefty price, sales have been brisk
and it is believed it will generate annual revenues in excess of $3 billion
dollars the first year. Other states are considering similar hunting license
"Susan, please close the window over there. It's cold outside."
"Harry, if I close the window, will it get warm outside?"
I went to a store
to buy some insecticide. "Is this good for beetles?" I asked the clerk.
"No," he replied. "It'll kill them."
An attorney specializing in personal injury decided to branch out,
so he added libel claims to his practice. He wanted to add insult to injury.
Two buddies were watching the game when one turned to his friend
and said "You won't believe it. All last night, I kept dreaming of a horse
and the number five. So I went to the track, put $500 on the fifth horse in
the fifth race, and you won't believe what happened."
"Did he win?"
"Nah," the guy said. "He came in fifth."
If you haven't heard back from me on Strategic Commodities fund, you will. I've
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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