Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM EST Friday, February 9, 2007: This
has been a bad week for commodities and computer problems (other peoples') ,
and a good week for lawyers.
First, the computers. We expect our computers and our Internet to turn on and
work as reliably as a light. Sadly, No. Most of us haven't a clue how this computer
magic works. When it fails -- as it will -- we're distraught. Our files are
gone. Our Outlook email lifeline is dead, etc.
I hate to suggest this. But you can't leave your computer to your 15-year old
pimply computer whiz. You must understand enough to back up, troubleshoot and
restore your computer. You must also understand how your network is connected,
to where and how.
My basic strategy is:
+ Daily backup of all my working files. I use FileSync.
+ Clone my PC's hard disk before I update, change or add software. I always
assume that new software I load will barf and screw everything up. I use my
backup to revert to the old reliable disk. Windows XP has a "go back"
system. I don't trust it.
+ I always have two connections to the Internet -- a DSL or cable modem (depending
on where I am) and Verizon's Broadband Access card.
+ I have two identical laptops. Should one crash, I can pop the original or
the replacement hard disk in and keep working.
There are some things you can't backup or duplicate. That includes the idiot
who puts up your web site and runs your email. (Hopefully, you're not stupid
enough to do that yourself.) The best you can do is to find a reliable provider
(if there is such a thing) and pray. I like ICDSoft.com.
some commodities have tumbled, hitting my commodities fund and my Australian
mining stocks. In hindsight, I should have seen this coming and taken quick
profits last year. I'm sanguine about commodities and metal prices bouncing
back what with India and China, etc. But the point remains (following this week's
theme): When you're up short-term, take your profits and move on. There is no
"Buy and Hold" left. That strategy is well and truly DEAD! If you
don't have time to "manage" your stocks weekly, get out and let someone
else do it -- like a nice index fund.
brings me to my Vanguard funds:
+ International Value Fund
+ Total International Stock Index Fund
+ 500 Index Fund
+ Pacific Stock Index Fund
+ Emerging Markets Stock Index Fund
+ Mid-Cap Index Fund
night, I put some money into a new Vanguard fund -- the Global Equity Fund.
I did this because I like its performance and because Forbes Magazine suggested
that this fund was going to close soon.
As regards "The Lawyers' Full Employment Act," I'm happy to
report that it's been the most successful piece of legislation ever passed by
Congress. Item: Yesterday I received a one page letter from a BIG law firm that
As a follow up to the mailing that you received within the past few days with
regard to XXX Corp., enclosed is a self-addressed envelope for use in returning
the materials contained in that mailing, which may have been inadvertently
they left out the stamped self-addressed envelope. They want me to use and send
them back several bits of paper I'm to sign. Imagine how many hours the poor
client got billed because they forgot to send a miserable #10 envelope! By the
way, the envelope had 87 cents of postage on it. The papers they wanted would
easily go for 39 cents. They wasted 48 cents of their clients' money. I wonder
how many zillions of stockholders got that expensive envelope.
to save energy: 90% of the electricity to light
an incandescent bulb is used to heat it. That's called wasting energy. The are
now at least four different bulb technologies. And LED is coming soon. I made
this chart out of a TtrakLighting.com catalog. (Yes, there are two ts.).
The best value for money are fluorescents. They cost more, but last forever
and over their life save oodles of energy. Their problem? Most don't look "warm"
like incandescents. They are bright white and have lots of green in them. You
can see that in their color temperature readings. My wife hates fluorescents.
You need to find a brand you (and your wife) likes. There aren't many. How many
hours you'll get out of your bulbs depends on your local electricity supplier.
If it's delivering consistently above 120 volts, you might try 130 incandescent
volt bulbs. They'll last forever, but burn even less bright. The best deal today
remains compact fluorescents -- if you can find a "warm" one.
120 volt incandescent
fund nightmare: Getting into a hedge fund is
easy. Send them your money. Getting out of a hedge fund is difficult. First
you have to give them notice. That can cost you money if they're on a roll downwards.
Second they may not give your money back; they may give you some of the junky
shares or futures (or whatever) they bought with your money and they can't sell.
For your edification (and my pain), here's an excerpt from a typical hedge fund's
book of rules applying to its lucky (??) investors.
Next Wednesday is Valentine's Day: Hallmark reports that 85% of all
Valentine's Day cards are bought by women, most in desperation. Don' let it be..
Men, step up to it.
be made to a partner withdrawing over 90% of the balance of his Capital Account
(as of the date of the withdrawal) in the following manner: (i) 90% of the
amount of his Capital Account withdrawn (less any applicable withdrawal fee),
within thirty (30) days of the effective date of the withdrawal; and (ii)
the balance of the amount of his Capital Account withdrawn, within thirty
(30) days following the delivery of the audited financial statement of the
partnership for the Fiscal Year in which such withdrawal date occurs, together
with interest on such latter amount (at prevailing rate applicable to Partnership
credit balances) accruing from the withdrawal date, unless the General Partner
consents to delivery of such remaining balance at an earlier date. The General
Partner, in its sole discretion, may consent to withdrawal payments as of
other dates. At the option of the General partner, the amount of the withdrawal
may be made in whole in cash, or in whole in kind, or in part in cash and
in part in kind. In kind payments may but need not be pro rata as to the assets
of the Partnership.
(b) In the case of a withdrawing Limited Partner whose Capital Account reflects
in interest in securities whose immediate public resale is prohibited by legal
or contractual restrictions; or that is illiquid or, in the judgment of the
General Partner, subject to significant market conditions impairing such immediate
public resale (all of the foregoing being referred to herein as "Restricted
Securities"), the General Partner shall have the right, at its option,
to (i) make an in-kind distribution, upon one or more of the Regular Withdrawal
Dates provided in paragraph (a) of this section 6.4, of such withdrawing Partner's
share of restricted Securities allocated to such Capital Account; or (ii)
suspend the effective date of payment of such share of the withdrawal to such
date as of which all gains and losses on such allocated Restricted Securities
have been fully realized, in order to determine the value of such share of
the withdrawal to such date as of which all gains and losses on such allocated
Restricted Securities have been fully realized, in order to liquidate the
value of such share on a realized basis, and make such withdrawal payment
in the form of cash, together with interest thereon at the rate provided in
clause (ii) of said paragraph (a); or (iii) whether pursuant to clause (ii)
hereof or otherwise, establish and maintain, at the cost of the Partnership,
a liquidating trust for purposes of facilitating the public resale of such
parasite: My son Michael's office sent him
a "Get Well" present -- a book on parasites called Parasite
Rex. I looked it up on the web and found an on-line bookstore telling me
that I might also like another book -- "Fast Food Nation -- the dark
side of the all-American meal." I thought that was funny. My son, whose
stomach still hurts, didn't.
Prawn and the Shark -- the world's most contrived bad pun:
Far away in the tropical waters of the Caribbean, two prawns were
swimming around -- one called Justin and the other called Christian. The prawns
were constantly harassed and threatened by sharks.
One day Justin
said to Christian, "I'm fed up with being a prawn; I wish I were a shark.
Then I wouldn'worry about being eaten."
A large mysterious
cod appeared and said, "Your wish is granted", and lo and behold,
Justin turned into a shark. Horrified, Christian immediately swam away, afraid
of being eaten by his old mate.
Time passed and
Justin found life as a shark boring and lonely. All his old mates swam away
whenever he came close to them. They were scared of him.
One day he saw
the mysterious cod again. He asked the cod to change him back. Lo and behold,
he found himself turned back into a prawn.
With tears of
joy in his tiny little eyes Justin swam back to his friends. Looking around
the gathering at the reef he realized he couldn't see his old pal. "Where's
Christian?" he asked.
home, still distraught that his best friend changed sides and became a shark."
Eager to put things
right again, he set off to Christian's abode. As he opened the coral gate, memories
came flooding back. He banged on the door, "It's me, Justin, your old friend.
Come out and see me again."
"No way man, you'll eat me. You're now a shark, the enemy. I'll not be
tricked into being your dinner."
Justin cried back.
"No, I'm not. That was the old me. I've changed..... I've found Cod. I'm
a prawn again Christian".
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
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note I'm not suggesting you do. That money, if there is any, may help pay Claire's
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