Harry Newton's In Search of The Perfect Investment
9:00 AM EST, Tuesday, January 20, 2009: Inauguration
Day. Obama's acceptance speech will start
at 11:46 AM this morning and run 17 minutes. One of his cute daughters told
him to "keep it short." He will. The timing comes from my friend
got flack from readers about last Friday's column on investing lessons, namely
Stick with what you know.
Put the savings from your first love into the safest investment -- muni
bonds or treasuries. Reinvest the interest.
+ Don't borrow
and everything hot today will be cold tomorrow.
+ When in
doubt, stay out.
+ Every investment
you make requires accounting, tax forms and time beyond anyone's imagination.
+ Don't believe
anything your friends tell you.
+ Stop eyeing
your friends with jealousy.
+ All the
panoply of securities "regulation" (both government and exchange
self-enforced) is nonsense.
+You can be
protected from your own greed -- if you learn to say NO.
Readers argued that this was not the perfect investment, but the "perfectly
safe investment." I don't deny that. In today's uncertain world,
I'm going after safety and avoiding equities. I remain fearful of what the
Economist refers to as manufacturing worldwide "Accelerating
have gotten to me this morning:
unemployment. Circuit City's liquidation cost 34,000 people their jobs.
That's a huge number. It's not typical. But it's happening throughout the
economy. I figure the real unemployment rate is already above 10% and will
soon hit 15%.
costs of corporate borrowing. Southwest Airlines is paying 10.5% -- nearly
double the rate it had paid in 2004. Nabors Industries is paying 9.25%
versus 6.15% it paid a year ago. That's for companies that can get loans.
Those who can't (and there are many) are cutting employment, canceling plans
and selling assets.
growth is slowing dramatically. I rue this Bloomberg headline, "Zero
Growth in China Is 2009 Black Swan Event: William Pesek." For more,
4. Hard to
predict Government moves. The TARP failed to get the economy going and
loans flowing. It rewarded incompetent banks and gave competent banks a bonus
they didn't deserve (nor, in many cases, want). Bank stocks still fell. Who
can predict what the new Washington is going to do next? Yet, it's clear Washington
-- above every other factor -- is presently steering the ship called U.S.S.
5, Most stocks
are overvalued. The Journal this morning has a piece discussing with Circuit
City's liquidation, one guesses that Best Buy is a best buy. Wrong. The Journal
figures it's not a best buy, yet. Its shares trade at 13 times next fiscal
year's expected earnings. Personally I figure they should be trading with
a P/E in the single digits to make the stock semi-attractive. For the Journal's
But for those
of you who are keen to take a little money and gamble, I refer you to Jim
Kingsdale's excellent stock recommendations from Friday's
at Circuit City? It was in Chapter 11, but couldn't find a recovery
solution. It's now in Chapter 7 where its inventory is being liquidated as
fast as possible. You may be able to find some bargains in your local Circuit
City. But you may not. A reader , Tim Jebara writes this morning:
Harry be careful
of Circuit City deals, on a few things they cut prices 5-10% but they marked
them up to MSRP. So you might think you're saving a lot on that TV, but
it maybe cheaper at Best Buy. The best deals will be had in February and
I have had
bad experience in the past from Comp USAs liquidation. They raise
all the products prices and then discount to trick the consumer. A lot of
people fall for it, and it's worse when they get a liquidator, as Circuit
City has now. Here are two articles on it. Its good they're closing,
another example of poor customer services, and financial kids thinking they
can treat a retail operation as if its a financial company, with little
regard to customers. Here are a couple of articles, "Circuit
City Closeout Deals Aren't Deals at all." AndCircuit
City closings begin, lines form, bargains await.
Open Tennis began this weekend. The huge
time difference makes this ideal for TiVo. Enjoy. (M Men, W = Women, D = Doubles. All times EST.)
of life -- part 1
During a commercial airline flight an Air Force Pilot was seated
next to a young mother with a baby in arms. When the baby began crying during
the descent for landing, the mother began nursing the infant as discreetly
The pilot pretended
not to notice and, upon disembarking, he gallantly offered his assistance
to help with the various baby-related impedimenta.
When the young
mother expressed her gratitude, the pilot responded, "Gosh, that's a
good looking baby...and he sure was hungry!"
the mother explained that her pediatrician said nursing would help alleviate
the pressure in the baby's ears.
The Air Force
Pilot sadly shook his head, and in true pilot fashion exclaimed, "And
all these years, I've been chewing gum."
of life -- part 2
A mortician was working late one night. He examined the body of
Mr. Schwartz, about to be cremated, and made a startling discovery. Schwartz
had the largest private part he had ever seen!
Mr. Schwartz," the mortician commented, "I can't allow you to be
cremated with such an impressive private part. It must be saved for posterity."
So, he removed it, stuffed it into his briefcase, and took it home
something to show you won't believe," he said to his wife, opening his
the wife exclaimed, "Schwartz is dead!"
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
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