Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Tuesday, January 31, 2006: Yesterday
I wrote that tonight President Bush, in his state of the union address, will
focus on making the U.S. independent of imported energy. He will announce major
initiatives designed to encourage alternative energy. As a result, there will
be a pop in many of these stocks. Yesterday morning I published this list of
alternative energy and coal companies. By end of the every one of these
stocks had risen, many substantially. I have a bunch of happy readers.
said I would publish an expanded list. Here's today's expanded list. I have
also included a column for market capitalization, to show you the tiny size
of many of these companies.
As usual, do not buy any of these without
a modicum of research. Bush speaks tonight at 9 PM. I'd probably cash in my
profits before he speaks, on the basis that, like sex, anticipation in the stock
market is often better than realization.
Harry: My five Vanguard funds I burbled on about are now profitable,
i.e. above what I paid for them. Remember my brilliant timing? I moved into
the three funds just before Tokyo hiccuped in mid-January. They were Total International
Stock Index (VTRIX), Emerging Markets Stock Index (VEIEX) and Pacific Stock
Index Admirals funds (VPADX). I still feel confident that Asia and the Pacific
would well this year and these three are a relatively painless way of participating.
Other Vanguard funds I own include the International Value Fund (VTRIX) and
the Mid-Cap Index Fund Admirals shares (VIMAX). These two are doing the best,
the price: After management and idea, the price you pay is critical.
In venture financing, they call it market capitalization. There are two ways
of looking at market cap -- before you put your money in and after you put your
money in. I prefer after you put your money in (assuming you do). Every recent
venture I've looked at recently has been too expensive, i.e. its market cap
has been outta sight. My theory is that if the company hasn't any profits and
limited revenues, and a wonky marketing business (i.e. one in need of help and
money), the venture isn't worth more than a million or two -- depending on how
ready for market the product is. These days most presidents start at $10 million.
At that point I listen politely, say "thank you" and go play tennis.
I can play a lot of tennis for the money I'm likely to lose on the deal.
However, not all
is lost. Sometimes miracles happen. I received this email yesterday, "Harry:
a large investor, XYZ Corp --$1.4 million -- asked for a valuation reduction,
and ABC Corp's founders went along with it. so, the pricing is now $5 million
pre-money rather than $10 million pre-money. The raise has been expanded to
$3M from $2M to let all interested investors in the deal."
Cell phones as nuttiness: Ring
tones are the sound your cell phone makes when a call comes in. All cell phones
come with a collection. Certainly enough to satisfy me, but not everyone. Selling
ring tones over the Internet is a billion a year business. My favorite ring
tones are found on a site called www.MoanTones.com (click
here). Now your cell phone can sound like your favorite porn
star faking an orgasm -- in many languages, including Russian. Many of these
tones are clipped from porn movies (usually without authorization).
went to the dentist yesterday. Hence, this is appropriate:
He ordered one hamburger, one order of French fries and one drink. The old man
unwrapped the plain hamburger and carefully cut it in half. He placed one half
in front of his wife. He then carefully counted out the French fries, dividing
them into two piles and neatly placed one pile in front of his wife.
He took a sip
of the drink, his wife took a sip and then set the cup down between them. As
he began to eat his few bites of hamburger, the people around them kept looking
over and whispering. You could tell they were thinking, "That poor old
couple - all they can afford is one meal for the two of them."
As the man began
to eat his fries a young man came to the table. He politely offered to buy another
meal for the old couple. The old man said they were just fine. They were used
to sharing everything.
people noticed the little old lady hadn't eaten a bite. She sat there watching
her husband eat and occasionally taking turns sipping the drink.
Again the young
man came over and begged them to let him buy another meal for them. This time
the old woman said "No, thank you, we are used to sharing everything."
As the old man
finished and was wiping his face neatly with the napkin, the young man again
came over to the little old lady who had yet to eat a single bite of food and
asked "What is it you are waiting for?"
+ Munich, the movie. A must-see. Click
+ Identity Theft precautions. Click
+ Dumb reasons we hold losing stocks. Click
+ How my private equity fund is doing. Click
+ Blackstone private equity funds. Click
+ Manhattan Pharmaceuticals: Click
+ NovaDel Biosciences appeals. Click
+ Hana Biosciences appeals. Click
+ All turned on by biotech. Click
+ Steve Jobs Commencement Address. The text is available:
Click here. The full audio is available. Click
+ The March of the Penguins, an exquisite movie. Click
+ When to sell stocks. Click
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.
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