Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Friday, July 15, 2005: Paperwork
and more paperwork. Harry's new rule: The broader your allocation, the more
your paperwork and the more time you spend pushing it around. That's my
excuse (and Bank of America's idiocy-- see below) for today's uninspiring (but
you know, I've been feeling more positive about the market. Earnings are quietly
rising. And stocks are quietly rising. My allocation to equities is also quietly
rising. Today's USA Today explains:
new life into aging bull:
NEW YORK The stock market, all but forgotten amid investors' current
fascination with real estate, has quietly rallied to its highest level in
& Poor's 500 index closed Thursday at 1226.50 its best finish since
July 3, 2001 injecting new life into an aging bull market that began
in October 2002.
Notching a fresh
high in the current bull is significant because it gives a psychological boost
to investors, confirms that the multiyear uptrend is intact and has the potential
to draw more dollars to stocks. "Making a new high is an important milestone,"
says Ken Tower, chief market strategist at CyberTrader.
Adds money manager
Gary Kaltbaum of Kaltbaum & Associates: "Whenever you have a major
stock index breaking out, you are dealing with a lot of stocks, and that is
The broad advance
also extends to rebounding tech stocks and shares of smaller companies, which
have been leading the market for years. Thursday, the Nasdaq composite hit
a 2005 high, and the Russell 2000, a small-stock index, finished close to
an all-time high.
A bevy of economic
indicators that are stock-market friendly has fueled the rally. The second-quarter-earnings
season is off to a better-than-expected start. June retail sales came in strong.
Inflation at the consumer level is virtually non-existent. Overall economic
growth appears more robust than analysts expected. And interest rates on long-term
Treasury notes are hovering around 4%.
All of those
plusses have come as a surprise to skeptical investors, says James Paulsen,
chief investment strategist at Wells Capital Management.
long, we have been waiting for the economy, consumers and profits to roll
over and die," Paulsen says. "But none of that happened."
is still 19.7% below its March 2000 peak, and the debate now is whether its
hitting a four-year high will spark buying or result in a fresh bout of selling
from investors who view this as a market top rather than a new up phase.
as Paulsen think the ingredients are in place for more gains. He's sticking
with his year-end-price target of 1325 for the S&P 500 an 8% gain
from current levels. With interest rates relatively low and earnings power
still strong, stocks could benefit from an expansion in price-to-earnings
boost for stocks is greater participation from professional fund managers,
"shifting from a defensive position to a neutral if not an aggressive"
stance, Tower says. But even he doesn't expect a massive rally in stocks,
but rather incremental gains. "For someone to buy stocks at new highs,
they have to be pretty confident of what's ahead of us," Tower adds.
for stocks: The current bull market is 2.8 years old, which is two months
longer than the median, says James Stack, president of InvesTech Research.
"It doesn't mean the bull is ending next week, but it does suggest we
are in the latter third of the bull."
of America truly sucks. I can't believe how quickly Bank of America
(BAC) is destroying Fleet Bank, my old bank which BAC bought. In the old days,
I'd call my friendly Fleet bank manager of 20 years and he'd wire money out
for me. A one-page fax and a quick phone conversation. Now I have to be physically
at a BAC branch, wait interminably, be given the third degree and grovel for
a wire transfer -- for which privilege I get charged an arm and a leg. BAC moved
my bank manager and left his assistant, who bemoaned the new Bank of America
regime with one sweet sentence, "If you had a business up here, I'd
come work for you."
Don't open email attachments: That's how
you get viruses. From Computerworld magazine: "On an average
day, one in every 33 email messages is infected with a virus."
in the tree are worth how much in the ...
Little Johnny is in school and the teacher is discussing math. She
asks the class: "If there are three birds on a telephone wire and you shoot
one how many birds are left?"
knows and holds up his hand and the teacher calls on him.
many birds are left?"
how did you get that?"
you shoot one all the rest fly away."
that's the wrong answer, the correct answer is two. But I like the way you think!"
Johnny is upset
because he knows his answer is right so he decides to quiz his teacher.
if there are three women sitting on a park bench all eating a popsicles. One
woman is licking her popsicle, one is sucking on her popsicle and one is biting
her popsicle. Which one is married?"
The teacher is
now turning red as she ponders her response: "The one sucking on her popsicle?"
the one wearing a wedding ring. But I like the way you think."
What they do in Romania:
My father was born there. But he never told me about this:
Recent column highlights:
+ 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 your 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 .
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