Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM EST, Wednesday, July 18: I'm
so happy with my Vanguard funds and my various iShares. So much easier than
buying individual stocks. But that's a story you've heard before.
bless Michael, my son, the genius: You buy
1,000 shares of ABC Corp. Three weeks later you buy some more. Then six months
later you sell half. Nine months later the rest.... What's your rate of return
on all this? Did you do better than simply investing the money with Vanguard?
I always knew there was a way in Excel of figuring it. But it was too complicated.
my son, to the rescue. Here's how you do it. It couldn't be easier. You make
two columns. The first is the dates when you bought or sold things. The second
is the money. You have to start with a negative figure, i.e. when you first
invest, your outflow. The formula is simple: =XIRR(the investments in
and out, the dates of the investments).
Here's a simple example (I made all these numbers up). It shows the formula.
I clipped this example from my Office 2003 Excel spreadsheet using Photoshop.
I took the same investment and simply asked myself "What would happen to
my rate of return, if I received the final $800,000 payment six months earlier?
Answer, my rate of return rises from 8.457% to 8.646%.
This began to be real fun. What would happen if, along the way, I had to spend
another $100,000 (that's the second number in red)? My IRR would drop to 6.513%.
is a formula in Excel called IRR. But my son says "nobody uses it."
Moreover, he doesn't understand what it does. So use XIRR. OK. Drop everything,
open an Excel spreadsheet. Try it. See how easy it is. Don't bitch you never
learned anything useful from this column.
links: Up top on the left are some "Useful
Links." I've just added a link to Jim Kingsdale's Energy
Investment Strategies. Jim is a very successful investor, averaging around
25% a year for years. He has a special knowledge of the energy sector. He's
a classmate. So I've known him for nearly 40 years. He's started writing a column
for the same reason I write one -- for fun. It has to be "fun" since
there's no money for him. He doesn't even carry the few miserable Google ads
Office 2007: I continue to resist using Office
2007. But I
may switch... I have resisted for two reasons. I have not seen any major improvements.
It saves in a new file format. If I send files in that format to my friends,
they've have to download 27.5 megabytes of file conversion software, what Microsoft
calls its Microsoft
Office Compatibility Pack for Word, Excel, and PowerPoint 2007 File Formats.
there appear to be real, serious reasons for using the new file format. The
files are smaller and the files more robust, less prone to being corrupted.
Maybe that's all Microsoft propoganda. But I did note that you can have it save,
by default, in all the old file formats. Anyone had experience with Office 2007?
How is it? Please email me .
health insurance: My
health insurance company is Oxford. They're expensive and increasingly inflexible.
Lately, they've stopped reimbursing Quest Diagnostic expenses! This really annoys
me off since every doctor I use seems to use Quest. I've been thinking: What
I really want from a health insurance is not what I get today. I want "catastrophe
health insurance." I want to be covered if an illness or an accident causes
me to spend, let's say, $250,000 or more. Until then, I'll pay my own bills.
been looking for a health insurance policy that will do that. So far, nothing.
Anyone reading this got any ideas? Please email me .
really want the goverment taking over more of your health? Read this
Smartmoney.com piece of earlier this week:
Moore the Scarier by Jonathan Hoenig
can't Apple's iPhone do?
Based on the hype, not much. Based on this totally charming video, absolutely
nothing. Click here.
I MAKE A BRIEF APPEARANCE, unwilling and unpaid mind you, in "Sicko,"
Michael Moore's new film about health care in the U.S. In it, I make the point
that while Canadians are entitled to their share of socialized medicine, the
quality and availability of services is atrocious. Moore might be determined
to present an alternate reality, but almost on cue I just happened to hear this
week from an associate whose Canadian mother was diagnosed with kidney cancer
in March. By June, she still hadn't been given a date for an operation, prompting
her family to bring her to the Mayo Clinic in Minnesota and pay $45,000 out
of pocket to have the procedure done. Not surprisingly, they'd rather pay to
receive a service and be cured than not pay for it and die waiting for an appointment.
First off, it's important to realize the health-care system in the U.S. is far
from a free market. Between Medicare, Medicaid and a myriad of other public
programs, it's estimated that the government pays for and controls nearly half
the health care in the country. Even private health care in the U.S. is a highly
regulated, obsessively congealed ball of red tape. Under the present system
virtually every element of private health care, from who can practice medicine
to how kidneys are allocated, is controlled by bureaucrats. Yes, U.S. health
care is problematic, but not because it's a for-profit capitalist system. The
problem stems from it not being capitalist enough. It's a little bit bewildering
to suggest there's a "right" to health care considering that, all
things being equal, food and shelter are more basic necessities of life. Why
those aren't the subject of multimillion-dollar documentary films is because
the free market has done a pretty good job of addressing those issues already.
Home ownership in this country is at an all-time high and obesity, not starvation,
is the major problem facing rich and poor alike.
like Moore, along with politicians on both sides of the aisle, are now calling
for even more government involvement in health care by setting up a "universal"
system. Of course, universal health care is just another name for socialized
medicine. Under socialism, health care is a right, just like life, liberty
and the pursuit of happiness. Everybody has a right to health care in their
view, not because they've done something to deserve it, but simply because
of the fact they need it. Men like Moore believe that the fact that you lawfully
earn your money doesn't entitle you to it, yet the fact that a cancer patient
needs chemotherapy does entitle him to it.
is that from Canada to Cuba socialized health care's record is appalling.
It's impossible to tally how many patients die waiting for routine preventative
procedures or how many innovations go undiscovered because precious resources
are squandered. If you think the Post Office, IRS and Social Security are
run poorly, then you can only imagine how horrific a national health-care
system would be.
Yet the real
reason to oppose socialized heath care isn't that it's impractical, but because
it's immoral. As properly defined in the Declaration of Independence, we have
the right to life, liberty and the pursuit of happiness. So while you have
an absolute right to your life, you don't have the right to demand society
at large provide you with food, shelter, four weeks of vacation, a laptop
computer or any other entitlement that populist politicians or socialist filmmakers
care to propose.
Of course, a
right is a right to action, but not to a freebie owed to you simply by being
born. In America, individual rights mean you're free to pursue your own life
just as others are free to pursue their own. To the extent you'd like to contribute
glasses for the blind or pay for operations for the poor, you're welcome to
voluntarily. But man is not born owing thy neighbor anything, only the obligation
not to interfere with his own life, liberty and pursuit of happiness. Your
right to free speech, for example, doesn't obligate me to listen.
a right to health care is enslaving someone else with the obligation to provide
it. A right to health care means that in fact, I don't have a right to my
own pursuit of happiness, because I have a legal duty to work to fulfill your
rights. If you need an aspirin, I work an extra 15 minutes a day. If you need
a respirator, it might be an extra 15 days. Forced to serve the collective,
the individual no longer has any rights at all.
Last fall I
wrote that "political winds have prompted me to increase my allocation
to foreign exchange beyond the good ol' greenback. You can debate if higher
taxes and minimum wage, along with a move toward expanding entitlements such
as Social Security or universal health care are worthy goals, but one thing
is certain: They aren't free. As the anticapitalist, welfare state expands,
it's my belief the value of the dollar will undoubtedly decline." Lo
and behold, the dollar has already fallen sharply as the country has moved
more toward an entitlement state and socialized health care. The trend shows
no sign of shifting anytime soon.
of Moore's film and the widespread movement toward socialized health care
by members of both political parties will only mean further declines for our
nation's currency. Of course, that's the one risk I can hedge. The sad part
is the quality of the health care for all Americans, rich or poor, will fall
right along with it.
is managing member at Capitalistpig Hedge Fund LLC.
Unscubscribe: Yippee. It's working.
I'm unsubscribing from Nordstroms, LLBean, Eddie Bauer, Duluth and zillions
of "free" newsletters. Go down to the bottom of each email receive.
Check the small type. Everyone has a different way of unsubscribing you. Most
seem to work. My favorite:
the UNSUBSCRIBE button you will add
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The hardest list
to get off is Microsoft. I could have figured that.
At a U2 concert in Ireland, Bono (the lead singer) asks the audience for some
quiet. Then he starts to slowly clap his hands.
Holding the audience
in total silence, he says into the microphone...."I want you to think about
something. Every time I clap my hands, a child in Africa dies."
Suddenly, a voice
from the front of the audience yells out...."Then stop clapping, ya asshole!"
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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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