Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Wednesday, July 20, 2005: It
feels good. We're smack in the middle of second quarter earnings reporting season
and numbers are good. This is the heaviest week. You're seeing a lot of "earnings
top forecast." Today 176 companies report. I'm increasingly sanguine
about the stockmarket's prospects for the rest of the year. I've shifted a few
more funds into equities.
picks are popping -- the following day: On Monday's "Mad
Money" he picked Caterpillar (CAT) and said it will report
"monster" second-quarter earnings on Thursday. Yesterday CAT rose
$2.58, or 5% -- a testimony to Cramer's growing power. Be interesting to watch
the earnings numbers tomorrow. You can get a recap of Cramer's 'Mad Money'
show on TheStreet.com the following day. Click
tend to be large cap. He is clearly worried about what his growing influence
could do to a small cap: Bounce it and then crash it. Not good. Big caps are
not always the place to be, however.
appeals: Yesterday I met with the management
of NovaDel Pharma (NVD), a company I own. The story here is:
+ A great core technology platform.
+ Promising potential products, awaiting eventual FDA approval.
+ Good clinical, experimental indiications product works.
+ Low market cap at present -- only $41 million. Stock price is $1.15.
+ Huge long-term potential.
+ Great motivated management.
+ Low-risk, double pronged business strategy, which appeals.
sprays drugs into the mouth. That's its technology and its patents. Going through
the mouth gets drugs into the body faster than pills, which have to go through
the stomach and then the liver before they start to work. NovaDel has picked
six "big" drugs. It's formulating the generic version of these drugs
into a lingual spray, testing them and getting FDA approval. Two choices at
that approval point:
License the drug to the big pharma which owns the branded version.
2. Sell a generic version lingual version of the spray itself.
big pharma, NovaDel brings a big benefit -- extending patent protection on drugs,
now being sold as pills. A new delivery mechanism means a new patent. To NovaDel,
this strategy could play well for many years. Drugs losing patent protection
in 2006 sold over $20 billion in 2002 (and probably more this year).
Here are the drugs and the big markets, NovaDel has initially picked to develop
lingual (mouth-spray) products.
Drug sales today
(e.g. after Chemotherapy)
I really like
the last one -- anesthetic. NovaDel has this neat idea that doctors would use
the spray for quick in-house procedures. Today there's no general anesthetic
for that purpose, unless you inject Diprivan. Hence, NovaDel has identified
a brand new market.
sum up, NovaDel is two to three years from decent profits. It will need to raise
more money along the way. As it achieves progressive FDA approvals (and it will
-- there is no question in my mind), its stock should pop. There is a sort of
predictable market cap appreciation with biotech firms -- relating o FDA approvals
and licensing deals signed. If you have broadband, you can see NovaDel's investor
presentation. Click here. You'll need PowerPoint,
or the free PowerPoint Viewer, which you can download: Click
Apple's iPod battery. They're easy to change. To buy a replacement
battery, click here. To see
how to do it, click here.
Useless factoid of the day: One third of
Taiwanese funeral processions include a stripper.
friend the Muslim comedian, Goffaq Yussef, doesn't
And better, several smart readers spoke his name out
loud and got the message. Meantime, the jokes were funny. If you missed them,
and the flood, circa 2005
In the year 2005, the Lord came unto Noah, who was now living in
the United States, and said, "Once again, the earth has become wicked and
overpopulated and I see the end of all flesh before me. Build another Ark and
save two of every living thing along with a few good humans."
He gave Noah the
blueprints, saying, "You have six months to build the Ark before I will
start the unending rain for 40 days and 40 nights".
Six months later,
the Lord looked down and saw Noah weeping in his yard...but no ark. "Noah",
He roared, "I'm about to start the rain! Where is the Ark?"
me, Lord," begged Noah. "But things have changed. I needed a building
permit. I've been arguing with the inspector about the need for a sprinkler
system. My neighbors claim that I've violated the neighborhood zoning laws by
building the Ark in my yard and exceeding the height limitations. We had to
go to the Development Appeal Board for a decision.
Then the Department
of Transportation demanded a bond be posted for the future costs of moving power
lines and other overhead obstructions, to clear the passage for the Ark's move
to the sea. I argued that the sea would be coming to us, but they would hear
nothing of it.
Getting the wood
was another problem. There's a ban on cutting local trees in order to save the
spotted owl. I tried to convince the environmentalists that I needed the wood
to save the owls. But no go!
When I started
gathering the animals, I got sued by an animal rights group. They insisted that
I was confining wild animals against their will. They argued also the accommodation
was too restrictive and it was cruel and inhumane to put so many animals in
a confined space.
Then the EPA ruled
that I couldn't build the Ark until they'd conducted an environmental impact
study on your proposed flood.
I'm still trying
to resolve a complaint with the Human Rights Commission on how many minorities
I'm supposed to hire for my building crew. Also, the trades unions say I can't
use my sons. They insist I have to hire only Union workers with Ark building
To make matters
worse, the IRS seized all my assets, claiming I'm trying to leave the country
illegally with endangered species.
So, forgive me,
Lord, but it would take at least ten years for me to finish this Ark."
Suddenly the skies
cleared, the sun began to shine, and a rainbow stretched across the sky. Noah
looked up in wonder and asked, "You mean, you're not going to destroy the
said the Lord. "The government beat me to it."
+ 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 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 .
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. If you click on a link, Google may send me money. That money
will help pay Claire's law school tuition. Read more about Google AdSense,
here and here.