Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Monday, March 20, 2006: Funny
weekend reading. A bunch of articles say the stockmarket is about to tank. A
bunch say it's about to soar. Both sets have learned reasoning
with oodles of carefully chosen statistics.
Predictions fill newsletters and newspapers. That's their BIG accomplishment.
A coin toss today would work just as well. Suffice, follow our rules: Don't
buy on margin. Don't take outrageous risks. Be broadly diversified. When anything
tanks 15%, get out.
absolutely delightful feature: Firefox is the
better Internet Explorer. Get it for free from here.
Two big reasons to use it, not IE:
1. Firefox is less susceptible to viruses, spyware, etc.
2. Firefox has tabbing. You can have 20 web sites open simultaneously and jump
instantly between each. File/New Tab. I've just learned you can set Firefox
up so when you start it, it will automatically open the web sites you
want. Here's how. Set up the web sites you want, e.g. Wall Street Journal, New
York Times business, BusinessWeek, and this site. Then go Tools/Options.
Underneath the home page location is a button marked Use Current Pages.
Fund sales charges can still be outrageous: Some mutual fund families
have dramatically reduced their sales charges to match Vanguard's.
Some remain staggeringly high. There is zero relationship between high sales
charges and performance. You don't get better performance if you pay
more in sales charges.
There are basically three types of sales charges -- those you pay up front (going-in
charges) -- as much as 5.75%. This means you give them $100 in cash.
They invest $94.25. To get back to your original $100, the fund would
have to earn 6.1% -- which is more than many funds earned in the past
The second way of paying sales charges is to pay nothing up front, but pay when
you take your money out (going-out charges), i.e. cash your fund shares out.
Here's a typical (and outrageous) going-out charge schedule:
Redemption Deferred Sales Charge
Seventh and following
The third charge is an annual management fee. All funds charge it. But not all
funds charge going-in or going out fees. The average annual management fee is
about 1.5%. My Vanguard funds (which charge no going-in or going-out
fees) charge 0.5% annual management fee.. By comparison, Fidelity's
Contrafund, which Cramer pushes, charges 0.91% annual management
fee -- and also, to its credit, charges no going-in or going-out fees.
media companies are making a huge push onto the Internet: Private
Capital Management put me into newspaper stocks which was dumb because newspapers
are dying. And, so, it turns out are traditional media companies. This is from
load your PC with junk. Especially Apple junk. My daughter allowed
a relative to put Apple's iTunes onto her laptop so he could load up his
new iPod. Good for him. Lousy for her. Her laptop turned glacial. She needs to
rip off the extraneous software Apple loads, like QuickTime. Lessons:
starts this week in America, and for the rest of the month millions of basketball
fans will watch the country's college teams dunk on each other, until the
final of the men's national championship on April 3rd. CBS, a broadcast-television
network, has shown the event since 1982but this year it is conducting
an experiment. As well as broadcasting the games on TV, it is streaming them
live over the Internet free of charge, accompanied by advertisements.
CBS's move is
one of many recent efforts by traditional media companies to try to develop
new media revenue streams. Music firms have sold their material
online for a while. Newspaper and magazine publishers are busy trying to attract
readers on the Internet. But now the world's largest entertainment companies
are rushing to distribute their video content online and, to a lesser extent,
to the users of mobile phones.
Old media companies
are also snapping up Internet firms as fast as they can. Most of these are
profitable, in contrast to the dotcoms of a few years agobut only just.
On March 6th NBC Universal, a media firm owned by General Electric, spent
$600m on iVillage, a website for women which had a profit of $9.5m in 2005.
Last year Rupert Murdoch's News Corporation spent more than a billion dollars
buying barely profitable Internet companies.
Has the industry
gone as crazy as basketball fans in springtime? The answer is that traditional
media companies have no choice but to experiment. They are in mature businesses,
many of which are endangered by the Internet and other technologies. Investors
have sold down their shares. This week, Mr. Murdoch warned in a speech in
London that changing technology means that power is moving away from
the old elite in our industrythe editors, the chief executives and,
let's face it, the proprietors. Old media companies badly need to persuade
the stockmarket that the digital era brings them opportunities as well as
got a digital tsar now, or if they haven't, they're frantically searching
for one, says Peter Kreisky, a media consultant. Many large media firms
have recently formed separate digital divisions. With the exception of Time
Warner, which in 2000 merged with AOL, an Internet-access firm, most of these
contribute only a tiny slice of their parent company's revenues (see chart).
But they are growing rapidly. Jessica Reif Cohen, a media analyst at Merrill
Lynch, reckons that profits from online advertising and paid content could
represent up to 8-9% of total earnings for Disney, Viacom and News Corporation
in 3-5 years and considerably more for Time Warner, courtesy of AOL. The most
obvious opportunity is to put the content they already own on new platforms.
Media companies can charge people directly, or sell ads around it. In October
last year Disney took the big step of allowing two of its hit dramasLost
and Desperate Housewivesto be downloaded from Apple's iTunes
download service on to iPods for $1.99 an episode. Programmes from NBC and
from Viacom's cable channels soon followed, and CBS has put two of its hits,
CSI and Survivor, on Google Video Store, the search
firm's new video service. Time Warner, Disney and Viacom have all started
Only a fraction
of the media firms' video content is online, certainly, but every few weeks
another slew of popular programmes makes the leap. In just a few years, says
Michael Wolf, president and chief operating officer of MTV Networks, almost
all the company's content will be available online and on several platforms.
Because people in offices will be able to gain access to it, he says, daytime
will become the new primetime. (For people watching March Madness at
work, CBS has thoughtfully provided a Boss Button, which at a
moment's notice calls up a fake spreadsheet.)
the Internet will take time, because powerful forces are lined up against
changes to video distribution, says Josh Bernoff, a television analyst at
Forrester Research. Most important are huge concerns about digital piracy,
although Apple and Google do seem to have eased those with digital-rights-management
technology, which guards against unauthorized copying. Content owners also
worry that putting their video online might mean that fewer people would watch
programmes on TV, which is where they earn most of their advertising revenue.
And none of
the conglomerates want to jeopardize the phenomenal profitability of DVDs.
So far, Hollywood has barely allowed its films onto the Internet, and certainly
not before their release on DVD. But even that taboo may soon be broken. Amazon,
an online retailer, is reportedly in talks with three Hollywood studios about
a service that would allow people to download new movies at the same time
as they come out on DVD.
Which of the
big entertainment conglomerates is furthest ahead? That, of course, is fiercely
debated by rival executives. Many were jealous of Mr. Murdoch's purchase of
MySpace.com, a social-networking site, because its soaring popularity has
pushed News Corporation up among the giants of the Internet by page views.
Viacom is believed to have wanted to buy the site, but it lost out to News
Corporation at the last moment. Now, however, after a furor over men lying
about their age on MySpace.com so as to meet under-age girls, competitors
are feeling a bit less envious.
there is no doubt that News Corporation has moved most vigorously among large
media firms. Viacom, on the other hand, has missed some opportunities, perhaps
partly because it has spent the last year or so concentrating on splitting
from its sister company, CBS Corporation. As well as missing MySpace.com,
it has still to launch the music download service it has talked of for years
(it is planning a music service called URGE with Microsoft for later in 2006)
and in the meantime Apple has seized the online music market.
Each of the
firms has a different strategy for the Internet. Viacom and News Corporation
want to build or acquire brand new online businesses as well as to expand
their existing brands onto the Internet. Disney and Time Warner, on the other
hand, are mostly putting their own programming online. Jeff Bewkes, chief
operating officer of Time Warner, reckons that one-off download deals such
as Disney's and NBC's with Apple's iTunes will prove to be merely a beginning.
These are fine trials and they may turn up something, he says,
but the evidence says that the real money goes to ad-supported and subscription
models. Vivendi Universal, a French media firm, is being more cautious
than the American firms. Its chief executive, Jean-Bernard Levy, says it will
exploit the Internet to distribute its content, but not as a general-purpose
advertising medium. There is still plenty of doubt over whether traditional
media companies have the right stuff to prosper on the Internet. But now no
one can accuse them of not trying. Perhaps the most promising change is that
executives at all levels are fully aware that succeeding online means personal
reward. As one manager explains: In 2002 it was career death to be involved
with the Internet, now it's a career priority.
+ Don't allow anyone mess with your PC.
+ Load the absolute least software you need. Want to play with software?
See if it's any good? Load it on a old machine you don't care about.
Real estate syndication does wonderfully well:
We bought a downtown office building, fixed it up, rented it fully out and
then sold it (in the last few days). IRR? 37%? Better than a slap in the
belly with a cold fish.
More stuff on bird flu: From an authoritative
source, I'm assured:
Bird flu is
an infected disease which is caused by avian (bird) influenza (flu) viruses,
so it is called also avian flu. These flu viruses seem generally among birds.
Wild birds worldwide carry the viruses in their intestines, but usually they
do not get sick from them. Nevertheless, avian influenza is very contagious
among birds and can make some domesticated birds, including chickens, ducks,
and turkeys, very sick and kill them. Domesticated birds may become infected
with avian flu virus through direct contact with infected waterfowl or other
infected poultry that have been contaminated with the virus.
think viruses like the common cold and influenza, fly through the air then
into your body through your mouth or nose. But most viruses don't fly into
your body - they hitchhike! It can spread many ways. With a virus on your
hands all you need to do is touch, scratch or rub your eyes or nose and the
virus can enter your body. Over ninety percent of respiratory viruses get
into your body when you touch your eyes and nose with your fingernails.
Bird flu can
be treated by Tamiflu. It belongs to a group of medicines called neuraminidase
inhibitors. It is directly attack the influenza virus and prevents it from
spreading inside your body. Tamiflu treats flu at its source by attacking
the virus that causes the flu, rather than simply masking symptoms. Each Tamiflu
remedy contains 75 mg of perfect drug and should be taken by mouth.
Tamiflu is usually
well bearable remedy. Tamiflu may cause mild-to-moderate nausea or vomiting
in minor amount of people. Taking Tamiflu with food may decline the potential
for these side effects. Other less common side effects may include bronchitis,
sleeplessness and vertigo. Tamiflu is approved for patients aged 1 year and
older and is available in a choice of capsule or liquid suspension form.
A flu vaccination
is your best chance to protect against the flu, if you can take it. However,
you may have heard that the vaccine is not completely effective. Why? Because
the flu strains it protects against may not be the same as the ones that are
going around in your area. So even if you have received a flu shot, you could
still get the flu.
If these conditions
apply to you, consult with your doctor. Learn about the opportunity of preventing
flu with antiviral medications such as Tamiflu. These are available only by
prescription and must be started within 2 days of flu exposure. Tamiflu is
approved for patients aged 1 year and older and is available in a choice of
capsule or liquid suspension form.
To prevent getting
the flu, or to lessen its severity, before flu season starts, you should get
a flu shot each fall. This is particularly prescribed if you are aged 50 and
older or have a heart problem. Wash your hands could be the best way to avoiding
the bird flu virus. You should wash and dry your hands every time you go to
the toilet and any time you have hand to hand contact with people or contact
with birds. The next time you go to rub your eyes or engage in an unmentionable
activity with your nostrils remember viruses don't fly into your surroundings-
to have a bad day? Every time I look at this, I laugh. Perhaps I'm
was St. Patricks Day. Three more:
An Irishman arrived at J.F.K. Airport and wandered around the terminal with
tears streaming down his cheeks. An airline employee asked him if he was already
replied the Irishman "I've lost all me luggage!"
fell out!" said the Irishman.
An Irish priest is driving down to New York and gets stopped for speeding in
The state trooper
smells alcohol on the priest's breath and then sees an empty wine bottle on
the floor of the car. He says, "Sir, have you been drinking?"
says the priest.
The trooper says,
"Then why do I smell wine?"
The priest looks
at the bottle and says, "Good Lord! He's done it again!"
Two Irishmen were sitting at a pub having beer and watching the brothel across
They saw a Baptist
minister walk into the brothel, and one of them said, "Aye, 'tis a shame
to see a man of the cloth goin' bad."
Then they saw
a rabbi enter the brothel, and the other Irishman said, "Aye, 'tis a shame
to see that the Jews are fallin' victim to temptation as well."
Then they see
a catholic priest enter the brothel, and one of the Irishmen said, "What
a terrible pity...one of the girls must be dying.
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
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