Harry Newton's In Search of The Perfect Investment
Technology Investor. Auction Rate Securities. Auction Rate Preferreds.
8:30 AM EST Friday, March 21, 2008: Good Friday:
Exchanges are closed. I dumped my silver and gold yesterday.
The "hurt" is spreading through the economy. Follow old advice: When
in doubt, stay out.
Rate Securities (Update) from yesterday:
+ I hear one in
five of Silicon Valley's technology companies is stuck with ARPs. Palm, which
is losing money, has $74.7 million of them and is talking about "reclassifying"
them on its balance sheet. Palm is completing "an impairment analysis"
and expects to record an impairment charge that will be made available in Palms
upcoming quarterly report. I listened to the conference call. There was only
one question on ARPs. I learned nothing. And the analysts on the call didn't
seem to be interested in the $74.7 million. Palm said it could survive without
the $74.7 million. You can hear a replay of the call on 888.286.8010
(domestic) and 617.801.6888 (international), passcode 88825488.
I wouldn't bother.
Boy, are these conference calls stacked! Calamos had a touchy-feely
conference call to talk about redeeming its ARPs. It took two "questions"
from Wachovia people, both of which included effusive compliments for Calamos
management. I'm guessing those Wachovia people were brokers who's made money
selling the Calamos ARPs. While Calamos management was touchy feely, they did
include two positive statements:
of) auction rate preferreds will not lose any of their money."
"If all the (possible) financing solutions fail, we'll deleverage."
working diligently to find new financing options. We'll report to you soon."
" These are trying times. We're doing everything possible to refinance
the (ARPs) debt."
a solution in the near future." We don't know when the near future is.
holders are getting paid to wait."
is the best option. Very strange market. Strangest I've seen. Cost of leverage
should not be onerous."
Q: How soon the
"near future" is?
One man from Wachovia
got on the conference call and said he "had no sympathy for the
auction rate preferreds. They should have known what they were buying all along.
So let them stew."
problem explained: John Clarke and Bryan Dawe are an Australian comedy
team. Dressed in suits and looking very serious, they explain the intricacies
of the sub prime mortgage crisis. Two minutes of fun video. Click
TV Schedule - 2008 Pacific Life Open at Indian Wells: The
problem is finding Fox Sports Network on your cable or satellite TV. Clue: Sometimes
they hang out with MSG (Madison Square Garden). This schedule is not accurate,
but it's the best I can do.
you get married in Heaven?
On their way to get married, a young Catholic couple is involved
in a fatal car accident. The couple find themselves sitting outside the Pearly
Gates waiting for St. Peter to process them into Heaven. While waiting, they
begin to wonder: Could they possibly get married in Heaven? When St. Peter showed
up, they asked him.
St. Peter says,
"I don't know. This is the first time anyone has asked. Let me go find
out," and he leaves.
The couple sat
and waited, and waited. Two months passed and the couple is still waiting. As
they waited, they discussed that IF they were allowed to get married in Heaven,
what was the eternal aspect of it all.
it doesn't work?" they wondered, "Are we stuck together FOREVER?"
After yet another
month, St. Peter finally returns, looking somewhat bedraggled. "Yes,"
he informs the couple, "you CAN get married in Heaven "Great!"
said the couple, "But we were just wondering, what if things don't work
out? Could we also get a divorce in Heaven?"
St. Peter, red-faced
with anger, slams his clipboard onto the ground. "What's wrong?" asked
the frightened couple.
"OH, COME ON!" St. Peter shouts, "It took me three months to
find a priest up here! Do you have ANY idea how long it'll take me to find a
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
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