Harry Newton's In Search of The Perfect Investment
Technology Investor. Auction Rate Securities. Auction Rate Preferreds.
8.:30 AM EST Thursday, May 1, 2008:
people dont know what theyre doing, and a lot of them are really
good at it. George Carlin
The Carlin quote is a perfect start to today's column.
Fed dropped interest rates by a quarter of a point yesterday. It won't make
credit more available. We're still in the Mother of All Credit Crunches. The
lenders are keeping their checkbooks closed. But the rate cut will annoy all
of us who are living on interest from savings accounts, short term money market
funds, etc. Thank you for nothing, Mr. Bernanke. By the way, I thought your
mandate was to address inflation. Hello, have you visited a gas pump or a supermarket
recently? I am not pleased.
My friend called.
He was crying. His life was falling apart. All those years of building a business
had come to this. Last year my friend, a successful entrepreneur involved in
financing real estate out west, had an income of many millions. This year he'll
lose many millions as he dumps what little personal money he has into his business
desperately to keep it afloat. He's put his office building up for sale. The
pressures on him from his investors are immense. Many of his borrowers have
gone Chapter 11.
This credit crunch
is wreaking havoc with marriages. There's a new phenomenon: It's called Sudden
Divorce Syndrome. The headline from a recent BestLife
magazine piece reads:
One in four
men who will get divorced this year don't have any clue that it's coming.
Here's how to avoid that surprise.
Housing was the
Big Boom after the Dotcom bust. Now housing is the Big Bust, and
busting more daily. From Bloomberg comes this depressing story:
April 29 (Bloomberg)
-- Home prices in 20 U.S. metropolitan areas fell in February by the most
on record, pointing to an imbalance between supply and demand that shows
no sign of ending.
home-price index (the best method of measuring housing prices -- my comment)
dropped 12.7 percent from a year earlier, more than forecast and the
most since the figures were first published in 2001. The gauge has fallen
every month since January 2007.
probably keep sliding as foreclosures push even more properties onto the market
just as stricter lending rules limit the number of qualified buyers. Shrinking
home values have contributed to a slowdown in consumer spending that may already
have tipped the economy into a recession. ...
the 20 cities in the index showed a year-over- year decrease in prices for
February, led by a 23 percent slump in Las Vegas and a 22 percent decline
in Miami. Charlotte was the only area showing a gain with a 1.5 percent increase.
January, homes in all 20 areas covered dropped in value.
going to continue in this abyss for a while,'' said Ellen Zentner, an economist
at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. "Inventories are getting
worked off but it's a slow process. Sales and prices will go down.'' ...
have yet to stir buyers. The total number of houses sold in March dropped
to a 5.456 million annual pace, the fewest since comparable records began
trying to devise ways to reduce foreclosures. Bank of America Corp., seeking
approval of its Countrywide Financial Corp. takeover, yesterday said it will
modify at least $40 billion in troubled mortgage loans over the next two years
to keep customers in their homes. The move would help as many as 265,000 homeowners,
company officials said.
GMAC LLC, the
auto and home lender that General Motors Corp. sold to a private equity group,
reported today it lost $589 million in the first quarter as more borrowers
fell behind on mortgage payments.
chief economist at MacroMarkets LLC and a professor at Yale University, and
Karl Case, an economics professor at Wellesley College, created the home-price
index based on research from the 1980s. ...
Eli Broad, a
philanthropist and co-founder of KB Home, the fifth-largest U.S. homebuilder
by revenue, yesterday said he expects home prices to drop another 20 percent.
think we're anywhere near a bottom in housing,'' Broad told Bloomberg TV yesterday
at the Milken Institute Conference in Beverly Hills, California. "We're
going to have a big inventory of unsold, unoccupied homes that's going to
take three or four years to clear out.''
homebuilders are suffering as demand falters. Ryland Group Inc., the U.S.
builder that targets first-time buyers in 15 states, last week reported a
first-quarter loss as sales dropped.
conditions have not improved,'' Chief Executive Officer Chad Dreier
said in an April 24 conference call with analysts. Closings in the quarter
dropped by almost a third from the same time last year and the average
price fell by 14 percent, the company said.
to drop in price? Computerworld magazine says
AT&T will drop the price of iPhones by $200 this summer. If you buy one,
make sure it's the new iPhone and supports AT&T's new 3G network -- which
is much faster than the 2G (also called EDGE) network it's working on today.
Apple's goal is to sell 10 million iPhones during 2008 -- far more than BlackBerries
by Research in Motion (RIMM). Apple is doing everything to make sure that its
iPhone works in the corporate world, which RIMM presently dominates. And from
what I've seen, Apple will prevail. The trade still is buy Apple (P/E of 36)
and sell RIMM (P/E of 54).
and MasterCard to fall? Visa and MasterCard
have been Wall Street darlings of late. Today consumers are reducing their credit
card use. It's hard to believe these two will stay up so high. These two don't
assume credit risks. Those they happily hand off to the banks. They are simply
giant data processing machines. Still...
to prevent diabetes.
Eight Ways to Control Your Blood Sugar.
(From Men's Health Magazine). I don't have this problem, but a lot of
my friends do.
like it's a prescription. That means at least 20 to 30 minutes every day.
It takes a only a few days of missed workouts and poor eating to worsen a person's
insulin resistance, says Barry Braun, Ph.D., an associate professor of kinesiology
at the University of Massachusetts at Amherst. To make sure you stick with it,
choose the exercise that you enjoy the most.
cinnamon on everything you can stand. Studies show it can improve insulin
sensitivity. This means your body needs less of the hormone insulin to keep
your blood-sugar levels in check. "The cheap supermarket stuff works just
as well as expensive supplement versions," says Jonny Bowden, Ph.D., C.N.S.,
author of The Most Effective Natural Cures on Earth.
3. If you already
have high blood glucose, take alpha lipoic acid. "This supplement is
unexcelled as a blood-sugar nutrient and is a prescription item in Europe,"
says Bowden. He recommends taking 300 milligrams twice a day. Puritan's Pride
Alpha Lipoic Acid is reasonably priced and passed purity tests at consumerlab.com.
4. Skip the
sugary sports drinks. University of Massachusetts scientists recently discovered
that exercising improved insulin sensitivity by 40 percent when a 500-calorie
deficit was created, but produced no improvement when the burned energy was
immediately replaced with mostly carbohydrates.
5. Invest in
a glucose monitor. It'll allow you to find out how specific meals, foods,
and beverages affect your blood sugar. One option is the TrueTrack Smart System
brand ($13 for the monitor, $35 for the strips, cvs.com).
Simply prick your finger 2 hours after a meal. The number shouldn't be above
139 mg/dl, and it shouldn't be below 100 or your fasting number -- whichever
is lower," says Keith W. Berkowitz, M.D. If you fall out of that range,
you need an oral glucose-tolerance test.
6. Snack on
pumpkin seeds or sunflower seeds. A small handful won't impact blood sugar,
and they're rich in magnesium, a mineral that fights insulin resistance, according
to a 2006 study from Tufts University researchers.
7. Eat every
2 to 3 hours. Eating this often helps prevent drops in blood sugar, which
can lead to sugar binges, says Dr. Berkowitz.
8. Check your
meds. If you're taking a thiazide diuretic for hypertension, ask your doctor
about switching to an ACE inhibitor. A 2006 Hypertension review of 59 drug trials
found a "strong relationship" between low potassium levels caused
by diuretics and increased blood glucose.
Solutions screwed up.
They registered TechnologyInvestor.com, the original name of this site
and the way most people get to it. Then it expired. Network Solutions forgot
to tell me it was expiring. I was on the phone with them in India (!!) for over
three hours. They really are hopeless. Never
ever do business with Network Solutions. If you're registering a web site,
use a company called 1and1.
The Big Lesson. If you have a web site, do a WhoIs
search today and check that your contact information is up to date.
my son Michael:
Had a bit of
a crazy day. I was studying when I heard a shout for someone to call 9-11.
Ran around the corner to see a guy on the ground having a massive seizure
blood everywhere, foaming at the mouth, the whole nine yards. A sectionmate
called 9-11, I ran for security, and another person made sure the guy didnt
hurt himself further. The whole thing worked out fine in the end (despite
the fact that it took Boston paramedics about 40 minutes to arrive. Had it
been a heart attack, he would have been dead) but it was scary.
The key lesson
was that guy didnt have any obvious phone numbers in his cell phone.
Nothing was labeled Mom, Home, Emergency,
etc. We couldnt get any history on him or reach anyone to help. The
paramedics said this was one of the more common problems they face daily and
one of the easiest ways to help yourself if anything were to go wrong.
the time to program a few obvious numbers into your phone. Or label your cell
phone with an Emergency number. Or wear a dog tag. Or something. We ain't
getting any younger.
favorite recent New Yorker cartoons:
experience for the new job?
The woman applying for a job in a Florida lemon
grove seemed way too qualified for the job.
'Look Miss,' said
the foreman, 'have you any actual experience in picking lemons?'
'Well, as a matter
if fact, yes!' she replied .
'I've been divorced
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 on this site. Thus I cannot endorse, though some look interesting.
If you click on a link, Google may send me money. Please note I'm not suggesting
you do. That money, if there is any, may help pay Michael's business school
tuition. Read more about Google AdSense, click
here and here.