Harry Newton's In Search of The Perfect Investment
Technology Investor. Harry Newton
AM EST, Friday, May 1, 2009. At the bottom
of a bear market, price earnings ratios of blue chip stocks rise to double
digits, and dividend yields rise to over 5%. We never got there. In early
March, stocks took off and have pretty well stayed up.
are two schools of thought:
1. This is a bear trap, a head fake rally in a bear market.
2. There is a humungous amount of money sitting on the sidelines -- over a
$1 trillion by one estimate. As much as $9 trillion in money market funds.
And the only thing investors hate worse than losing money is missing the subsequent
boom. Hence, the market may never drop back to its March lows.
I'm for nibbling. Two areas: Those energy service companies -- including ERF,
PWE and LINE -- and maybe a handful of banks. I'd stay away from all the ETFs
that double and triple leverage plays. They're too complex for us mere mortals
currency business shines. Remember my piece
about the Zimbabwe bank notes?
a thank you, Bruce Tupholme who owns
CollectorsCurrency.com sent me four notes -- one hundred trillion,
fifty trillion, twenty trillion and ten trillion. I'm framing them as a constant
reminder of what happens when a government just prints and prints and prints
money. I asked Bruce, who's a really sweet guy, a bunch of intrusive questions.
Here's his reply.
Hi Harry ,
I gave up being a broker to start my own investment firm as I found it more
rewarding and less stressful. I had an opportunity many years back to attend
a numismatic fair in Europe where I was enticed by bundles of currency from
all over the world that people were dealing in . For me it was terrific
as I could really see physical money , not just numbers on a screen as I
did as a broker/dealer. I have been collecting and dealing ever since and
attend the main numismatic and coin Fairs in Europe every year .
At one of
these fairs I met up with Iraqi and Jordanian dealers and I have a close
relationship with them to this day with our sister site www.iraqidinars.com.
You ask me what sells - well it is Iraqi money , everyone wants it , frankly
it gets better returns than Dollars and people bet on Iraq , they have since
2003 when we founded iraqidinars.com . I have dealt with a wide variety
of customers worldwide with the Dinars and trade actively in it daily .
is more a novelty and for inflation money collectors . It is doubtful that
another 100 Trillion note will show up in history , so it is a unique item
and a warning of what happens when governments don´t stop printing
money . I would not say it is worthless outside of Zimbabwe , ironically
it is incredibly difficult and expensive to actually get these notes now
as they were hardly in circulation and then were abruptly withdrawn from
circulation , so in history people will always want to own hyper inflation
currency . I also own some Fannie Mae and Freddie Mac stock that a good
friend of mine gave me a "tip" on when they were collapsing ,
frankly I prefer my Zim Dollars on my wall.
As far as
collecting currency compared to stamps , yes it is similar , currency is
graded on what condition it is in and rarity value much like stamps . Most
of our notes are uncirculated and many of our customers only collect uncirculated
currency as it commands higher values .
economic woes worldwide today currency investment and coin investment remain
strong and in fact the auction prices being realized are rising on the rare
items as people search an alternative haven for their cash .
We use the
American grading companies NGC and PCGS to grade our more valuable coins
especially our Nelson Mandela coins that are increasing in value every day.
We cannot get enough of these high grade coins for our buyers right now
as they are terrified of holding physical Euros or Dollars, they prefer
coins and rare bank notes .
As far as
going up in value , we bought Iraqi Dinars in Baghdad the day US forces
took Baghdad in April of 2003 at 3000 Dinars to a dollar , during the war
it was 5000 at one point. Today in Baghdad they trade at 1170 to the Dollar
, so in a war torn country with all its problems we have seen substantial
Then , I can
tell you another one , Mandela Proof coins were issued at R25 in Proof State
(PF) back in year 2000 , these coins easily change hands between dealers
at about R5000 today .
pre Euro money in uncirculated form is up 60% before the introduction of
the Euro in 2002 , so the right currency or choice does definitely pay off.
I know dealers here in Portugal (where I live) who have all their cash in
bank notes , they do not trust the banks and they get better returns on
By the way,
proof is the highest polished coins issued for collection purposes. In the
US, the annual sets are issued in Proof, an Uncirculated State. The highest
valued ones are the Proofs as they only mint a few. Less supply means more
proofs did that in under 10 years and continue to climb despite the crisis
Over the last
6 months I have never seen American and other customers so scared of holding
traditional currency, they want alternatives and yes I have customers afraid
that the Dollar is worthless. I have a particular client. He is a New York
cab driver that has his entire life savings entrusted to me and it is invested
in everything BUT US Dollars. Eerything he has he has converted out of US
funds, because he expects substantial returns in what he has invested in
compared to the Greenback. I find it sad what has happened to America, I
admired and continue to admire America but that debt caught up with the
value of the Dollar and now people are paying the price..
upon a time, a great person defined Washington,
D.C "as eight square miles surrounded by reality."
MarketWatch, 4/30/2009 12:07:32 PM:
to enter bankruptcy; it 'will emerge stronger,' says White House
from the Internet. Remember the nice Zacks
Investment Management salesman Mark Jay Rafaloff, who visited me last Thursday?
calls yesterday and insists I remove him from my web site. Apparently its
the only place on the Internet you can find him when you do a Google search
and he says its upsetting his company - though his boss wont
What should I do? My wife said "remove him." Todd says "Be
a nice guy, for a change. Take him out." My friend Dan says "Refuse.
You own the photo and he agreed to it at the time or at least he did not protest.
Tell him it's Google's fault, not yours. Let's start a feud and maybe they'll
pay you money, give you a free subscription or at least a cup of coffee and
a bagel. Anyway, it's good that Google is indexing your site."
are some lessons here for all of us:
1. If your outfit is designed to attract attention, it will.
2. Before you visit anyone, do a Google search on them.
3. If someone asks if they can take your photo, ask "What do you intend
to do with it?"
And now to the
most important lesson: Be ultra wary of the Internet. If you have a serious
day job, don't have an account on Facebook or any other social network.
The computer industry press is rife with stories about how social networks
create ultra-tricky situations at work. From Computerworld:
30, 2009. Imagine walking into a meeting and encountering not just your current
co-workers, but all your colleagues and managers from jobs past, along with
your spouse, your college drinking buddies, your Senior Prom date, and, off
in a corner, your adolescent son, busy telling your boss how many hours he
logs in every day playing Grand Theft Auto.
It's not a
nightmare, it's Facebook.
anything like the 200 million users on the burgeoning social network, you
probably didn't give enough thought when you first signed on to which friend
requests you accepted, or whom you invited via the Friend Finder. Now you've
got a dangerously random group of friends and friends-of-friends sharing
-- and over-sharing -- information, sometimes without your even being aware
told two friends, and they told two friends" syndrome can be embarrassing
in your personal life, but potentially much more serious in the world of
writing "Yo, how did the layoffs go down?" on your wall is enough
to cause havoc in your office -- particularly if layoff day hasn't yet happened.
troubling: the online behavior of your direct reports, who, demographically
speaking, are likely to be both more enthusiastic and less discriminate
in their use of Facebook and other social networks. "Younger people
are using Facebook on a quasi-professional basis to build stronger relationships
with people," says Michael Argast, director of Global Sales Engineering
at security vendor Sophos Plc. "That means they're sharing a lot of
information with a lot of people on a regular basis."
the information they're sharing is what five albums have most influenced
their lives, fine. If the information they're sharing is that your division
might miss its new product ship date "by a mile!!!!!!," that's
not fine. Even more alarming, a new tool from Facebook lets users see their
friends' activity streams from cell phones or computers without having to
be logged into their Facebook home pages, which could potentially spread
unwary users' updates and comments even faster than before.
the more ubiquitous Facebook becomes, the greater its potential to muck
up office life -- and make your job as a manager just that much more treacherous....
For the entire
it all got started.
+ May I still eat the 99 cent specials at Taco Bell?
+ Can I get swine flu from my Mexican Chiwawa?
+ My hands aren't really dirty. Do I have to wash them?
+ My friend brought me a raw pig from Mexico, can I eat it for lunch?
+ Should I give up all my unclean Christian friends for Jews and Muslims?
to be thoroughly ripped off. During the bank
panic of a few months ago, I opened an FDIC-insured account with Chase. They
gave me their Chase Plus Savings rate --which now is a grand 0.50%. For March,
I earned a gigantic $39.65 in interest. I'm sure they told me it would earn
There are three lessons here: Check your monthly statements. Don't believe
what they tell you. Get this money out today, and into an FDIC-insured CD.
recent New Yorker cartoon:
touch. John Vicari of Mariella Pizza was so happy with his 15 minutes
of fame, he gave me a free slice of pizza and a free Coke -- value $3.50.
His big concern yesterday: the family health insurance. "It goes up 20%
each year. My salary doesn't. Sales are down. What do I do?"
Iran was upset when they found out a shipment of oranges had boxes
labeled product of Israel.
The matter was
resolved peacefully when it was discovered that the oranges came from China
and were a counterfeit product of Israel!
They gaily exclaimed
Those Chinese will counterfeit anything!
weather in the northeast this weekend. Heavy rain and heavy hay
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
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note I'm not suggesting you do. That money, if there is any, may help pay
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