Harry Newton's In Search of The Perfect Investment
Technology Investor. Harry Newton
AM EST, Friday, May 15, 2009. The overarching
lesson from yesterday secondaries story was how heavily stacked against the
private investor the stockmarket actually is. You spent major time researching
a stock, decide you like it and then this sort of nonsense happens:
We know how
the institutions make money on this. They sell short when the secondary is
rumored. They buy the secondary (this one at $7) and dump it instantly.
We know how
the brokers make money on this -- they get 20 cents a share commission for
secondary shares they sell their clients.
How do you and
I make money? According to my best hedge fund manager, "Buy on secondaries,
like LINE. They almost always trade higher over the next few weeks. But make
sure you buy only companies you really like."
For your amusement,
here are the secondaries which were priced last night:
Priced last night
I do like Smithtown
Bancorp. I have their annual report in my hot little hand. It's a seriously
impressive local bank -- I need to do a little more reading before I buy.
If you didn't
read yesterday's piece on syndications, please do. I was impressed with my
own work. Dan Good, my Wall Street maven, yawned and quipped, "So
what's new?" For yesterday's piece.
makes us happy? Studying happiness yields
no easy answers. That has made it a new academic discpline. Because it is
part of "The Search For the Perfect Investment," I'm fascinated
and have gobbled up much of the literature. Until recently the conventional
wisdom said comparative wealth was key. It wasn't how much money you had --
but whether you had more than your friends. Demonstrating how much you had
became a key driver of the McMansion, European-car, Rolex watch crowd of the
1990s boom. None of that stuff really made anyone happier. It simply showed
you were "happier" to your friends.
recent reduction in everyone's wealth should, theoretically, help with the
comparative wealth happiness measure. But I suspect not. You can never win
this game since there's always someone with more. So you'd better find your
own happiness in something else -- accomplishments, friends, family, etc.
72 years, researchers at Harvard have been examining the happiness question.
They've been following 268 men who entered college in the late 1930s through
war, career, marriage and divorce, parenthood and grandparenthood, and old
age. A peek at the results are in the latest Atlantic.
people to work, and love, as they grow old? By the time the Grant Study
men had entered retirement, Vaillant, who had then been following them for
a quarter century, had identified seven major factors that predict healthy
aging, both physically and psychologically.
mature adaptations was one. The others were education, stable marriage,
not smoking, not abusing alcohol, some exercise, and healthy weight. Of
the 106 Harvard men who had five or six of these factors in their favor
at age 50, half ended up at 80 as what Vaillant called happy-well
and only 7.5 percent as sad-sick. Meanwhile, of the men who
had three or fewer of the health factors at age 50, none ended up happy-well
at 80. Even if they had been in adequate physical shape at 50, the men who
had three or fewer protective factors were three times as likely to be dead
at 80 as those with four or more factors.
dont matter? Vaillant identified some surprises. Cholesterol levels
at age 50 have nothing to do with health in old age. While social ease correlates
highly with good psychosocial adjustment in college and early adulthood,
its significance diminishes over time. The predictive importance of childhood
temperament also diminishes over time: shy, anxious kids tend to do poorly
in young adulthood, but by age 70, are just as likely as the outgoing kids
to be happy-well. Vaillant sums up: If you follow lives
long enough, the risk factors for healthy life adjustment change. There
is an age to watch your cholesterol and an age to ignore it.
has yielded some additional subtle surprises. Regular exercise in college
predicted late-life mental health better than it did physical health. And
depression turned out to be a major drain on physical health: of the men
who were diagnosed with depression by age 50, more than 70 percent had died
or were chronically ill by 63. More broadly, pessimists seemed to suffer
physically in comparison with optimists, perhaps because theyre less
likely to connect with others or care for themselves. ...
again, Vaillant has returned to his major preoccupations. One is alcoholism,
which he found is probably the horse, and not the cart, of pathology. People
often say, That poor man. His wife left him and hes taken to
drink, Vaillant says. But when you look closely, you see
that hes begun to drink, and that has helped drive his wife away.
The horrors of drink so preoccupied Vaillant that he devoted a stand-alone
study to it: The Natural History of Alcoholism.
other main interest is the power of relationships. It is social aptitude,
he writes, not intellectual brilliance or parental social class, that
leads to successful aging. Warm connections are necessaryand
if not found in a mother or father, they can come from siblings, uncles,
friends, mentors. The mens relationships at age 47, he found, predicted
late-life adjustment better than any other variable, except defenses. Good
sibling relationships seem especially powerful: 93 percent of the men who
were thriving at age 65 had been close to a brother or sister when younger.
In an interview in the March 2008 newsletter to the Grant Study subjects,
Vaillant was asked, What have you learned from the Grant Study men?
Vaillants response: That the only thing that really matters
in life are your relationships to other people.
of these findings stems in large part from the rarity of the source. Few
longitudinal studies survive in good health for whole lifetimes, because
funding runs dry and the participants drift away.
Read the entire piece -- TheAtlantic.
your hands. And other precautions. Send this
PowerPoint to your family, friends, and co-workers. It comes from U.S. Centers
for Disease Control and Prevention. It tells the entire story on swine flu.
You must watch it. Click here.
insanity of this IPO. This should be fun. OpenTable
(OPEN) is going public today. This is one of those 1990s Internet stocks.
It's ridiculously overpriced -- five times 2008 revenue. It purports to get
you reservations at local restaurants. It stinks. I checked six of my favorite
local Manhattan restaurants. It didn't list one. The shares are coming at
$12-$14, allegedly. I wish I could short the thing. But I gather there's some
rule about shorting new IPOs. The Journal has a piece on OPEN in Heard
on the Street. The Journal has "reservations on OpenTable Share
Offering." I bet they ran the story just to be able to publish the bad
screen TVs have sucky sound. Its always better to pump the
sound through a stereo receiver or even better a receiver with five
channels, which you can also use to pump your DVDs through. Avoid the TV's
speakers. As they get flatter, they sound suckier.
recent New York cartoon:
bad locker room humor. (But I can't stop
Two guys are
in a locker room when one guy notices the other guy has a cork up his ass.
He says, "How'd
you get a cork in your ass?"
The other guy
says, "I was walking along the beach and I tripped over a lamp. There
was a puff of smoke, and then a red man in a turban came out."
He said, 'I
am Tonto, Indian Genie. I grant you one wish.'
And I said,
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,
here and here.