Harry Newton's In Search of The Perfect Investment
Technology Investor. Auction Rate Securities. Auction Rate Preferreds.
9:00 AM EST Thursday, May 22, 2008: An
upbeat way to start today's column. Read the sign carefully:
has an important conference call this morning at 11 AM EST on its ARPS. For
Today's column is short because I added so much to
my Auction Rate Preferreds web site. If you ever thought you could trust Wall
Street, a quick read of that site this morning will quickly dispel your trust.
amazing stuff coming out is how badly Wall Street brokerage firms are behaving,
and have behaved. UBS will lend you money on your locked securities --
but only if you let it sell your securities whenever it wants to, at whatever
price it feels like. Linda, a holder of ARPS emailed me:
Yes I got a
copy of that UBS loan contract - I was appalled that they would think I'm
that stupid. I guess they figure I was stupid enough to buy that crap in the
first place, I would fall for that contract. I had to insist on seeing their
loan document first and it took almost a month for them to mail it to me.
redemptions are not being handled fairly. You should read Wachovia's
explanation. Wall Street's favorite clients get more than their fair share,
while the retail clients get less. This is amazing stuff. Most brokers won't
deal with the secondary market for these securities, i.e. they won't sell your
shares. And the reason: they fear you'll sue them for your loss. And Merrill
Lynch issued load-up-the-boat "research" nine days before it pulled
out of the auctions causing them to fail.
morning, I wrote on the Auction Rate site:
was Merrill Lynch thinking? Did they deliberately push these securities on
their clients, knowing it would rid Merrill's own balance sheet of some of
them, knowing that their clients would be stuck with them? Was this your typical
Wall Street "screw the client, do the best for us" strategy? It
sure smells like it. I think the regulators need to investigate this one.
This one seriously stinks.
do get it right -- sometimes. I've been forecasting higher oil prices on this
column for some time. I figure we'll soon see $150. This morning, according
to the Wall Street Journal, "Energy watchdog IEA is preparing a sharp downward
revision of its global oil-supply forecast, a development that could further
rattle the oil market. Oil hit a new record above $135, with supply worries,
rising global demand and a slumping dollar keeping crude prices on an upward
way to play this is OIL and OIH.
for being right on selling and shorting First Solar. The thing fell $19.61 (or
6.56%) yesterday. But its P/E ratio is still 119 -- far too high for its growth.
your hard drive starts making funny noises.. Clone
it and junk it. It's telling you it's about to crash. A good place to buy hard
drives is sparepartswarehouse.com.
Hard disks have become so cheap and your data so precious that it's worth throwing
your hard drive out every six to nine months. Other than the fan, it's the only
part of your computer which moves. Hence it will break down. While you're at
it, you probably should swap out your laptop's keyboard. Most are do-it-yourself
10-minute jobs to change.
long will I live?
A distraught senior citizen phoned his doctor's office'"Is it
true," he wanted to know, "that the medication you prescribed has
to be taken for the rest of my life?"
"Yes, I'm afraid so," the doctor told him.
There was a moment
of silence before the senior replied, "I'm wondering, then, just how serious
is my condition because this prescription is marked 'NO REFILLS'."
Have a great day.
Get some exercise. Be happy you're alive, have food in your belly and can see
the humor of all this. I should patent a Newton Cynicism Meter (sort
of like a reverse VIX). My meter is running pretty high today. I'm very cynical.
I'll be interested to hear the Nuveen call.
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.