Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Thursday, May 5, 2005: Hedge
funds are so numerous and so desperate, they're making life in the stockmarket
confusing and difficult. For example, they're been hugely short stocks like Google
(7.4% of Google is sold short), eBay (2.6%), Research in Motion (9.2%), Yahoo
(6.2%), Starbucks (3.1%) and General Motors (16.9%). When something happens (like
Kerkorian's bid for GM), the hedge funds panic and the stock bounces. There's
logic, as Cramer pointed out last night, in buying heavily-shorted stocks. Perhaps,
yes. Perhaps, no. Remember Todd's motto, "When in doubt, stay out."
best part of buying GM: Kirk Kerkorian is 87,
one year younger than my father-in-law. They both run their own company and
wouldn't have it any other way. "You retire, you die,"
says Viacom's Sumner Redstone, who will turn 82 this month. Mr. Kerkorian keeps
going because "he has a very calm manner and is not very excitable,"
says Ralph Whitworth, a longtime acquaintance and a principal of Relational
Investors LLC, an activist investment firm in San Diego. "He goes about
his business at his own pace."
Kerkorian , then and now.
The freedom to
continue at one's own pace -- however fast -- is something other executives
may envy. After wielding so much power, it can be difficult to let go. In fact,
many companies still have mandatory retirement rules for CEOs. Several of my
friends have been kicked out of their jobs recently because of their age. Some
of them are bored, poor and irritable. Fortune Magazine has a cover story on
being 50 and fired:
One of the good aspects of owning your own company is that you make the rules
-- like when you retire. Which is why executives likes Rupert Murdoch, 74.,
Warren Buffett, 74 and Sumner Redstone, 81, and my father-in-law, Alan Tomlinson,
88 stay at their posts.
you do when you're older is a serious issue -- worth thinking about now.
The second best part of buying GM: It's
confusing Wall Street. The Street has zero idea what's in Kerkorian's obviously
awesome brain. Most of the analysts were down on the stock -- until yesterday
when some reversed themselves and started recommending it -- purely on the basis
that if Kerkorian was buying it, there must be something there they didn't see.
Wrote the Wall
Street Journal, "GM could go back to the auto maker's powerful unions
and ask them to agree to sizable cuts in health-care and other benefits that
are severely crimping the company, by saying that if the cuts don't materialize
Mr. Kerkorian could launch a takeover of the company that might result in even
more drastic cuts." Neat idea.
Mr. Kerkorian claimed the bid was for "investment purposes" only,
disavowing any interest in running GM -- a claim as believable to most analysts
as the idea that sports odds are for "entertainment purposes" only.
Mr. Kerkorian made a similar claim when he bought into then-struggling Chrysler
in 1990. Instead, he rode herd on management, Chrysler turned around, got bought
by Daimler and he turned a handsome profit.
Personally, I've never owned, and never considered owning a GM car. But I would
-- in heartbeat -- if they made something that appealed. I suspect every other
American feels the same.
Foods (WFMI) does well: Last night, WFMI , the world's largest natural
foods chain and my favorite store, reported that second-quarter earnings rose
22% from last year, driven by solid 20% sales growth. Every day over 9,000 people
pass through my Whole Foods in the Time Warner Center. If you're in New York,
meet me at Whole Foods. I'll show you around. It's a fun place. Whole Foods
has a 57,000 square foot store in the basement.
in New York: People smarter than me believe
New York's Manhattan remains top target for Al Qaeda. The PR value of hitting
this city is huge. This morning two small makeshift grenades exploded outside
the British Consulate in Midtown Manhattan, causing slight damage to the building
but injuring no one.
believe that 9/11 caused a profound change in the level of fear we Americans
now cart around. That fear is manifesting itself in many things -- including
the design of cars which are taking on tank-like characteristics. Lots of protective
metal, high doors, small windows, heavy threatening front grill, etc. Look at
the new Chrysler 300.
Homes, again: Reader Donald Verlench writes,
for everyone. If I were you I would rent one for a 2-week trip or buy an old
one for the dimes on a dollar before sinking that type of money into the type
of coach you are looking at.
-- Gas costs a lot.
-- You have to rent a car or tow a car to your destination.
-- Backing up is a bitch.
-- Tight turns are impossible.
-- No matter how expensive the coach. When it is windy, they are a bitch to
-- Setting up the Internet link is time consuming. The Internet satellite
link must be more accurate then a TV satellite link.
Despite all the above I love it! My Pace Arrow is getting up there in years,
but the microwave, furnace, AC, Generator, refrigerator all still work so
no need to get a new one.
Imaging (TPTH) Conference Call this morning: TriPath
will hold a conference call to discuss the Company's first quarter financial
results this morning at 11:00 a.m. ET. Call 1-888-344-3716 or 1-706-634-4926.
The Making of an American Capitalist: My son
just devoured this book. He loved it. You can pick up a copy for $12.21 at WalMart.com
or $13.27 from Amazon.com.
new Army Captain was assigned to a recon company in a remote post in the Iraqi
desert. During his first inspection, he noticed a camel hitched up behind the
mess tent. He asked the First Sergeant why the camel is kept there.
is the nervous reply, "as you know, there are 250 men here and no women.
And sir, sometimes the men have ...ummm.... urges. That's why we have the camel,
The Captain says, "I can't say that I condone this, but I understand about
urges, so the camel can stay."
About a month
later, the Captain starts having a real problem with his own urges. Crazy with
passion, he asks the First Sergeant to bring the camel to his tent. Putting
a stool behind the camel, the Captain stands on it, pulls down his pants, and
has wild, insane sex with the camel. When he is done, he asks the First Sergeant,
"Is that how the men do it?"
"Uh, no sir,"
the First Sergeant replies. "They usually just ride the camel into town
where the girls are."
a Texan could think of this ...
from the State where drunk driving is considered a sport, comes this supposedly
Recently a routine
police patrol parked outside a bar in Bandera, Texas. Staked out, the officer
noticed a man leaving the bar so intoxicated that he could barely walk. The
man stumbled around the parking lot for a few minutes, with the officer quietly
After what seemed
an eternity and trying his keys on five different vehicles, the man managed
to find his car which he fell into. -- He sat there for a few minutes as a number
of other patrons left the bar and drove off. Finally he started the car, switched
the wipers on and off (it was a fine, dry summer night) -- flicked the blinkers
on, then off a couple of times, honked the horn and then switched on the lights.
-- He moved the vehicle forward a few inches, reversed a little and then remained
still for a few more minutes as some more of the other patron vehicles left.
At last, the parking lot empty, he pulled out of the parking lot and started
to drive slowly down the road.
The police officer,
having patiently waited all this time, now started up the patrol car, put on
the flashing lights, and promptly pulled the man over and carried out a breathalyzer
test. To his amazement the breathalyzer indicated no evidence of the man having
consumed any alcohol at all! Dumbfounded, the officer said, "I'll have
to ask you to accompany me to the police station. This breathalyzer equipment
must be broken."
it," said the truly proud Texan. "Tonight I'm the designated decoy."
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 .
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