Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Tuesday, November 1, 2005: In
1966 I traveled in Indonesia. When I arrived, I got 56,000 rupiah for
each dollar. When I left six weeks later I got 128,000 rupiah. I remember
changing $10. They rought the rupiahs in a Samsonite briefcase. They had single
rupiah notes, no large notes and no one counted the notes. You guessed it by
weight. The money changer begged me to change $20. As incentive he would throw
in the Samsonite case.
I can understand the obsession with inflation. It wreaks havoc, though I don't
see America's economy 2005 as at all similar to Indonesia's economy 1966.
the Fed will increase our interest rates by another quarter-percentage point
rate to 4%. The
Fed is obsessed with preventing inflation. It raises interest rates to make
it less attractive for people and businesses to borrow money to spend. This
brakes the economy. The "economy" is, however, so broad and large
that hitting it with higher interest rates is a selective tool. It will hurt
the housing business because that's interest-rate sensitive. But it won't hurt
the energy business, because it's swimming in money.
For me personally, I've kept cash in short-term floaters. Hopefully, the interest
I earn will now rise slightly.
a little off the table, please: Whole Foods (WFMI) is the "tech
stock" of 2005. Growing strongly in a hot space... The investors' darling.
But -- by all standard investment measures -- it's way overpriced. It's time
to take a little off the table.
When a favorite stock grows large and unwieldy: Dell's sales are
now running at $56 billion a year. To grow by 11% a year it has
to increase its sales by $6 billion. I remember when the entire computer
industry was far less than $6 billion. It wasn't that long ago. The math of
large companies doesn't produce great growth. And great growth is what Wall
Street craves. Don't believe your broker who is now pounding the table for a
"cheap" Dell -- are you listening Citigroup?
Ditto for Intel,
now also so large it's falling all over itself trying to eke out a little growth.
Latest "falling all over itself" -- a delay in production of dual-core
the research firm, forecasts that global PC shipments will actually grow 12.7
percent in 2005. Unit sales of mobile PC's, including laptops and tablet
PC's, are forecast to grow 31 percent in 2005. But Gartner
also noted that as consumers and businesses are buying at the lower-price end
of the market, revenue from PC sales is expected to grow a mere 0.5
percent this year. "The industry is running to stand still,"
Charles Smulders, a Gartner analyst, said. Moreover, as growth in the industry
shifts to China and India, where the lowest-price units sell fastest, the gap
between revenue growth and sales growth widens.
didn't I think of this? Shame on my lack of imagination.
you really want one -- makes a great Christmas present for your obese cousin
with his matching obese dog, go to www.doggysteps.com.
The classic Halloween story
A cabbie picks up a Nun. She gets into the cab and the cab driver
won't stop staring at her.
She asks him why
he is staring. He replies: "I have a question to ask you, but I don't want
to offend you".
She answers, "My
son, you cannot offend me. When you're as old as I am and have been a nun as
long as I have, you get a chance to see and hear just about everything. I'm
sure that there's nothing you could say or ask that I would find offensive."
always had a fantasy to have a nun kiss me."
She responds, "Well, let's see what we can do about that: Couple of conditions
#1, you have to be single and #2, you must be Catholic."
The cab driver
is very excited and says, "Yes! I'm single and Catholic!"
the nun says. "Pull into the next alley."
The nun fulfills
his fantasy with a kiss that would make a hooker blush.
But when they
get back on the road, the cab driver starts crying.
child," said the nun, why are you crying?"
me but I've sinned." The cabbie says, " I lied. I must confess, I'm
married and I'm Jewish."
The nun says,
"That's OK, my name is Kevin and I'm going to a Halloween party."
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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
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