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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.

Today 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.

Take 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 Itanium processors.

Gartner, 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.

What didn't I think of this? Shame on my lack of imagination.

If 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."

"Well, I've 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!"

"OK" 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.

"My dear child," said the nun, why are you crying?"

"Forgive 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."

Recent column highlights:
+ Dumb reasons we hold losing stocks. Click here.
+ How my private equity fund is doing. Click here.
+ Blackstone private equity funds. Click here.
+ Manhattan Pharmaceuticals: Click here.
+ NovaDel Biosciences appeals. Click here.
+ Hana Biosciences appeals. Click here.
+ All turned on by biotech. Click here.
+ Steve Jobs Commencement Address. The text is available: Click here. The full audio is available. Click here.
+ The March of the Penguins, an exquisite movie. Click here.
+ When to sell stocks. Click here.

Harry Newton

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. Thus I cannot endorse any, though some look mighty interesting. If you click on a link, Google may send me money. That money will help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
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