Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
9:00 AM Wednesday, November 16, 2005:
Yesterday's perfect investment was the Treasury's I Bond which is presently
paying 6.73% -- subject
to federal taxes, but not state or local. There are rules and limitations,
but fortunately, workarounds:
1. You must hold them for one year. If you redeem them within the first five
years, you'll forfeit the three months most recent interest. That's not onerous.
you're only allowed to buy $30,000 each year. But reader Josh Cohen points out:
Start by buying them
directly from the Treasury. Click
Limits are 30k
online per person per calendar year
30k in paper version via your local bank, per person per year.
Like the current Nov 1 pricing? Buy 60k this calendar year.
Married? Buy some in your spouses name. 60k.
Got the cash? January 1, buy another 120k.
Total between now and Jan 2: Up to $ 240,000 at 6.73%! Super safe
writes, the pricing is 6.73% annualized for 6-months from the first date
of the month you purchase them in, as I understand it. Buy toward the end of
the month and the interest is still calculated from the first of the month,
Buy it before
the May 1 re-pricing, and you get the current base rate of 1.0%, which is locked
for the life of the 30-year bond. Add the inflation factor (that's why they're
called an I Bond) and the total is 6.73%, even if bought and settled/issued
by April 30. And the 6 month clock starts. After that period, the next 6 months
is 1.0% base plus the new May 1st inflation factor.
great occupation for your kids: Become an accountant/auditor.
Sarbanes Sarbanes-Oxley, the law Congress passed in 2002 to rein in corporate-accounting
abuses, has become The Auditors' Get Rich Quick Act. Auditing
bills are skyrocketing. It's gets even better. In the old days, you could ask
your auditors for advice and get it. No more.
had a contract for $13 million for the office building. That was
a bargain at under $25 a square foot. Then he did extensive due diligence. He
didn't like what he found. He offered $8 million. They countered with
$9 1/2 million -- a 27% reduction. They're still negotiating. There are
five lessons here:
1. The asking
price is always negotiable, even in a "hot" real estate market.
2. Don't fall in love with the property. Be prepared to walk.
3. When God closes a door, She opens a window. There'll always be a better
4. Cash is far better than saving an awful deal.
5. Keep looking.
Advice to would-be private equity investors:
Bob Metcalfe invented Ethernet, the legend goes. He also built a successful
company called 3Com. . He's now a venture capitalist.
An interview in this week's Electronic Engineering Times contains:
EET: How do you see the role of the VC?
Metcalfe: I began with a conceit that I have since tempered. VCs split
their time between choosing companies and helping companies, and my conceit
was that since I had built a successful company [3Com], I was going to be helpful.
What I've learned over the past five years is that it's much more important
to choose, rather than to be helpful. You have to do both, obviously, but
if you're going to generate a big return for your investors, which is our job,
then you have to be sure that you choose very carefully, as there's a limit
to just how much help you can give a company.
you expect rapid turnaround, and has that happened?
Metcalfe: There was a period during the bubble when rapid turnaround
was the rule. Now it's the exception. We plan on five to seven years between
initial investment and liquidity.
For the entire
deleting all your programs? I can't live without my TiVo. But I wouldn't
touch its stock with a 20 foot barge pole. My biggest issue with my TiVo is
that it prematurely deletes programs I asked it to record. According to TiVo
management, the reason is that my TiVo hard disk is "too full." OK.
I've cut my "default" recording quality to "basic."
And I'm making sure everything I record is in "basic quality." We'll
A Touch of the Poet now playing at Studio 54:
We saw it last night. It's a great play by perhaps the greatest American playwright,
Eugene O'Neill who won the Pulitzer Prize a record four times and is the only
American dramatist ever awarded the Nobel Prize in Literature. The play addresses
the problem we all will face -- What happens when one shining moment of glory
-- our "15 minutes of fame" -- is over? How do we live a life
outside "the spotlight"? The answer is not easy. I remember Johnny
Carson saying that the first thing he learned about happy retirement was not
to stay in his robe all day. Get up. Have a shower. Get dressed. Pretend you're
going to work. The play deals with more weighty issues. It's wonderful. Highly
yesterday's photo? I wrote every
child who's visited Central Park has posed with, or on this statue, "dedicated
to the indomitable spirit of the sled dogs that relayed Dan Titoxin 600 miles
over ice, across treacherous waters through Arctic blizzards from Nenana to
the relief of stricken Nome in the winter of 1925. Endurance. Fidelity. Intelligence."
Many readers wrote and told me the dog was called Balto. Here's his story, courtesy
1925, a life-or-death race to rescue the children of Nome, AK, from
disease made an international hero of one sled dog -- and eventually
led to the creation of Alaska's Iditarod sled dog race, the subject
of NATURE's SLED DOGS: AN ALASKAN EPIC.
1925, doctors realized that a potentially deadly diphtheria epidemic
was poised to sweep through Nome's young people. The only serum that
could stop the outbreak was in Anchorage, nearly a thousand miles away.
But the lone aircraft that could quickly deliver the medicine had been
dismantled for the winter. In desperation, officials turned to a much
lower-tech solution: moving the medicine by sled dog.
1925, sled dogs helped stem a diphtheria outbreak.
Soon, a musher embarked from Anchorage on the first leg of a remarkable
dog-sled relay aimed at delivering the needed serum to Nome. More than
20 mushers took part, battling temperatures that rarely rose above 40
degrees below zero Fahrenheit and winds that sometimes blew strong enough
to knock over sleds and dogs. Reporters brought news of the race to
a world suddenly transfixed by the drama in the far north.
Incredibly, just six days later, on February 2, 1925, Gunner Kaassen
drove his heroic dog team into the streets of Nome. In the lead of his
team was a husky named Balto, whose furry face soon became known around
the world. A year later, in honor of the epic trek, admirers erected
a statue of Balto in New York City's Central Park.
became known around the world.
Balto was suddenly a world-famous celebrity; for two years after the
serum run, the dog and some of his teammates traversed the continental
United States as part of a traveling show. After Balto died in 1933,
his body was preserved and displayed at Cleveland's Natural History
Museum. In 1995, a popular animated movie about Balto was released,
adding to his fame.
Long after his death, Balto's popularity lives on. Today, some Alaskan
schoolchildren are campaigning to bring Balto back to his home state.
The students want his body moved to the Iditarod Trail Sled Dog Race
museum in Wasilla. But Cleveland officials aren't ready to give Balto
back, noting he spent more than half his life in their city. There are
plans in the works, however, for Balto to return to Alaska as part of
a temporary exhibit at the Anchorage Museum of History and Art -- a
testament to the strength of Balto's memory and a fitting memorial to
his indomitable spirit.
coming hard winter:
It was autumn, and the Indians on the remote
reservation asked their new Chief if the winter was going to be cold or mild.
he was an Indian Chief in a modern society, he had never been taught the old
secrets, and when he looked at the sky, he couldn't tell what the weather
was going to be.
to be on the safe side, he replied to his tribe that the winter was indeed
going to be cold and that the members of the village should collect wood to
be prepared. But also being a practical leader, after several days he got
an idea. He went to the phone booth, called the National Weather Service and
asked, "Is the coming winter going to be cold?"
looks like this winter is going to be quite cold indeed," the meteorologist
at the weather service responded.
the Chief went back to his people and told them to collect even more wood
in order to be prepared.
week later, he called the National Weather Service again. "Is it going
to be a very cold winter?"
the man at National Weather Service again replied, "it's definitely going
to be a very cold winter."
Chief again went back to his people and ordered them to collect every scrap
of wood they could find.
weeks later, he called the National Weather Service again. "Are you absolutely
sure that the winter is going to be very cold?"
the man replied. "It's going to be one of the coldest winters ever."
can you be so sure?" the Chief asked.
weatherman replied, "The Indians are collecting wood like crazy."
The Tennis Masters in Shanghai: ESPN has
it every morning. It ends on Sunday. Federer is playing and winning, as usual.
this column at 9:00 AM, not 8:30 AM: I rarely made my 8:30 AM deadline.
Instead of getting more disciplined, I've inched the deadline forward to 9:00
AM every day.
+ Dumb reasons we hold losing stocks. Click
+ How my private equity fund is doing. Click
+ Blackstone private equity funds. Click
+ Manhattan Pharmaceuticals: Click
+ NovaDel Biosciences appeals. Click
+ Hana Biosciences appeals. Click
+ All turned on by biotech. Click
+ Steve Jobs Commencement Address. The text is available:
Click here. The full audio is available. Click
+ The March of the Penguins, an exquisite movie. Click
+ When to sell stocks. Click
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
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