Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM EST Friday, November 17, 2006: Interest
rates are inching up, making cash more profitable. My triple tax-free, one-week
New York muni bond floaters are now paying 3.61% and my one-week CDs
from Sovereign Bank are paying 5.20%. That's nice interest rates. They're
not likely to go higher any time soon.
fell over all for the second straight month in October, the government reported
yesterday. That means that the Federal Reserve is likely to keep benchmark short-term
interest rate unchanged at 5.25 percent for several more months.
Wall Street likes
low inflation. Stocks are rising, for now. The Standard and Poors 500
stock index is now at a new high.
prices have been a major factor for the last two months, Cheaper cars, computers,
clothing and airline fares push the core rate down in October. However, rents
and medical costs are rising. Rents go up when houses start to get too expensive
often means a slow economy. The Economist has a piece on Europe. Excerpts
growth for the euro area
OH, THE fickleness
of figures. Until a few days ago, most economists who watch the euro area
thought that its GDP had grown by perhaps 0.7% in the third quarter of the
year. By the zones modest standards, that would be spectacular stuff,
though not as stunning as the previous quarters 0.9%. Alas, the first
official estimate, published on Tuesday November 14, was a mere 0.5%.
This is scarcely
disastrous: it is probably in line with the euro areas long-run potential;
it is just ahead of Americas performance (0.4%, or 1.6% at an annualised
rate) for the second quarter running; and growth in 2006 is still set to be
the highest for six years. Still, the figure was disappointing. And
it raises two familiar, closely connected questions. First, is the euro zone
running out of steam already? Second, can the zone (and the rest of the world)
keep going as the American economy slows? The best answers are still
probably not and probably. Nevertheless, prospects for the coming months have
become even less certain.
The zone slowed
mainly because its two biggest economies did. Germany, which managed
1.1% in the second quarter, recorded 0.6% this time. French GDP, having surged
by 1.2% in the spring, did not grow at all. (Growth in the third-largest economy,
Italy, was also sluggish; Spain, ranked fourth, had yet another strong quarter.)
... it is too
soon to be gloomy. The French figures may reflect changes in inventories and
a statistical wrinkle in the treatment of holidays, which boosted the second
quarter relative to the third. In Germany, say official statisticians, growth
in the third quarter was based on both domestic and foreign demand
a welcome sign, because until recently German growth had relied perhaps too
heavily on the latter, and consumers have kept their wallets closed. Furthermore,
David Mackie, of JPMorgan, notes that over the past year German growth numbers
have been revised upwards by an average of 0.3 percentage points per quarter.
In other countries too, second-quarter numbers have been raised by a notch.
And surveys and other indicators suggest that in the fourth quarter the euro
zone is holding up well.
In the next
few months the euro area will face two important tests. One is a tightening
of fiscal policy, especially in Germany, where the upper rate of value-added
tax is due to rise from 16% to 19% on January 1 (2007). Given
the reluctance of Germans, worried about their jobs, wages and pensions, to
spend in recent years, this will probably knock demand in the first quarter
of 2007. It may, however, help demand at the end of this year as German shoppers
try to beat the taxman.
Second is Americas
slowdown, which some economists expect to drag Europe back; others think
that the old continent is stronger than in the past. It does seem that domestic
demand (including intra-zone trade), rather than net trade, is now pulling
the euro area along. And the zones ties with Asia have strengthened
in the past few years. Those who think that the world economy can still
grow healthily even as America slows will also take heart from Japan, where
GDP looked unexpectedly strong in the third quarter.
the European Central Bank is most prominent. Almost a year ago it started
raising interest rates even though many critics said the euro areas
economy was still too tender. All year the euro zone has confounded the doubters;
and five quarter-point increases later, the central bank looks certain
to lift rates again next month. Even after this weeks disappointing
GDP number, it may well feel obliged to carry on in 2007. But a foggy few
months lie ahead.
another Trading Exchange to Debut. (I've been writing
about them all week.)
From Dow Jones MarketWatch today:
Mason doesn't want Spanish
NEW YORK (MarketWatch)
-- Nymex Holdings Inc.'s initial public offering priced above the planned
range late Thursday, suggesting strong demand for shares of the oil and metals
The IPO of 6.5 million shares priced at $59 each, raising more than
$380 million. The pricing came in above the expected range of $54 to $57 a
share. The stock is schedule to begin trading on Friday (i.e. today)
Nymex (NMX) , the corporate name for the New York Mercantile Exchange,
had already boosted its IPO price range from $48 to $52 a share earlier this
week and increased the size of the offering from 6 million shares.
Going public after more than 130 years as seat holder-owned entity, the Nymex
has drawn fans as the latest financial marketplace to tap into greater profit
margins from electronic trading. Its added appeal comes from roles in hot
energy and metals businesses and its status as a possible takeover candidate.
If Nymex performs like other exchange IPOs, it'll add on about $20 after the
open. Six new issues in the exchange business have risen an average of 35%
in their first day of trades:
* The Chicago
Mercantile Exchange (CME) rose 23% above its $35 offering price on Dec.
5, 2002. The stock trades at $541 now.
* The IntercontinentalExchange (ICE) rose 51% over its $26 price in
its Nov. 16, 2005 IPO. The stock now trades at about $97 a share.
* The NYSE Group (NYX) -- going public by margining with Archipelago
-- rose 25% to $80 a share from its previous day close of $64.25 when it began
trading on March 8. The stock now trades at about $95 a share.
* The Nasdaq
(NDAQ) rose 18% over its $9 price when it moved to the Nasdaq exchange
from the bulletin board on Feb. 9, 2005. It now trades at $37 a share.
* The International Securities Exchange (ISE) rallied 69% over its
$18 price in its IPO on March 8, 2005. The stock is now at $51 a share.
* The Chicago Board of Trade (BOT) rose 49% over its IPO price of $54
a share on Oct. 18. 2005. It's now at about $160 a share.
Charting a rise
in its trading fortunes, Nymex Holdings Inc. on Nov. 7 reported third-quarter
net earnings of $40.7 million, up 82% from $22.4 million in the same
period last year. The results included one-time, pre-tax charges of $6 million
resulting from the closure of Nymex's London facilities and from job cuts.
The owner of the New York Mercantile Exchange said revenue in three months
ended Sept. 30 rose 46% to $142.4 million from $97.9 million. Daily
average contracts traded rose to 1.32 million, up 42% from last year.
may be those among you who support including Spanish in our national language.
I for one am 110% against this! We must preserve the exclusivity and, above
all, the purity of the English language.
Will Rogers. Will Rogers was our greatest political
sage. His sayings included.
To all the schlemiels,
schlimazels, nebbishes, nudniks, klutzes, putzes, shlubs, shmoes, shmucks,
nogoodniks, and momzers that are out there pushing Spanish, I just want to
say that I, for one, believe that English and only English deserves linguistic
prominence in our American culture.
To tell the
truth, it makes me so farklempt, I'm fit to plotz. This whole Spanish schmeer
gets me broyges, especially when I hear these erstwhile mavens and luftmenschen
kvetching about needing to learn Spanish.
These shmegeges can tout their schlock about the cultural and linguistic diversity
of our country, but I, for one, am not buying their shtick. It's all so much
dreck, as far as I'm concerned. I exhort you all to be menshen about this
and stand up to their fardrayte arguments and meshugganah, farshtunkene assertions.
It wouldn't be kosher to do anything else. Remember, when all is said and
done, we have English and they've got bubkes!
The whole myseh
is a pain in my tuchas!
+ Never slap a
man who's chewing tobacco.
+ Never kick a
cow chip on a hot day.
+ There are two
theories to arguing with a woman...neither works.
+ Never miss a
good chance to shut up.
+ Always drink
upstream from the herd.
+ If you find
yourself in a hole, stop digging.
+. There are three
kinds of men: The ones who learn by reading. The few who learn by observation.
The rest of them have to pee on the electric fence and find out for themselves.
+ After eating
an entire bull, a mountain lion felt so good he started roaring. He kept it
up until a hunter came along and shot him. The moral:
When you're full of bull, keep your mouth shut.
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
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