Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM EST Monday, November 27, 2006: A
couple of my hedge funds and one of my money managers are under water for 2006.
Their managers get paid vast amounts of money to beat the market, but haven't
been able to this year. Is it really worth trying? My son, Michael, has just
read A Random Walk Down Wall Street.
As I was bemoaning
my 2006's losers last night, Michael pointed out:
1. Losers are more painful than gainers are pleasurable.
2. Losers suck time from pleasurable activities like tennis.
3. Few beat the market long-term.
4. Why not put Daddy's investments on auto pilot and save all the aggravation?
The best "auto
pilot" around is a broad-based equity fund -- most likely an index fund
-- from a low-cost, low-fee provider, like Vanguard. I've sung Vanguard's praises
before. I'm up 13.48% on my Vanguard -- basically in the last 15 months.
These are the Vanguard funds I own:
International Stock Index
Stock Index Admiral Shares
Markets Stock Index Admiral Shares
Index Fund Admiral Shares
The returns are
not fully up-to-date (Vanguard's web site sucks), but they're close.
is touting a WatchList of its own funds. The returns are more up to date:
as of 11/24/2006
Mkt Idx Inv
dollar is dropping. But Asia is booming.
The dollar dropped sharply last week against a broad range of major
currencies, with the euro breaking through $1.30 for the first time in
a year and a half. The British pound rose to its strongest value against the
dollar in two years. No one knows why the dollar is ailing at this precise moment
-- except the usual suspects -- the huge trade imbalance with China, a slowing
domestic housing market in the US, booming Asia and improving Europe.
Thus the imperative
is to find more investments outside the US. I like Australia because of its
limitless minerals and the huge demand for those minerals from booming Asia.
My favorite Kagara Zinc (KZL.AU) had its annual meeting last week. The
executive chairman, Kim Robinson, said, inter alia:
been an exhilarating year for our Company. We have brought two new orebodies
into production, one of which is a very profitable underground operation, and
commissioned a new copper treatment plant at Mt Garnet. We are now in the process
of commissioning our third treatment plant at Thalanga which will treat copper
ore now being mined from Balcooma. You can see from the flitch plan showing
detailed results of the ore zone currently being mined at Balcooma and which
contains 72,102 tonnes grading 4.18% copper that when Thalanga commences full
production we are in for a good ride. Due to a few minor commissioning issues
the time frame for full production has now drifted out to early December.
You will have
followed with great interest our recent acquisition for $25 million of the
nickel interests at Forrestania. This is part of a deliberate strategy to
complete our diversification into zinc, copper and nickel. Our fourth leg,
gold, encompassing the gold assets at Red Dome and Mungana, is more by accident
than design, but we are more than happy to have it in our exploration portfolio.
A near production opportunity such as the extensions to the T5 nickel deposit
at Flying Fox gives us the opportunity to get into the nickel business very
cheaply and quickly without having to purchase nickel production at elevated
prices, and we can look forward to exploration commencing early in the new
year. In the meantime we have the advanced Mungana project and the very large
Admiral Bay zinc project in the development pipeline. Joe Treacy will have
more about all of these talk the meeting.
The other pleasing
aspect of the years performance has been the strong cash flows and profits
that we are now producing. After tax profits have grown from $14.4 million
for the year ending June 2005, to $35.6 million for the year ending June 2006,
with a further substantial increase expected for the current year.
more on the Chairman's remarks and Kagara's annual meeting, click
here and click
Christmas/Chanukah presents -- part 2: The two magazines I most enjoy
are the Economist and Best Life. Give subscriptions to your friends:
One year $79. Click
10 issues for $19.97. Click
another plug for my iPod: There is nothing more enjoyable than falling
asleep listening to music with your iPod ear buds plugged in and your head coddled
in a down pillow. You have to buy the latest iPod. It's smaller. It's
really small. The controls are better. The screen is phenomenal. And you don't
have to carry around a heavy, clunky power supply. It charges via USB port on
The 30 gig unit is totally wonderful -- much smaller than the 80. And only $249,
the same price as the much smaller Nano. Click
Tip: When downloading iTunes 7 -- the latest version of Apple's free software
-- turn off pop-up blocking on your browser.
In a small town in the old country the Rabbi died. His widow, the
rebbetzin, was so disconsolate that the people of the town decided that she
ought to get married again. But the town was so small that the only eligible
bachelor was the town butcher. The poor rebbetzin was somewhat dismayed because
she had been wed to a scholar, and the butcher had no great formal education.
However, she agreed
and they were married.
After the marriage,
Friday came. They went to the Mikva. Then home to prepare to light the candles.
The butcher leaned over to her and said, "My mother told me that after
the Mikva and before lighting the candles, it's a mitzvah to have sex."
So they did.
She lit the candles.
He leaned over again and said, "My father told me that after lighting the
candles it's good to have sex." So they did.
They went to bed
after prayers to get ready for Shabbos. When they awoke he said to her, "My
grandmother said that before you go to the synagogue it's a mitzvah to have
sex." So they did
all day, they came home to rest, and again he whispers in her ear, "My
grandfather says after praying it's a mitzvah to have sex." So they did.
On Sunday she
goes out to shop for food and meets a friend who asks, "So, how is the
She replies. "Well,
he is no scholar but he comes from a wonderful family."
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. Please
note I'm not suggesting you do. That money, if there is any, may help pay Claire's
law school tuition. Read more about Google AdSense, click
here and here.