Harry Newton's In Search of The Perfect Investment
9:00 AM EST, Friday, October 10, 2008: Ask
yourself a simple question: Would you personally buy anything in today's sinking,
stinking stockmarkets? If you answer NO, as I answer, then your only action
must be to buy some (not many -- we're talking gambling) of the ultra-short
ETFs, which I recommended several days ago. Here is their performance just yesterday.
They were pretty well the only green on my screen yesterday.
SSG is semiconductors,
FXP is China, EEV is emerging markets, DXD is the Dow 30, TWM is the Russell
2000, and the QID is the Nasdaq index.
on Rosh Hashanah. Buy on Yom Kippur. That's an old stockmarket maxim. Here's
a chart of Dow during that 10-day period, which ended yesterday. It opened on
September 29 at 11,139.62 and closed night at 8880.66 -- 20% lower.
If the maxim is
true, and since Yom Kippur was yesterday, you should be buying equities today.
How bad have things
been? Here's a chart showing recent worldwide markets.
How much further
can prices fall? Goldman Sachs has just issued a report called "Credit
Crisis Contagion: Implications for the Global Economy and Financial Markets."
of entrepreneurial opportunities.
I am totally convinced that now is the perfect time to start a new business.
There's been a rash of new banks started. I can name three in New York alone.
Richard Branson is going into the mortgage business (see next item). And friends
are buying up cheap homes and renting them out. They figure an 8% return --
not including any capital appreciation (if that ever happens).
Branson promotes his new book.
From the writeup:
Since his first business venture, publishing a student magazine in 1968, Richard
Branson has become one of the worlds most successful entrepreneurs. Today,
his Virgin Group is recognized the world over and Branson is its charismatic
public face. For the first time, Richard is prepared to share the inside track
on some of his greatest business deals so that everyone can learn from his achievementsas
well as his failures.
From his CNBC
interview this morning:
the one lesson you've learned from all your years in business?
To protect against disaster, to protect against the downside. When I started
my first airline, I asked Boeing if they'd support me. They said yes. I'd buy
one plane. But I said that if my airline didn't work, I wanted to be able to
hand that plane back at the end of 12 months. They said yes. More businessmen
would have benefited, if they had asked the question, 'What if house prices
go down 20%.'
he is now going into the home mortgage business in England. His rationale: "It's
hard to get a mortgage at present. But there's a big demand."
One of the reasons we are
so deceived by bubbles is the same reason that we are deceived by professional
magicians, the Yale economist Robert Shiller wrote in Irrational Exuberance.
When clever persons become professionals at deceiving people, and devote
years to perfecting an act, they can put seemingly impossible feats before our
eyes and fool us, at least for a while.
When we have the equivalent of
professional magicians running some of our companies or acting as some of our
real estate brokers, we have to expect that what we see is not reality.
writes up John McCain
There's a long piece on McCain in the latest issue of RollingStone. It's worth
+ I bought a toaster yesterday and was given
a "thank you" gift -- a bank.
A new study reveals that the American public's approval of Congress is now only
14%. When told of the results, Congresspeople responded with surprise: "It's
Q: What's the difference between a pigeon and a banker?
A: A pigeon
can still make a deposit on a BMW
new words: The sub-prime mess had added richly
to the English language. There is Ninja loan -- no income, no job and no assets.
There are liar loans. And now comes trashout.
Example citation: "They didn't have the money to get a moving
van, so they took what they could throw in the car and took off," says
a local man, whose business clearing out abandoned houses is booming.
"We don't even know where they went." Clearing out a house is called
a trashout. But people leave behind much more than trash. They leave computers,
printers, flat-screen TVs, new furniture, children's toys all the stuff
that used to be so easy to buy on credit. Charities don't want it, and so it
all goes in the dumpster. Margaret Wente, "America's house of cards
make that, credit cards," The Globe and Mail, October 4, 2008
Story; The Wisdom of children.
was reading the story of The Three Little Pigs to her class of six year olds.
She came to the part of the story where 1st pig was trying to gather the building
materials for his home.
She read . 'And
so the pig went up to the man with the wheelbarrow full of straw and said: 'Pardon
me sir, but may I have some of that straw to build my house?'
The teacher paused
then asked the class: 'And what do you think the man said?'
One little boy
raised his hand and said very matter-of-factly ...'I think the man would have
said - 'Well, I'll be damned!! A talking pig!'
The teacher had
to leave the room.
cruise (sick humor for sick times)
on the Pacific goes all wrong, the ship sinks, and there are only 3 Survivors;
Bob, Bill and Debbie.
They manage to
swim to a small island and they live there for a couple of years doing what's
natural for men and women to do.
years of casual sex, all the time, Debbie felt absolutely horrible about what
she was doing.
She felt having
sex with both Bob and Bill was so immoral and bad that she killed herself.
It was tragic,
but Bob and Bill managed to get through it. After a while, Bob and Bill's resistance
to nature's urgings waned, and the inevitable happened.
Well, a couple
more years went by and Bob and Bill began to feel absolutely horrible about
what they were doing.
So they buried
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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