Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Tuesday, October 11, 2005:
To pass the time of yesterday's semi-holiday, a bull and a bear battled on BubbleVision
(CNBC). By the end of it you were either bored or confused, or, most likely,
both. The segment was a good testimony to Todd's old adage:
in doubt, stay out."
Add that to Harry's
adage: "Stay diverse."
Good news (for
me) from a community shopping center in a small California town I own a teeny,
tiny piece of. They got a tenant faster than they thought. They upped this year's
distribution from a forecast 5.1% to 11%. They're now selling
the property for 20% more than they paid for it, giving us leveraged investors
an ROI of about 60% when the deal closes shortly. We will have held the
shopping center for around 10 months. That return is far better than all my
stockmarket managers (individually or combined) and far better than any of my
stock purchases, including Whole Foods.
Who knew? And
that's the whole point. Better to mess with stuff you have some control over.
Rather than gambling with "investments" in which there are too many
There are always "gotchas." This piece came in yesterday. It's from
a hedge fund that messes with commodities:
quite aware of the Greenspan conundrum in fixed income, but a less noticed
conundrum has developed in the grain market. The growing season in the U.S.
could safely be characterized as less than ideal. A wide band covering northern
Missouri, eastern Iowa and most of Illinois experienced a rather severe drought,
and the entire growing region had significantly above normal temperatures
throughout the season. Typically, this would be the formula for a drop in
corn and soybean yields in the neighborhood of 5-10% from trend expectations.
What has become apparent, however, is that yields may in fact be above trend,
perhaps as much as 5% in soybeans, and no one is quite sure why. Theories
abound. Many advances have been made in seed genetics in recent years, specifically
targeting drought resistance. One possible conclusion is that the spread of
these GMO seeds may have pushed yield expectations higher. Another
possibility is that farmers sprayed for Asian soybean rust, and although it
never made it to the main growing regions, the spraying may have controlled
other yield sapping diseases. In any event, the grain market will be paying
very close attention when the USDA reports its yield estimates on October
The point of
this rather long exposition about seeds and rain is that it is indicative
of what happens in commodity markets, and why they do not go up
forever. The supply side is constantly looking for ways to increase production,
even in periods of rather low prices. On the flip side, consumers are sensitive
to price and will find ways to use less or do without should prices become
too high. In the current oil market we see even more evidence of the nature
of commodity markets. Transocean Sedco Forex (RIG), a market leader in deepwater
oil drilling, recently contracted a movable drilling deepwater drilling platform
for 800 days beginning April 2006 for about $390,000 a day. The rig is currently
operating in the same region of coastal Africa at a rate of $190,000 a day.
Higher prices are encouraging capital expenditure. On the demand side, it
was not 12 months ago that the airwaves were full of ads trumpeting high horsepower
and SUVs. The tone has changed decidedly towards fuel economy. Rising prices
beget conservation and expanded production, which leads to declining prices.
Such is the nature of commodity markets.
Doing search on your cell phone: There are three providers. Here
are their SMS "phone numbers":
+ YAHOO -- 92466.
+ GOOGL -- 46645.
+ 4INFO -- 44636.
Text "pizza 20071" to GOOGL and within seconds you'll get text responses
with the addresses and phone numbers for pizza joints in downtown Washington's
20071 Zip code. You can also type "Washington DC pizza," or "Pizza
Hut 20071". Yahoo, Google and 4Info all let you search for weather by typing
in "Weather 20071" or, alternatively, just "W 20071" or
"W Washington DC." All three also offer stock quote searches by typing
in the company's ticker symbol.
There are also
searches unique to each provider. Google offers driving directions and answers
to simple questions -- U.S. population, for example -- while 4Info offers more
of the unexpected, such as Fantasy sports statistics, recipes for your favorite
cocktail or sports scores (just type in the team's name).
Most cell phone
companies charge a dime or so for each message. But Yahoo, Google and 4Info
You typically get a reply in fewer than 15 seconds. This morning I sent Google
an SMS message "Phone Harry Newton New York." It came back with an
8-year phone number. But, to Google's credit, it was me. Yahoo said it couldn't
find me. 4Info found Hamburger Harrys and other wrong numbers. These services
do better finding pizza places.
Set up your TiVo for a great program: The
program is called: Elusive Peace: Israel and the Arabs. It aired
last night on New York's WNET, Channel Thirteen. It will air in New York again
this Sunday at midnight. I watched it. It's engrossing. It shows deal making
at its most difficult. Worth watching as a lesson in serious negotiation. This
is WNET's description:
follows the fraught history of the Arab-Israeli peace process from 1999-2005.
It includes interviews with insiders ranging from Ariel Sharon and Yasser
Arafat to Bill Clinton and Colin Powell, behind-the-scenes footage of tense
peace negotiations, and snapshots of the violence that enveloped the region
in recent years. The film is a production of the award-winning Brook Lapping
is GM headed? Kirk Kerkorian, the raider pushing for
changes at GM, bought about 22 million shares between $25 and $27, nearly 19
million shares at $31, 8 million shares at $35, and a little over 5 million
shares at $35.71. Last night GM closed at $25.48. Personally I think
it's going lower.
'Operation Iron Junk' In Full Swing Across Iraq. Secretary
of Defense Donald Rumsfeld announced today that the U.S. military was taking
advantage of American car dealers' huge inventory of unsold sport utility vehicles
by dropping the SUVs on insurgent positions across Iraq. The new offensive is
called Operation Iron Junk.
can't get rid of SUVs, and we can't seem to get rid of those pesky insurgents,"
Mr. Rumsfeld told reporters. "Hopefully, by dropping SUVs on insurgents,
we will get rid of both." Operation Iron Junk began over the weekend when
a C-17 Globemaster III cargo plane pounded insurgent positions in the town of
Qaim near the Syrian border by opening its cargo hold and dumping fourteen fully
loaded Lincoln Navigators on foreign fighters and suspected al Qaeda operatives.
nothing scarier than seeing one of those mammoth gas guzzlers falling from the
sky," chuckled Mr. Rumsfeld. "I wish I'd been there!"
The Lincoln Navigator, 2 1/2 tons of muscle and blood.
Mr. Rumsfeld said
that while most of the SUV strikes have been successful, a few have missed their
mark, including a sortie on Sunday in which a Ford Expedition landed on an unoccupied
Toyota Prius, instantly crushing it. But on the whole, the defense secretary
was prepared to call Operation Iron Junk a success: "This is by far the
most mileage anyone has ever gotten out of an SUV."
charm and hope
An Amish boy and his father were in a mall. They were amazed by almost
everything they saw, but especially by two shiny, silver walls that could move
apart and then slide back together again. The boy asked, "What is this
The father (never
having seen an elevator) responded, "Son, I have never seen anything like
this in my life, I don't know what it is."
While the boy
and his father were watching with amazement, a fat, old lady in a wheel chair
moved up to the moving walls and pressed a button. The walls opened and the
lady rolled between them into a small room. The walls closed and the boy and
his father watched the small circular numbers above the walls light up sequentially.
They continued to watch until it reached the last number and then the numbers
began to light in the reverse order. Finally the walls opened up again and a
gorgeous 24-year-old blonde stepped out.
The father said
quietly to his son....."Go get your mother."
+ How my private equity fund is doing. Click
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+ NovaDel Biosciences appeals. Click
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+ 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
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