Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
AM EST Thursday, October 5, 2006: So much for that
beautiful idea. My commodities fund dropped 6.5% in September and is now down
abut 2.5% for the entire year. The big losses have been in natural gas (down
70%), sugar (down 27%) and soybeans (down 17%). Crude oil was down only 13%.
On the other hand, nickel is up 131% and copper 74%. If it hadn't been for those
metals, the diversified portfolio would have been firmly in the hole. Now it's
just tipping into the hole. Limiting your losses is one benefit of broad allocation.
The sad point is that it's harder and harder to predict anything. In the old
days, you could study supply and demand and figure likely price movements. These
days the speculators and the hedge funds make ridiculous bets to satisfy their
ever-demanding clients. And you have a bunch of "traders" who believe
trading is the key to instant wealth, not analysis and long-term holding.
I looked at a hedge fund when I was in Australia. The boss was impressive, and
had an impressive track record within the confines of a large institution. Then
the inevitable. Believing he walked on water, he leaves the institution and
sets up on his own. He hires a "trader." The boss picks great stocks.
They go up. The trader sells them. The boss wants to hold them. Their wires
are crossed. The fund's performance suffers. Fortunately, I didn't go into that
one. But some friends did. They're not pleased.
Commercial real estate remains the area performing best for me this year. The
demand for offices is high. And the supply of new offices very tight. During
the housing boom many offices were converted into residential condos and few
new offices were built. Many of the newer residential housing sprawls now really
need new local offices and shops the new residents can work and shop in.
The art of charting. There
is magic in the charts. Which WHICH charts? Chart your favorite stock or commodity
over a different time period and you'll get a very different picture. Here are
six gold charts. The 60-day chart shows gold definitely on the decline. The
10-year chart shows it clearly on a rise. Go figure!
too stupid to be a crook. I can't imagine what got into HP's tiny
brain to use illegal ways to find out who was doing the leaking. Yesterday prosecutors
filed criminal charges against HP's former chairwoman and four others. This
will not be good for their careers, let alone their pocketbooks. Think cost
of hiring criminal defense lawyers. HP is a company long revered for its ethics
and professionalism. Once the founders go, things typically deteriorate.
can't imagine also what got so many tech managements to backdate stock options
so they could reward themselves more. Did they honestly think they could get
away with it?
I was brought up in the old school. You tell the truth, no matter how painful.
Tell a lie, even a small one, you'll be eventually found out. You can always
"sell" the truth. "Yes, we have no international skills, but
that's good, because you have them."
screwed up. The Dow Jones 30 index is not market cap weighted. It's
price weighted. Here's an explanation:
The Dow Jones
average is price weighted rather than market capitalization weighted. The
movement of the Dow is affected only by changes in the stocks' prices, in
contrast with other indexes' weightings that are affected by both price changes
and changes in the number of shares outstanding. When the average was initially
created, its values was calculated by simply adding up the component stocks'
prices and dividing by the number of components. Later, the practice of adjusting
the divisor was initiated to smooth out the effects of stock splits and other
A couple was invited to a swanky masked Halloween Party. She got a terrible
headache and told her husband to go to the party alone.
He, being a devoted
husband, protested, but she argued and said she was going to take some aspirin
and go to bed, and there was no need of his good time being spoiled by not going.
So he took his costume and away he went.
The wife, after
sleeping soundly for one hour, awakened without pain, and as it was still early,
she decided to go to the party.
In as much as
her husband did not know what her costume was, she thought she would have some
fun by watching her husband to see how he acted when she was not with him.
She joined the
party and soon spotted her husband cavorting around on the dance floor, dancing
with every nice chick he could, and copping a little feel here and a little
His wife sidled
up to him and being a rather seductive babe herself, he left his partner high
and dry and devoted his time to the new stuff that had just arrived.
She let him go
as far as he wished; naturally, since he was her husband. Finally he whispered
a little proposition in her ear and she agreed, so off they went to one of the
cars and had great sex.
Just before unmasking
at midnight, she slipped away and went home and put the costume away and got
into bed, wondering what kind of explanation he would make for his behavior.
She was sitting
up reading when he came in and asked what kind of a time he had. He said, "Oh,
the same old thing. You know I never have a good time when you're not there."
Then she asked,
"Did you dance much?"
He replied, "I'll
tell you, I never even danced one dance. When I got there, I met Pete, Bill
Brown and some other guys, so we went into the den and played poker all evening.
But I'll tell
you, the guy I loaned my costume to sure had a good time!"
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 .
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