Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
AM EST Monday, September 25, 2006: Ted once let slip
"She's the only woman I've ever truly cared about." The words resonated.
I've always felt that true love was not infatuation -- that mad feeling they write
about in cheap novels -- but the feeling that you really wanted to be responsible
for someone's welfare. On Saturday night, Ted announced he and Claire were officially
engaged. I cried. As I write this two days later, I'm still crying.
Ted and Claire on Saturday night announcing their
engagement and upcoming marriage.
is super-bright and super grounded with a great sense of reality. He's not what
I was at his age -- fortunately. They are made for each other. I couldn't be
more pleased for Claire, for her mother, for her brother and for me. I'm sad
about my computer. I came to America 39 years ago all
by myself. Ted's grandmothers have promised an organization chart of
the massive Maloney clan. I
will soon have sufficient relatives to apply for a seat at the UN.
The chart will test my poor computer's memory.
Will Oracle buy Novell and put it out of its misery?
That's the latest rumor. There's some logic. Oracle has been on an
acquisition tear, most recently buying PeopleSoft and Siebel. The market has
liked what it's seen. Oracle's stock has soared.
In contrast, Novell has flagged, dogged by lousy management and a floundering
Lately it has floundered into Linux -- that open source (i.e. free) operating
system that has been winning converts in business. Oracle makes database and
business software that's agnostic. It doesn't care which OS your business runs
on. The Yankee Group calls Novell's SUSE Linux Enterprise Desktop "the
first Linux desktop that is truly enterprise ready." Forbes magazine
wrote on September 20 that Oracle's acquisitions are putting money in its shareholders
pockets. The software developer spent about $20 billion to buy PeopleSoft in
2005 and Siebel Systems this year, solidifying its place in the market for applications
used by big companies. Novell's market cap is a cheap $2.1 billion.
OpenWorld conference will be October 21- 26, at San Francisco's Moscone Center.
The theory is the Novell acquisition will be announced then.
much desperation. Too much Chutzpah
Brian Hunter, Amaranth's energy trader, was paid $100 million in 2006. His convinced
Amaranth, his employer, to let him work from Calgary, where Hunter hails from.
When Hunter returned to Amaranth's Greenwich headquarters last week, the company
had to hire bodyguards to protect him from the other traders who might have
killed him. Single-handedly Hunter has destroyed this year's bonuses for all
his colleagues, throwing their jobs into jeopardy and much of Wall Street into
But -- you got to hand it to Mr. Hunter -- losing $6 billion in one week is
a major accomplishment. There are clearly lessons for us all:
Don't buy on margin. Banks loaned Amaranth the money to make highly-leveraged
bets on natural gas. When the price of the natural gas started tumbling, the
banks called their loans. That caused Amaranth to sell stuff to meet the banks'
demands. Had Amaranth not borrowed money, it could be still be sitting on investments
that were bad -- but it wouldn't be in the mess it's in today. If I had borrowed
money to buy TriPath Imaging, the banks would have forced me to sell my TriPath
at a whopping loss. As it was, I was able to sit out my paper losses until a
miracle happened -- someone bought TriPath. And I ended with a profit, albeit
a small one.
2. Don't buy illiquid things in large quantities. Amaranth bought 70%
of the contracts on certain months of natural gas futures. Who can I sell it
to -- if I was the only buyer?
3. Don't get yourself into a pickle. Once the word is out on Wall Street,
every trader will seek to profit on your misfortune. And wouldn't you? These
days there's so much money on Wall Street, and so much desperation to show higher
returns than the next guy that you'd sell your own grandmother if you could
make a nickel on the trade. (Delivering might be problem.)
4. Don't discover
it late. Last year everyone made money betting energy and commodities would
rise. They did -- but not because China or India bought more. But because you
and I, commodity speculator, did. Some numbers to prove my point: In 2003, 13.7
million natural gas contracts traded on the Intercontinental Exchange (the ICE)
with a notional value of $186 billion. Last year, 55.5 million such contracts
traded, with a notional value of $1.3 trillion. That's an increase of
The world is in
fine shape, albeit slowing down a little. The
problem is money. There's too much of it. There's too much of it chasing too
few opportunities. Filling the gap are handsome, intelligent people willing
to bet your money on anything that moves.
in doubt, stay out.
best marriage joke
I had a great one. But then I thought it inappropriate,
given my daughter and future son-in-law will read this column. Then, oh heck.
A wife was making
a breakfast of fried eggs for her husband. Suddenly, her husband burst into
he said, "CAREFUL! Put in some more butter! Oh my GOD! You're cooking too
many at once. TOO MANY! Turn them! TURN THEM NOW! We need more butter. Oh my
GOD! WHERE are we going to get MORE BUTTER? They're going to STICK! Careful
. CAREFUL! I said be CAREFUL! You NEVER listen to me when you're cooking! Never!
Turn them! Hurry up! Are you CRAZY? Have you LOST your mind? Don't forget to
salt them. You know you always forget to salt them. Use the salt. USE THE SALT!
The wife stared
at him. "What in the world is wrong with you? You think I don't know how
to fry a couple of eggs?"
The husband calmly
replied, "I just wanted to show you what it feels like when I'm driving."
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
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note I'm not suggesting you do. That money, if there is any, may help pay Claire's
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