Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
AM EST Friday, September 8, 2006: I don't want to
achieve immortality. I just want to live forever. I'm having so much fun eyeing
all the wonderful investment opportunities floating over my desk. That's the
good news. The bad news is that checking them takes huge time. There lurks in
each one a "gotcha" -- one little quirk I didn't see that will
mess up my brilliant and optimistic calculations. Finding "gotchas"
is the key, and bloody hard work. No amount of due diligence can replace 20
years in the industry. Which is why, when I do due diligence, I always ask questions
like "What's the absolute worst thing that can happen?" "What
haven't I thought about?" "What question would you ask
that I haven't?"
horrible chart could spell a long-term opportunity. Pick up a few
shares. Put them away. Cross your fingers. The price is right, i.e. cheap. And
the company is making real progress.
Aspiring oncology (cancer) drug companies have been doing awfully of late:
Better to buy companies when they're in the toilet, i.e. still aspiring, than
when they're flying high and hideously over-priced. How overpriced can they
become? Check out Celgene (CELG) which is in the same business of fixing cancer.
Its market capitalization is $14.4 billion and its price earnings ratio
slightly north of 500. When they fly, they fly.
Investing in biotechs
is modified gambling. Will their drugs pass muster with the FDA? Will doctors
prescribe them? The "good" news is that people with cancer will pay
basically anything for a pill that extends their life, even for a few weeks.
The greatest news is that we're learning more about how to fix cancer and getting
better at it.
Vioquest (which I have shares in) explained to me:
on cancer" began 30 years ago with a Congressional mandate. Since that
time, significant advances in the treatment of some cancers have been achieved,
but overall progress has been disappointing. The recent introduction of targeted
therapy and personalized medicine appears to be finally changing the tide
of the war on cancer. The concepts underlying this new approach are five-fold:
first, that there are important cellular pathways, extending from the cellular
membrane to the cytoplasm and nucleus, that are activated to initiate and
perpetuate cancer; second, that inhibition of critical steps, so-called targets,
in these pathways can inhibit cancer; third, that it is technically possible
to develop compounds which block these targets in malignant cells, while minimally
affecting normal cells; fourth, that each patient's tumor has an identifiable
profile of targets upon which his/her tumor depends for survival; and fifth,
that giving the right targeted compound to the right patients can improve
that patient's survival without exposing the other patients to compounds from
which they are unlikely to benefit.
targets are protein kinases and protein phosphatases. Some cancer pathways
behave like interlocking cascades in which each phosphorylated kinase phosphorylates
or activates the next target, in a pre-determined sequence. The end result
is uncontrolled cell division cycles, suppression of apoptosis (cell death)
; promotion of angiogenesis (new blood vessel formation around a tumor,) tumor
invasiveness and ability to metastasize.
however, are composed of a unique group of phosphatases which behave differently
than the attenuating phosphatases described above. These phosphatases, known
as negative regulatory phosphatases, actually promote cancer.
Vioquest Pharmaceuticals' compounds are VQD-001/Sodium Stibogluconate, which
inhibits two phosphatases called SHP-1 and SHP-2, and VQD-002/Triciribine-P,
which inhibits phosphorylation of the AKT protein tyrosine kinase.
1. It's the cheapest in market cap in this list.
2. It has four trials ongoing with both its drugs with leading oncologists and
hospitals/universities, including MD Anderson (largest oncology hospital in the
world) and The Cleveland Clinic.
3. It expects to see positive data in the six to nine months.
4. In doing its trials, it's pre-selecting a patient population (i.e. ones already
with cancer and ones likely to respond positively to Vioquest's). This means its
drug tests will be cheaper because it needs fewer patients. Instead of spending
$6 million on a trial, it should only need to spend $3 million. These numbers
are not precise -- but you get the idea of saving money.
5. The FDA should give Vioquest faster approval because of the patient selecting.
And the FDA is also keen on drugs fighting cancer. There's an urgency. A lot of
people die of cancer.
6. There's some hope that it can be out selling one of its drugs -- VQD-001/Sodium
Stibogluconate -- next year.
7. Doctors are warming to the idea of drug cocktails -- thus tailoring drugs to
Makes you feel real comfortable: WILMINGTON,
Del. -- Chase Card Services, a unit of J.P. Morgan Chase & Co., said Thursday
it is notifying 2.6 million Circuit City credit-card holders that computer
tapes containing their personal information were mistakenly thrown in the trash.
In the identity theft business, a well-established and successful technique is
called "dumpster diving."
-- Part 2:
From today's New York Times, the headline reads, "Hewlett-Packard
Spied on Writers in Leaks". The story reads:
Sept. 7 The California attorney generals investigation into the
purloining of private phone records by agents of Hewlett-Packard has revealed
that the monitoring effort began earlier than previously indicated and included
journalists as targets.
included nine journalists who have covered Hewlett-Packard, including one
from The New York Times, the company said.
said this week that its board had hired private investigators to identify
directors leaking information to the press and that those investigators had
posed as board members a technique known as pretexting
to gain access to their personal phone records.
Thursday that journalists records had also been obtained, the company
said it was apologizing to each one. H.P. is dismayed that the phone
records of journalists were accessed without their knowledge, a company
spokesman, Michael Moeller, said.
In an interview
Thursday about the states criminal investigation of the Hewlett-Packard
matter, Attorney General Bill Lockyer said, A crime was committed.
general attorney with AT&T Services in San Antonio, who is working with
the California prosecutors, said the records of John Markoff, a reporter for
The Times in San Francisco, were a target of the pretexting in
2005. Two other news organizations, the online technology news service CNET
and The Wall Street Journal, said they had learned that their reporters had
also been targets.
A top Hewlett-Packard
official indicated earlier this week that the effort to obtain phone records
had begun in January 2006 after an article appeared on CNET with accounts
of a Hewlett-Packard management meeting. Those revelations prompted H.P.s
chairwoman, Patricia C. Dunn, to order an investigation of leaks, and the
company has conceded that subterfuge was used by a subcontractor to gain phone
records in the investigation. ...
An article in
The Wall Street Journal said records of its reporter, Pui-Wing Tam, had also
been a target of pretexting activity.
US Tennis Open is on. Nadal is out. Roddick
is in. Blake is out. This weekend are the semifinals and the final. Today is
sunny. For the day's Schedule of Play, i.e. who's playing, click
Tennis Open 2006 -- TV Schedule for August
times are Eastern Standard
a.m. - 6:00 p.m.
Doubles Final, Women's SF
a.m. - 1:07 a.m.
p.m. - 6:00 p.m.
p.m. - 10:00 p.m.
p.m. - 2:30 p.m.
p.m. - 7:00 p.m.
At a cocktail party, one woman said to another,
"Aren't you wearing your wedding ring on the wrong finger?"
"Yes, I am. I married the wrong man."
lady inserted an ad in the classifieds: "Husband Wanted".
Next day she received a hundred letters.
They all said the same thing: "You can have mine."
a woman steals your husband, there is no better revenge than to let her
little boy asked his father,
"Daddy, how much does it cost to get married?"
Father replied, "I don't know son, I'm still paying."
young son asked, "Is it true Dad, that in some parts of Africa a man
doesn't know his wife until he marries her?"
Dad replied, "That happens in every country, son."
there was a woman who said, "I never knew what real happiness was until
I got married, and by then, it was too late."
is the triumph of imagination over intelligence.
you want your spouse to listen and pay strict attention to every word you
say -- talk in your sleep.
think, if it weren't for marriage, men would go through life thinking they
had no faults at all.
guy says, "My wife's an angel!"
Second guy remarks, "You're lucky, mine's still alive."
Husband and wife are waiting at the bus stop with their nine children. A
blind man joins them after a! few minutes. When the bus arrives, they find
it overloaded and only the wife and the nine kids are able to fit onto the
the husband and the blind man decide to walk. After a while, the husband
gets irritated by the ticking of the stick of the blind man as he taps it
on the sidewalk, and says to him, "Why don't you put a piece of rubber
at the end of your stick? That ticking sound is driving me crazy."
blind man replies, "If you would've put a rubber at the end of YOUR
stick, we'd be riding the bus. So shut up."
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,
here and here.