Harry Newton's In Search of The Perfect Investment
9:00 AM EST, Monday, September 22, 2008: When
Hank Paulson took his Treasury job in 2006, he sold
his 3.23 million shares in Goldman Sachs for $500 million. His
sale at $154.40 a share is 24% more than today's early morning
trading of $125.06. The best news? He didn't have to pay capital gains
tax on his sale because of a rule introduced to stop wealthy people from being
penalized for taking a government job and having to sell assets.
For a further
clue to his brilliance, look at this morning's photo of the Treasury Department's
Washington headquarters. You'll notice it's sporting a new logo:
two little, three little Indians
Four little, five little, six little Indians
Seven little, eight little, nine little Indians
Ten little Indian boys.
nine little, eight little Indians
Seven little, six little, five little Indians
Four little, three little, two little Indians
One little Indian boy.
If you were the
head of Goldman Sachs and had wanted to eliminate all your competitors (incl.
Bear Stearns, Lehman Bros, etc.), you couldn't have done a better job than what
Mr. Paulson has now done. This man is definitely no dummy.
does it all really mean for you and me?
The devil is in the details. And the details
aren't available. A figure of $700 billion is being bandied around as rescue
money. But it could be less. And it could be more. Who precisely will get the
money and how much they'll get is still up for grabs. There's a line forming
is not about reality. It's about psychology. It's about getting financial markets
working again (and rewarding Wall Street for a bunch of very dumb mistakes --
but I'm not going there this morning.)
Personally I don't
believe happy days are here again. We still have an economy in recession. Corporate
earnings across the board are under pressure.
Some savvy people
think it's time to put one's toe back in. My oil guru, Jim Kingsdale, who writes
Investment Strategies wrote this weekend:
Does it mean
that the low point in the stock market decline has been reached? That is not
necessarily the case. I suspect the real economy will still go into recession.
And even with good intentions, the task before the government will be full
of challenges. It could be botched. But this does mean, that the great fear
of an unstoppable infection in American financial institutions that risked
spreading to all investment banks and great companies like General Electric
is likely to be dissipated. At least unless and until the government proves
itself unequal to the task. ...
In view of this
change, I have put back into place a good percentage of the long positions
that I had previously liquidated. While many stocks are still not cheap, some
have become very cheap, I think. SQM, which I once thought could fall to 35
actually reached 21 today. It will probably earn $1.50 this year and is still
growing strongly. TBSI is still forecast to to earn over $7 this year and
has fallen from over $70 per share to under $20. One of the largest wire cable
makers, Fushi Copperweld, which supplies many rapidly growing electric utility
markets and is expected to earn $2 had fallen from over $20 (where I once
thought it was cheap) to nearly $8.
to fix your broadband connection: There are
two ways to get broadband into your house:
Cable modem from your cable TV company. Fast and reliable, but not available
in the boonies.
ADSL modem from your phone company. Also called DSL service. Slower and less
reliable, but available in the boonies.
service is delivered over a conventional phone line. When there are thunderstorms,
electrical surges come up your phone line and destroy your ADSL modem.
This is DSL's biggest vulnerability, and your biggest nightmare. Hence, the
first thing you must do -- when you smell an approaching storm, disconnect
your ADSL modem from the phone line and from AC power. Don't plug it
back in until the storm has well and truly passed. When you shut your computer
down at night or leave to go out of town, disconnect the phone line and unplug
the modem from your AC power. Trust me. This will save you countless hours on
hold with Tech Support.
I want to explain is how to fix "busted" DSL or cable modem service.
Turn off your modem, your router, and any attached computers.
Count to 20. Turn on the modem. Wait until the lights come. Most DSL or cable
modems have four lights -- power, Internet, LAN and DSL. Three will come on
within 30 seconds. The final one -- LAN -- will come when you attach a computer
or a router.
Now turn your router on. Wait 30 seconds or so -- until a bunch of lights are
on. Some are steady and some are flickering.
Now turn your computer on. Hopefully it will find your LAN (local area network)
and the Internet. Note: the two are different. If it doesn't and you still can't
connect to the Internet and here are some elementary troubleshooting tips and
what they mean.
"Power cycling" means turning your modem on and off. Always wait 20
seconds between cycles. If it doesn't work on the third time, give up. Move
to Plan B.
B: Plug your computer directly into your DSL modem. On a Windows machine, go
to Start/Run/cmd. That will give you a C:> prompt. Then type ipconfig
/release. That will clear things. Now type ipconfig /renew. If you
get 0.0.0.0, you've probably got a busted modem. Call your phone company and
ask for a replacement. They'll need to set it up for you. That takes few minutes.
Then go down to the phone company's office and pick up the new one. Installing
it is trivial. Follow the turn-on routine detailed above.
you get some numbers -- any numbers -- then you have a live modem and it's time
to call tech support, They may be able to send some magic up your phone line
and invigorate your modem. If they can't "see" your modem, it's time
for a technician to visit and to figure out what's happened to the copper wires
and other electronics that make the phone line from the phone company's office
to your home.
In short, the
key to keeping your DSL modem working is to turn it off and disconnect its phone
line when you're not using it.
There is one other
"solution," also called "backup." Get yourself a subscription
to Verizon's, AT&T's or Sprint's Broadband Access service. Use your free
trial to make sure one of them will work at your home. Use it while you're waiting
for the phone company technician to fix your landline.
P.S. Much thanks
to Taconic Telephone for setting up a replacement DSL modem for me this past
Saturday. Special thanks to Pete Mercer, Pete Curry and Jeff Westover.
about your laptop being stolen? Adeona may
be useful. Click
movie "Traitor" is worth seeing. This
is about a plot about a small cell of Muslim terrorists plotting serious mischief.
The cell is infiltrated by the good guy, who must act bad to prove he's bad
and to find the cell's head so he can be dealt with.
plausibility in this movie to suggest that another 9/11 attack could happen.
You walk out of the theater thankful for the handful of good guys. In this movie,
the good guys are extraordinary. Most people who work for our government's security
agencies are not extraordinary. They are bureaucrats, protecting their careers
more than us. Some of this is covered in the movie also -- making "Traitor"
an engrossing, sobering movie. Highly recommended.
Mick, from Dublin, is on 'Who Wants To Be A Millionaire.'
He's already won 500,000 pounds.
You've done very
well so far,' said, Chris Tarrant, the show's presenter, 'but for a million
pounds you've only got one lifeline left - phone a friend. Everything is riding
on this question......will you go for it?'
'Sure,' said Mick.
'I'll have a go!'
'The question is which of the following birds does NOT build its own nest?
'I haven't got
a clue,' said Mick, 'so I'll use me last lifeline and phone me friend Paddy
back home in Dublin'. Mick called up his mate.
Mick!' cried Paddy. 'Dat's simple......it's a cuckoo.'
'Are you sure?'
'I'm sure.' Mick
hung up the phone and told Chris,'I'll go wit Cuckoo as me answer.'
'Is that your
final answer?' asked Chris
'Dat it is, Sir.'
There was a long,
long pause, and the presenter screamed, 'Cuckoo is the correct answer! Mick,
you've won one million pounds!'
The next night,
Mick invited Paddy to their local pub to buy him a drink.
'Tell me, Paddy?
How in Heaven's name did you know it was da Cuckoo that doesn't build its own
'Easy. A cuckoo
lives in a clock!'
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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