Harry Newton's In Search of The Perfect Investment
Technology Investor. Harry Newton
AM EST, Friday, August 14,
2009. Yesterday was glorious. I met with two companies
with great businesses. My pleasure was twofold. First, it's nice to have your
faith renewed in the vibrancy of our economy. There are superb new businesses
being started today, despite the recession. Second, there are wonderful people
out there with great talent and great knowledge who are a genuine joy to be with.
can get pretty boggy when the idiocies of daily life pile up. Like why did Citigroup
decide -- all by itself -- to change my credit card number. That's the card
I've spent eons listing with every vendor and his mother. Like why did my BlackBerry
not synch properly with my Outlook? Why did it omit 11 of my most precious contacts?
One of my joyous
companies was a software company. The founder is 32. Eight years ago, his friend
who runs an HVAC service company came to him and said, "All the software
packages for our industry are shit. You're a genius. Design me a better one.
And eight years later he did. He now has several hundred genuinely happy customers.
He now needs a few shekels to ramp up his marketing/sales program.
Lessons from this:
1. He started
a company with his own programming skills in his own basement.
2. It didn't
cost much -- what with cheap computers, the Internet, etc. etc.
3. He is saving
his customers a fortune by making them more efficient. He's doing the economy
One element I
loved most -- his marketing program. He buys words on Google. When you searched
for "HVAC software" (amongst others), you landed at his site. Google
charged him approx. $5 a lead. He had a handful of salespeople standing by to
call the leads instantly and try and sell them the product. And, though it was
hard work (maybe a 45-day close cycle), it worked.
To me. The whole
thing was ultra-revealing. I'm an old magazine publisher. In the old days, we'd
sell people like him an $8,000 advertisement. He'd have to wait until the magazine
was printed, delivered and consumer before he got a single lead. If he couldn't
afford the $8,000, tough.
These days, the
brilliance of Google is simple. He can choose to spend $300 or $3,000 -- tailoring
his leads to his capacity to handle them (he could never do that with magazines
or newspapers) and his budget.
No wonder magazines
and newspapers are dead. And Google thrives.
for word from yesterday:
Latest picks: STEC, EWA and EWZ are doing nicely. Thank you. I suspect
that GOOG, AAPL and GS will continue their inexorable climb. Having a little
in GLD is a good hedge. Don't gamble with this market. I can name you a whole
bunch of hedge fund managers who sold this market short and are presently looking
pretty bloody stupid.
look at my favorite STEC in the last few days:
You can't make this stuff up.
New York Times. August 14, 2009:: Hadassah, the Jewish volunteer organization,
knew it had invested $40 million with Bernard L. Madoff by the late 1990s. It
also knew it had taken more than $130 million from its Madoff accounts and still
had millions on the books when the vast Ponzi scheme was revealed in December.
What the charity
says it did not know, however, was that Sheryl Weinstein, its chief financial
officer when it made those investments, was having an affair with Mr. Madoff,
who has been married for 37 years, discloses that relationship in Madoffs
Other Secret: Love, Money, Bernie, and Me, a memoir scheduled for
publication by St. Martins Press at the end of August, a spokesman for
the publisher confirmed.
national president, Nancy Falchuk, told Hadassahs national board in
a letter on Thursday that the group was shocked to hear the news reports
of Mrs. Weinsteins personal admission regarding this relationship. Indeed,
we knew nothing of her relationship with Mr. Madoff until today.
who has been married to Mr. Madoff for almost 50 years, knew nothing about
the alleged affair, Peter Chavkin, her lawyer said.
From today's abc
Click on the photo for the full interview .
I buy shares in an investment banker? As a shareholder, you are at
the mercy of what the executives pay themselves. Today Bloomberg notes:
Aug. 14 (Bloomberg)
-- Blackstone Group LP Chief Executive Officer Stephen Schwarzmans $702
million compensation made him the highest-paid executive in the U.S. last
year, the Corporate Library reported.
for Schwarzman included $2.3 million of compensation and almost $699.8 million
from the vesting of one- quarter of the equity granted as he took the firm
public at $31 a share in 2007, said the Portland, Maine-based Corporate
Library. Schwarzman, Blackstones founder, was granted $4.7 billion in
equity at the time of the offering, said the Corporate Library, which specializes
in governance issues.
How has Blackstone's
stock done? In word -- shit. Down from $31 on the IPO to $14.41 yesteday --
a loss of 54%.
Why do people go on CNBC? Or Bloomberg.
1. Because they
have a large ego. That's the main reason.
2. To get free
publicity -- for their stock, their fund, their book, etc.
3. Because they
Is it an enjoyable
Do you get paid? NO.
Are you ever able
to discuss anything in depth? NO.
Do you have to
be expert to go on TV? NO.
Does CNBC or Bloomberg
check your investment performance? NO.
Do the best money
managers appear on TV? NO.
Should you believe
anything you see on BubbleVision ? That's for you to decide. Personally, I prefer
Jon Stewart of The
What is TV's primary
aim? To sell more ads. It does this by being upbeat and sensationalist,
How bad is it?
In the old days, they had a makeup department that made you look beautiful before
you went on TV. To save money, they've dispensed with that frivolity.
pants are absolutely great. New York City kids wear them to school.
I wore them to the Harvard Club for breakfast yesterday, horrifying my wife,
but amusing the Harvard Club's waiters. The kids pay $5. I prefer these from
They cost $14. They are soft woven 100% cotton, Most importantly, they have
pockets which means you can wear to the Opera and your wife will divorce you.
Buy them here.
About the Taliban, such genuinely nice folk
do you know if you're a Taliban.
1. You refine
heroin for a living, but you have a moral objection to beer.
2. You own
a $3,000 machine gun and $5,000 rocket launcher, but you can't afford
3. You have
more wives than teeth.
4. You wipe
your butt with your bare hand, but consider bacon "unclean."
5. You think
vests come in two styles: bulletproof and suicide.
6. You can't
think of anyone you haven't declared Jihad against.
7. You consider
television dangerous, but routinely carry explosives in your clothing.
8. You were
amazed to discover that cell phones have uses other than setting off roadside
9. You have nothing against women and think every man should own at least
always had a crush on your neighbor's goat.
in Afghanistan know their place
Several years before we invaded Afghanistan a reporter did a story on gender
roles in Kabul , Afghanistan. She noted that women customarily walked five paces
behind their husbands.
She recently returned
to Kabul and observed that women still walk behind their husbands, despite the
liberation we brought.
The reporter approached
one of the Afghani women and asked, 'Why do you now seem happy with an old custom
you once tried so desperately to change?'
The woman looked
the reporter straight in the eyes, and said, 'Land Mines.'
who did your landscaping? What did you do to
deserve this? Give them a hard time? Quibble with their bill?
It may actually be sunny in the northeast this weekend. My daughter
is visiting. She's coming for a rug and replacement battery for her laptop.
In return, she'll be nice to me and cut the hairs in my ears, if I I beg. The
challenge of parenthood is configuring increasingly massive reasons (a.k.a.
bribes) for your children to visit. I know my role.
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 on this site. Thus I cannot endorse, though some look 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 Michael's business school
tuition. Read more about Google AdSense, click
here and here.