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Harry Newton's In Search of The Perfect Investment Technology Investor. Harry Newton Previous Columns
9:00 AM EST, Monday, August 24, 2009: I'm ultra-virtuous. I'm showing my 93-year old father-in-law the Rockies. It was his lifelong wish. I've have been collecting Great Thoughts on Travel, along with some great photos. They'll wait until tomorrow.

Meantime, the market continues strong and the dollar weak. Oodles of publicity that the bankers think the recession is over. And increasing evidence that investors are taking some of their cash sitting forlorn in savings accounts and bank CDs and moving their money into the stockmarket.

If you haven't yet figured that the market works against little fish like you and I, two stories out of Goldman Sachs will drive the point home. First, there's the story of all those billions being made on high-frequency trading (which includes front-running) and second there's the story of how Goldman's trading tips reward its biggest clients (i.e. not you or me). You could also add in the weird and wonderful Goldman (and others) allocate shares in IPOs to their best clients, which doesn't obviously include you and I. (As I've mentioned several times, Goldman is losing me money in all my accounts with them, while paying themselves billions in bonuses.)

Anyway, you should read the two big Goldman stories today. The first is from the New York Times and starts:

Arrest Over Software Illuminates Wall St. Secret
Flying home to New Jersey from Chicago after the first two days at his new job, Sergey Aleynikov was prepared for the usual inconveniences: a bumpy ride, a late arrival.

He was not expecting Special Agent Michael G. McSwain of the F.B.I.

At 9:20 p.m. on July 3, Mr. McSwain arrested Mr. Aleynikov, 39, at Newark Liberty Airport, accusing him of stealing software code from Goldman Sachs, his old employer. At a bail hearing three days later, a federal prosecutor asked that Mr. Aleynikov be held without bond because the code could be used to “unfairly manipulate” stock prices.

For the full NYTimes story, click here.

The second story is from the Wall Street Journal and starts:

Goldman's Trading Tips Reward Its Biggest Clients
Goldman Sachs Group Inc. research analyst Marc Irizarry's published rating on mutual-fund manager Janus Capital Group Inc. was a lackluster "neutral" in early April 2008. But at an internal meeting that month, the analyst told dozens of Goldman's traders the stock was likely to head higher, company documents show.

The next day, research-department employees at Goldman called about 50 favored clients of the big securities firm with the same tip, including hedge-fund companies Citadel Investment Group and SAC Capital Advisors, the documents indicate. Readers of Mr. Irizarry's research didn't find out he was bullish until his written report was issued six days later, after Janus shares had jumped 5.8%.

.Every week, Goldman analysts offer stock tips at a gathering the firm calls a "trading huddle." But few of the thousands of clients who receive Goldman's written research reports ever hear about the recommendations.

At the meetings, Goldman analysts identify stocks they think are likely to rise or fall due to earnings announcements, the direction of the overall market or other short-term developments. Some of their recommendations differ from ratings printed in Goldman's widely circulated research reports. Some Goldman traders who make bets with the firm's own money attend the meetings.

Critics complain that Goldman's distribution of the trading ideas only to its own traders and key clients hurts other customers who aren't given the opportunity to trade on the information.

You should read the entire article, which contains charts. It's here.

My wife thinks I'm a genius. Every time her BlackBerry refuses to send her email, I remove the battery, count to ten, insert it back and wait an eternity while it starts up. In five minutes, it works again. I don't know why it locks up. But all computers do and the BlackBerry is a computer. I rue the day when I will have to unplug the battery in my car, count to ten and plug it back in.

So, how goes healthcare "reform"? From an insightful reader:

Let me get this straight.

Obama's health care plan is being written by a committee whose head says he doesn't understand it, passed by a Congress that hasn't read it, by Congressmen and women who won't be subject to it, signed by a President who smokes, funded by a treasury chief who did not pay his taxes, advised behind closed doors by an ex-Senator (Daschle) who also didn't pay his taxes and is now paid by hospital, drug and pharmaceutical companies, overseen by a surgeon general who is obese ...

and financed by a country that is broke.

What could possibly go wrong?

Two very sound reasons
One Shabbat morning, a mother went into the bedroom to wake her son and tell him it was time to get ready to go to the Shul, to which he replied:

"I'm not going."

"Why not?" she asked.

"I'll give you two good reasons," he said.

"One, they don't like me", and "two, I don't like them."

His mother replied:

"I'll give YOU two good reasons why you MUST go to the Shul.

"ONE, you're 54 years old", and

"TWO, you're the Rabbi"

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.