Harry Newton's In Search of The Perfect Investment
Technology Investor. Harry Newton
AM EDT, Thursday, October 1, 2009: He calls frenetically.
"This is the investment of my dreams. Fantastic technology. Fantastic potential.
They need $2.5 million." Two hours later, we reached several conclusions:
+ There are a
zillion great technologies out there. I see three to four a week. Since computing
got cheap, memory became throwaway and the Internet got ubiquitous, there's
been a explosion of technology startups.
+ No matter how
much due diligence you'll do, you'll never figure the black swan --- the one
event that messes things up irretrievably.
don't listen. Once you've given them your money, you have no leverage over them.
They'll do what they want with your money -- even though you have a better idea.
+ Losing $2.5
million is a lot more painful than the pleasure of, say, making $2.5 million
(i.e. doubling your money). Moreover, after 2009's debacle, nobody can afford
to lose $2.5 million.
The company is
close to cracking "the big sale," but it's run out of money, again.
That tells you something about how difficult selling new technology is. Buyers,
like angel investors and VCs, have seen it all before. Buyers buy from IBM.
It's safe, though they pay more. No one lost their IT job buying safe.
But, Harry, new
technology drives the economy, provides jobs and makes investors zillions. And
Harry, you made zillions with your technology business.
But I've also lost money on virtually every technology business I've invested
in since I sold the business I started and ran.
I've concluded, is twofold: I was there at the beginning. I and a partner ran
it. We worked super hard. We listened to each other, but not to our investors
(we had none). Times were different. Our business would not succeed today.
II love meeting
technology entrepreneurs. I'd love to invest in, and be involved with their
new company. The thrill of conquering the world is totally addictive. I suspect
it will have to be with a company I form from scratch, or in partnership with
a very special entrepreneur starting up. Will I find that very special fellow?
Will I find that special relationship? I kiss many frogs. Kissing frogs is almost
as much fun as playing tennis.
bible said it. Ecclesiastes 3 writes:
To every thing
there is a season, and a time to every purpose under the heaven:
+ a time to be born, and a time to die; a time to plant, and a time to pluck
up that which is planted;
+ a time to kill, and a time to heal; a time to break down, and a time to
+ a time to weep, and a time to laugh; a time to mourn, and a time to dance;
+ a time to cast away stones, and a time to gather stones together; a time
to embrace, and a time to refrain from embracing;
+ a time to get, and a time to lose; a time to keep, and a time to cast away;
+ a time to rend, and a time to sew; a time to keep silence, and a time to
+ 8 a time to love, and a time to hate; a time of war, and a time of peace.
What's AOL going
to be worth once Time Warner spins it off? Yesterday, two Wall Street analysts
-- JP Morgan's Imran Khan and Pali's Rich Greenfield -- figured that the new
AOL's valuation would be around $4 billion, assuming no net debt.
That's less than
the $5.7 billion valuation that Google and Time Warner assigned it earlier this
year when Google sold back its AOL stake. And it makes the dot-com bubble-era
valuations -- north of $161 billion -- look very silly.
This chart says
it all. You can get rich with technology. You'd better get your timing right:
+ U.S. Consumer
Spending Jumps by the Most Since 2001.
Oct 1 (Bloomberg) -- Spending by U.S. consumers climbed in August by the most
since 2001, indicating the biggest part of the economy is starting to rebound
from its worst slump in almost three decades.
The 1.3 percent
increase in purchases was larger than forecast and followed a 0.3 percent
gain in the prior month that was bigger than previously estimated, Commerce
Department figures showed today in Washington. Incomes climbed 0.2 percent
for a second month and inflation decelerated.
Rising Like Phoenix With Area Delinquencies Surging
Oct. 1 (Bloomberg) -- Drive up to the Peaks Corporate Park in north Scottsdale,
Arizona, and the only person youll encounter at the luxury office complex
is a security guard.
was planned to offer executive suites with views of the McDowell mountains,
neighbors such as General Electric Co. and a location just minutes away from
Jack Nicklauss Desert Mountain golf courses. Plans to lure tenants havent
materialized and today the complex in this city next to Phoenix is empty,
the entrance blocked by a traffic barricade.
in the Phoenix area on loans backed by office, industrial, retail and apartment
properties have risen more than five-fold since March, according to data compiled
by Bloomberg. The Phoenix region has the second-worst U.S. delinquency rate,
behind Detroits 10 percent. In Phoenix, the economic recovery looks
a lot like a recession.
"I don't get no respect. I told my landlord
I want to live in a more expensive apartment.
raised my rent." -- Rodney Dangerfield
Q: HOW CAN A STRANGER TELL IF TWO PEOPLE ARE
A: You might have
to guess, based on whether they seem to be yelling at the same kids. -- Derrick,
Q: WHAT DO YOU
THINK YOUR MOM AND DAD HAVE IN COMMON?
A: Both don't
want any more kids. -- -- Lori, age 8
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.