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Catch a falling knife

If you caught the falling knife in March 2009, you have made out like a bandit:


But it felt pretty gruesome in the early days of 2009. A lot of depressing talk. No one told you to buy then. But stock prices turned and shot up like a rocket. Warren Buffet says buy when the blood flows in the streets, as it was in early 2009. Buy them when everyone is selling them.

It’s not easy. Try these. Are they worth buying now? The logic? One day interest rates will rise (they already have a little).




All three were great investments for a long, long time. But then they fell and we got out. Is it time to dip our toes in? Perhaps.

BlackRock is the world’s biggest investor. It’s the subject of a cover story in this week’s Economist:


Here’s a list of BlackRock’s key holdings. Nice list:


BlackRock is not to be confused with Blackstone (BX), which I really like (and which has been on my recommended list for a while — see right hand column).


The simple case for owning SoftBank: It’s a really well-run company. And it owns about 37% of Alibaba, China’s largest online shopping site, which is bigger than eBay and Amazon combined and accounts for 60% of all the parcels delivered in China.


Dan Loeb pounded the table for SFTBY because of its ownership in Alibaba, which may come public soon.  Read more on this. Click here.  More on Alibaba here.

My friend’s daughter loves ADSK’s products: Items:

+ She works for an electrical engineering company.

+ She and her colleagues have been using Autodesk’s REVIT MEP (Mechanical Electrical Plumbing) since 2007.

+ They use it to make power and lighting drawings for commercial and residential buildings (hospitals, hotels, aircraft hangars, stores, i.e., any building or other structure).

+ It’s database-based and 3D-oriented.

+ They get strong support from Autodesk.

Yesterday I wrote about my new love for ADSK. This weekend, take some time and watch some presentations from this week’s AU University. Click here.

There will be more crime on Wall Street. And it’s your own job to protect yourself. The government won’t protect you. That’s the inescapable conclusion from the latest acquittal of some bad guys. Matt Taibbi of Rolling Stone has been covering the court case and concludes:

You can send a guy away for life on a murder charge based on a speck of blood and an old lady who saw a piece of a license number on a car screeching away from the scene. But you need to build a massive rhetorical case from scratch just to indict someone for being part of a nationwide bid-rigging conspiracy.

The crimes take place in a world unknown to ordinary people, so it is not unlike trying to explain a crime committed by aliens on another planet. In fact, the crime, in many cases, is not one that has even been seen in American courtroom before.

Judges need to be convinced they’re not wasting their time. Juries need to be walked by the hand down a very deep rabbit-hole of inscrutable paper transactions and then literally trained on the fly to recognize evidence – these trials are often more like seminars than court cases.

So bringing these cases takes forever. This one took forever. And in the end, for these three anyway, it was all for nothing.

The Carollo, Goldberg and Grimm case was important on a number of levels. Many years from now, we will look back on this story that began as far back as the late Nineties and recognize in it an early, smaller-scale preview of the major global manipulation/collusion scandals that have already rocked the planet and will likely continue to do so in the years to come.

After all, the most dangerous possible consequence of the extreme concentration of financial power that has taken place in the last few decades has always been the possibility that these giants might figure out ways to work together, to game the costs of things for the rest of us. That’s what took place in this case, as these defendants (and many big banks which have already settled with the state for similar actions) were caught colluding to skim from the investment returns owed to all of us local taxpayers.

Something similar also took place in the Libor case, and in the global currency exchange scandal now blowing up, and in numerous other manipulation cases (involving everything from metals to chocolate) already coming down the pipeline.

All of these cases will share the same features. The defendants, if there will be any, will have the best lawyers money can buy. And if they’re charged at all, it will be for the most complex crimes imaginable, offenses so convoluted that it will take years to make cases.

This carries serious risks for anyone trying for justice, and we’ve just seen what those risks are. It’s hard to put these guys away. It’s even harder to keep them there.

Read Taibbi’s entire piece here.

Best bicycle light ever: It’s called the Nite Ize TwistLit LE.D. I’ve researched these things for 20 years. This is the brightest, lightest, most durable, easiest to install and cheapest bicycle light I’ve ever found. The white is very bright. The red one is a bit weak, but acceptable. I have two white ones on the front and one red and one white on the back.


Only $7.99. Click here.

From a famous book called Disorder in the Courts:

ATTORNEY: What was the first thing your husband said to you that morning?
WITNESS: He said, ‘Where am I, Cathy?’
ATTORNEY: And why did that upset you?
WITNESS: My name is Susan!

ATTORNEY: What is your date of birth?
WITNESS: July 18th.
ATTORNEY: What year?
WITNESS: Every year.

ATTORNEY: Doctor, before you performed the autopsy, did you check for a pulse?
ATTORNEY: Did you check for blood pressure?
ATTORNEY: Did you check for breathing?
ATTORNEY: So, then it is possible that the patient was alive when you began the autopsy?
ATTORNEY: How can you be so sure, Doctor?
WITNESS: Because his brain was sitting on my desk in a jar.
ATTORNEY: I see, but could the patient have still been alive, nevertheless?
WITNESS: Yes, it is possible that he could have been alive and practicing law.

Harry Newton and Susan Newton saw Twelfth Night on Broadway last night. It was really good. Get tickets for the seats on stage, if you can.


  1. pahowley says:

    Rolling Stone is such a trust worthy source of knowledge and advice. And pigs fly, one of Harry’s favorite saying along with “a slap in the belly with a wet fish”, and cows jump over the moon. So Rolling Stone is disappointed in Wall Streeters not going to jail. Could it be related to the whore’s relationship between the Wall St. Crony Capitalists and the Wash DC political class (must be a better word for that than “class” since they have no class), and the stupid anti-business rules and regulatory conflicts: “do this, don’t do this”, and such?

    Typical, and here we go again if you’re watching, is the 1992 push, harassment and serious threats to banks to make bad mortgage loans (I think they called them something else), so the banks did, but not wanting to hold that crap, they sold them. Wall St. saw an opportunity and stepped in to help, but also, of course, didn’t want to hold them…and didn’t. So they prettied them up and sold them, some to Fanny Mae and Mac. That worked to a degree, but as our federal gov’t. over the next 2 decades more aggressively pushed, forcing banks to make even worse home loans, dropping the down payment from the initial 10% to 3% and then no percent, things got more exciting.

    So the Fed’s forced the two Fannies (well named, no?) to take on even more of the lousy debt. And it wasn’t only poor people; smart folks with little to no down payment therefore could and did buy bigger more expensive places. So when it finally broke, as it always will – even Pres. Bush tried to correct this stupidity (really!) – the “I had nothing to do with it Fed’s” beat up the banks (big fines, bad publicity, etc), and prosecuted a few on Wall Street (obviously those without good political connections). But, little has really changed as the gov’t is again pushing for “poor people mortgages” backed by the Fed’s (that is really you and me, working tax payers and our children and grand children).

    Funny, but I can’t remember any Washing DC folks being penalized, prosecuted, terminated, criticized, jailed, made to return or make up home owners’ money, and or even held to blame (maybe followed by mayo culpa, mayo culpa). Might have missed that day’s paper.

    So I can sympathize with Rolling Stone’s sadness at Wall Street successful greed. But Wall St. is only the middleman. The folks behind this stupidity live in a lovely town named after out first and great President.

  2. Warren says:

    Is Softbank the company that purchased about 80% of Sprint Corp?

    • harrynewton says:

      Yes. And they’re doing an accelerated job of catching up to Verizon. So far, they haven’t caught up. But they’re turning on LTE everywhere they can and eventually Sprint should have the coverage and speed of Verizon. Meantime, I believe Sprint has unlimited data and texting.

  3. Cliff says:

    You wrote: “But it felt pretty gruesome in the early days of 2009. A lot of depressing talk. No one told you to buy then.”

    I did, and Buffett did, in his almost universally ignored N.Y. Times editorial. THe examples you posted, asking if it’s time to buy now: Annaly and a muni income trust. The rules for buying when there’s blood don’t apply here. THese are somewhat esoteric. The “blood” rule applies to stand S&P and Dow stocks, index funds and the like. IT also does not apply to gold and silver.

    • Richard says:

      But when to take the profits?

      • Cliff says:

        I don’t take profits. I hold a stock or fund for decades. Yes, someday I will, in my late 60s and early 70s, if I make it that far. While the market has done extremely well since ’09, if you look at the past decade the performance is still just pretty good/OK. I don’t think we’re too high here, although there will be a 10-20% pullback in the next few months.

  4. Devon says:

    Harry – did you see the little “legal” scam Blackstone pulled in the credit default swap market – Jon Stewart did a nice piece on it.

    • harrynewton says:

      Yes. Do we know they pull scams? Yes,always. Will they ever be put in jail for their crimes? No. Hence when we deal with them, we need to be ulra-wary. When in doubt, assume they’re crooks and trying to steal from us. End of story.