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Harry Newton's In Search of The Perfect Investment Technology Investor. Auction Rate Securities. Auction Rate Preferreds.

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9:00 AM EST Friday, April 11, 2008: Pre-open on the market is down heavily this morning. The reason? General Electric reported a smaller-than-expected first-quarter profit on Friday and lowered its outlook for fiscal 2008, as a slowing U.S. economy sapped its financial services business. This should come as no surprise to anyone reading this column. But it has come as a big surprise to the analysts who cover GE. They had expected 51 cents a share; GE reported 44 cents. That's a huge 14% mistake.

Why would they make such a huge mistake? Listen to the conference calls. These analysts fawn all over management and want to believe. In fact, without the fawning and without the optimism, they lack access. So the system is biased against you and me. Surprise. Surprise.

Oh and today's good news. Put this in the category of closing the barn door after the horse has bolted. This morning -- after GE announced its results -- Credit Suisse and Goldman Sachs downgraded GE. Thank you for that remarkable insight!

Once again, I repeat my boring mantra -- the stockmarket is not the place to be. Cash is king -- with occasional shorts, and dabbling in precious metals.

Sell Motorola short: In one unbelievably desperate move, the board of Motorola appointed Dave Dorman as its new chairman. Dorman has zero knowledge of how to run a telecommunications manufacturer. He's never run one. He's always been on the regulated phone company side. His "career" is also seriously checkered, marked by several failures, including something called Concert. Worse, he is arrogant, and among the most difficult people I ever had the displeasure to work with during my career in telecommunications.That said, I should have made this call earlier when Motorola was much higher. I never did like the company. Still, it could easily drop to $5. It's not making any money and definitely won't under Dorman. I bet Carl Icahn, who owns a bundle of Motorola shares, will puke when he hears of Dorman's appointment.

The Bear Stearns lesson:
Bear's 14,000 employees owned one-third of the firm's shares. When it went bust and JPMorgan took it over, many lost their life savings. I hear one fellow who went from a net worth of $20 million to $800,000. Bear people have been in "a massive state of denial." One fellow told me Bear "never had once a loss quarter (in which it lost money)" until the very end. The anger got so bad that JPMorgan posted guards at Bear Stearns New York headquarters.

The lesson for all of us is something about not putting all one's eggs in one's basket -- especially as you get older. For no matter how good it's been, there's always a black swan that flies in and destroys all the best laid plans of mice and men. And that's today's worst mixed metaphor.

Search engines suck: Google searches maybe 2% of what's out there. None are any better. Some web sites never get found. I'm aware of this since no search engine returns my auction rate preferreds site, if I search for Auction Rate Preferreds. But it does work if I search for "Auction Rate Preferreds." In short, there are tricks. For example, I spend a lot of time searching for the electronic form of an article I read in a print magazine. The best way of finding it is to search by author, not by article title.

American cancels a zillion flights. We should be eternally grateful for airlines and not bitch about their minor inadequacies, like late and cancelled flights, lousy food and service, surly employees, etc. I remember an interview with Crandall, former president and chairman of American Airlines. Asked how he felt about airlines, he replied he loved working for them. It was the best job in the world. But he wouldn't put a nickel of his own money into them. They were the worst investment you could make. No one, he said, had ever made money owning an airline. I thought of Crandall as I watched Frontier go chapter 11 -- the fourth airline to do so in less than a month.

BlackBerry 8830 joy: I do love my Verizon BlackBerry 8830 world edition.

The phone

My favorite button

One feature I really like is the speakerphone button on the bottom right, next to the enter key. Touch it once, it becomes a speakerphone; touch it again it becomes BlueTooth (if you have a Bluetooth headset connected). Touch it again, it becomes a normal cell phone which you hold up to your ear. I love BlueTooth and the speakerphone for taking conversation notes.

ARPS site updated: I updated my Auction Rate Preferreds web site with some important tax information.

China Moves Olympics to Undisclosed Location
Fearful about the prospect of human rights protesters ruining the 2008 Olympics in Beijing, China today announced a plan to move the summer games to a remote location where no one can find them.

A spokesman for the Chinese ministry of sport, Wu Qingxiu, said that reasoning behind the move was simple, Wu told reporters: “You cannot protest what you cannot find.”

While rumors swirled about where the Olympics might be relocated, the Chinese official said that all such speculation is futile: “China is a very large country, and if you want to hide the Olympics, it is a very easy to do.”

To keep the new location a secret, Wu revealed that China had not even disclosed it to NBC, who has a contract to televise the 2008 summer games.

This decision drew an outraged response from NBC chairman Jeff Zucker, who told reporters in New York, “If NBC doesn’t know where the Olympics are, no one will watch them. Think of all the ads we've sold for pills that will cure everything from obesity to ugliness.”

Wu took exception to Mr. Zucker’s comment about no one watching the Olympics. He said “That sounds like a typical NBC show to me.”

On the campaign trail, Sen. Hillary Clinton (D-NY) blasted China’s human rights record, telling an audience in Pittsburgh, “I have always fought for human rights in China, which is why I risked my life in Tiananmen Square.”

Mrs. Clinton spent the day crisscrossing Pennsylvania while former president Bill Clinton wrapped up a successful trip to meet with Eliot Spitzer to discuss successful campaign strategies.

Differences between Grandfathers and Grandmothers
A friend, who worked away from home all week, always made a special effort with his family on the weekends. Every Sunday morning he would take his 7-year old granddaughter out for a drive in the car for some bonding time. Just he and his granddaughter.

One particular Sunday however, he had a bad cold and really didn't feel like being up at all. Luckily, his wife came to the rescue and said that she would take their granddaughter out. When they returned, the little girl anxiously ran upstairs to see her grandfather.

"Well, did you enjoy your ride with grandma?"

"Oh yes, PaPa" the girl replied, "and do you know what? We didn't see a single dumb bastard or a lousy shithead anywhere we went today!"

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.

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