Technology Investor 

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

Previous Columns Auction Rate Preferreds.
8:30 AM EST Friday, April 18, 2008: These bubbles are coming fast. I thought the next "Big" one would be alternative energy. Wrong. It's commodities. And, best, it's still continuing. Bubbles are happening increasingly often because plentiful money is now chasing scarce opportunities. In my father's day, plentiful opportunities were chasing scarce money. Check out yesterday's Bloomberg piece:

Soros Says Commodity 'Bubble' Still in Growth Phase' (Update3)

April 17 (Bloomberg) -- Billionaire George Soros said the boom in commodities is still in a "growth phase'' after prices for oil, wheat and gold rose to records.

"You have a generalized commodity bubble due to commodities having become an asset class that institutions use to an increasing extent,'' Soros said today at an event sponsored by the Centre for European Policy Studies in Brussels. "On top of that you have specific factors that create the relative shortage of oil and, now, also food.''

Commodities are in their seventh year of gains, with oil rising to a record $115.54 a barrel today as the dollar plunged to an all-time low against the euro. Rice has more than doubled in a year, while corn has advanced 68 percent and wheat 92 percent. Investments in commodities rose by more than a fifth in the first quarter to $400 billion, Citigroup Inc. said April 7.

Commodities have outpaced stocks and bonds this year, spurring pension funds and other investors to increase holdings in wheat, gold, copper and tin, which climbed to a record.

The UBS Bloomberg Constant Maturity Commodity Index of 26 commodities has returned 20 percent this year, while the Standard & Poor's 500 Index of stocks has fallen 7.3 percent. U.S. Treasuries have returned investors 3 percent, according to Merrill Lynch & Co. indexes.

Soros's comments echo those of Jim Rogers, a fellow founder of the Quantum Hedge Fund in the 1970s. Rogers is best known for being a commodities bull since the late 1990s, before the market started to rally in 2001. His Rogers International Commodity Index has more than quadrupled since its start in 1998.

The world's largest banks and securities firms have reported more than $245 billion of writedowns and credit losses since the start of last year. Bear Stearns Cos. last month collapsed after losing the confidence of lenders and clients amid the spreading crisis, leading to a planned purchase by JPMorgan Chase & Co.

"The whole world is facing a very serious financial crisis,'' Soros said. "I call it the most serious financial crisis of our lifetime and the financial system is seriously disrupted.''

A week ago, Soros said the seizure in global credit markets caused by the subprime collapse will get worse before it gets better. He told reporters on a teleconference that regulators and the U.S. administration "failed to perform their job.''

He said today that because authorities know how to respond to avert financial collapse, "there's no question of a replay of the 1930s.''

Soros, 77, earned an estimated $2.9 billion last year, ranking second after John Paulson, founder of New York-based Paulson & Co., according to Institutional Investor's Alpha Magazine.

A trade I'm researching: It's called a paired trade. Sell RIMM. Buy Apple.

The concept is that the iPhone will kill the BlackBerry. Within three months, the iPhone will have everything the BlackBerry has today and a heck of a lot more. If you don't believe me, ask your iPhone-toting friend to show you how his well his email works on the iPhone (BlackBerry's erstwhile strength). (The iPhone supports POP3 and IMAP email.) Ask him to show you his three favorite iPhone features. Make sure he shows you surfing the net, how he has his kids' photos organized.. Then read these two releases -- one from Kleiner Perkins and one from Apple. To be fair, BlackBerry also has a developers' kit, but it's much more limited. Apple is focusing on applications for both the corporation and the world and they'll help you sell them. BlackBerry is focusing on apps for your company, which doesn't excite entrepreneurs. The only thing missing with Apple is a button keyboard. Stick around. We're expecting new iPhone shortly.


KPCB’s iFund™ is a $100M investment initiative that will fund market-changing ideas and products that extend the revolutionary new iPhone and iPod touch platform. The iFund™ is agnostic to size and stage of investment and will invest in companies building applications, services and components. Focus areas include location based services, social networking, mCommerce (including advertising and payments), communication, and entertainment. The iFund™ will back innovators pursuing transformative, high-impact ideas with an eye towards building independent durable companies atop the iPhone / iPod touch platform.

"A revolutionary new platform is a rare and prized opportunity for entrepreneurs, and that's exactly what Apple has created with iPhone and iPod touch," said John Doerr, Partner at Kleiner Perkins Caufield & Byers. "We think several significant new companies will emerge as this new platform evolves, and the iFund™ will empower them to realize their full potential."

"Developers are already bursting with ideas for the iPhone and iPod touch, and now they have the chance to turn those ideas into great companies with the help of world-class venture capitalists," said Steve Jobs, Apple's CEO. "We can't wait to start working with Kleiner Perkins and the companies they fund through this new initiative."

Seattle-based Pelago Inc. is the first company to receive financial backing through the iFund. Their social discovery service, Whrrl, will be available on the iPhone as a native application in June 2008.

The iFund™ will be managed by KPCB Partner Matt Murphy in collaboration with partners Chi-Hua Chien, John Doerr, Bill Joy, Randy Komisar, Ellen Pao and Ted Schlein. Apple will provide KPCB with market insight and support.

Apple Announces iPhone 2.0 Software Beta Includes SDK & Built-in Microsoft Exchange ActiveSync

CUPERTINO, California—March 6, 2008—Apple® today previewed its iPhone™ 2.0 software, scheduled for release this June, and announced the immediate availability of a beta release of the software to selected developers and enterprise customers. The iPhone 2.0 beta release includes both the iPhone Software Development Kit (SDK) as well as new enterprise features such as support for Microsoft Exchange ActiveSync to provide secure, over-the-air push email, contacts and calendars as well as remote wipe, and the addition of Cisco IPsec VPN for encrypted access to private corporate networks.

“We’re excited about creating a vibrant third party developer community with potentially thousands of native applications for iPhone and iPod touch,” said Steve Jobs, Apple’s CEO. “iPhone’s enterprise features combined with its revolutionary Multi-Touch user interface and advanced software architecture provide the best user experience and the most advanced software platform ever for a mobile device.”

The iPhone SDK provides developers with a rich set of Application Programming Interfaces (APIs) and tools to create innovative applications for iPhone and iPod® touch. Starting today, anyone can download the beta iPhone SDK for free and run the iPhone Simulator on their Mac®. Apple today also introduced its new iPhone Developer Program, giving developers everything they need to create native applications, and the new App Store, a breakthrough way for developers to wirelessly deliver their applications to iPhone and iPod touch users.

With the iPhone SDK, third party developers will be able to build native applications for the iPhone with a rich set of APIs, including programming interfaces for Core OS, Core Services, Media and Cocoa Touch technologies. The iPhone SDK will allow developers to create amazing applications that leverage the iPhone’s groundbreaking Multi-Touch™ user interface, animation technology, large storage, built-in three-axis accelerometer and geographical location technology to deliver truly innovative mobile applications.

Apple has licensed Exchange ActiveSync from Microsoft and is building it right into the iPhone, so that iPhone will connect out-of-the-box to Microsoft Exchange Servers 2003 and 2007 for secure over-the-air push email, contacts, calendars and global address lists. Built-in Exchange ActiveSync support also enables security features such as remote wipe, password policies and auto-discovery. The iPhone 2.0 software supports Cisco IPsec VPN to ensure the highest level of IP-based encryption available for transmission of sensitive corporate data, as well as the ability to authenticate using digital certificates or password-based, multi-factor authentication. The addition of WPA2 Enterprise with 802.1x authentication enables enterprise customers to deploy iPhone and iPod touch with the latest standards for protection of Wi-Fi networks.

The iPhone 2.0 software provides a configuration utility that allows IT administrators to easily and quickly set up many iPhones, including password policies, VPN setting, installing certificates, email server settings and more. Once the configuration is defined it can be easily and securely delivered via web link or email to the user. To install, all the user has to do is authenticate with a user ID or password, download the configuration and tap install. Once installed, the user will have access to all their corporate IT services.

The iPhone 2.0 software release will contain the App Store, a new application that lets users browse, search, purchase and wirelessly download third party applications directly onto their iPhone or iPod touch. The App Store enables developers to reach every iPhone and iPod touch user. Developers set the price for their applications—including free—and retain 70 percent of all sales revenues. Users can download free applications at no charge to either the user or developer, or purchase priced applications with just one click. Enterprise customers will be able to create a secure, private page on the App Store accessible only by their employees. Apple will cover all credit card, web hosting, infrastructure and DRM costs associated with offering applications on the App Store. Third party iPhone and iPod touch applications must be approved by Apple and will be available exclusively through the App Store.

The iPhone SDK provides a reliable, fast and secure way to create innovative applications for the iPhone and iPod touch. In addition to the rich set of iPhone OS APIs, the iPhone SDK also provides advanced tools for creating native iPhone and iPod touch applications including: Xcode® for source code editing, project management and graphical debugging; Interface Builder with drag and drop interface creation and live preview; Instruments to monitor and optimize iPhone application performance in real time; and the iPhone Simulator to run and debug applications.

During the beta iPhone SDK program, a limited number of developers will be accepted into Apple’s new iPhone Developer Program and offered the ability to get code onto iPhones for testing. The Standard Program costs $99 (US) per year and gives members an iPhone SDK and development tools; access to pre-release iPhone software; technical support; the ability to get code onto iPhones for testing; and distribution of applications via the new App Store. The Enterprise Program costs $299 (US) per year.

In addition to these new iPhone network and security features, the beta iPhone 2.0 software provides several new Mail features such as the ability to view PowerPoint attachments, in addition to Word and Excel, as well as the ability to mass delete and move email messages.

Apple plans to release the final iPhone 2.0 software, including the iPhone SDK and new enterprise features, as a free software update for all iPhone customers by the end of June. Third party applications created for the iPhone will also run on the iPod touch, and iPod touch users will be required to purchase a software update to run these applications. The free beta iPhone SDK is available immediately worldwide and can be downloaded at The iPhone Developer Program will initially be available in the US and will expand to other countries in the coming months. Apple is accepting applications beginning today from enterprise customers who would like to join the private iPhone Enterprise Beta Program (

Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market with its revolutionary iPhone.

Spec of the day: Goldspring Inc. is buying small gold and silver mines out west. It is reputed to have some neat technology to glean gold out of mines others have considered mined out. It's a total spec, with shares selling for under two cents.

Passover begins tomorrow: Jews define their holidays as having three characteristics:

1. They tried to kill us.

2. They failed.

3. So, let's eat.

If you can find kosher Coca Cola, buy it. It contains real sugar and tastes better than the crap we normally buy which contains high fructose corn syrup, which is cheaper but doesn't taste as good. According to Jewish law, nothing made with chametz (any of a number of proscribed cereals and grains, including corn) during Passover may be consumed — so in order not to lose sales from observant Jews during that eight day period, a small number of Coca-Cola bottlers make a limited batch of the original Coke formulation, using refined sugar. Stocks run out quickly and fans of Passover Coke have been known to travel many miles seeking out supermarkets with remaining caches.

The best Passover story is:

Moses is taking the Israelites away from Egypt. He arrives at the Red Sea. He calls for his VP Engineering to build a bridge.

"No such luck, boss. Look around. We're in the desert. No wood. No nothing."

He calls for his VP Sales, "Go ride back to the Egyptians. I can see them in the distance. Ask them if they're up for a deal?"

"No such luck, boss. They simply want us dead."

In disgust and desperation, he calls for his VP Public Relations.

"Yankele, what can you?"

"Easy, boss. See that rock. Stand on it. Hold your hands in the air. Ask God to part the Red Sea. He will. Take the Israelites through. When you reach the other side, there'll be another rock. Stand on it. Wait for the Egyptian army to be in the middle of the parted Red Sea. When they are, stand on the rock. Raise your hands and ask God to close the Red Sea, which He will."

Moses looks quizzically at Yankele. "This stuff gonna work?" Moses asks.

Yankele, " Boss, frankly, I'm not sure. But if it does, I'll get you three pages in the Old Testament."

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.

Go back.