Fortune Magazine has a reporter and a photographer in Phoenix. They're looking to take pictures of busloads of California investors rushing in to buy 30 to 40 houses in a frenzied afternoon. Nothing with dissuade the Fortune team from their mission, which also includes proving that Arizona is one gigantic real estate bubble that's about to burst with disastrous implications. My friends asked the reporter: "Do you personally own real estate?" Answer: No. "Have you considered owning it?" Answer: No.

Fortune's reporter lives in a rented apartment in New York City.

Most reporters approach stories with their minds already made up. The "facts" are for confirming their conclusions. Business reporters are no different. Most have no business skills. Anyway what should they? They're employed for their writing skills, not their business skills -- despite what they write about. If they did have business skills -- the magazines couldn't afford to employ them.

When I ran magazines I helped (read forced) about 12 reporters and other employees buy houses and apartments. They all have done well. All showed major capital appreciation over the years. For example, we bought one townhouse on foreclosure for $96,000 around 1996. Freddie's now selling it for $324,000. Another one we bought for $145,000 is now worth around $325,000. I believe having a bout with capitalism makes one a better business reporter. Fortune Magazine clearly doesn't buy into this philosophy.

Fortune's story isn't out yet. It will be interesting to see how negative on real estate it is. Remember, Fortune is also the magazine that fell in love with Carly Fiorina.

Meanwhile money continues to pour into real estate: All my real estate investments are through syndications, so far. One of my syndicators of office property had a conference call yesterday and confirmed:

+ Prices are high.
+ Cap rates are high.
+ Office rents are recovering, which helps. There is positive net absorption at present.
+ Interest rates remain favorable for borrowing.
+ The 70s, 80s and 90s "busts" all had heavy speculative office building construction. There's little of it at present, except in Washington, D.C.
+ New York is really expensive. My syndicator told how he bid on 30-40 deals in New York City in the past several years, but got outbid on all of them.
+ He looks carefully each year at 100 deals, bids on 20, ends up buying one.
+ Though today's market is "more challenging than ever," it is possible to find real estate deals that have "slipped through the cracks."

For more on real estate as an investment, see yesterday's column. Click here.

Married With Problems? Therapy May Not Help. I found this piece from the New York Times yesterday totally fascinating:

"Each year, hundreds of thousands of couples go into counseling in an effort to save their troubled relationships. But does marital therapy work? Not nearly as well as it should, researchers say. Two years after ending counseling, studies find, 25 percent of couples are worse off than they were when they started, and after four years, up to 38 percent are divorced.

Many of the counseling strategies used today, like teaching people to listen and communicate better and to behave in more positive ways, can help couples for up to a year, say social scientists who have analyzed the effectiveness of different treatments. But they are insufficient to get couples through the squalls of conflict that inevitably recur in the long term.

At the same time, experts say, many therapists lack the skills to work with couples who are in serious trouble.

Unable to help angry couples get to the root of their conflict and forge a resolution, these therapists do one of two things: they either let the partners take turns talking week after week, with no end to the therapy in sight, or they give up on the couple and, in effect, steer them to divorce...."

For the full article, click here.

The New Pope. I'm not Catholic. I don't understand the whole notion of having a head of a religion to lay down what I should believe. To me, religion is a very personal thing. Still I found these words from today's Wall Street Journal online to be totally fascinating:

"Some of those who know the 78-year-old cleric tell the Times that Benedict knows he may have a short papacy and that he intends to move quickly to put his own stamp on the church and to reverse its decline in the secular West. He is already known for speaking out against what he has called "cafeteria Catholics," who disregard, for example, the ban on artificial birth control. But the choice of Benedict to lead the fight against secularism and "moral relativism" carries risks, The Wall Street Journal says: "While Pope John Paul II's personal warmth smoothed the edges of traditionalist messages -- no birth control, no marriage for priests, no ordaining of women -- the former Cardinal Ratzinger will be pushing the same philosophy without the same deep wellspring of charisma." On the same note, Newsweek contributing editor and practicing Catholic Melinda Henneberger says that while she was overcome with emotion and burst into tears the first time she saw John Paul, as Benedict stepped onto the loggia last night, "I only wanted to cry. The joke already making the rounds in Rome tonight was that while John Paul's first words at his installation were, 'Be not afraid,' the first from Benedict will be, 'Be afraid. Be very afraid.' "

Reader Alex Rohwedder recently sent me an excerpt from the bible, namely Matthew 23 verses 1-12. It reads:

"Then Jesus said to the crowds and to his disciples, "The teachers of religious law and the Pharisees are the official interpreters of the Scriptures. So practice and obey whatever they say to you, but don't follow their example. For they don't practice what they teach. They crush you with impossible religious demands and never lift a finger to help ease the burden.

"Everything they do is for show. On their arms they wear extra wide prayer boxes with Scripture verses inside, and they wear extra long tassels on their robes. And how they love to sit at the head table at banquets and in the most prominent seats in the synagogue! They enjoy the attention they get on the streets, and they enjoy being called `Rabbi.' Don't ever let anyone call you `Rabbi,' for you have only one teacher, and all of you are on the same level as brothers and sisters. And don't address anyone here on earth as `Father,' for only God in heaven is your spiritual Father. And don't let anyone call you `Master,' for there is only one master, the Messiah. The greatest among you must be a servant. But those who exalt themselves will be humbled, and those who humble themselves will be exalted."

How to inherit a small fortune:
Soon his wealthy father would die and Robert would inherit a fortune.

Robert decided he needed a woman to enjoy it with. So he went to a singles bar and he searched until he spotted a woman whose beauty took his breath away.

"Right now, I'm just an ordinary man," he said, walking up to her, "but within a month or two, my father will pass and I'll inherit over 20 million dollars."

The woman went home with Robert, and four days later she became his stepmother.

Men will never learn.


Harry Newton

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. Thus I cannot endorse any, though some look mighty interesting. If you click on a link, Google may send me money. That money will help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
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