Harry Newton's In Search of The Perfect Investment
Technology Investor. Harry Newton
AM EST, Thursday, April 23, 2009. How's
this for a wild ride in the last few days?
stocks doing ultra-well. Amazon , Apple, Goldman Sachs. I suspect that all
three will continue on their tear. But they're now risky, since they're so
prices will drop lower. Should I wait? It's a common question.
Every location is different. In some places prices have fallen 90%; in some
only 15%. No one knows how much more they'll fall, if at all. My approach
Is the location right? You want to live there?
Can you manage it? Never underestimate the time.
Are the economics right? Are the tenants stable? Will the rents cover the
mortgage, the expenses and then some? Do not assume any increase in value
in your calculations. Could you take a 30% drop in rent and still survive?
Bid low. Be prepared to walk.
Don't even think of borrowing more than 60% of the value -- called LTV --
loan to value.
competitions. Many of us are involved with our local schools, colleges,
and universities. Get them to start contests -- for business plans, for engineering
ideas, etc. My son's business plan is now one of four finalists at Harvard.
I loved the enthusiasm at last week's NYU contest, where I played judge. And
yesterday I received this email from reader Milind Trilokekar:
Gd Day Mr.
great interest and showed your suggestions for a winning business plan to
my daughter. I hope she has the opportunity to have her Business Plan judged
by you in 2013!
I was away
this weekend in Washington attending the Young Epidemiologist Scholars (YES)
Competition and it was amazing to see the talent that this country has.
Each student researcher had to present their paper and answer questions
from 6-9 judges, who were in my opinion among the top strata in their field.
Reminded me of your judging the NYU Stern students, except in the medical
field. Following your same line, I would encourage all high schools to have
a "Science Research" club and get the kids involved in science
research. YES is akin to Intel Science Search, WESEF, ISEF and similar competitions,
except dedicated to Epidemiology and mainly funded by the College Board
and Robert Wood Johnson Foundation.
Finally one great salesman appears. He answers emails quickly.
He's got the technical stuff down pat. He's the only one to actually send
me a copy of a book he's printed. And it's relevant to what I want to print.
All the rest are asking dumb questions like "Do we still have time to
bid?" "Did you receive our quote? How do we stand up?" And
my favorite, "Here's my phone number. Please call me." (I kid you
They don't teach
salesmanship in school, college or business school, but they bloody well ought
to. My God, a little intelligence, a little responsiveness and lots of enthusiasm
go a long way. Please tell the book printers of the world that it's not only
price that gets the job.
to be thoroughly depressed? Here's what Porter Stansberry, respected
investment newsletter guru, ended a piece yesterday with:
think we ought to have free health care and drugs for retirees, more military
spending than the rest of the world combined, a bankrupt retirement scheme
based on government debt, government guarantees for the banks, etc. doesn't
matter to me. I'm not interested in pie-in-the-sky ideas about how the world
should work. I write about how the world does work. And I can tell you this
with 100% accuracy: You cannot support the world's reserve currency when
you are the world's largest debtor, when you plan to finance annual deficits
exceeding $2 trillion with progressive income taxes and money printing.
Our economy is a charade. And when it falls apart, the consequences will
successfully shorting stocks for months. Last night he writes:
announced an $86.9 million quarterly loss last night. Its charge-off rate
for U.S. cards increased to 8.4%. The company expects its charge-off rate
to "cross 10% in the next couple of months" and only sees things
getting worse through the rest of the year. In my December 2008 issue, I
wrote a 10% charge-off rate throughout Capital One's entire book would nearly
wipe out the company's equity, and the stock would fall to zero by the end
of this year. We're getting closer.
Russell of the Dow Theory Letters, last night:
One of the
major problems of today is that the banks will not mark their toxic assets
to market. If they did, it's probable that a great many banks would be insolvent.
In other words, many banks are really the "walking dead." Nobody
knows which banks are solvent. The banks are not lending because they need
all the money they can accumulate to stave off possible balance-sheet bankruptcy.
The bank problem won't be solved and the banks won't lend until they're
willing to be honest and mark to market. Those banks that survive, will
Treasury Secretary Geithner announced today that the "vast majority
of US banks have more capital than needed." Really, then if that's
true, why the hell aren't the banks lending?
what to do? Months ago I sent money to Australia figuring its abundant
natural resources would protect it. I sent the money when the Australian dollar
was around 96 cents. Within weeks it had dropped to 63 cents. It's now back
to 71 cents. So, I'm not totally stupid.
crashes the party. Viacom has removed South
Park's Margaritaville full episodes from the Internet. Copyright infringements,
they claim. Bah , humbug. I downloaded my own copy. Its 90 megs. So hard to
email. If someone finds a place where it's still available, please email me.
This is an episode not to be missed.
saver revisited. No more kwetching over volume.
His and her headphones. My strong recommendation -- the Sennheiser
headphones. We have them attached to every TV set we own. I am deaf. Susan
can hear a fly walk up a window pane 100 feet away.
There are two ways to buy -- the headphones and the transmitter. Click
here. And just the headphones. Click here.
One transmitter will send a signal to as many headphones
as you own. Do not pay any attention to what Amazon writes when you click
to buy. They call the transmitter a "charging cradle," which it's
works for your family abroad. You live here. They live there. They
want goodies from Gap, Amazon, Banana Republic ... but many American mail
order places won't ship overseas. Solution: MyUS.com.
They accept your packages, bundle them into one (if that's what you want)
and then ship them DHL most anywhere in the world. Their prices are remarkably
good -- though never underestimate the cost of international shipping.
A woman was having a passionate affair with an inspector from a
pest-control company. One afternoon they were carrying on in the bedroom together
when her husband arrived home unexpectedly.
said the woman to the lover, "into the closet!" and she pushed him
in the closet, stark naked.
however, became suspicious and after a search of the bedroom discovered the
man in the closet.
you?" he asked him.
inspector from Bugs-B-Gone," said the exterminator.
you doing in there?" the husband asked.
a complaint about an infestation of moths," the man replied.
are your clothes?" asked the husband.
The man looked
down at himself and said, "Those pesky little bastards!"
Italian said to his two friends, "Well, last night my wife and I had
sex. I rubbed her body all over with olive oil. We made love, and she screamed
for over 10 minutes."
boasted, "Last night when my wife and I had sex. I rubbed her body all
over with butter. We then made passionate love and she screamed for 20 minutes."
A Jewish man
boasted, "Last night, my wife and I had great sex. I rubbed her body
all over with schmaltz (chicken fat), we made passionate love, and she screamed
for six hours."
The other two
were stunned. The amazed Frenchman asked, "What could you have possibly
done to make your wife scream for six hours?"
The Jew said,
"I wiped my hands on the bedspread."
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
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