Harry Newton's In Search of The Perfect Investment
Technology Investor. Harry Newton
7:00 AM EST, Wednesday, April 8, 2009.
If I had been
intelligent and knew what I knew today, I would taken the entire monies I
got from selling the business in September 1997 and put the monies 100% into
muni bonds. Result: I would have been far richer and would have lived a nice,
worry-free life. I figure I would have enjoyed 100% principal preservation
and a 4.5% to 5% return on my money tax-free each year. And since I live in
heavily-taxed New York City, that would have been equivalent to earning 7%
to 8% taxable.
I know today is that:
Equities lost money over the past ten-plus years.
+ Virtually all my private equity investments lost money, some their entire
Chasing yield is what I've been doing. And it's the stupidest idea on God's
earth -- unless you have control. But, without control or at least having
major input, you're at someone's else whim. Most people are whimsical, which
means they're lousy managers first, and don't have your long-term interests
at heart, second.
Losing money is much worse psychologically than making it. You really feel
you've betrayed your family, your children and your wife. You've betrayed
them because you tried to earn a few more shekels you could never spend with
an investment that, in hindsight, was just plain stupid.
had dinner last night a man who manages muni bonds. He's done it for 18 years
and has never had a losing year. Had I dumped my money into a laddered
collection of sound muni bonds in 1997, I would never ever have ever lost
a nickel. Of course, some years muni bonds do go down in price. But I would
not have cared, since my goal would have been to hold until maturity, not
trade into oblivion.
Harry, now you're smarter. Why don't you dump everything you own into muni
bonds? And the answer is -- that's the thought going through my tiny brain
first, some Q&A on muni bonds: Aren't they risky today because of the
economy? For example, lower tax revenues make a California disaster...
week's "Private Wealth Forum" publication from Goldman Sachs has
two charts. The first shows clearly that muni bonds aren't all cut from the
same cloth. Some are more risky than others. This first chart says it all:
second question is today's economy. Aren't some muni bond issuers likely to
go broke because of all the unemployment and economic misery? First historically,
muni bonds have had the lowest default rate of any security on the planet
-- with one exception -- treasuries. Second, the Obama Administration has
said it will help issuers of muni bonds. Third, no matter how much you trust
or don't trust Obama, Administrations in the past have always helped
out issuers of muni bonds in the past. Speaking to that is the second Goldman
it for now. I'm playing tennis at 7:30 AM and got to run.
your tennis. The USTA has thrown up short video clips of top players'
strokes. You can play the clips in slow motion, stop them altogether, rewind,
etc. Super for seeing in precise detail how the pros do it. All you have to
do is to copy them. Click here.
it wasn't the IRS? I spoke too soon. The
IRS didn't lose my return. Reader Robert Coates send this clip.
Bank reaches settlement over lost tax returns and checks
July 5, 2007: Pittsburgh-based Mellon Bank has agreed to pay the federal
government $16.5 million to settle all claims relating to the destruction
of 77,000 federal individual income tax returns and checks in 2001.
a contract to collect and process returns and payments for the Internal
Revenue Service during the peak busy season in the spring of 2001. Mellon
employees who later claimed they were overworked and unable to meet deadlines
purposely destroyed 77,000 tax returns and accompanying checks totaling
$1.3 billion at a Pittsburgh service center in April 2001.
previously paid the government more than $18 million to cover the interest
the government lost on the delayed payments as well as the costs of relocating
the Pittsburgh service center to a new site. Mellon has agreed to cooperate
with the government and has accepted responsibility for its employees' actions.
Mellon employees have been indicted relating to their participation in the
destruction of the documents. Several have pleaded guilty; court proceedings
are pending for others.
spent $20.21 yesterday mailing a copy of my 2007 return to the IRS. Can I
charge them for it?
FROM THE YEAR: 2029
+ White minorities still trying to have English recognized as California's
+ Spotted Owl
plague threatens northwestern United States crops and livestock.
+ Baby conceived
naturally! Scientists stumped.
+ Couple petitions
court to reinstate heterosexual marriage.
+ Iran still
closed off; physicists estimate it will take at least 10 more years before
radioactivity decreases to safe levels.
+ Castro finally
dies at age 112; Cuban cigars can now be imported legally, but President Chelsea
Clinton has banned all smoking.
+ Postal Service
raises price of first class stamp to $17.89 and reduces mail delivery to Wednesdays
+ 85-year $75.8
billion study released: Diet and exercise is the key to weight loss..
+ Average weight
of Americans drops to 250 lbs.
+ Supreme Court
rules punishment of criminals violates their civil rights.
+ Average height
of NBA players is now nine feet, seven inches.
+ New federal
law requires that all nail clippers, screwdrivers, fly swatters and rolled-up
newspapers must be registered by January 2030.
+ IRS sets lowest
tax rate at 75 percent.
+ Florida voters
still having trouble with voting machines.
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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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,
here and here.