Technology Investor 

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

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8:30 AM EST Friday, August 1, 2008: I continue to not like what I see. We are not yet at bottom. And bottom looks lie being a little away, yet. See today's New York Times piece More Arrows Seen Pointing to a Recession. All this means two things:

1. Buying great stocks is like catching a falling sharp knife. Yesterday, the Dow fell another two hundred plus points.

2. Selling short makes huge sense in a tanking market. There are some keys. You can lose much more short selling than you can going long. Hence, ultra-tight stops make huge sense. If your trade goes 3% to 5% against you, cover. The BIG game in short-selling is identifying deadbeat companies on their way down and down. Here Uncle Sam gives you a nice present. If you sell and never cover, you didn't close the transaction and hence pay no taxes. But, because you sold the stock, you have the cash money to spend. There is one loophole. If your chosen deadbeat company goes broke, your transaction is closed out the day the company files for bankruptcy. What you're pray for is a long, painful demise.

Cockroach stocks are the best place to look for long, painful demises. When bad untoward things happen to companies, they become Cockroach stocks. Bad, untoward things are not normal things like lousy earnings because the economy is terrible. They're events totally out of left field which just keep coming.

I nominate three stocks in that category today: Merrill Lynch, UBS and Yahoo. I'll have more in coming days.

To see the cockroaches streaming out of Merrill and UBS, you need to visit my other site,

Yahoo's days in the sun are over. It reminds me of AOL. Time is passing it by. There's someone on the Internet that does what Yahoo does but only better -- starting with Google in search. We'll hear more nuttiness out of Yahoo at today's annual meeting.

Brokers will make you broker. That's why they're called brokers. They're also not called investors. To think brokers have ANY insight into what's happening is a gigantic stretch of our imagination. Worse, their management keeps them conveniently in the dark, forcing brokers to sell toxic securities. Don't believe my harsh words? Read the stories at my other site, There you'll find senior management actively telling lies to their brokers, forcing them to sell toxic paper to their customers (and in many cases to themselves) -- in this case, the toxic paper was auction rate securities.

To see that this stuff goes on today makes you wonder if you can trust anything Wall Street tells you. The simple answer is you can't.

The Australian dollar is falling. When I sent my $1,000,000 to Australia, it was 96 cents. Now it's 93.5 cents. This means that, so far, I'm down $24,500 (or 2.5%) on my brilliant move. I'm earning 8% on my money, so I'm not yet in the hole vis-à-vis keeping the money in a low-paying U.S. money market fund or bank CD. As a wise man once told me, "yield hogs get slaughtered."

Cash remains king. As you know I also took clumps of $95,000 to several banks. The FDIC will insure only $100,000, or $200,000 if you have a joint account and two social security numbers are on the account. This FDIC insurance is a critical factor these days, since more and more banks are failing. Worse, it's impossible to figure which bank will be next to go bust.

There is a way to save on the multiple bank visits. It's called CDARS -- Certificate of Deposit Account Registry Service -- which some banks offer. Go to one bank. Give them $500,000. They split it between five banks. Your primary bank handles all the paperwork. You get one statement listing all your CDs, along with the issuing banks, maturity dates, interest earned, etc. At least that's what the brochure says. I opened one CDAR with $414,000. My bank asked me for banks I didn't want them to deal with -- which included banks I had deposits with and banks I felt uncomfortable with. I haven't received my paperwork yet. I'll check on it this morning.

National Debt Revisited. From a reader:

Dear Harry, I was amused at Your Paragraph on the National Debt. I worked as a Civil Service Employee for the Federal Government for every President from Franklin Roosevelt to Richard Nixon, and in those days We were under the Gold Standard and the Government operated under a National Debt Limit. I remember well when President Roosevelt (about 1937 or 1938) had to go to the Congress and ask that the National Debt Limit be raised to $50,000,000.

Perhaps I should have cried, instead of being amused at Your remarks on the Debt.

Sincerely, Your 98 year old Friend in Florida, Bob Bailey

The best bicycle bell. It's loud. Cars hear it. People hear it. $7.95 from If you ride a bicycle, you must have one. It could save your life.

The Reich bicycle bell. $7.95.

There's a horrible article on commuter bicycling in today's Wall Street Journal. Don't believe it. Bicycles save gas, give you the exercise you sorely need, are a great way to see the world, are actually safe and fun. If your commute is too long for a bike, get yourself a motor scooter. See my previous article.

Cloning makes huge sense. It's so nice to have Claire, my daughter visit. It always me feel so wanted.

Claire: My laptop is busted. It's showing a blue screen of death. I used yours while you were out.

Harry: That's nice, Is mine still working?

Claire: For now.

There is good news. When I set her machine up initially, I made a clone hard disk and hide it. Last night, I pulled it out, popped it into her machine, copied her working files and photos over. Bingo, she was up and running in ten minutes. Now I need to clone the clone and hide it away for the next time Claire needs her Daddy. There will be a next time. Trust me. (And it won't be Claire's fault. Windows always eventually screws itself up.)

Going to British Columbia for your summer vacation?

Or maybe you want to vacation off Mexico?
Most sports have an extreme side. Only the best of the best can handle it. Surfing is no exception. Surfing’s extreme players are big wave riders. They risk their lives to tackle the biggest waves imaginable. In 2001, surfers made their way to Cortez Bank. Surfing that spot isn’t for amateurs. Cortez Bank isn’t a beach. It’s a reef in the Pacific Ocean. With the right conditions, Cortez Bank makes giant, perfectly formed waves.

Mike Parsons is one of the best big wave surfers around. This video is his last ride of the day at Cortez Bank. You’ll see him careen down a 66-foot wave, a mountain of water. It was judged to be the biggest wave of the year. Parsons was awarded $66,000 by his corporate sponsor. Check out if this sport is for you. Watch the video.

Time to draw the curtains
Mick met Paddy in the street and said, 'Paddy, will you draw your bedroom curtains before making love to your wife in future?'

'Begorrah, Why?' Paddy asked.

'Because,' said Mick, 'the whole street was laughing when they saw you making love yesterday.'

Paddy said, 'Stupid bastards, the laugh's on them........I wasn't home yesterday.'

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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