Harry Newton's In Search of The Perfect Investment
Technology Investor. Auction Rate Securities. Auction Rate Preferreds.
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.
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.
nominate three stocks in that category today: Merrill Lynch, UBS and Yahoo.
I'll have more in coming days.
see the cockroaches streaming out of Merrill and UBS, you need to visit my other
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
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, www.AuctionRatePreferreds.com.
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.
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
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.
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.
From a reader:
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
Sincerely, Your 98 year old Friend in Florida, Bob Bailey
best bicycle bell. It's loud. Cars hear it.
People hear it. $7.95 from BikePartsPlace.com.
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
makes huge sense. It's so nice to have Claire,
my daughter visit. It always me feel so wanted.
My laptop is busted. It's showing a blue screen of death. I used yours while
you were out.
That's nice, Is mine still working?
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.)
to British Columbia for your summer vacation?
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. Surfings 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 isnt for amateurs. Cortez
Bank isnt a beach. Its 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. Youll 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
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?'
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.