Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Wednesday, August 10, 2005:
The Fed yesterday lifted its target for the federal
funds rate for the tenth time by 25 basis points to 3-1/2 percent. Here's what
it's looked like:
What does this rate-hiking mean?
1. It doesn't mean long-term rates -- like what you borrow on a mortgage --
are going up. These rates are determined by the supply of money. And right now
there's plenty of money to lend you and me.
2. It doesn't even mean that all short-term rates are going up. For example,
with my uninvested cash, I buy short-term, triple tax-free muni bond floaters.
I buy them through Smith Barney. These things reset every week. Here's been
my recent history:
7/13 2.30 %
Thanks to Smith Barney's Seth Wernick for the chart. The rates have been as
high as 2.90% in the past year. I don't see much of a trend. I have, however,
managed to badger my savings bank into paying me more, using the Fed's rate
hikes as "justification."
3. With the Fed lifting at the low end and the top end not rising, this has
got to be bad for banks. Hence their obsession with "fees." This is
not the time to be invested in banks.
The double good news is that the economy is getting stronger and inflation
has stayed moderate. This is what the Fed actually said yesterday. It's typical
economist-speak, meaningless mumbo-jumbo.
Committee believes that, even after this action, the stance of monetary policy
remains accommodative and, coupled with robust underlying growth in productivity,
is providing ongoing support to economic activity. Aggregate spending, despite
high energy prices, appears to have strengthened since late winter, and labor
market conditions continue to improve gradually. Core inflation has been relatively
low in recent months and longer-term inflation expectations remain well contained,
but pressures on inflation have stayed elevated.
perceives that, with appropriate monetary policy action, the upside and downside
risks to the attainment of both sustainable growth and price stability should
be kept roughly equal. With underlying inflation expected to be contained,
the Committee believes that policy accommodation can be removed at a pace
that is likely to be measured. Nonetheless, the Committee will respond to
changes in economic prospects as needed to fulfill its obligation to maintain
ways I use to avoid all of the ridiculous foreign currency surcharges:
From Minneapolis reader, Jason J. Dalebroux:
1. Join a credit union and open a checking/savings/money market account
with an ATM card. My small credit union does not charge me ANY ATM fees. ZERO.
Recently, I spent a few weeks in Europe and never once paid any fees. I searched
for ATMs there where the host bank or institution did not charge any fees either,
so I took out cash pounds or euros at the market exchange rate for the day and
nothing more. In fact, with all of the other ridiculous banking fees showing
up from time to time on my monthly bank statements, I always threaten to close
all accounts and permanently move everything to the credit union. The fees
are ALWAYS dropped. My war with the large national chain banks continues.....their
only advantage is online services that small banks and credit unions cannot
2. I have an AMEX
Corporate Card for business travel that does not charge any additional fees
for foreign currency transactions. The bill comes to my home address, and I
can use the card for non-business transactions. This works well in Asia, but
not so well in Europe, where many businesses do not take AMEX.
Patrick Bullot writes: To avoid these hefty charges, best is to have an
bank account in France in Euros. Also do not buy anything in France. Things
are much cheaper in the U.S. Also be aware you cannot return merchandise that
easily in France.
For more on these fees, see yesterday's column. Click
Remember Baidu.com (BIDU), the Chinese Google. It came public on
Friday at $27 and then went crazy as every day trader and their uncle
bought, sold and generally amused themselves. This was the chart I published
yesterday. I said don't go near this thing. Far too insane. Small float. Crazy
valuation. This is what's happened so far.
yourself a Manhattan pied-à-terre: Here's
a suggestion. Only $50 million to buy and another $10 million to fix up. That
works out to $3,000 a square foot when it's all done. The house is on the corner
of Fifth Avenue and 82nd Street.
Vincent Laforet/The New York Times
The Duke Semans Mansion has 20,000 square feet of space.
in Kentucky, you don't see too many people hang-gliding.
decided to save up and get a hang glider. He takes it to the highest mountain,
and after struggling to the top, he gets ready to
take flight. He takes off running and reaches the edge. Into the wind he goes.
and Paw Hicks were sittin' on the porch swing talkin' bout the good ol' days
when Maw spots the biggest bird she ever seen!
the size of that bird, Paw !" she exclaims.
Paw raises up,"
Git my gun, Maw."
She runs into
the house, brings out his pump shotgun. He takes careful aim. BANG! BANG! BANG!
BANG! The monster size bird continues to sail silently over the tree tops.
ya missed him, Paw." she says.
he replies, "but at least he let go of Bubba!
+ Manhattan Pharmaceuticals: Click
+ NovaDel Biosciences appeals. Click
+ Hana Biosciences appeals. Click
+ All turned on by biotech. Click
+ Steve Jobs Commencement Address. The text is available:
Click here. The full audio is available. Click
+ The March of the Penguins, an exquisite movie. Click
+ When to sell your stocks. Click
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,
here and here.