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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, Thursday, August 14, 2008: There are no places to hide from the contagion. The "logical" moves don't work. For example, when stocks fall, money flocks to gold and silver. Wrong:

And, of course, oil has fallen through the floor.

Commodities -- like nickel and zinc -- have also fallen heavily as a result of thinking that a global economic slowdown and the continuing credit squeeze will hurt demand.

The reason that these price moves are so dramatic and occur within such a short period of time is that they're basically speculator driven. Hedge funds now speculate on anything and everything. And they do it from minute to minute, from day to day. Add "everything and anything" to the trading desks at Wall Street's investment bankers and you have a desperation willing to throw billions at "bets. -- many of which pay off spectacularly, if you can read the tea leaves and sharply limit your losses if the market moves against you and watch it hawklike. This is a game that most of us simply don't have the time, patience or stomach for. But we're the victims of it, as we see our long-term "logical' ideas get crushed.

I doubt that this situation will change. I suspect that with limited investment banking fees and rich clients soured on their brokerage houses (because of the auction rate securities freeze-up), the big Wall Street houses will spend more of their time gambling (also called trading). And markets will become even more volatile.

Look at the charts. No one can time when markets change direction. But you could. When it's going up, stay long. The minute you get a one or two percent pullback, sell and go short. Stay short until the market moves against you. Meantime, make sure you get on CNBC and argue "logically" that Gold or Silver or Oil is dead (or alive) for the following reasons. You can always find reasons. And you can always find lazy CNBC reporters who need someone with a shtick and a point of view on how to make their viewers their next bundle. CNBC is only interested in the next bundle. That's why viewers watch and hence, advertisers buy ads.

It's getting super hard to be a long term investor. In the old days, you could pick some "logical" positions, stay with them and eye your monthly brokerage statements with satisfaction. No more.

I don't have a simple solution this morning. My wife's "solution" looks increasingly enticing, "If we have it, let's spend it. That way we get something for our money."

The Australian dollar rose a little yesterday after a steady decline that began the day I shipped $1 million to Australia, attracted as I was by the 8% interest Westpac was paying. The Australian dollar's subsequent fall has whipped out all my interest rate gains, and then some. Maybe we'll spend the money on a bang-up vacation there?

Dumb luck.
Given a choice between brilliance and dumb luck, I'll take dumb luck any day. True story: A friend put $180,000 into an oil exploration company. It went bust. When the bankruptcy sale took place, oil was over $140 (it's now $114). He got back his entire $180,000 plus a 25% profit.

The fantastic Prius taxi. I asked a Prius taxi yesterday for his mileage in the city (New York). His answer -- an incredible 47 miles per gallon. Our Mayor, Mike Bloomberg, has mandated that all New York taxis will be hybrids by 2012. Meanwhile in Australia, a Cairns-based Toyota Prius taxi has recently clocked up 550,000 kilometers, the highest kilometers recorded for an Australia delivered Prius to date. According to Black and White taxis (the car’s owner), in its three years of service the Prius has cost half the fuel and maintenance outlay compared to other conventionally-powered taxis in the fleet. So far there are 32 Prius taxis in Cairns with another eight on order. Each Prius averages around 200,000 km a year.

Backup. Backup. Backup. You can now buy a 500 gigabyte external USB hard disk drive for under $100. There is no excuse any longer for not backing up your work.

Adultery's euphemism.
There was an old priest who got sick of all the people in his parish confessing to adultery.

One Sunday, in the pulpit, he said, "If I hear one more person confess to adultery, I'll quit!"

Well, everyone liked him, so they came up with a code word. Someone who had committed adultery would say instead that they had 'fallen.'

This seemed to satisfy the old priest and things went well until the priest passed away at a ripe old age.

A few days after the new priest arrived, he visited the mayor of the town and seemed very concerned.

"Mayor, you have to do something about the sidewalks in town. When people come into the confessional, they keep telling me they've fallen."

The mayor started to laugh, realizing that no one had told the new priest about the code word. But, before he could explain,

The priest shook an accusing finger at him and shouted, "I don't know what you're laughing about, because your wife has fallen three times this week!"

Universal health coverage? No!
A doctor was leading a tour through the hospital. One of the woman on the tour noticed that a man was masturbating in a hospital room with the door wide open.

"Oh my God! screamed the woman, "That disgraceful! Why is he doing that?"

The doctor that was leading the tour explained, " I am very sorry...but this man has a serious condition where the testicles rapidly fill with semen. If he doesn't do that five times a day,they'll explode and he'll die within minutes."

"Oh, well in that case, I guess it's OK, " commented the woman.

In the very next room they could see that a nurse was performing oral sex on a different male patient. Again the woman screamed "Oh my God! How can that be justified?"

The doctor replied..." same illness, better health plan."

The hedge fund letter.
If you missed yesterday's column with the hedge fund letter, you must read it. It's hysterical. Click here.

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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