Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Monday, August 29, 2005: Learn
enough to be dangerous -- especially when dealing with "experts" like
lawyers, accountants, and architects, all of whom tend to be know-it-all prima
donnas. Learn enough to question their recommendations. The latest "got
me going" was reading how KPMG "viewed its conduct as above reproach,
in a sense viewing itself as smarter than the I.R.S. and Department of Justice
by developing these creative (i.e. bogus) tax shelters," said Peter J.
Henning, a professor of criminal law at Wayne State University Law School. KPMG
will pay a whopping $456 million fine -- which at least will allow it
to avoid a criminal indictment -- which would have destroyed the firm. One of
my friends got suckered into one of KPMG's phony tax shelters. For him, it's
been expensive, difficult and unpleasant. I've had my share of bad tax advice
also from the "experts."
unregulated hedge fund industry: Another story
of massive fraud. This time at Bayou Group, a $400 million Connecticut hedge
fund. "Sophisticated" investors did their due diligence. But their
monies still disappeared. The moral is obvious: If it's too good to be true,
it usually is. The story: From the Wall Street Journal, click
here. From The New York Times, click
here. Remember, 100% capital loss is real hard to recoup.
impact of Katrina: Potentially massive on us
all. This comes from Stratfor, a superb global intelligence service:
A Category 5
hurricane, the most severe type measured, Katrina has been reported heading
directly toward the city of New Orleans. This would be a human catastrophe,
since New Orleans sits in a bowl below sea level. However, Katrina is not
only moving on New Orleans. It also is moving on the Port of Southern Louisiana.
Were it to strike directly and furiously, Katrina would not only take a massive
human toll, but also an enormous geopolitical one.
The Port of Southern Louisiana is the fifth-largest port in the world in terms
of tonnage, and the largest port in the United States. The only global ports
larger are Singapore, Rotterdam, Shanghai and Hong Kong. It is bigger than
Houston, Chiba and Nagoya, Antwerp and New York/New Jersey. It is a key link
in U.S. imports and exports and critical to the global economy.
The Port of
Southern Louisiana stretches up and down the Mississippi River for about 50
miles, running north and south of New Orleans from St. James to St. Charles
Parish. It is the key port for the export of grains to the rest of the world
-- corn, soybeans, wheat and animal feed. Midwestern farmers and global consumers
depend on those exports. The United States imports crude oil, petrochemicals,
steel, fertilizers and ores through the port. Fifteen percent of all U.S.
exports by value go through the port. Nearly half of the exports go to Europe.
The Port of
Southern Louisiana is a river port. It depends on the navigability of the
Mississippi River. The Mississippi is notorious for changing its course, and
in southern Louisiana -- indeed along much of its length -- levees both protect
the land from its water and maintain its course and navigability. Dredging
and other maintenance are constant and necessary to maintain its navigability.
It is fragile.
If New Orleans is hit, the Port of Southern Louisiana, by definition, also
will be hit. No one can predict the precise course of the storm or its consequences.
However, if we speculate on worse-case scenarios the following consequences
+ The port might become in whole or part unusable if levees burst. If the
damage to the river and port facilities could not be repaired within 30 days
when the U.S. harvests are at their peak, the effect on global agricultural
prices could be substantial.
+ There is a large refinery at Belle Chasse. It is the only refinery that
is seriously threatened by the storm, but if it were to be inundated, 250,000
barrels per day would go off line. Moreover, the threat of environmental danger
would be substantial.
About 2 percent
of world crude production and roughly 25 percent of U.S.-produced crude comes
from the Gulf of Mexico and already is affected by Katrina. Platforms in the
path of Katrina have been evacuated but others continue pumping. If this follows
normal patterns, most production will be back on line within hours or days.
However, if a Category 5 hurricane (of which there have only been three others
in history) has a different effect, the damage could be longer lasting. Depending
on the effect on the Port of Southern Louisiana, the ability to ship could
A narrow, two-lane highway that handles approximately 10,000 vehicles a day,
is used for transport of cargo and petroleum products and provides port access
for thousands of employees is threatened with closure. A closure of as long
as two weeks could rapidly push gasoline prices higher.
At a time when oil prices are in the mid-60-dollar range and starting to hurt,
the hurricane has an obvious effect. However, it must be borne in mind that
the Mississippi remains a key American shipping route, particularly for the
export and import of a variety of primary commodities from grain to oil, as
well as steel and rubber. Andrew Jackson fought hard to keep the British from
taking New Orleans because he knew it was the main artery for U.S. trade with
the world. He was right and its role has not changed since then.
This is not
a prediction. We do not know the path of the storm and we cannot predict its
effects. It is a warning that if a Category 5 hurricane hits the Port of Southern
Louisiana and causes the damage that is merely at the outer reach of the probable,
the effect on the global system will be substantial.
Check. Check. It's my motto. I had signs printed and hung all over
the office -- CHECK. CHECK. CHECK.
1. Check that your bank is paying interest on your checking account. It said
it was, but wasn't.
2. Check that your broker doesn't hit you with dubious "interest"
charges and then takes forever to remove them.
3. Check your favorite rent-a-car company is not charging you $50 a year to
belong to their gold card program.
4. Check your credit cards are not charging an annual fee. Get another one that
5. Check your escrow money is earning real savings -- say 2.75% a year -- not
the 0.40% mine is.
to avoid fees on overseas purchases: From reader, Steve Ellis:
Saver: I had a hearing test. I've lost some hearing, not enough to
justify an aid. Meantime, to catch exactly what's happening on TV, a wireless
headset is best. Both of these are from Amazon. Both work fine. There's no sense
in buying a new one, when remanufactured (also called refurbished) work just fine.
Sorry about pushing HBO's Rome. Despite $100 million, it was boring.
Since my son was going to be studying at Oxford for a couple of years, I checked
into credit card currency fees and choose a CapitalOne MasterCard, which did
not charge such a fee. As far as I can tell, they still don't. Moreover, their
exchange rates for the GBP and the Euro are extremely fair, their interest rates
are low now that the zero-interest promotion is over, and customer service is
excellent. Unfortunately, I expect this will all change when they get bought
up by Chase or Citicorp some day. Sigh.
Sony MDR-IF240RK for $39.99 refurbished from Amazon. Charges in cradle.
Sennheiser RS-100 remanufactured for $44.98 from Amazon. Uses two AA batteries.
gold out of drek. Martha Stewart
told The New York Times her five months in prison had been an undisguised
blessing. "I felt that I could go and have a 'vacation,' "
she said, making quote marks with her fingers in the air. "This was
a time to think about the future. I pretty much thought about a lot of serious
good things." Got to hand it to this gutsy lady. Years ago, a friend
went on a date with Martha. He said she was "an awful date." She spent
the evening at the restaurant checking all the guests and paying my friend zero
Street Atlas 2006 USA: I have to recommend the new version. They
adopted some of my ideas -- like making airports easier to find. I would never
leave home without my Delorme Street Atlas and its small GPS finder. The thing
will always get you there faster than a paper map.
a good idea: I pay CallWave $3.95 a month to
receive my faxes, convert them a PDF and email me them as attachments. This
means I get my faxes on my laptop -- no matter were I travel. Now CallWave has
a neat new service, called CallWave
Mobile. It's a prepaid phone with no annual contracts or termination fees.
You pay only for the minutes you use! Plus, the phone is FREE, and comes preloaded
with 60 minutes talk time. Better, you can turn off your cell phone and calls
to your cell phone ring on your home phone. Uses Verizon or Cingular. Only $3.95
a month. Click
Two brooms were hanging in the closet and after a while they got to know each
other so well, they decided to get married. One broom was, of course, the bride
broom, the other the groom broom.
The bride broom
looked very beautiful in her white dress. The groom broom was handsome and suave
in his tuxedo. The wedding was lovely.
the wedding dinner, the bride-broom leaned over and said to the groom-broom,
"I think I am going to have a little whisk broom!!!"
!!" said the groom broom.
Are you ready
EVEN SWEPT TOGETHER!"
(Sounds to me
like she's been "sweeping" around!)
+ US Tennis Open TV Schedule. Click
+ 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.