Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM EST Friday, August 4, 2006:
one right. Qwest.
The company reported
a profit for the second quarter. And Richard Notebaert, chairman and CEO, said
Qwest's board will consider dividends, share repurchases, further debt reduction.
The company reported a second quarter of $117 million, or 6 cents a share, compared
with a loss of $164 million, or 9 cents a share, a year ago. Revenue was flat
at $3.47 billion.
Qwest's good fortune
reinforces one rule of investing: When a great executive takes over a troubled
company whose shares in the toilet, the shares are probably a great bargain.
But you got to be patient. Are you listening, Harry?
a brilliant week for us: Instead of Word, I wrote, try Writely.com,
They stopped accepting new users just after my column appeared. I wrote about
a movie on radical Islam you should watch. It was here.
Apparently someone got to Google and they removed it. I tried to find out from
both Google and the movie's producer what happened but no one got back to me.
The whole thing smells.
But there is good news, More and more companies are putting software up on the
Internet, which you can use and share your results. Instead of running Excel
on your computer, try iRows.com,
Want to share your calendar? Try Google
neat airline site: Add www.flightstats.com
to our list. You can look up the status of every flight in real time. Oodles
of information to while away your time while you're waiting at your unfavorite
airport for your delayed flight.
Useful tax software: Brendan
Smith is my really great accountant. He writes:
For more, click
Recently I subscribed
to the CCH Tax Research Network switching over from RIA's checkpoint research
software. CCH enables me to search tax topics providing me with both Primary
(Federal and State Code's and Regulations) and Secondary (CCH and other third
party commentary) on income tax and payroll tax related issues. The package
also includes tax tools that help generate election and compliance statements.
The best feature
of CCH is the Perform Plus II ASP software. When you subscribe to the service
it gives you access to the most current Federal, State and Municipal Forms.
Unlike other tax form software (Note this is not tax preparation software)
Perform plus II updates daily and has the most complete listing of tax forms
published. High net worth individuals have complicated investment vehicles
that require additional disclosure statements not included in tax preparation
software packages. I would have to complete these forms by hand preparing
your individual return would be burdensome. In addition as part of the package
I get to prepare payroll tax returns on the computer and have minimal chance
YouTube, you own it, maybe: When you upload
your videos to YouTube they get a free license to pretty well do whatever they
want with your video for free. You should know this if you happen to
have video that might be worth something if sold to a TV station, etc.
Buenos Aires is great: My friend Ed Sonderling
just returned from a holiday there. He loved it:
1. Same time zone as Eastern US. No jet lag problems.
2. Fabulous flight. The length is perfect. You have enough time to sleep.
3. The place is dirt cheap now they've devalued the Peso. Ed says he ate the
best filet mignon for $8.
4. The architecture is super. It's fun walking the cobbled streets.
latest favorite gadget:
It's a "retro handset" for your cell phone. I love the idea of walking
along the street talking on this while my Blackberry is safely in my pocket.
Imagine pulling this thing out at meeting. $29.95. Click
Great news for the ailing telecom industry: A
study has revealed that 8 out of 10 adults are so dependent on their cell phones
that they can't bear to shut them off during sex.
Bill Payer Falls Behind, Like [its] Clients.
This article by Floyd Norris of the New York Times makes me sad that
this sort of thing still happens at public companies.
want to reach 80
In April, the
company had a problem.
In June, the
chief executive sold $16 million of stock.
In August, the
company disclosed the problem, and the stock price plunged.
That is what
happened at CheckFree, a company in the electronic bill-paying business. Its
shares fell 14 percent yesterday after it reported disappointing earnings
and advised analysts to lower their forecasts for the current quarter.
In a conference
call with investors after the market closed on Tuesday, CheckFree said that
in April a significant number of customers skipped making payments.
As a result,
the company said, it was left with revenue and profits below what it had told
Wall Street to expect.
If April had
been normal, said Peter J. Kight, the companys chairman and chief executive,
in the conference call, clearly, we wouldnt be in the situation
we are in now. Instead, he said, the company would have reported a good
On June 14 and
June 15, Mr. Kight sold 350,090 shares for $16.1 million, an average price
of $46.06, according to the reports he filed with the Securities and Exchange
Commission. Had he sold at yesterdays closing price, he would have taken
in $3.1 million less.
Wicks, a spokeswoman for CheckFree, said last night that Mr. Kight had sold
the shares to buy a winery, and said they represented only about 5 percent
of his total holdings in the company.
to say whether Mr. Kight had known of the April problem when he sold in June,
or whether he had considered disclosing the problem before he made his sales.
Mr. Kight was not available to comment.
Shares of CheckFree,
traded on the Nasdaq market, plunged $5.93, to $37.20, on volume of 17.3 million
shares, the highest daily volume in the more than 10 years that the company
has been publicly traded. The low price for the day, $34.35, was the lowest
figure in a year. The stock had been a strong performer this spring, rising
as high as $57.08 in April, just as the problems were occurring.
electronic bill-paying Web sites, in some cases as a contractor for banks
whose names are on the sites. It speculated that the problem might have been
partly caused by changes in when some banks actually transferred payments
from customer accounts, confusing consumers who perhaps delayed payments or
bounced checks as a result.
also told analysts that it might be that many skipped credit card payments
in April, perhaps to pay their taxes. It is paid a fee for each payment it
processes, and so suffers if fewer payments are made.
told analysts that the problem of below-normal payments continued, at reduced
levels, in May and June, but that payments in July seemed to be back to normal.
Still, the company cut its estimate of profits in the current quarter, the
first of the new fiscal year, although it said it expected profits for the
full year to stay on target, implying a strong recovery in later quarters.
they expected to cut research and marketing expenses. All other things being
equal, that would raise reported profits.
going to get to the bottom of it, Mr. Kight said in the conference call
about the April slowdown. Were going to figure out how to do something
about it. Im sure there are a lot of frustrated people out there on
the call. He went on to say he was still positive and excited
about the companys prospects.
this business, he said as the conference call ended.
Mr. Kight was
not asked on the call about his share sales. But he was asked about a change
the company made in the numbers it provides to analysts. It told them it expected
to post free cash flow for fiscal 2007, ending next June, of $190 million
to $195 million, an increase of as much as 15 percent from the year just ended.
Free cash flow
normally is defined as consisting of a companys operating cash flow
less its capital spending, although companies sometimes change details. CheckFree
had used a variant of that normal definition, but it said Tuesday that it
was changing the definition it uses.
It expects to
borrow about $85 million to build new data centers next year, and will count
the loan receipts as part of free cash flow, thus raising the figure by that
amount. Without the change, the company evidently would have had to forecast
a large decline in its cash flow figure.
proceeds of borrowing in free cash flow is highly unusual, and, as the company
said in a filing with the S.E.C., CheckFrees measure of free cash
flow may not be comparable to similarly titled measures reported by other
picked a new primary care physician. After two visits and exhaustive lab tests,
he said I was doing "fairly well" for my age.
A little concerned
about that comment, I couldn't resist asking him, "Do you think I'll live
to be 80?"
He asked, "Do
you smoke tobacco or drink alcoholic beverages?"
"Oh no," I replied. "I'm not doing drugs, either."
Then he asked,
"Do you eat rib-eye steaks and barbecued ribs?"
I said, "No,
my other doctor said that all red meat is very unhealthy!"
"Do you spend
a lot of time in the sun, like playing golf, sailing, hiking, or bicycling?"
"No, I don't," I said.
He asked, "Do
you gamble, drive fast cars, or have a lot of sex?"
"No," I said. "I don't do any of those things."
He looked at me
carefully and asked, "Then why do you care about reaching 80?"
Church Restoration Project
There was a tradesman, a painter named Jack, who was very interested
in making a dollar where he could. So he often would thin down his paint to
make it go a wee bit further. As it happened, he got away with this for some
time. Eventually the local church decided to do a big restoration project. Jack
put in a painting bid and, because his price was so competitive, he got the
job. And so he started, erecting the trestles and putting up the planks, and
buying the paint and thinning it down with turpentine.
Jack was up on
the scaffolding, painting away, the job nearly done, when suddenly there was
a horrendous clap of thunder. The sky opened and the rain poured down, washing
the thin paint from all over the church and knocking Jack off the scaffold to
land on the lawn.
Jack was no fool.
He knew this was a judgment from the Almighty, so he fell on his knees and cried,
"Oh, God! Forgive me! What should I do?"
And from the thunder,
a mighty Voice spoke, "Repaint! Repaint! And thin no more!"
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 .
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