Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Tuesday, August 9, 2005: August
is traditionally a dreary month in the stockmarket. That's bad. What is good
is that a number of my syndicators are finding new properties. The bad news
is that most are in second and third tier markets -- away from the east and
west coasts. The real estate boom continues to be bi-coastal.
space in the Midwest.Two years ago my friend bought
an empty office building near Dayton. A Fortune 500 company built it for $60
million. My friend bought it for $5 million, a "bargain" at $25 a
square foot. Two years later, the building is still empty, awaiting its first
tenant. My friend told me last night: "Real estate can be a very hard
business. Many of the Mid-Western states remain in serious recession."
cards and ATM machines are tacking on heavy surcharges if you use them overseas.
Visa, MasterCard, American Express and others
are tacking an extra 2% to 5% fee on international transactions.
This is not a currency-exchange commission, because the Visa/MasterCard
clearinghouse has already taken its commission (currently 1%) when converting
your transaction from foreign currency into U.S. dollars. My wife learned about
this trick when she checked her MasterCard bill after a three-day quick trip
Montreal. There was an extra $43 on it.
There's a worse
wrinkle. Let's say you've bought an item in Paris and charged it to your Visa
or MasterCard. You take it back to the hotel, find that it doesn't fit or doesn't
work, and return it to the store. The shopkeeper now issues a credit in euros.
Visa or MasterCard converts the credit into dollars (taking their commission)
and passes the dollar amount on to your credit-card company. Your credit-card
company may then impose a surcharge on the credit. In other words, you're gouged
twice: first with the 2% to 5% surcharge on the original purchase, and again
with a 2% to 5% surcharge on the store's refund.
is the "cross-border transaction fee," which applies to foreign transactions
in your own currency. For example, if you're an American and you charge $1,000
in onboard charges aboard a cruise ship, the credit-card company may pad the
bill by another $20-30 just because the ship was outside of U.S. waters.
How to avoid surcharges:
+ Take cash.
+ Check with your credit card issuer just before you leave. Policies change
quickly. Maybe you'll find a lucky one.
+ Don't buy anything in Paris. In fact, don't go there.
+ Stay home.
of hidden ATM fees: Some banks are now charging hidden fees of several
percentage points on foreign-currency ATM transactions.
ripoff: Merchant fees: The Wall Street Journal reports that
some merchants are now charging foreign customers in their home currencies.
For example, a hotel in Rome might bill an American customer in U.S. dollars
instead of euros and earn a 2% to 5% commission for this unrequested "convenience."
To avoid such fees, insist on being billed in local currency. The Journal reports
that Visa requires merchants to let customers opt out of conversion, and American
Express waives its 2% conversion fee if the merchant has converted the charge
to a foreign currency.
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.
Now, look what happened yesterday. It spiked up and then plummeted. I repeat:
Don't go near this thing.
This bothers me. But am I surprised? The commission investigating
the UN oil-for-food program in Iraq on Monday accused the program director,
Benon Sevan, of accepting money from kickbacks in Iraqi oil sales and a second
UN official of soliciting a bribe from a program contractor. The panel, led
by Paul Volcker, the former chairman of the U.S. Federal Reserve Board, said
that Sevan had accumulated at least $150,000 in his New York accounts from exploiting
the program he headed and that Alexander Yakovlev, a procurement officer, had
sought money in exchange for confidential bidding information. While the bribe
offer was unsuccessful, the committee said it turned up "persuasive evidence"
that Yakovlev had gained as much as $1.3 million in payments from contractors
in other UN programs and deposited it in an offshore account.
REITs are tumbling because long-term interest rates
are rising and because they have have had a great run. The present
wisdom is to sell your REITs. I've sold all mine. I cannot predict interest
rates. No one can. BUT, this time higher rates do seem to be sticking:
Everyone expects another quarter point rise today from the Fed.
My second best lawyer joke:
One afternoon, a well-to-do lawyer was riding in his shiny limousine when he
saw two men along the roadside eating grass.
ordered his driver to stop and he got out to investigate the situation.
He asked one man,
"Why are you eating grass?"
have any money for food," the poor man replied. "We HAVE TO EAT GRASS!"
The lawyer then
said, "Well, then, you can come with me to my house and I'll feed you!"
I have a wife and two children with me. They are over there, under that tree."
along," the lawyer replied.
Turning to the
other poor man he said, "You come with us, too."
The second man
said, "But sir, I also have a wife and six children with me!"
all!" the lawyer answered. They all jammed into the huge limo.
one of the poor fellows turned to the lawyer and said, "Sir, you are too
kind. Thank you for taking all of us with you."
the lawyer replied, "Glad to do it. You'll really love my place; the grass
is almost a foot high!"
+ 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 .
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