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Harry Newton's In Search of The Perfect Investment Newton's In Search Of The Perfect Investment. Technology Investor.

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8:30 AM Thursday, December 22, 2005: GM short doing well. Down 4.2% yesterday. More to come -- unless Toyota buys GM. And pigs will truly fly. Michael and I are off on a one-week bonding trip to Copper Mountain. He'll ski. I'll watch. I'm writing this column on a bus from Newark's long-term (aka economy parking lot) and uploading it via Verizon's Broadband Access service -- while I'm on the moving bus. Ain't technology great!

I've started my list of "Investment Things I learned in 2005." I hope some of you will email me your list. Here's my preliminary list:

1. Family is number one. They provide far more joy than any humble GM short will ever.
2. My own health is number two. I hate exercise. But I love tennis and bicycling, which I don't consider "exercise." Everyone has to find their own physical pleasure.
3. Capital preservation is the most important investment goal. It takes many 10% a year gains to get back the money you completely lost. My mantra now is "When in doubt, stay out." Sadly, you'll also forgo great gains. Don't flagellate yourself with "Coulda, Shoulda, Woulda." I'm the master of brilliant investment decisions I almost made. I'm learning to stop rebuking myself for my dumbness. It's hard. The evidence is so strong.
4. Control is key. I've made a thousand times more money with investments I've had some control over than deals I hand them my money and pray. Sadly, when you've made your money with the business you just sold, you have to find something to do with your gains. Start with sticking all the money in muni bonds and treasuries. Avoid the temptation to play angel. Absent the temptation, you wouldn't be reading this column. I'd be on the beach. Not me. Dumb.
5. Constant learning is next. My first love was technology. My new love is investing. I thought I could learn this stuff quickly. Wrong. I'm seven years into it full-time. I figure I have another 30 to go. By then, I'll be truly dangerous.
6. Nothing is predictable. Well, not true. You can see that Whole Foods is making it and GM isn't. But gold at $800 or $400? When in doubt, stay out. Be diversified. That way you bet on everything. Well, not everything. But things that make sense to you.
7. Some investments take a long time. At one point my private equity/leveraged buyout fund was down 50%. Now it's up 22%. But that took four years. In those years, I rode a rough emotional rollercoaster.
8. Due diligence is necessary, but not foolproof. The best researcher is you. Don't rely on anyone else. Check out whatever anyone tells you before you commit your money. Their ten years of happy experience is no guarantee that your ten years will be happy.
9. Nobody listens. Nobody. I've tried with the New York Times, TiVo. Toshiba, etc. But, once every blue moon I find somebody.... Remember they have your money. They can and do with it what they will. And it most likely won't agree with what you believe.

10. Rebooting works for everything. Turn it off. Wait for 30 seconds. Then turn it on again. Bingo, it will work.

Top Google searches in 2005: I don't make this stuff up.

Google --Top Gainers of 2005
Google -- Top Searches in 2005
Froogle - Top Searches in 2005
 1 Myspace
 2. Ares
 3. Baidu
 4. wikipedia
 5. orkut
 6. iTunes
 7. Sky News
 8. World of Warcraft
 9. Green Day
10. Leonardo da Vinci
 1. Janet Jackson
 2. Hurricane Katrina
 3. tsunami
 4. xbox 360
 5. Brad Pitt
 6. Michael Jackson
 7. American Idol
 8. Britney Spears
 9. Angelina Jolie
10. Harry Potter
 1. iPod
 2. digital camera
 3. mp3 player
 4. iPod mini
 5. psp
 6. laptop
 7. xbox
 8. iPod shuffle
 9. computer desk
10. iPod nano

Leaving town: Unplug anything and everything that responds to a remote. That includes all all your TVs and cable boxes. Those things use huge amounts of electricity even when they're "off."

The Road to Self-Renewal: John Gardner had a very productive public and private life. He gave this speech in April 1993. It's right up there with Steve Jobs' Commencement Address. Click here.

It is a puzzle why some men and woman go to seed, while others remain vital to the very end of their days. And why some people stop learning and growing. ...

If we are conscious of the danger of going to seed, we can resort to countervailing measures. You don't need to run down like an unwound clock. And if your clock is unwound, you can wind it up again. You can stay alive in every sense of the word until you fail physically. ...

We build our own prisons and serve as our own jail keepers... Sometimes people cling to the ghosts with something almost approaching pleasure, but the hampering effect on growth is inescapable. As Jim Whitaker, who climbed Mount Everest, said, "You never conquer the mountain. You only conquer yourself."

The more I see of human lives, the more I believe the business of growing up is much longer drawn out than we pretend. If we achieve it in our 30s, even our 40s, we're doing well.

There's a myth that learning is for young people. But as the proverb says, "It's what you learn after you know it all that counts." The middle years are great, great learning years. Even the years past the middle years. I took on a new job after my 76th birthday and I'm still learning.

Learn all your life. Learn from your failures. Learn from your successes. When you hit a spell of trouble ask, "What is it trying to teach me?" The lessons aren't always happy ones, but they keep coming.

We learn from our jobs, from our friends and families. We learn by accepting the commitments of life, by playing the roles that life hands us (not necessarily the roles we would have chosen). We learn by growing older, by suffering, by loving, by taking risks, by bearing with the things we can't change.

The things you learn in maturity aren't simple things such as acquiring information and skills. You learn not to engage in self-destructive behavior. You learn not to burn up energy in anxiety. You discover how to manage your tensions. You learn that self-pity and resentment are among the most toxic of drugs. You find that the world loves talent but pays off on character.

You come to understand that most people are neither for you nor against you; they are thinking about themselves. You learn that no matter how hard you try to please, some people in this world are not going to love you, a lesson that is at first troubling and then really quite relaxing. ..

You learn the arts of mutual dependence, meeting the needs of loved ones and letting yourself need them. You can even be unaffected - a quality that often takes years to acquire. You can achieve the simplicity that lies beyond sophistication.

Of course failures are a part of the story, too. Everyone fails. When Joe Louis was world heavyweight boxing champion, he said, "Everyone has to figure to get beat some time." The question isn't did you fail, but did you pick yourself up and move ahead. And there is one other little question: "Did you collaborate in your own defeat?" A lot of people do. Learn not to.

One of the enemies of sound, lifelong motivation is a rather childish conception we have of the kind of concrete, describable goal toward which all of our efforts drive us. We want to believe that there is a point at which we can feel we have arrived. We want a scoring system that tells us when we've piled up enough points to count ourselves successful.

So you scramble and sweat and climb to reach what you thought was the goal. When you get to the top you stand up and look around, and chances are you feel a little empty. Maybe more than a little empty. You may wonder whether you climbed the wrong mountain.

But the metaphor is all wrong. Life isn't a mountain that has a summit. Nor is it, as some suppose, a riddle that has an answer. Nor a game that has a final score.

Life is an endless unfolding and, if we wish it to be, an endless process of self-discovery, an endless and unpredictable dialogue between our own potentialities and the life situations in which we find ourselves. ...

There's something I know about you that you may or may not know about yourself. You have within you more resources of energy than have ever been tapped, more talent than has ever been exploited, more strength than has ever been tested, more to give than you have ever given. ..

It isn't possible to talk about renewal without touching on the subject of motivation. Someone defined horse sense as the good judgment horses have that prevents them from betting on people. But we have to bet on people, and I place my bets more often on high motivation than on any other quality except judgment. There is not perfection of techniques that will substitute for the lift of spirit and heightened performance that comes from strong motivation. The world is moved by highly motivated people, by enthusiasts, by men and women who want something very much or believe very much. ...

For many, this life is a vale of tears; for no one is it free of pain. But we are so designed that we can cope with it if we can live in some context of a coherent community and traditionally prescribed patterns of culture. Today you can't count on any such heritage. You have to build meaning into your life, and you build it through your commitments, whether to your religion, to an ethical order as you conceive it, to your life's work, to loved ones, to your fellow humans. Young people run around searching for identity, but it isn't handed out free anymore - not in this transient, rootless, pluralistic society. Your identity is what you've committed yourself to.

It may just mean doing a better job at whatever you're doing. There are men and woman who make the world better just by being the kind of people they are. It matters very little whether they're behind the wheel of a truck or running a country store or bringing up a family. ...

We cannot dream of a Utopia in which all arrangements are ideal and everyone is flawless. Life is tumultuous - an endless losing and regaining of balance, a continuous struggle, never an assured victory. Nothing is ever finally safe. Every important battle is fought and refought. You may wonder if such a struggle, endless and of uncertain outcome, isn't more than humans can bear. But all of history suggests that the human spirit is well fitted to cope with just that kind of world. ...

Meaning is not something you stumble across, like the answer to a riddle or the prize in a treasure hunt. Meaning is something you build into your life. You build it out of your own past, out of your affections and loyalties, out of the experience of humankind as it is passed on to you, out of your own talent and understanding, out of the things you believe in, out of the things and people you love, out of the values for which you are willing to sacrifice something. The ingredients are there. You are the only one who can put them together into that unique pattern that will be your life. Let it be a life that has dignity and meaning for you. If it does, then the particular balance of success or failure is of less account.

No more racist jokes.
A little old lady is walking down the street, dragging two plastic garbage bags with her, one in each hand. There's a hole in one of the bags, and every once in a while a $20 bill is flying out of it onto the pavement.

Noticing this, a policeman stops her...."Ma'am, there are $20 bills falling out of that bag..." "Oh!, No! " says the little old lady....."I'd better go back and see if I can still find some. Thanks for the warning!"

"Well, now, not so fast," says the cop. "How did you get all that money? Did you steal it?"

"Oh, no", says the little old lady. "You see, my back yard backs up to the parking lot of the football stadium. Each time there's a game, a lot of fans come and pee in the bushes, right into my flower beds!"

"So, I go and stand behind the bushes with a big hedge clipper, and each time someone sticks his little thingie through the bushes, I say: $20 or off it comes!"

"Hey, not a bad idea!" laughs the cop. "OK, good luck! By the way, what's in the other bag?"

"Well", says the little old lady, "not all of them pay up"....

Recent column highlights:
+ Dumb reasons we hold losing stocks. Click here.
+ How my private equity fund is doing. Click here.
+ Blackstone private equity funds. Click here.
+ Manhattan Pharmaceuticals: Click here.
+ NovaDel Biosciences appeals. Click here.
+ Hana Biosciences appeals. Click here.
+ All turned on by biotech. Click here.
+ Steve Jobs Commencement Address. The text is available: Click here. The full audio is available. Click here.
+ The March of the Penguins, an exquisite movie. Click here.
+ When to sell stocks. Click here.

Harry Newton

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. Please note I'm not suggesting you do. That money, if there is any, may help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
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