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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 Tuesday, February 21, 2006: Forget money (for now). The more exercise you do, the healthier you are. Six hours on the tennis court playing singles over the weekend. And I feel like a hundred million dollars -- one million not being what it used to be.

How David Swensen does it: Excerpts from a Bloomberg Markets piece:

... David Swensen has performed very well: For the fiscal year ended on June 30, he generated a 22.3 percent return on Yale's $15.2 billion endowment. Over the long term, his record is equally compelling: an annualized return of 16.1 percent since 1985 and a 17.3 percent return for the past 10 years. From January 1990 to June 2005, U.S. hedge funds had an average annualized return of just 14.07 percent, according to the Hedge Fund Research of Chicago Index.

Swensen, who also teaches graduate and undergraduate classes on investing at the university, has nurtured dozens of protégés over the years, and many of them now populate top investment firms and head up endowments at other schools. “I think it would be impossible to overstate his importance,” says Andrew Golden, president of Princeton University Investment, who interned with Swensen and then worked in the Yale investment office for four years. “He has had an effect on large and even medium-size endowments.”...

Among Swensen’s most influential doctrines, Golden, 46, says, is that university investment managers shouldn’t be afraid to take positions in so-called alternative areas such as hedge funds, private equity and real estate. Most endowments don’t invest as heavily in such fields as Yale, which, Swensen says, has almost 70 percent of its assets in alternatives. Still, Golden says, most hold more now than they did before Swensen came along. “It’s because of David’s willingness to push good ideas further that I no longer know what an alternative investment is,” Golden says.

Talking about alternative investments: I'm putting more money into Strategic Commodities Fund this morning. Strategic buys a broad range of commodities -- from oil to aluminum. Last year the fund achieved 26% returns by betting that everybody wants more commodities to improve their standards of livings -- especially China and India. If you'd like to know more on this fund, email me.

Keep your eyes open , idiot: I was in Home Depot recently buying fluorescent bulbs. Their sales people were genuinely helpful. They had what I wanted. I even bought some things I didn't want. The store was impressive. And housing has been booming. So why didn't I check the company's stock out? Today Home Depot announced that its latest fourth quarter profit rose 23%. Dah! Keep your eyes open, you idiot!

The charm (or otherwise) of investing in private companies: Best conversation of the weekend. A bank president and successful investor explained in gruesome detail why he had given up investing in private companies:
1. The management usually confuses marketing with sales. "Forget the marketing," says my friend, "bring me some cash sales."
2. Few of the other board members read the board materials, leaving my friend to ask the hard questions.
3. Few of the other board members take the management to task for dumb decisions.
4. Since most management are in love with their own ideas and products, the odds of long-term success are very low.

5. Managed money, of late, has returned more consistent and higher returns.

Verizon Broadband Access sings again:
My son stuffed our our Verizon PC card into his laptop and carried it this past long weekend to remote places. It worked beautiful. He couldn't sing its praises enough.

This morning I emailed Ivan Seidenberg, Verizon's CEO:

I've been in telecom for 35 years. The most exciting product I've seen in all those years is Verizon's Broadband Access product.
Pop a card into your laptop and, bingo, you have high-speed Internet and email access virtually everywhere. I've used it on buses, planes, cars and trains and in remote towns. You ought to be hyping the heck out of this product. It is genuinely thrilling.

Intel's Dual Core machines: Intel is upgrading PC chips to dual core. This makes them much faster -- especially if you're running several programs simultaneously -- like doing a spreadsheet and playing Internet music. The speed hike gives you a persuasive reason to upgrade your PC -- desktop or laptop. But don't buy the first dual core machine you see. There are six dual core processors. You want the fastest -- the one with the 2.16 GHz clock speed. Some PC makers (such as Toshiba) have not yet announced machines with the fastest processor. It's worth waiting. Even better news is that these new, faster top-of-the-line laptops are much cheaper than the previous top-of-the line models. I suspect that's because competition has forced Intel to reduce its high prices. God bless competition.

Which airline to fly during a snow storm? When storms disrupt travel, some airlines are more aggressive than others. American and United, according to the Wall Street Journal, are quick to cancel flights, while Continental and JetBlue stay aloft longer.

Dry hands again. Six hours of tennis on the weekend and my right hand is cracked, dry and bleeding. There are two solutions -- New Skin to seal the tears and No-Crack to soften my skin and deflect my wife's comments about my ugly hands.

19 people have died over the Danish Mohammed cartoons: If you want to see what all the fuss is about, Click here.

Meanwhile, the worst Danish joke ever
Ole Vas working at the fish plant up nort in Duluth vhen he accidently cut off all ten of his finkers. He vent to da emergency room in the Clinik and vhen he got dar da Norsky doctor looked at Ole and said, "Let's have da finkers and I'll see vhat I can do."

Ole said, "I haven't got da finkers."

"vhat do you mean, you hafen't got da fingers?" he said. "Lord-it's 2006! ve's got microsurgery and all kinds of incredible techniques. I could hafe put dem back on and made you like new! vhy didn't you brink da finkers?" To vhich Ole answers........

"How da fock vas I suppose to pick dem up?

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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