Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Monday, February 27, 2006: Relapse.
Temperature 5 degrees. Blinding winds. Came down with the old cold or flu or
whatever it is. Every muscle aches. This morning I visit the doctor. It's time
to find some warm weather. I'm in New York. Weather.com says its 18 outside,
but feels like 4. What about global warming?
Twenty years ago
a friend bought 200 acres of Hudson Valley land for $300,000. Last week he sold
two acres for $300,000. Over the years he's sold other bits and piece. He still
holds over 100 acres free and clear. The remaining land he holds is a major
asset. Worth at least $2 million.
I went looking
for raw land on the weekend. The land that used to cost $1,500 an acre in Columbia
County, midstate New York, now costs $13,000 an acre. There are 196 acres available
for $2.5 million. So what's my investment thinking? I can't afford to sit on
$2,5 million of raw land for 20-years. I have to figure a "strategy"
for adding value. Join this land to an adjoining parcel of land, split it up,
sell the bits for more, fix up the house.
There are problems:
1. There is talk of a moratorium on real estate subdividing in the local town.
I read the proposed proposed regulations. They won't get any prizes for clean
writing. Pages and papers of stuff you don't want to understand.
2. There's an
adjoining piece of 54 acres and a house and that needs serious work -- perhaps
$300,000. They want around $1 million for the land and the house.
3. By the time
I add the 196 acres to the 54 acres for $1.0 million ($18,500 an acre) + $300,000
(to fix up) + $100,000 (legal fees) + $100,000 (to remove the barns from farm)
plus real estate taxes of $100,000 over the years), I'm looking at $4,000,000.
I now now have 192+54=246 acres, for $16,260 an acre. Which is very high and
leaves little room for immediate sales to pull some money out.
My friend says
real estate is great. You can never lose it all -- if you pay cash. If things
go bad, you can probably sell it for what you paid for it. If things go well.
You can do well in coming years. This is naive. There have been years when raw
land has not risen in price.
The big key is
to bid low. If they're asking $2.5 million, bid
$2 million. If you get it you have a "bargain." If you don't,
you don't care. Never get fall in love with property. My friend tells me he
bids low and often. When the higher sale falls through, he comes to the seller's
rescue and moves in quickly. Do I want a full-time career in real estate. No
the way I feel this morning.
on computer stuff are BS: Many computer products
offer "rebates" -- if you fill in all the paperwork and wait an eternity.
Best to assume you'll never get the promised rebates. I got on this bandwagon
when I went shopping for LCD monitors on the weekend. Many offer "instant
rebates." Many web sites (like newegg.com)
have "reviews" from customers. The reviews scream about rebates that
never came and endless phone calls to earn get their money. D-Link owes me a
miserable $15. Here's a totally stupid email they sent me over the weekend.
Dear Harry Newton,
The D-Link Systems Rebate Center recently received your submission for the
Department: 070118 - D-Link Up To $40 Rebate
Submission ID: 68011238
To access the status of your submission during processing, you may contact
Customer Service: 866-205-0209
We appreciate your business. Thank you.
Please do not reply to this message. Because this message has been automatically
generated, your reply will not receive attention.
of Cramer wisdom
Don't lie to
yourself when you're wrong, Cramer said on his "Mad Money"
TV show. That only compounds the problem. If you're wrong, sell the stock
and find something new, instead of letting hope creep in. "Hope has no
place," said Cramer. "If you can't be honest with yourself, you
can't make a dime."
to strengthen the muscles in your arms and shoulders.
Begin by standing on a comfortable surface, where you have plenty
of room at each side.
With a 5-LB.
potato sack in each hand, extend your arms straight out from your sides, and
hold them there as long as you can. Try to reach a full minute, then relax.
you'll find that you can hold this position for just a bit longer.
couple of weeks, move up to 10-LB. potato sacks.
sacks, and eventually try to get to where you can lift a 100-LB. potato sack
in each hand and hold your arms straight for more than a full minute.
feel confident at that level, put a potato in each of the sacks.
Overwhelmed and sick: You will hear from
me today on the Strategic Commodities fund. Hopefully, the doctor will cure
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
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