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8:30 AM Wednesday, January 18, 2006: The FBI visited me last night. One of my investments had gone south. They were checking for crookery. Lessons:

1. Hand your money over to an "entrepreneur" and you're now 100% in their hands.
2. If the entrepreneur is a crook or an incompetent, you won't get a nickel back.
3. There is a fine line between being a crook and an incompetent. Here's a chart I drew up last night.
4. Losing 100% of your money is a possibility with every investment you make.
5. Your own due diligence will never fully cover you.
6. Capital preserevation is the key. You can never recover from a 100% loss.
7. Your mantra has to be "When in doubt, stay out."
8. Never rely on anyone else's due diligence. I did in this case. (It happened a long time ago.) I was wrong. When I questioned my advisor (who also lost money on this), he said blandly, "I made a mistake." I'm still waiting for an apology.

How goes big commercial real estate? Yesterday was spectacular. Two of my commercial office building syndications got sold -- one for an IRR or 35% and one for an IRR of 40%. The real estate industry uses IRR (internal rate of return) to measure the entire return on a project -- from purchase to dividend payments to eventual sale.

Real estate, despite the boom, is not a trivial business. My syndicator reports that in 2005, he reviewed 512 potential acquisitions, bid on 120 and acquired only seven. That's a lot of analysis and a lot of work for little action. That's the nature of that business.

Nickel and diming us all to death: UBS took $125 out of my account for a "resource management account fee." I called.
"Why?" I asked.
"You don't use checks?"
"No."
"Oops, sorry. I'll get removed."

Check. Check. Check. Check every bill. Every financial institution has become super-creative with new charges. They all think they're telephone or car rental companies.

Google downgraded to a sell: Scott Devitt, analyst with Steifel, Nicolaus downgraded Google to a Sell. His reasons were unclear -- except that Google was expensive. Yesterday Henry Blodget wrote this on the web site, Internet Outsider (click here):

Implications of Yahoo! Underwhelm: The key question is whether the revenue deceleration (from 51% in Q2 and 46% in Q3 to 39% in Q4) is:
1) the result of a broader industry slowdown, in which case Google is screwed, too, or
2) the result of Google eating Yahoo!'s lunch, in which case Google will probably have another strong quarter or two.

In any case, the global online advertising industry no longer seems to be growing fast enough to justify the sector multiples --Google's included. One lesson from 2000 is that, when the rest of the industry is grinding to a halt, the market leader can't keep going like a bat out of hell forever, no matter how much share it steals.

The uselessness of Wall Street analysts: Intel's latest earnings were poor. Wall Street analysts (Citigroup, UBS, JMP Securities, Piper Jaffray) are falling all over themselves this morning to downgrade the stock. What am I missing? Isn't their job to downgrade the stock before it reports bad earnings? Hello!

As of yesterday, 47 analysts followed Intel. Of that, 32 had some level of a "buy" on the company. 13 were neutral and two had a "lighten." None had a sell.

The price of flat screen monitors continues to plummet: But buying one is not easy. Here are some of the monitors Costco is selling. Some caveats:
1. You must run the monitor at the pixels it specifies. That contrasts with a glass screen, where you can change pixels and it looks fine.
2. You must have a computer with a video card capable of driving whatever the screen works at. Cheap PCs often don't.
3. If you want a huge Dell 24" screen, you'll need a video card capable of putting out 1920 x 1200 pixels. My laptop won't go that high, though my VillageTronic VT Book PCMCI card will. Click here.
3. The best monitors have DVI inputs. The cheapest monitors only have VGA inputs, which is the most common connection, but also the poorest quality.
4. My laptop doesn't output DVI, but if I attach a $150 docking station, it will.
5. The biggest bargain are the 19" monitors with DVI inputs. I find multiple 19" monitors more useful than one gigantic 24" screen.

The Australian Tennis Open has started. Here's the TV schedule. Best is to ask TiVo to record tennis. Be wary. Because of the huge time difference -- 16 hours -- ESPN plays it live and repeats it, so you can get duplication.

Everything Is Big In Texas
There once was a blind man who decided to visit Texas. When he arrived on the plane, he felt the seats and said, "Wow, these seats are big!"

The person next to him answered, "Everything is big in Texas."

When he finally arrived in Texas, he decided to visit a bar. Upon arriving in the bar, he ordered a beer and got a mug placed between his hands.

He exclaimed, "Wow these mugs are big!"

The bartender replied, "Everything is big in Texas."

After a couple of beers, the blind man asked the bartender where the bathroom was located.

The bartender replied, "Second door to the right."

The blind man headed for the bathroom, but accidentally tripped over a bucket and skipped the second door. Instead, he entered the third door, which lead to the swimming pool and fell into the pool by accident.

Scared to death, the blind man started shouting... "Don't flush, don't flush!"

Recent column highlights:
+ Munich, the movie. A must-see. Click here.
+ Identity Theft precautions. Click here.
+ 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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