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Harry Newton's In Search of The Perfect Investment Newton's In Search Of The Perfect Investment. Technology Investor. Previous Columns
8:30 AM Monday, January 31, 2005: I bought a few triple-tax-free muni bonds on Friday -- not because the yields (3.5%-4.2 %) were brilliant but because they provide a modicum more income and I have no intention of selling them. Bonds are strange animals. Many more dollars of them are bought and sold every day than dollars of company shares. Yet the industry exists largely behind a closed door. You can't find out the commission you pay your broker to buy bonds -- "it's included in the price," he says. And it's hard to find prices for bonds --to figure if you're getting a good deal or not.

Today there is a Big Bond celebration. The door has creaked open just a tinge. Writes today's New York Times, "As of Monday (i.e. today), millions of retail investors will be able to find municipal bond prices that are virtually current. Just go to, the Web site of the Bond Market Association. Click on "municipal bond trade information." On the next page, you can search for bonds by state and sort by credit rating, maturity and interest paid. You can also find a bond by using its identification number. The trade information will be 15 minutes old, not including a small distribution delay, and it will be free. That is as fast as it gets. Not even deep pockets can buy faster service.

The Municipal Securities Rulemaking Board, the self-regulatory agency for the municipal bond market, and the Bond Market Association have been working for years to make trading data easily available to individual investors — and as current as possible. Until now, the data has been a day old.

Dealers send the trade information to the rulemaking board, which then makes it available to any vendor. The Bond Market Association provides the data free on its Web site. For people who want to buy or sell their own municipal bonds, this is the place to go before calling a broker. By seeing recent trades, you will be better able to decide whether your broker is charging you too much or paying you too little.

Micah S. Green, the Bond Market Association president, said "real-time prices will let somebody compare prices and help them decide if a broker's price is reasonable."

There is no doubt that some retail investors have been cheated by their brokers. In June, eight investment firms paid $610,000 in fines and restitution after regulators determined that investors had received less than market prices for their municipal bonds, for a loss totaling just over $300,000. At the end of September, about $2 trillion in municipal bonds was in public hands, of which about $670 billion was owned directly by individual retail investors. An additional $600 billion was owned by bond funds. On Monday, February. 7, the Bond Market Association will begin providing trades for investment grade corporate bonds and most high-yield bonds with a delay of about 30 minutes. (The delay drops to about 15 minutes in July.) Corporate bond trade data is now four hours old."

The world of AT&T: Telecommunications was my first love. The entire "industry" was one dumb entity called AT&T. It was ripe for competing against. I was right. But I never would have forecast a demise this fast and this insane. In 1969, AT&T employed more than a million people. It provided local and distance to everywhere. And it made virtually all its own equipment and the equipment it leased to its customers. Now it employs 47,000 -- or 95% fewer. That's a remarkable implosion for 36 years. And if SBC succeeds in buying them, AT&T will basically cease to exist, except in name. This morning a dear friend, who sells phone systems for a living, emailed me:

"Around 1980, AT&T announced they would start selling (not just renting) phone systems. I was terrified they would put me out of business. You told me not to worry, because they were so disorganized. You told me, "it will take them ten years to find the men's room."

I guess they finally found it, and leaped head-first into the toilet.

AT&T went from being "the biggest company on earth" (the title of Sonny Kleinfield's book) to irrelevance, and then nonexistence, in 25 years. In all of those years, scores of inept managers took home huge paychecks, while stockholders and employees got royally screwed.

Unlike WorldCom or Enron, no one will be fined or go to jail for this; but I've always thought stupidity is a major crime."

I'm trying to figure the "logic" of why SBC would want to buy AT&T -- after all AT&T's long distance business is imploding -- or why SBC would possibly want to employ AT&T's arrogant, not-too-bright boss, Dave Dorman in a senior management position. I won't be around in another 36 years. But I'd be surprised if SBC were.

Now to today's lesson in economics. There are two ways to print money:
1. The government prints dollar bills.
2. Companies print share scrip and offer it as "money" in exchange for valuable assets. If you're an AT&T shareholder faced with the SBC bid, you have two choices today: Sell your shares for cash or take SBC scrip. I'm no psychic. But look at SBC's miserable stock. I'd take the cash asap. Meantime I have to do something about my AT&T shorts. Do they now become SBC shorts? I hope so. I clearly overestimated Mr. Whitacre's IQ. He's buying a major bill of goods.

Actual dumb conversation:
Feeling dumb, I emailed my friend Dan, "I hate you."
He emailed back: "What caused this sudden ire?"
Harry: "I hate people who are more intelligent than me."
Dan: "What have I done?"
Harry: "Not you. Me. Dumb things I’ve done that you would not have done."
Dan: "I’ll trade you my dumb things for your dumb things."

What does Love mean?
Researchers posed this question to a group of 4 to 8 year-olds. Answers included:

"When my grandmother got arthritis, she couldn't bend over and paint her toenails anymore. So my grandfather does it for her all the time, even when his hands got arthritis too. That's love." -- Rebecca- age 8

"When someone loves you, the way they say your name is different. You just know that your name is safe in their mouth."
Billy - age 4

"Love is when a girl puts on perfume and a boy puts on shaving cologne and they go out and smell each other."
Karl - age 5

"Love is when you kiss all the time. Then when you get tired of kissing, you still want to be together and you talk more. My Mommy and Daddy are like that. They look gross when they kiss" Emily - age 8

"Love is when you tell a guy you like his shirt, then he wears it every day." Noelle - age 7

"During my piano recital, I was on a stage and I was scared. I looked at all the people watching me and saw my daddy waving and smiling. He was the only one doing that. I wasn't scared anymore." Cindy - age 8

"Love is when Mommy gives Daddy the best piece of chicken." Elaine-age 5

"Love is when Mommy sees Daddy smelly and sweaty and still says he is handsomer than Robert Redford." Chris - age 7

"I know my older sister loves me because she gives me all her old clothes and has to go out and buy new ones." Lauren - age 4

"Love is when Mommy sees Daddy on the toilet and she doesn't think it's gross." Mark - age 6

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. That money will help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
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