Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM EST Wednesday, January 9, 2008: Ouch!
It broke through. (See yesterday's
column for more on reading this chart.)
of the market are financials and technology. I'm guessing you can still coin
shekels by shorting the usual suspects -- from Citibank to Bank of America,
from Google to Research in Motion, and Garmin, which Deutsche Bank this morning
downgraded. The economy is slowing, you could get creative and check out companies
which sell capital goods whose purchases are likely to be delayed or canceled.
Wall Street analysts will shortly bombard us with downgrades in these areas.
Deutsche Bank this morning downgraded U.K. banks with these words, "We
expect significant pressure on retail and corporate banking profits driven by
margins (narrower liability spreads offsetting better credit spreads), slower
volumes, wage inflation and higher impairments." (I love the word "impairments."
In real English, the word is screwup.)
Be wary. The market
is "oversold," which means it could whip around and crush your shorts,
short-term. In short, keep your shorts short and small. Once you have made some
shekels, cover most of your position.
By now most of
us should be stopped out of most of our holdings -- stopped out by our inviolate
15% rule. The big "safe haven" is gold which yesterday rose $17.90
to $879.90 an ounce. Platinum is also up at a new record. Copper, nickel and
corn are also up. My commodities fund is up 2% in the first week of 2008.
On that note,
reader Jase Auby, who thought the bond insurers were more intelligent than they
turned out to be, emailed me yesterday:
Well, I was
stopped out of my MBIA and my ABK positions today. Clearly, this was one of
the worst ideas I've had. Clearly I was blinded by my "expertise".
I apologize to you and your readers.
Perhaps my throwing
in the towel is a buy signal? :)
to do with your cash. Rules:
Don't leave it in your broker's money market fund. His rates suck. (That's a
2. Don't give
it to your bank on a short-term CD -- their rates are low; the CD is not insured
(except to $200,000 if the spouse tags along) and the interest they pay is taxable
as ordinary income.
3. Get a broker
to find you short-term, triple tax-free muni bond floaters. They come in two
variations -- variable rate and auction rate. If you broker doesn't know what
I'm talking about, send me an email and I'll get you someone who does. The key
is to buy floaters covered by a pool of bonds -- not one floater backed by one
muni agency. I don't believe that the world is coming to an end. I don't believe
we are likely to see municipal agencies defaulting. But it has happened. Think
happy story: Once
upon a time, New York City insisted on big klunky "comfortable" cabs,
like this Ford Crown Victoria, which is among the most common taxi in our city.
Then one day New
York woke up and went "green." Now the fastest-growing cab is the
Ford hybrid Escape. No one wants to drive the Crown Victoria.
have confirmed these stats: On a standard 12-hour shift tootling around New
York City, the Crown Victoria will eat $46 to $48 in gas. The
Ford hybrid Escape will eat only $24 to $25 in gas. Passengers
tell the drivers they prefer the Escape for two reasons: First, when
it's stopped it's quiet, in fact noiseless. Second, it emits far less pollution.
Passengers like breathing cleaner air. One driver told me he puts the $20 a
day saving into a special bank account. "That's $120 a week,"
he told me happily, "I'm putting it away for my children's college."
joys of retirement.
Rhoda and Irwin, a retired couple living in Boca Raton, are getting
ready to go out to dinner. Rhoda says, "Irwin, darling, do you want me
to wear this Chanel suit or the Gucci?"
Irwin says, 'Do
A few minutes
later Rhoda says, "Irwin, should I wear my Cartier watch or my Rolex?"
Irwin says, "Who
A few more minutes
pass and Rhoda says, "Irwin, love, shall I wear my five-carat pear diamond
ring or my six-carat round diamond ring with the baguettes?"
Irwin says, "Rhoda,
I really don't care what you wear, but if you don't move your ass, we're going
to miss the 4:30 PM Early Bird Dinner Special."
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
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