Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Thursday, July 21, 2005: It
been crazy or frenetic. The long haul back has not been based on eyeballs, pageviews,
pinpricks or other nonsenses. It's been based on solid, continuing earnings
gains -- a combination of rising demand, new product introductions and better
management. In short, solid economic progress, which rewards intelligence stockpicking.
These monthly charts show the comeback to new four-year highs.
There is celebration on Wall Street. But yours should be tempered. The VIX is
very low. This means low volatility, high complacency -- no one is concerned.
This often means the market could drop -- though it hasn't for several years.
How much attention to pay to the VIX is unclear, today. It's interesting to
see how its movement has sharply narrowed in the past few years.
+ President Bush's commission will recommend
abolishing the alternative minimum tax, which was established to prevent wealthy
people from taking advantage of tax breaks but has hurt ordinary people -- like
you and me.
+ China said it will no longer peg its currency to the U.S. dollar but instead
let it float in a tight band against a basket of foreign currencies. This means
it has been upvalued by 2% -- a first step. Hence, Chinese goods will get a
tad more pricey and the U.S. trading deficit should narrow slightly. This is
clearly a first baby step for the Chinese. It shows they listened to Washington.
Religion can be very profitable: When
we were on the speaking circuit, my partner and I used to joke about "religion
being the most profitable business in the world." Get the people pumped
up with visions of "success and wealth beyond your wildest imaginations"
and sell them admission and a few overpriced trinkets. Think religion. Now think
Cramer. Last night was his first live show. It smacked of religion. The guru
and his disciples. Cramer is clearly on a roll. Many of his picks -- e.g. Google
-- have made his fans a great deal of money. And it showed.
To Cramer's credit, last night, while grateful for the new stockmarket highs,
he pushed his followers into "taking some profits off the table."
Excellent advice. And I repeat it. Take some of your profits off table -- particular
in stocks that have skyrocketed in recent months, e.g. Urban Outfitters, Legg
Mason and even my beloved Whole Foods, which is already pulling back.
Cramer was right about Caterpillar (CAT). It
did report "monster" second-quarter earnings on this morning.
But it's risen over 5% since he recommended it. And this may be a case of "Buy
on rumor (i.e. anticipation of better earnings). Sell on news."
FYI: Sales and revenues were up 23 percent. Profit was up 34
percent. You can get a recap of Cramer's 'Mad Money' show on TheStreet.com
the following day. Click
Wi-Fi Hotspots work. Some don't.
Rule: Don't ask the Starbucks employees. They're usually clueless about WiFi.
Test the service yourself with your own laptop. Those are the conclusions of
a Wall Street Journal survey. For more, Click
I like biotechs: This is indicative of what happens to biotech stocks
as they move up the FDA approval chain. And this is why I've been writing about
"cheap" biotechs, like Hana Biosciences, Manhattan Pharma, NovaDel
Pharma and Point Therapeutics.
It's time to book passage to Mars!
technology and Impeccable logic:
(Reuters) - The word "fail" should be banned from use in British
classrooms and replaced with the phrase "deferred success" to avoid
demoralizing pupils, a group of teachers has proposed. Members of the Professional
Association of Teachers (PAT) argue that telling pupils they have failed can
put them off learning for life.
An Indiana farm wife called the local phone company
to report her telephone failed to ring when her friends called - and that on the
few occasions when it did ring, her pet dog always moaned right before the phone
rang. The telephone repairman proceeded to the scene, curious to see this psychic
dog or senile elderly lady.
He climbed a nearby
telephone pole, hooked in his test set, and dialed the subscriber's house. The
phone didn't ring right away, but then the dog moaned loudly and the telephone
began to ring. Climbing down from the pole, the telephone repairman found:
1. The dog was
tied to the telephone system's ground wire via a steel chain and collar.
2. The wire connection
to the ground rod was loose.
3. The dog was
receiving 90 volts of signaling current when the phone number was called.
4. After a couple
of such jolts, the dog would start moaning and then urinate on himself and the
5. The wet ground
would complete the circuit, thus causing the phone to ring
The moral of this
story is that (some) problems CAN be fixed by pissing and moaning.
+ NovaDel Biosciences appeals. Click
+ Hana Biosciences appeals. Click
+ All turned on by biotech. Click
+ Steve Jobs Commencement Address. The text is available:
Click here. The full audio is available. Click
+ The March of the Penguins, an exquisite movie. Click
+ When to sell your stocks. Click
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,
here and here.