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Harry Newton's In Search of The Perfect Investment Newton's In Search Of The Perfect Investment. Technology Investor.

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8:30 AM Thursday, July 21, 2005: It has not
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.

Good news:
+ 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 the following day. Click here.

Some 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 here.

Why 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!

LONDON (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.

Strong technology and Impeccable logic:
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 ground.

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.

Recent column highlights:
+ 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 your 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. That money will help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
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