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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 Monday, July 25, 2005: Hot weather. Wall Street is at the Hamptons, enjoying the water. More good earnings coming this week. Nice feeling.

Buffet, the Making of an American capitalist. Michael, my son, gave me this book and said, "Read it. It's good." He's right. I'm engrossed. Several points:
+ Buffett is a man of my heart. Said his wife Susie, "All Warren needs to be happy is a book and a sixty-watt bulb." Actually she meant a book or an annual report. Each year he reads thousands of them. Or used to.
+ He believes in the Ben Graham's value investing ideas, but not exclusively. He believes companies also have "intrinsic value." Like being the only company in a submarket. Or having a great brand.
+ Early on, he obviously learned that buying stocks blind was a gamble. But buying stocks whose management you had some control over maximized your chances dramatically.
+ Taking large positions makes sense if you've done your homework.
+ Buffett's philosophy: He looked for companies he understood, run by honest and competent managers, with favorable long-term prospects and available at a decent price. He made no attempt to anticipate the short-term price action.
+ His best buys were made when things looked bleakest.
+ Buffett's own stock, Berkshire Hathaway is no great bargain. It sells for 1.49 times its book value -- a crucial Buffett measure of stock value.

Roger Lowenstein's brilliant book on Buffett. One of the various iterations of the classic Ben Graham book. My son is reading it at present.

Whatever happened to Enron? Stephen F. Cooper, 58, who was brought in January, 2002, as interim CEO, has overseen the sale and restructuring of some $12.65 billion worth of the Houston energy giant's assets. Among his deals: the pending sale of Oregon utility Portland General Electric Co. for about $2.35 billion in cash and assumed debt. Once the sale closes and outstanding claims are resolved, Enron, which emerged from bankruptcy in November, will distribute some $12 billion to creditors -- far less than the $63 billion they claimed they were owed. Individual shareholders will get absolutely nothing. But Cooper and his turnaround company, Kroll Zolfo Cooper Inc., will have pocketed at least $63.4 million in fees.

How big is obesity? According to Sunday's New York Times,

THE obesity epidemic isn't just a growing health risk; it's also a problem for the economy. The percentage of Americans over 20 who are regarded as obese has more than doubled, to about 30 percent, from about 14 percent in the early 1970's. And the Centers for Disease Control and Prevention says obesity was responsible for 112,000 premature deaths in 2002, and for $75 billion in medical costs in 2003.

Now you know why I'm interested in Manhattan Pharmaceuticals (MHTT) which has a one-day-to-be-approved, promising obesity drug called Oleoyl-estrone. According to the company,

OE is an orally administered small molecule that has been shown to cause significant weight loss in extensive preclinical animal studies, without the need for dietary modifications. In such studies, OE appears to be safe and effective with no evidence of rebound weight gain after treatment has been discontinued. Developed by researchers at the University of Barcelona, OE has been tested in both obese and lean rats; treatment with OE resulted in significant weight loss even in the presence of abundant food and water.

Diet and physical exercise regimens are difficult to maintain. As a result, most overweight patients can lose only moderate amounts of weight, and usually only for a short period of time. The current medications for the treatment of obesity have significant side effects that limit their use. A safe, effective, orally administered compound that not only produces, but also sustains weight loss, would be a breakthrough in the treatment of obesity, and represent a significant advantage over currently available treatments. The future market opportunity is estimated in the multi-billions of dollars range, given that 2001 sales of the currently approved therapeutics amounted to more than $800 million.

Lance Armstrong wins his 7th Tour de France: You can buy the bike Lance rode into Paris on yesterday. It's called a Trek Limited Edition Liverstrong Madone SL, is made of carbon fibre and costs only $9,499. When he's in Paris, Lance stays at the Hotel de Crillon on the Place de La Concorde. Many years ago, I stayed there one weekend. (Someone else picked up the tab.) The best part of my stay was the ironed cotton sheets in the bed. I spent months trying to find the maker of those sheets. In the end all I found out was the Crillon rented (I kid you not) the sheets from a supplier who cleaned them and ironed them and who would not divluge where he got them from -- no matter how much begging and groveling I did.

This is one of the Crillon's suites. If you even think about asking what a night costs, you can't afford to stay there.

How to drive three external monintors with your laptop: This is the configuration I use. My laptop drives its internal screen and one external screen. My VillageTronic VTBook PC card and its dualhead cable powers the other two screens. I drag windows from one screen to the other. I have Outlook email on one screen, a browser on another, streaming quotes on another, Macromedia on a fourth. I can also have an gigantic Excel spreadsheet spread across three monitors. The VTBook PC Card and cable cost under $300. If you use a laptop as your primary PC, it's the best computer investment you can ever make. Honestly. For more, click here.

Never, ever buy a Mercedes-Benz. I bought my wife a new E500 wagon in 2004. It's given nothing but trouble. Late last week, its air conditioning died. It was 86 heat and 99% humidity. Mecedes-Benz roadside assistance said they wouldn't fix it. Take it to a dealer. The closest dealer is 45 miles away. Want the list of the eight other busted things? In contrast, my own Subaru Outback wagon works like a charm and hasn't had a single problem since I bought it three years ago.

It pays to check your bills. My dear friend Dan Good writes, "I just checked my Time Warner Desert internet bill and it was $62 instead of the normal $45. When I called and asked why they admitted a mistake. I was supposed to receive a credit but they charged me instead. I am now receiving a $34 credit. As you said recently, it pays to review your bills carefully."

Cinderella is now 95 years old. After a fulfilling life with the now dead prince, she happily sits upon her rocking chair, watching the world go by from her front porch, with a cat named Bob for companionship. One sunny afternoon out of nowhere, appeared the fairy godmother. Cinderella said, "Fairy Godmother, what are you doing here after all these years"?

The fairy godmother replied, "Cinderella, you have lived an exemplary life since I last saw you. Is there anything for which your heart still yearns?"

Cinderella was taken aback, overjoyed, and after some thoughtful consideration, she uttered her first wish: "The prince was wonderful, but not much of an investor. I'm living hand to mouth on my disability checks, and I wish I were wealthy beyond comprehension. Instantly her rocking chair turned into solid gold

Cinderella said, "Ooh, thank you, Fairy Godmother".

The fairy godmother replied "It is the least that I can do. What do you want for your second wish?"

Cinderella looked down at her frail body, and said, "I wish I were young and full of the beauty and youth I once had."

At once, her wish became reality, and her beautiful young visage returned. Cinderella felt stirrings inside of her that had been dormant for years.

And then the fairy godmother spoke once more: "You have one more wish; what shall it be?"

Cinderella looks over to the frightened cat in the corner and says, "I wish for you to transform Bob, my old cat, into a kind and handsome young man."

Magically, Bob suddenly underwent so fundamental a change in his biological make-up that, when he stood before her, he was a man so beautiful the likes of him neither she nor the world had ever seen.

The fairy godmother said, "Congratulations, Cinderella, enjoy your new life. With a blazing shock of bright blue electricity, the fairy godmother was gone as suddenly as she appeared. For a few eerie moments, Bob and Cinderella looked into each other's eyes. Cinderella sat, breathless, gazing at the most beautiful, stunningly perfect man she had ever seen.

Then Bob walked over to Cinderella, who sat transfixed in her rocking chair, and held her close in his young muscular arms. He leaned in close, blowing her golden hair with his warm breath as he whispered..........

"Bet you're sorry you had me neutered."

Sunday at church: One Sunday a pastor told the congregation that the church needed some extra money and asked the people to prayerfully consider giving a little extra in the offering plate. He said that whoever gave the most would be able to pick out three hymns.

After the offering plates were passed, the pastor glanced down and noticed that someone had placed a $1,000 bill in offering. He was so excited that he immediately shared his joy with his congregation and said he'd like to personally thank the person who placed the money in the plate. A very quiet, elderly and saintly lady all the way in the back shyly raised her hand. The pastor asked her to come to the front. Slowly she made her way to the pastor. He told her how wonderful it was that she gave so much and in thanksgiving asked her to pick out three hymns.

Her eyes brightened as she looked over the congregation, pointed to the three handsomest men in the building and said, "I'll take him and him and him."

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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