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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 Wednesday, July 27, 2005: Hot. Humid. Earnings season bustles nicely along. Durable goods orders are up better than expected. U.S. manufacturing is doing well.

TriPath Imaging (TPTH) has popped to over $9. It reports earnings and holds an 11 AM conference call next Thursday. Insite Vision (ISV) is popping also. Yesterday I bought a little HMS Holdings (HMSY), Charles River Labs (CRL), Gevity HR (GVHR) and Bright Horizons Family Solutions (BFAM). Each are in interesting, growing, niche businesses.

How good are securities analysts? Most are not very good. Today's New York Times has a piece today:

An Analyst Receives a Time Out From Altera

For the 25 years that Tad LaFountain has been a technology stock analyst on Wall Street, he has often written negatively about the strategies or prospects of the companies he followed. Not once did a company retaliate, he said.

Until now.

Mr. LaFountain, who follows 21 semiconductor companies at Wells Fargo Securities in New York, said yesterday that he was dropping coverage of the Altera Corporation, an industry giant, because its executives had told him they would not take his phone calls, would not let him ask questions on analyst conference calls and would no longer give him the information he needed to analyze its business.

Why the cold shoulder? According to Mr. LaFountain, the company objected to his negative opinion on Altera stock. Before he withdrew his coverage, Mr. LaFountain had a sell rating on Altera shares.

Writing his final report on the company yesterday, Mr. LaFountain said he expected to replace Altera in his list of companies with one "that takes a more appropriate view of the role of independent investment research."

Out of the 21 semiconductor companies Mr. LaFountain follows, he has buy ratings on seven, hold ratings on nine and sell ratings on five....

In dropping coverage on Altera, Mr. LaFountain forecast a price target of $14 for the stock. It closed yesterday at $22.45.

Yup. You got it. The stock is way above his target and lately rising.

Check. Check. Check -- Part 1.
NorVergence offered cheap long distance to small businesses. To get the service, you had to agree to rent a device for five years. The rent ranged from $200 to $2,300 a month. The company sold its leases to big financial institutions, including Wells Fargo and U.S. Bancorp. NorVergence apparently collected around $200 million from the sale of the leases. Then it declared Chapter 11. The financial companies are still trying to collect their dues. They are suing the small businesses. The leases all have an escalation clause. If you're late with your payment, all remaining lease payments are due. The upshot for NorVergence's customers is they now have no long distance service and owe huge sums for equipment that is no longer working.

After the Federal Government changed the rules in telecommunications in 1996, the industry attracted scam artists and crooks. Some are in jail, or on their way. Many are still out there. Please be careful before you let anyone mess with your precious phone service.

Check. Check. Check -- Part 2. I subscribe to QCharts, which makes pretty charts like this one:

It also lets you keep track of a portfolio. But it has bugs up the ying yang. For example, I own 22,500 shares of Blackrock Muni Fund which closed last night at $15.40. QCharts happily tells me each morning that the value of my holdings is -$82,996.73. That's a minus $83,000. It should be a plus $346,500. I've pointed this bug out to QCharts for the past year and it's still there. Lycos bought the company. Service deteriorated. The moral of this boring story is check your online accounts. They're often wrong.

The chart shows a nice bump up on Nasdaq since early May.

Personal safety revisited: From a reader:

Good morning Harry,
I picked up one common theme from the safety tips on today’s postings; AVOID BEING RECOGNIZED AS AN AMERICAN!

As a person who came from thousands of miles away to get here in order to fulfill my life’s dreams, it makes me rather sad to see that the world’s attitude on America has changed so much. It used to be that most people saw this country as “the” land where one’s imagination and hard work would be the only limitations to fulfilling one’s dreams. Most of us (including the legendary Harry Newton) left EVERYTHING behind in our home land and came here to do just that. That, in turn, bred such admiration for anything American by most of the world. Sad, how mixing politics with religion can change that so fast."

This Week's magazine this week:
+ Police in India punished 200 people caught watching an illegal porn movie by making them do situps.
+ The manager of a Hungarian supermarket unexpectedly ordered his staff to slash the price beef tenderloin by two-thirds shortly before his wife came in and bought 47 pounds of it. Police are investigating whether the two events are related.
+ A study in the Journal of the American Medical Associationreported that up to 32% of scientific studies may be inaccurate and misleading. Some scientists have already disputed the accuracy of the report.
+ Animal rights activities are calling for the town of Fishkill, NY to change its name. The "kill" in Fishkill derives from the Dutch word for creek. But People for the Ethical Treatment of Animals (PETA) says that fact is lost on the general public. "When they think of Fishkill, they think of abusing fish and that's not the right message," says Karin Robertson of PETA. By that standard, says Fishkill town historian Willa Skinner, PETA should also challenge Otterkill, Beaverkill and Catskill.

What's staging? Yesterday I wrote that to sell your house for maximum dollars, you should "stage" it. Several readers asked "What's staging?" Basically it's changing your house from the quirky, messy place you live in to a decor that will more appeal to the people you're trying to sell your house to. There are professional "stagers," who understand the minutiae of what sells -- far better than your real estate broker. One talented stager I met in Phoenix has a warehouse full of acceptable furniture which she can deliver quickly, making your crappy house suddenly look saleable. I've seen investment returns on staging expenses. They're huge.

If you sneeze too hard, you can fracture a rib.
If you try to suppress a sneeze, you can rupture a blood vessel in your head or neck and die. And, if you keep your eyes open by force, they can pop out.

A Solution to Every Problem
The high school coaches in Boise, Idaho went to a coaches' retreat. To save money they had to room together. No one wanted to room with Coach Daryl because he snored so bad. They decide it's not fair to make one of them stay with him the whole time, so they vote to take turns.

The first coach sleeps with Daryl and comes to breakfast next morning with his hair a mess, eyes all bloodshot. They say, "Man, what happened to you?"

He said, "Man, that Daryl snored so loud, I watched him all night."

The next night it was a different coach's turn. In the morning, same thing -hair all standing up, eyes all bloodshot. They say, "Man, what happened to you? You look awful!"

He said, "Man, that Daryl shakes the roof. I watched him all night."

The third night was Frank's turn. Frank was a big burly ex-football player-looking type of man's man. Next morning, he comes to breakfast bright eyed! and bushy tailed.

"Good morning."

They can't believe it! They say, "Man, what happened?"

He said, "Well, we got ready for bed. I went and tucked Daryl into bed and kissed him good night. He watched me all night long."

Recent column highlights:
+ Manhattan Pharmaceuticals: Click here.
+ 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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