Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM EST, Friday, July 27, 2007: Down
photo by Daniel Acker, Bloomberg News
Not a disaster. We're still up nicely for the year:
My trader friends don't think it's all over. There's
enough gloom talk to spook stockmarkets again. The gloom talk focuses on stupid
bankers who lent money to deadbeats to buy a house they could never afford.
The deadbeats saw monthly payments for a new big house suddenly cheaper
than renting an old small apartment. The bankers gave interest-only "loans"
at low interest rates. This gave idiocy in banking a whole new meaning. Then
the Fed rained on this parade of idiocy by raising interest rates. And the whole
pack of cards came crashing down.
the angst part of the stockmarket's psychology. The rest has to do with fears
of tightening corporate earnings as a result of higher energy prices (oil is
now over $75 a barrel).
of this is serious stuff. Stockmarkets will get over their angst and stop falling.
The world is not coming to an end. But....
market can stay irrational longer than you can stay solvent." -- John Maynard
Hence, there are
things you should do today:
1. Sell any
stock you own that's down more than 15% from its high this year.
2. Visit every stock you own. Check out its fundamentals. Sell those
whose fundamentals now look weak.
3. Buy stocks you really like which have fallen a little. This is called
4. Take some
money off the table. It's more restful to play with the bank's money than
5. Don't panic. Nobody got rich by panicking. Don't listen to Bill Gross.
Remember he's selling bonds. He needs to panic equity holders.
6. Cash is
as good as money. Don't be embarrassed that your money isn't "working."
Banks are paying over 5% on cash. Mine is paying 5.19%. As they say so charmingly
in Australia, "that's better than a slap in the belly with a cold fish."
7. Look at
technology. On this I agree with Cramer. Yesterday I said buy Riverbed Technology
(RVBD) in anticipation of blowout earnings number to be announced after the
call. Yesterday Riverbed was up $2.89, or 6.47%. It announced blowout earnings.
This morning Citicorp said "buy," and put a $52 target on the stock.
It closed last night at $47.53. It now looks a little pricey. Despite yesterday's
general market contagion, some tech stocks rose -- including Apple (AAPL), Synchronoss
(SNCR), MEMC Electronic Materials (WFR), Vasco Data Security (VDSI) and Riverbed
8. Oil is rising.
You need to own OIH, an ETF owning "companies that provide drilling,
well-site management and related products and services for the oil service industry."
Exxon Mobil fell 4.9% yesterday because it's not doing enough drilling. It'll
wake up and use the services of OIH companies.
9. The only
real "free lunch" in investing is diversification. Which means
real estate, commodities, loans, private equity funds, etc. etc. My portfolio
diversification keeps me sane.
There is another
theory for yesterday's fall: Hedge funds have been borrowing heavily from Japan
to finance their purchases of U.S. stocks. When the Yen rises (i.e. gets expensive),
the hedge funds sell U.S. stocks and repay their Japanese loans. This has happened
twice this year -- the last time at the end of February, when we had our first
big one-day crash of the year. The second time was yesterday. The Japanese yen
is on the rise again. There is talk of a stronger dollar and thus a weaker yen.
coat of arms
has a kangaroo and an emu. These two animals have one thing in common: Neither
can walk backwards.
phone calls: Everyone has caller ID, so you
know who's calling. Enter phone spoofing. These are services that let you change
the number that the people you call see on their caller ID. These services also
change your voice. Sites to visit: Spoofcard
which says "Our service is intended for
business professionals within the U.S. including, but not limited to; Private
Investigators, Skip Tracers, Law Enforcement and Lawyers, giving them freedom
to choose any number as their Caller ID. Telespoof allows you to be whoever
you want to be." Comforting thought.
cookie wisdom: "In case of fire, keep calm, pay bill, then
A husband and his wife are taking a Hebrew language course.
As they walk into the class the rabbi ask the man what does he think about this
The husband of the woman replied "I'll only have to learn the first part
of every sentence".
The rabbi replied "Why is that?"
The husband says: "Because my wife finishes all my sentences".
On a train from London to Manchester, an American was telling off
the Englishman sitting across from him in the compartment.
are too stuffy. You set yourselves apart too much. Look at me... in me, I have
Italian blood, French blood, a little Indian blood, and some Swedish blood.
What do you say to that?"
replied, "Very sporting of your mother."
York's weekend weather:
Nice weather generally,
with occasional thunderstorms. Reads a bit like the stockmarket. So ... hug
the kids. Kiss the spouse. Get some exercise. Be thankful you're alive and sane
-- unlike all those idiots who borrowed to buy stocks. That's Harry's
big NO-NO. Never borrow to buy stocks.
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 .
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