Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Friday, July 29, 2005: This
morning, Whole Foods (WFMI) is quoted up about $14 to $136,
after having gained $3.17 yesterday. I pray that everyone
reading this column has oodles of the stock. I've certainly been pushing it.
How can I not love the stock, when:
1. Every meal I've eaten this week has come from Whole Foods.
2. Every time I go into our local Whole Foods -- the one in the basement of
the Time Warner Center -- I'm staggered at the traffic. The manager tells me
close to 10,000 people a day now shop there.
3. I'm convinced that this company has barely begun its nationwide expansion.
Heck it's got fewer than 160 stores. And it doesn't have one (yet) on New York's
tony upper east side.
success with Whole Foods brings up the whole issue of stock philosophy. Indulge
Should I have done a "Warren Buffett" and bet the farm? (I only own
2,500 shares.) There are two reasons, it seems to me, to bet the farm:
First, when you feel very positive about the stock. I could not feel more positive.
Second, when you realize that you don't feel as positive about other stocks.
This is the whole "diversification/allocation" issue.
Everyone says diversification makes sense. Yet there are two issues here:
Diversification means you have to find many investments you're comfortable with.
It doesn't make sense to diversify into drek for the pure joy of allocating
broadly. Finding a bunch of "perfect investments" -- what I've been
doing since I sold my business in September, 1997 -- is very difficult. In fact,
finding good investments and good managers is far more difficult than
running your own business. It involves very different skills. It's only now
-- seven years later -- that I'm beginning to feel even half-way comfortable
with the process. (Of course, I am on a high this morning because of my beloved
No one every got rich by diversifying. All the great fortunes -- even my little
one -- were made with concentrated bets. That's how Warren Buffett did it. No
one in the Forbes 400 got rich by being a diversified investor.
I intend to take more concentrated bets from now on.
your cell phone : Grab your cell phone now. Program in ICE and the
name and phone number of the person you want to be contact In Case Of an
Emergency. Apparently, paramedics
are now turning to a victim's cell phone for clues as to that person's identity.
You can make their job much easier with a simple idea that they are trying to
get everyone to adopt: ICE.
earphones to buy for your iPod? Apple's iPod
is the greatest pleasure machine ever invented. The cheap earphones it comes
with do an adequate job. But ... I've been on a hunt for the perfect earphone.
Here it is. It's the Etymotic ER6i 6isolator. (Don't blame me for the
These things list for $139. But you can buy them new on eBay for $100 or so,
including shipping. Last night I tested all the earphones I've bought. When
I popped these things in, I actually screamed "Wow." They're that
much better. For more, click
latest rant. Don't tar me because I like watching Cramer. (My wife
hates him.) But he's made me money. And he occasionally agrees with me -- he
also has loved Whole Foods. Last night Cramer recommended that everyone sell
their baby bells -- Verizon, SBC, BellSouth, Qwest, etc. His logic: Skype
will destroy their landline long distance business. To date, there have
been 142 million downloads of the Skype software which lets you make free phone
calls anywhere in the world to another PC also equipped with Skype software.
1. If you're not using Skype, you're missing out on the biggest money-saver
around -- especially if you have a child or relative overseas. Click
2. it won't only be Skype that will hurt the baby bells. Some other "hurts"
-- 9% of U.S. adults use wirelessly exclusively. They don't have a single landline.
This growing trend is bad for the landline companies. And if Skype and declining
landlines weren't bad enough, figure the awfulness of their management. To gauge
that, ask yourself one question -- name one single new, useful feature you've
seen on landlines in the past 25 years? The baby bells' dearth of imagination
is staggering. Cramer's right. Sell the baby bells.
charities are an elaborate ripoff. They're designed to benefit the
charity organizers not the people they're ostensibly benefiting. My two rules:
1. Check where they spend the money. If more than 5% is on administration (which
includes exec salaries), skip it.
2. If you can, form your own charity, raise and spend the money under your own
What got me started on this today was an approach by the Fortune Society that
I fund an "advocacy" center. I asked for a budget. Turns out that
the $150,000 they want will be spent on salaries of $93,700 and "fringes"
of $26,236 (medical, workers' comp, etc.) and office expenses. Not a nickel
goes in services to a single worthy recipient. I had previously given money
to the Society and attached strings -- namely that all monies spent would be
pre-approved by me before the money could be spent. I found they were single
sourcing computer equipment and paying much more than they should. Fortunately,
I stopped that. But I was surprised at the cavalier attitude to money.
The second that got me going was reading an old copy of the Wall Street Journal,
which talked about Don Imus's Ranch for sick children. Turns out the ranch is
a gigantic boondoggle for Imus' family to vacation in grand style. The ranch's
expenses totaled $2.6 million in 2003 and $2.7 million in 2002, yet hosted only
100 kids in 2002. According to the Journal, that worked out to $27,000 per child,
or just under $3,000 a night for their typical nine-day stays. Reported the
Journal, "For the same amount, a child could stay in a top suite at
New York's Waldorf Astoria or secure a cabin on the Queen Mary 2."
What is an HD Ready TV set?
With help from Walt Mossberg: To receive and display high-definition programming,
a TV set needs two basic features. One is a display capable of rendering the
high-definition picture. The other is a tuner, or receiver, capable of receiving
the high-definition signal, either over the air, or from a cable or satellite
service. When a TV set is described as "HD-ready," it usually means
the set can display high-definition pictures, but lacks the special tuner needed
to receive them. It may have no tuner at all built in, or it may have just a
standard tuner. With this type of TV, you must buy a separate high-definition
over-the-air tuner, or obtain a high-definition cable box or satellite receiver,
to get high-definition programming. A high definition tuner, cable box or satellite
receiver will cost you more money than a standard unit. But, if you can get
some decent high-definition TV programming, it's worth it.
makes three software apps: I use two of them every day. I use Judy's
TenKey calculator and Judy's Conversions, which converts ounces to grams, Fahrenheit
to centigrade, etc. etc. You can buy the lot for $25. Worth every penny. Here's
some screen shots from TenKey.
For more, Click here.
men only: Because of many complaints from passengers that they are
being fondled, US and Canadian Airports will soon be using a new machine for
checking people boarding aircraft. To see an example of how the device functions,
here. Women: Do not go here. It's totally tasteless. Some programmer
with far too much time on his hands wrote it.
case you missed yesterday, here's an update. How to use Excel: I
asked my son, Michael, how do I figure the rate of return on an investment involving
strange timing? Let's say that I put $250,000 into a hedge fund on September
1 and again on December 1 last year. At the end of June, 2005 that investment
was now worth $550,988. Here are the steps:
1. Open Excel. Go to Tools/Add-Ins. Check off Analysis ToolPak and Solver
Add-In. Install them. You may need to have your original Microsoft Office
in your CD drive.
2. Enter the numbers as shown. Your contributions to the fund go in as negatives.
Your ending result is positive. Enter the dates.
3. In line B8, enter the formula =XIRR(A3:A5,B3:B5,0.1)
4. If it gives an error, you haven't installed the two Add-Ins or your cell
My son is a genius. I have to write this, or he won't teach more Excel.
I asked him why the formula ended in 0.1. His reply: "The 0.1 in the formula
is your guess at what the IRR is. Excel needs it because it runs the equation
as a minimization formula over 20 calculations. You basically
just need to enter a positive or a negative number that is somewhat in the ballpark."
I asked him if I put in 0.2, would that matter? He replied, "Nope, not
really. Maybe by a millionth of a decimal place but otherwise no. But if you
put in a -0.2 it wouldn't work though - you need to be in the range."
or for real?:I don't know. This came yesterday from London.
Just discovered: Secret code from ancient Judea:
Written across the wall of the cave were the following symbols:
It was considered
a unique find and the writings were said to be at least three thousand years
old! The stone was removed, brought to the museum, and archaeologists from around
the world came to study the ancient symbols. They held a huge meeting.
The President of the society pointed to first drawing and said: "This is
a woman. We can see these people held women in high esteem. You can also tell
they were intelligent, as the next symbol is a donkey, so they were smart enough
to have animals help them till the soil.
The next drawing is a shovel, which means they had tools to help them. Even
further proof of their high intelligence is the fish which means that if a famine
hit the earth and food didn't grow, they seek food from the sea. The last symbol
appears to be the Star of David which means they were evidently Hebrews."
The audience applauded enthusiastically.
Then a little old Jewish man stood up in the back of the room and said, "Idiots,
Hebrew is read from right to left...... It says: 'Holy Mackerel, Dig The Ass
On That Woman."
+ Manhattan Pharmaceuticals: Click
+ 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.