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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 EST Friday, July 14, 2006: Oil is now above $78 and going higher, as the Middle East erupts. Israeli companies will slow, as their employees are called up. Israeli stocks will be hit. U.S. and world stockmarkets are spooked.

The top ten Israeli companies are Teva Pharmaceutical Industries, Oil Refineries (BAZAN), Israel Electric Corporation, Israel Chemicals, Elco Holdings, Israeli Aircraft Industries, Tnuva Group, Vishay, Makhteshim Agan and Intel Electronics, according to Wikipedia.

Four brilliant men recently left Goldman Sachs to form a hedge fund. Because of their reputation they easily raised $4 billion. In May, their first month, their fund fell 7 1/2 percent. That's $300 million. Ouch!

Sell in May and stay away is proving the best advice this year.

If you didn't sell, now what? As I wrote yesterday, I can't see a single reason why big cap stocks will advance significantly in coming months. The economy is slowing down. The consumer is broke. And business spending is not picking up the slack. Today, I'm dubious not only about large cap stocks. How many companies can successfully withstand $78 a barrell oil. Can you?

Now what? Do what I did yesterday, cast a beady eye over everything you own. Ask yourself, do I really want to own this? Is it likely to drop? What will I have to make to earn back the money? Lose 7.5% today, you have to earn 8.11% just to get yourself just to break-even.

You can make calls. I've been making them in recent columns, e.g.
+ I hate Tech stocks (and yesterday Intel said it was firing 1,000 managers "citing a drag on decision making," according to today's Wall Street Journal.)
+ I hate newspaper stocks because of the Internet taking their classified advertising. (To confirm this, yesterday, the Tribune Co. reported a 62% drop in earnings.)

Other stocks you own and feel queasy about. Remember, our old nugget: When in doubt, stay out. Now is a good time to be out.

You also ought to ditch managers who don't recognize today's realities. I ditched one yesterday. But I had this delicious conversation:

Him: "I'm sorry you're leaving us. Your portfolio got hit by a couple of stocks, including Gentex."
Me: "You like Gentex?"
Him: "We do. They make 80% of the mirrors for the high-end cars. They've been hit by troubles in the automotive business. But their business is sound."
Me: "Their stock is down 29% in my portfolio. It's now around $13. If it fell to $5, for example, would you still keep it in my portfolio?"
Him: "Yes."

Michael, my son, said, "Dad, he didn't say he loved the stock so much he'd double down. Just that he'd hold it forever. That makes little sense."

My feeling also.

The lesson from all this? Diversification. Diversification. Diversification.

Good news: My distress real estate fund is making its first call. And one of my hedgies is heavily short and is making money for me in this ghastly, but wonderful stockmarket.

Google Finance has major charms. In order:
1. The charting. Not only of various lengths -- 1 day to 1 year to a few years -- but you can drag the chart back and forth to cover different time periods. Best yet, there are labels on the chart corresponding to events and then the events are on the side. Really neat.

2. Below this chart are financials and links to historical income statements, balance sheets and cash flow reports. I really like the clear simple layout.

3. There's also nice bios on management, occasional photos and some blog postings.

Check it out. Click here.

Renault cars have their charm (?): You can buy this Renault Modus in Europe:

It's actually called a Renault Modus Authentique.

You think my wife will allow me to trade her black Mercedes E500 in for the Authentique?

Headbutting is not good for your brains, your head or your career.

But you would be doing your head a disservice if you failed to watch this video. Click here.

The best headlines of 2005 (with appropriate remarks)

Something Went Wrong in Jet Crash, Expert Says
[No really]

Police Begin Campaign to Run Down Jaywalkers
{That will definitely solve the problem]

Panda Mating Fails; Veterinarian Takes Over
[What a guy!]

Juvenile Court to Try Shooting Defendant
[See if that works any better than a fair trial!]

War Dims Hope for Peace
[I can see where it might have that effect!]

If Strike Isn't Settled Quickly, It May Last Awhile
[You think?]

Enfield Couple Slain; Police Suspect Homicide
[They may be on to something!]

Red Tape Holds Up New Bridges
[You mean there's something stronger than duct tape?]

New Study of Obesity Looks for Larger Test Group
[Weren't they fat enough?!]

Kids Make Nutritious Snacks
[Taste like chicken?]

Hospitals are Sued by 7 Foot Doctors
[Boy, are they tall!]

And the winner is....

Typhoon Rips Through Cemetery; Hundreds Dead

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. Please note I'm not suggesting you do. That money, if there is any, may help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
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