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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 Thursday, July 20, 2006: Nice bounce yesterday. Thank you, Mr. Bernanke. Good time today to dump those stocks you may not want to own going into a weak second half year. Will it be weak? My sense is yes. But your prediction is as good as mine. Short-term volatility is still with us, benefiting day traders, not investors, who grab their stomachs with each gyration. In this chart, down days are in red, up days are in white.

My friend, Todd, the stockmarket philosopher, this morning explained: "Two days ago good news was bad news and bad news was worse news and all the news was horrible. Today bad news is not so bad and the end of the interest rates rises (Bernanke's speech yesterday) is a cure-all for every problem in the world including the Arab-Israeli conflict it seems."

Real estate booms: In May, 2005, we bought a big block of apartments in upstate new York for around $39 million, assumed the mortgages. Now we're selling it for around $48 million. Why? We spent money on improving the place. We bumped the rents slightly. We kept up occupancy. And we got a nice office. We're lucky. Though the area is booming and rental housing is in great demand, it still takes two years to get a building permit. When the numbers come in on this investment, it looks like a 60%+ IRR. The second best thing about intelligent real estate is that you don't get daily gyrations. It's far easier on the stomach. See yesterday's column for upcoming opportunities in real estate.

Addicted to oil. Thomas L. Friedman reporting: His one-hour documentary is on Discovery Times TV tonight at 9 PM -- channel 839 in New York. My son saw it recently in a preview. He said it was stimulating. In questions after the screening, Friedman admitted that his gloom and doom scenario (as depicted in the documentary) was turning out less gloomy. Despite zero encouragement from our government (which Friedman wanted) Americans were coming up with neat solutions to high oil prices and our dependence on buying oil from people who hate us.

Why backups are critical: Last night I was transferring some TiVo shows to a spare hard drive, one devoted to TiVo. This morning the computer says the hard drive no longer exists. It has totally disappeared, failed, gone bye bye. I don't know why. I don't how how to recover it. Fact is I probably never will. Eventually every hard drive -- the only part of your computer that moves -- will crash and usually at the worst possible time. Hence the need for constant backups and replacing your hard drives every six to nine months. Old boring story.

I guess they don't like us: Ayatollah Ali Khamenei, Iran’s spiritual leader and the country’s most powerful figure, said in a speech on Sunday that Israeli strikes in Lebanon and the Palestinian territories proved how “the presence of Zionists in the region is a satanic and cancerous presence and an infected tumor for the entire world of Islam. The American president says Hezbollah should be disarmed, but it will not happen.”

Two types of phone systems: VoIP and TDM. The newer ones are VoIP, which stands for voice over IP. The older technology is called TDM -- time division multiplexing. The difference is simple. Under the old technology, you got an entire circuit devoted to your phone conversation. In the new IP technology, you share your circuit. The new IP technology promises huge benefits, mostly useful to big companies -- benefits like creating networks of farflung employees and offices. The new technology is too new and too unproven for smaller businesses. Stay away from it.

A touching story
In 1986, Mkele Mbembe was on holiday in Kenya after graduating from college. On a hike through the bush, he came across a young bull elephant standing with one leg raised in the air.

The elephant seemed distressed so Mbembe approached it very carefully. He got down on one knee and inspected the elephant's foot, and found a large thorn deeply embedded in it.

As carefully and as gently as he could, Mbembe worked the thorn out with his hunting knife, after which the elephant gingerly put down its foot. The elephant turned to face the man and with a rather stern look on its face, stared at him. For several tense moments Mbembe stood frozen, thinking of nothing else but being trampled. Eventually the elephant trumpeted loudly, turned and walked away.

Mbembe never forgot that elephant or the events of that day. Twenty years later he was walking through a zoo with his teenaged son. As they approached the elephant enclosure, one of the creatures turned and walked over to near where Mbembe and his son Tapu were standing. The large bull elephant stared at Mbembe and lifted its front foot off the ground, then put it down. The elephant did that several times then trumpeted loudly, all the while staring at the man.

Remembering the encounter in 1986, Mbembe couldn't help wondering if this was the same elephant. Mbembe summoned up his courage, climbed over the railing and made his way into the enclosure. He walked right up to the elephant and stared back in wonder. Suddenly the elephant trumpeted again, wrapped its trunk around one of the man's legs and swung him wildly back and forth along the railing, killing him.

Probably wasn't the same elephant.

The Rabbi and his son
A boy had just gotten his drivers license. He asked his father, who was a rabbi, if they could discuss his use of the family car.

His father took him into his study and said, "I'll make a deal with you. You bring your grades up, study your Bible a little, get your hair cut, then we'll talk about it."

After about a month, the boy came back and again asked his father if they could discuss his use of the car. They again went into the father's study where the father said, "Son, I've been very proud of you. You have brought your grades up, you've studied the Bible diligently, but you didn't get your hair cut."

The young man waited a moment and then replied, "You know Dad, I've been thinking about that. Samson had long hair, Moses had long hair, Noah had long hair. Even Jesus had long hair."

The father said, "Yes, and everywhere they went, they walked."

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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