Harry Newton's In Search of The Perfect Investment
Technology Investor. Auction Rate Securities. Auction Rate Preferreds.
9:00 AM EST Wednesday, July 9, 2008: A
delightful 18-year old visited me last night. He interviewed me for a book he's
writing on life-skills for schoolkids. Think of all the skills your kids need.
Suddenly you realize how few of them they learn at school.
How to solve problems -- i.e. deductive reasoning.
How to sell.
How to handle your personal finances.
How to write business English.
How to present, and publicly speak.
How (and why) to start your own business.
bet you can think of a dozen more. Since they don't teach this stuff at school
(or college), it's your job to teach them at home.
said NO to ethanol investment proposals. I
thought they just didn't make economic sense. Most tellingly you needed heavy
government subsidies and unlimited ultra-cheap corn. Worse, each gallon of ethanol
used more energy to produce it than it produced. The whole corn-based
ethanol just looked dumb. If I put a notional value of 25% IRR on all those
projects I've said NO to over the years, I'd be a zillionaire. From Yahoo! Green:
based on food crops are taking a serious hit because of the price hike for
grains and the flooding in the Mid-west that has wiped out a significant number
of crops. In just the most recent news, Heartland Ethanol is tossing plans
to build seven corn ethanol plants in Illinois, and even worse, theyre
dissolving the company all due to feedstock prices. VeraSun Energy
is delaying construction at two of their plants because of the flooding.
With corn passing
$8 a bushel and a 10% drop in production over the last year, it seems that
corn ethanol is finally reaching the end of its popularity (of what little
it had left) and corn ethanol plants are either already in, or nearing the
red without the prospect of getting funding thanks to the credit crunch.
is likely just the first of many crop-based ethanols to take an immediate
dive, despite the best efforts of biofuel companies. Ethanol stocks are getting
downgraded since Citi analysists are predicting more large-scale shut-downs
as small and midsize producers will be forced to shut down due to the price
issues, representing a loss of between 2-5 billion gallons of ethanol per
year. Citigroup analyst David Driscoll is predicting that about 76% of ethanol
plants are at risk of shutting down in the next few months. Earth2Tech has
counted 11 plants whose operations are suspended just since May (see the above
map). Feels a little bit like a rapid downward spiral, doesn't it?
What does this
mean for the future of biofuel? Well, most likely it means more research will
be going in to cellulosic ethanol and creating fuel from municipal waste,
and those companies already working on that technology will get a little more
wiggle room from competitors for awhile. Figuring out how to turn trash to
fuel is a whole lot more logical than turning crops to fuel anyway. And I
suspect fuel from algae will gain in popularity pretty quickly, making coal
plants happy since its an opportunity for them to green up
their image among the general population. I highly doubt the shutdowns will
do much to change grain prices in the short term.
tough to mentally dig ourselves out of yet another boom-to-bust industry in
our already flailing economy, especially one that once held so much hope for
those that wanted to "go yellow." Well just have to watch,
wait, and hope that necessity is indeed the mother of invention and some awesome
new cellulosic ethanol technology will bust wide open.
to go, dude. From the Yuma Sun:
take to the streets
Spiking gas prices have driven some resourceful commuters to complete more
than a round of 18 holes in their golf carts.
on 11 cents per kilowatt hour, it comes out to 3 cents per mile
to drive a cart," said Greg Nelson, owner of West Coast Golf Cart in
Yuma. "Even the Yuma Police Department is using golf carts."
Google "golf carts" and you find wonderful designs.
The YPD began
using golf carts to patrol the wetlands parks seven years ago to provide greater
mobility options, according to Officer Clint Norred, YPD spokesman.
street legal, but for us it's a utility type thing to handle off-road terrain
where a police car can't get to," Norred said. "It was not in response
to the rising cost of gas but it's a useful thing to have."
But before that
golf cart can leave the lush green fairway for the blacktop, the typical golf
cart must have all the required safety equipment, cautioned Nelson.
To be "street
ready," they must include windshield, rear-view mirror, turn signal lights,
brake lights, electric horn, four-way flashers, license plate and license
plate light. They also need seat belts if they go more than 20 mph, but unless
the power is increased, they typically do only 17 mph. ...
called Geico (insurance company) and they quoted me $50 a year for insurance,"
Nelson said. ...
Sales of golf
carts this year are up 35 percent, Nelson said. And every golf cart
he sells includes a charger that is "very user-friendly" One cable
from the charger plugs into an outlet under the driver's seat and the other
cable goes to any standard 115-volt household outlet.
After use for
30 hours, a full recharge will take four to five hours and can be done as
little as once a week, but it is recommended on a daily basis. Batteries should
be filled with distilled water and a tire pressure check done once a month,
along with an annual servicing.
out that he is selling way more golf carts to street users than golfers, who
comprise just 25 percent of his business. They are popular among seniors,
especially those who reside in recreational vehicle parks, and he sold over
300 golf carts to Cocopah Bend RV Park alone, he recalled. ...
a retired maintenance electrician who also uses the golf cart, said a round
trip to Wellton takes 10 minutes by truck but 30 by golf cart, yet his truck
burns $4 of fuel while the cart costs only 46 cents.
A typical street
legal golf cart costs new $12,000 to $15,000. A whole industry has grown around
customizing them, e.g.
Custom paint job, 20inch rims, Gucci seats, TV/DVD combo, visor monitors
the creation of Bad Ass
Golf,. Only $38,000.
Linksys WRT54G2 Wireless-G Broadband Router. You
plug one of these into your cable or DSL modem.
Then you plug your computers in. Bingo, you can now
share your broadband line among four computers attached by cables and/or many
big pluses about this gadget over earlier routers is:
You can set up so only you and your family can get on your network -- not your
You can use it to network all your printers so everyone can print from their
PC or Mac.
You get a remarkably good hardware firewall -- useful in today's mean and nasty
You get a remarkably useful, ultra-reliable, easy-to-set up gadget. All for
earlier routers did not have a firewall. You may consider replacing your old
one with this one.
free podcasts: From Anne Himpens and Michael Newton ... drumroll...
their three favorite podcasts... The Bugle; Wait, wait, don't tell
me and This American Life. All available for free from iTunes.
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
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