Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM EST Tuesday, June 6, 2006: I'm
bored with inflation obsession. I'm bored with our new Fed Chairman's ability
to spook stockmarkets. I hope (and pray) that in time Bernanke will learn to
keep his foot out of his mouth. If he keeps doing what he did yesterday, he'll
drive us into recession. Yesterday the Dow fell a tinge under 200 points (a
whopping 1.77%) because Bernanke burbled on about inflation. His spooky
words (my highlighting):
price inflation has been elevated so far this year, due in large part
to increases in energy prices. Core inflation readings -- that is, measures
excluding the prices of food and energy -- have also been higher in recent
months. While monthly inflation data are volatile, core inflation measured
over the past three to six months has reached a level that, if sustained,
would be at or above the upper end of the range that many economists,
including myself, would consider consistent with price stability and the promotion
of maximum long-run growth. For example, at annual rates, core inflation as
measured by the consumer price index excluding food and energy prices was
3.2 percent over the past three months and 2.8 percent over
the past six months. For core inflation based on the price index for personal
consumption expenditures, the corresponding three-month and six-month figures
are 3.0 percent and 2.3 percent. These are unwelcome developments."
To my brain, the
man is freaking out over nothing, burbling on about statistical peculiarities.
He must know how totally inaccurate the government's inflation measures are.
We've already burst the real estate bubble. And there's nothing he can do about
energy. But if he keeps burbling on about higher inflation and much higher interest
rates, he's going to kill corporate capital spending... And that definitely
won't be good.
That said, the stockmarkets are going to have to deal with a green, baby Fed
chairman, who still learning (hopefully). Which means this summer is gong
to be far worse in the stockmarket than we'd predicted with our simplistic
"Sell in May and Go Away."
Cash is going to be king this summer. Losing value to inflation will be far
less painful than losing to falling stock prices.
While the markets deal with our green Fed Reserve chief, they also have to deal
with a green Treasury Secretary, Hank Paulson.
But this one is brighter, more savvy and far more tested in the realities of
markets. Paulson is the very talented head of Goldman Sachs. Jim Cramer, who
worked at and with Goldman Sachs for many years has written a really decent
piece explaining Paulson's intelligence (he's bright), his successes (they're
awesome) and his motivation (he wants to give back). The piece begins (and I
buy into what Cramer says):
in this country dont understand how robust the U.S. economy is, that
it grows as fast as many much younger countries, and that it creates
countless jobs and a tremendous amount of wealth. While we have our faultswe
borrow too much, we dont save enough, we are energy gluttons and shopaholicsour
economy is still the envy of most nations.
Yet who cares?
Who even knows? Certainly not the electorate.
between the reality of strong growth and wealth creation and the domestic
perception of our economy is staggering. Most Americans probably think we
are teetering on recession, not putting up the best numbers weve had
in years. People think George W. Bush is a stumblebum, not just for the business
in Iraq but for business in America.
the new Treasury secretary, is going to change that. The former chief executive
officer of Goldman Sachs is going to make a difference, on any number of levels,
but the most important is that he can communicate the one good story that
President Bush really has to talk about: the economy.
When I try to pin down why Bush has failed so utterly in trying to make the
case that hes responsible for superb job and GDP growth, I always come
back to Treasury for an explanation. The Treasury secretary is both the point
man for strategy to create growth and stability and the nations chief
economic pitchman. Its his job to shape economic policy and to sell
that policy to investors. John Snow, the man whom Paulson replaces, was seemingly
silent as an operator, and terrible as a promoter. Paul ONeill, Snows
predecessor, had ideas but couldnt get himself heard, inside or outside
the other hand, can operate and sell.
For the entire
assumptions: Never accept the conventional wisdom. Question it. Doing
so will make you a better investor, a better businessperson, a better person.
I'm not pushing contrarism. I'm pushing questioning assumptions. For, on those
assumptions, we build heady castles in the sky. Those castles are often built
on firm logic and infirm assumptions. Item from today's Wall Street Journal:
French Open Tennis is continuing. Set your TiVo or PVR.
and athletes are always searching for the perfect shoe to improve performance
and reduce injury. But some say shoes are the problem, and the best solution
may be training without them.
now believe that most athletic shoes, with their inflexible soles, structured
sides and super-cushioned inserts keep feet so restricted that they may actually
be making your feet lazy, weak and more prone to injury. As a result, barefoot
training is gaining more attention among coaches, personal trainers and runners.
without shoes may sound painful, the idea is that your feet need a workout,
too. Proponents believe running barefoot changes a runner's form and body
mechanics to prevent some common athletic injuries.
For more, click
here or here.
AM to 3:00 PM
AM to 3:00 AM
8:00 AM to 3:00 PM
AM to 3:00 AM
8:00 AM to 3:00 PM
AM to 4:30 AM
6:00 PM to 8:00 PM
AM to 4:30 AM
A man boards an airliner, takes his seat, and
is surprised to find a large purple parrot in the seat next to him.
The aircraft takes
off and a pretty flight attendant walks down the aisle past the man and his
seat mate. "Hey, bitch," says the parrot, "bring me a whiskey
and soda, and make it snappy!"
The flight attendant
looks annoyed, but walks on. A minute later, she walks back up the aisle, and
the parrot pipes up again.
you lazy w#$%^, where's my whiskey? Hurry it up!"
the flight attendant hurries up the aisle and returns quickly with the parrot's
the parrot's technique, the man decides to get some quick service for himself.
says the man, "get me a dry martini. And don't drag your sorry ass - I
want it right now!"
The flight attendant
turns red with anger and runs to the front of the plane. In a moment she returns
with the First Officer and two burly male flight attendants.
The crewmen seize
the passenger and the parrot, jerk open the emergency door, and hurl them both
out of the airplane at 35,000 feet.
As the two hurtle
out the door, the parrot says to the man, "Ya know, for someone who can't
fly, you got a lotta cojones."
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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