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8:30 AM EST Monday, March 27, 2006:



I sent this to a senior executive at Microsoft, a friend, who joined them in 1988. He replied, "The big lesson is make sector bets across a number of companies in emerging sectors." So I sent him my list of emerging sectors:

- Commodities
- Biotech
- China and India
- Avian flu
- Alternative energy
- New display technologies
- Australia (because of commodities and minerals)
- Hot new Internet stocks*

My friend emailed me back:

My list looks similar though I’m not chasing avian flu or new display technologies. My commodity exposure is very old school. I am a little broader than biotech – overweighted on health care broadly. I am tempted to buy PPH as everyone has written big pharma off. I don’t have specific China and India investments – just overweighted in emerging markets though I am about to lighten up a little there. I am also tempted to bet on German recovery. I bet on Japan two years ago and think Germany might get its act together and separate itself from the French.

I've published portfolios for some of these "emerging sectors." Obviously I'm still searching. An interesting Australian play is something called the Vanguard Index Australian Shares Fund, up 22% in the 12 months to end of February, 2006.

* I don't have a list of hot new Internet stocks. BusinessWeek recently picked six new stocks to replace losers in its BW Web 20 portfolio:

But they're all very expensive. I'm not thrilled with any of them -- though I did like Vistaprint when it was cheaper. I'll track them, beginning with Friday's price. And maybe try and find some more.

Vanguard fund kicking butt for me: International Value Fund (VTRIX).

Buying a second home. The pricing explosion is clearly cooling. Excerpts from today's Wall Street Journal:

It seems every real-estate agent says that now -- whenever that happens to be -- is the best time to buy. But....

First, look at who's buying. Are new households coming into the area, and why or why not? Are homes selling mostly to investors, part-time owners or permanent residents? Too many investors can leave a market vulnerable to substantial price swings. A preponderance of part-timers can drive up prices and drive out locals. Permanent residents lend the market stability. Real-estate agents and local lenders are good sources for this kind of information.

Second-home buyers should look into school quality and the general affordability of homes in the area, even if these issues don't affect them directly. ...If the schools are terrible or declining, permanent residents may be inclined to move away, leading to vacation-home ghost towns and depressed real-estate values. You can get information on school performance from real-estate agents or from the Web site of the state education department.

Buyers also need to ask about job growth in the area they're considering. If year-round residents can't find work, they won't be able to buy homes. But even if job growth is strong, affordability is important. While part-time residents may not give much thought to where the local teachers, firefighters, police officers and restaurant workers live, they should, many real-estate agents say, because when these workers get priced out of the market, essential services suffer -- and so do home prices. And there's a warning signal here: According to the National Association of Realtors, in the fourth quarter of 2005, housing affordability hit its lowest level since 1991.

Don't go near SuperFund: BusinessWeek had a benign "Special Report" on Christian Baha's SuperFund "managed futures" hedge fund, which he's now peddling in the U.S. I was surprised that
a. BusinessWeek gave SuperFund so much editorial space.
b. BusinessWeek didn't pan the SuperFund, as it should have (and as I have in the past).
c. BusinessWeek didn't find out what Christian Baha does with your money, other that spend it on exceptionally glitzy marketing to convince you to give him more money.

BusinessWeek did point out that if you put money into SuperFund A, the going-in fees are so high that the fund needs an 8.75% return just to get to break-even, i.e. to get to the money you started with. SuperFund B is even worse. You need a 10.63% to get back to break even.

As an ex-publisher, I have a sneaking suspicion that we are about to see ads for SuperFund in BusinessWeek.

60 Minutes did a piece on hedge fund SAC and Biovail. Biovail is suing SAC, run by Steve Cohen, the highest-paid hedge fund manager on the planet ($500 million last year) Biovail alleges SAC conspired to drive down the price of Biovail's shares, which SAC had shorted. The facts are murky, but the allegations and denials strong. For all the juicy details, read yesterday's New York Times. Click here.

Before you buy a laptop... Figure it will take you 11 hours minimum to set your new laptop up the way you like it -- like the old one. If you still insist, some tips:
1. Remove all the junk software. (See Friday's column).
2. Install the absolutely minimum software you need. When in doubt, don't install.
3. Microsoft Office Save my Settings Wizard produces a file you can copy to your new machine.
4. You can export Internet Explorer's cookies and favorites, and then copy them to your new machine.
5. You should keep all original disks.
6. You should have a file with all your serial numbers.

My new laptop arrived last Thursday. It won't be ready for another week. No one can do all those boring 11 hours of work in one go.

No good deed goes unpunished: My daughter flew from Boston to La Quinta, CA to visit us for our anniversary. Her United Red Eye going back last night was nearly two hours late. It left just before midnight... Yuch. Do planes every run on time any more?

This is really silly:

A man walks into shul with a dog. The shammas comes up to him and says, "Pardon me, this is a House of Worship, you can't bring your dog in here." "What do you mean," says the man, "this is a Jewish dog. Look." And the shammas looks carefully and sees this dog has a tallis bag round its neck. "Rover," says the man, "daven!". "Woof!" says the dog, stands on his hind legs, opens the tallis bag, takes out a kipa and puts it on his head. "Woof!" says the dog, stands on his hind legs, opens the tallis bag, takes out a tallis and puts it round his neck. "Woof!" says the dog, stands on his hind legs, opens the tallis bag, takes out a siddur and starts to daven. "That's fantastic," says the shammas, "absolutely amazing, incredible! You should take him to Hollywood, get him on television, get him in the movies, he could make a million dollars!!" "You speak to him," says the man, "he wants to be a dentist.

I played too much tennis on the weekend.

Harry Newton

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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