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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 Tuesday, March 28, 2006: Yesterday I received an interest payment of $47,193. Clearly, I'm pleased. What makes me more pleased is the fact that I feel the principal is safe. Nothing is more important for my peace of mind than capital preservation.

Repeat after me:

"If I ever feel the slightest pang of doubt about safety, I will run from the investment as fast as my two little legs will carry me. Nothing can make up for a loss of principal. Nothing. Not in my lifetime."

Google will join the S&P 500 on Friday. This news is sufficient to justify this big jump in the stock? Apparently yes.

"As a result, we think the stock will be in demand from funds and ETFs that emulate the S&P 500, and to some extent, those whose benchmark is the S&P 500," wrote Standard & Poor's equity research analyst Scott Kessler in a research note Friday. "We consider this a major near-term positive for the stock, but it does not change our skepticism about what we consider the notable material challenges faced by Google." Kessler maintained a "hold" rating on Google, which will replace Burlington Resources in the index.

Go figure!

Depressed, elated, or simply surprised? From today's New York Times:

The number of American households with a net worth of $1 million or more, excluding their principal residence, grew to a record 8.9 million last year. ... In most large counties, about one household in 12, or about 8.5 percent, was worth $1 million or more, Ms. Luhr said. An exception was Nassau County on Long Island, where millionaire families were more than twice as common, at 17.5 percent of all households.

The households had an average net worth, excluding principal residence, of nearly $2.2 million, of which more than $1.4 million was in liquid, or inevitable, assets. The survey counted some tax-deferred retirement savings but did not include individual retirement accounts in the liquid assets.

Despite a rising stock market, Ms. Luhr said that more than half of those surveyed said they had "become much more conservative in their investment approach over the past year."

The survey found that 29 percent of the millionaire households did not own stocks or bonds and 32 percent did not own mutual funds. One in four had a second mortgage on a home.

Half of the heads of millionaire households were 58 or older, Ms. Luhr said, and 45 percent were retired.

Just 18.7 percent of the millionaires own — or owned before they retired — part of a business or professional practice. ...

Venture capitalist Doerr makes pitch for green tech. From the San Jose Mercury News:

Green technology is piping hot right now. Buzz echoed in the ballroom at the Cleantech Venture Network conference this week in San Francisco, where venture capitalists gathered to discuss the future of alternative energy investments.

Most of the more than 500 attendees -- up from 325 at the previous conference -- crammed in to hear John Doerr, the well-known venture capitalist at Silicon Valley's Kleiner Perkins Caufield & Byers, give a rousing talk about the urgent need for more energy efficiency.

"We will suffocate, and overrun, and pollute and poison our planet to death,'' he said of the rampant growth in population of major cities -- with eight cities the size of Manhattan being built every year, mainly in China, he noted.

A warming planet, through climate change, is another threat. Doerr, who was joined onstage by his partner John Denniston, displayed slides, including pictures of the entire Bay Area sitting under water -- to show what would happen if global warming melts away Greenland's ice sheet. The ice sheet's melting is well under way, and its demise would lead to a 20-foot rise in ocean levels, he said.

Doerr's solutions are twofold. First is to implement sensible policies, including a market for trading carbon emissions credits. Such a market would give credits to countries that pollute less than their pre-set limit, and allow them to sell those credits to other countries that want to pollute more than the limit. Doerr also recommends more state and federal subsidies to help support alternative sources of energy, and consumption.

Entrepreneurship, Silicon Valley's strong suit, is the second answer Doerr offered. Companies should search for ways to reduce the vast amounts of energy consumed by cars, industrial pumps and other energy hogs.

He popped up a slide of a new car called the Loremo. Created by a German start-up, Loremo AG, the car is a super-efficient coupe that costs only 11,000 Euro ($13,200) and promises an impressive 157 miles per gallon. It was shown in Geneva earlier this month, and is expected to hit the market in 2008.

HOW DO YOU MAKE GREEN BILLIONS?: The clean technology market has had a bad rep among investors for decades, namely because it's been so hard to make money in the highly regulated energy sector.

So if Doerr's talk about saving the environment was too touchy-feely for profit-hungry investors, the conference's second day may have made some salivate.

That's when Dr. Zhengrong Shi, now apparently the richest Chinese man on mainland China, gave a breakfast talk. Shi took his company, Suntech Power, public on the New York Stock Exchange in December, and he is apparently personally worth about $2.2 billion. The company, which makes solar cells and panels, was the biggest tech IPO in 2005. And it's profitable.

Should you buy extended warranties? What was once a three-year warranty is now a one-year warranty. If you want the old warranty, you pay. Are extended warranties worth it? Probably not. PC World Magazine did a survey. Of 2031 respondents, 63% bought the extended warranties. 37% didn't. Most seemed happy with their decision. (I personally don't buy extended warranties, except on washing machines, dryers and dishwashers.) PC World came up with 10 Extended Warranty Tips:

1. Read the terms before you buy: Nearly half of the people in our survey didn't read the terms of the extended warranty beforehand. You don't have to read the warranty in the checkout line -- take it home. You can usually buy it later.
2. Determine the coverage term: Look for the word inclusive, which means the store's warranty overlaps with the manufacturer's -- so a four-year extended warranty really gives you only three additional years on top of a standard one-year warranty.
3. Beware shipping charges: If the product needs to be sent in for service, you could get stuck with the tab.
4. Consider accidental damage coverage: Most policies do not cover products that are damaged from falls, spilled coffee, or getting run over by the family truck. You'll pay more to protect against the oops factor, but it may be worthwhile for mobile products.
5. Know the cancellation terms: If you feel buyer's remorse, you can usually get a full refund if you act quickly, or a prorated refund down the road, provided you haven't used the warranty.
6. Look for extras: Many extended warranties cover replaceable items, such as projection TV bulbs, which can cost $300 or more. But note how much TV you watch, and compare it against the expected lifespan of the bulb.
7. Investigate the product's reliability: CRT televisions, for example, hold up much better than sets with newer technologies. You can also predict device reliability by examining a manufacturer's record on this score. Find that data in PC World's annual Reliability and Service survey and Consumer Reports' reliability ratings.
8. Weigh plan cost vs. product cost: For example, Best Buy charges $60 for a four-year plan on a $200 CRT television (30 percent of cost) and $400 for a four-year plan on a $4000 projection TV (10 percent). CRTs break down less often, so paying the higher percentage doesn't make sense.
9. Shop around: A four-year plan for a Sony rear-projection TV set costs $400 at Best Buy, $525 at Circuit City, and $600 at CompUSA.
10. Check your credit card terms: Some cards extend the manufacturer's warranty. But if you need something fixed, you may have to pay up front and be reimbursed.

Google maps impress: I paid money for Delorme Street Atlas 2006, but Google Maps does a better, cleaner, easier job. And Google is free. This Google map of Manhattan's upper west side is much cleaner than Delorme's -- the erstwhile leader. First, Google.

Then Delorme. Notice that Columbus Circle is not a circle in Delorme's. The Mall is not a road. Google doesn't show it. But Delorme does. Google shows the roads the way they are, many windy. Delorme shows them as joined straight lines, which is not the way they are.

Sorry about all this mapping stuff. I got fascinated with it late last night.

Two wonderful cartoons

These definitions are truly fun. Try them on your kids.
What a bullfighter tries to do.
Bernadette: The act of torching a mortgage.
Burglarize: What a crook sees with.
Eclipse: what an English barber does for a living.
Eyedropper: a clumsy ophthalmologist.
Heroes: what a guy in a boat does.
Left Bank: what the robber did when his bag was full of loot.
Misty: How golfers create divots.
Parasites: what you see from the top of the Eiffel Tower.
Pharmacist: a helper on the farm.
Relief: what trees do in the spring.
Rubberneck: what you do to relax your wife.
Selfish: what the owner of a seafood store does.

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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