Harry Newton's In Search of The Perfect Investment
Technology Investor. Harry Newton
9:00 AM EST, Tuesday, March 31, 2009.
This chart is
for Joe Daley. I played Joe tennis yesterday. He argued that if you "buy
and hold" stocks for a long time, you'll do fine. Joe, here's what the
Dow has done over the last ten years -- lost money.
entices. Like having a casino on our own street. Hard to avoid. The stockmarket
fills newspapers when it makes a blip. Yesterday it went down by 250 points
because investors didn't like something. Today's it's going up because they
like something. The Wall Street Journal will tell us why. Fact is the Journal's
reporter has as much idea as I do -- which is zero. Richard Russell of Dow
Theory Letters writes in his latest newsletter:
-- This is the time to have a totally open mind. We are seeing phenomena
in the economy that nobody has ever seen before. The US government has declared
all-out war against the prevailing primary bear trend. I'll remind subscribers
that "the market can do anything" but man's emotions and market
action tend to be pretty much the same over the years.
I continue to believe in the Dow Theory thesis that the primary trend cannot
be manipulated or reversed by any group of men or any government. Once the
primary trend of the market is established, it tends to run to conclusion
or exhaustion. This is the reason why I believe the well-intentioned activities
of the Fed and the Treasury will fail or at best, extend the duration of
the bear market.
I tell myself, "Russell, "no matter what -- you must keep an open
mind." We're living in a new globalized world. Two billion people have
been added to the world economy. The old guard is weakening -- the international
power of the US is ebbing. That alone changes the game.
I come back to control. It's very simple: If I have control, I make
money. If I don't, I'm gambling.
A real estate
friend yesterday asked me if I'd like to invest in a fund that plans to buy
distressed houses, fix them up and sell them. I asked him will he invest?
If I had some
money I would. I bought distressed real estate in the early 90's bear market
-- eleven $50,000 to $100,000 apartments about to go into foreclosure or
otherwise distressed, close to my then home in Miami. I bought in buildings
I knew something about. I was personally able to manage/repair/rent/sell
them in my spare time, turning them around for about a 300% profit after
expenses in about seven years. I computed my IRR at about 20%, which frankly,
wasn't that much more than the stock market's (???) but I had tremendous
For me, this
investment in the fund would be the same play I made in the early 90's,
only I'd be buying lower (via my share of entire bank portfolios at bigger,
bulk discounts than I could get one-at-a-time back then. Drawbacks are that
I'd be probably selling somewhat lower, since there's no way I could personally
add value by managing, improving and selling the properties-- and I have
no control over the managers. Which is, of course, the biggest risk.
would you fix the economy?
The St. Petersburg Times asked readers for ideas. David Otterson
of Largo nailed it:
40 million people over 50 in the work force. Pay them $1 million apiece
severance with stipulations. They leave their jobs. Forty million job openings
- unemployment fixed. They buy NEW American cars. Forty million cars ordered
- auto Industry fixed. They either buy a house or pay off their mortgage
- Housing Crisis fixed.
For more ideas,
Minutes freaked out on malware. Update 1. It
talked about a piece of software called Conficker that wends its way into
your computer and is triggered to do mean and horrible things beginning on
April 1. The main interviewee was a man from Symantec anti-virus software.
Of course, the threat is real. And of course, Symantec has an interest is
freaking everyone out. There are now six things you can (and should) do:
Keep your Winds and anti-virus software up to date. Run your anti-virus
software this morning in scan mode.
Don't open email attachments.
Don't visit dubious web sites. When in doubt, stay away.
Don't freak out. If your PC does get infected, you'll want to replace its
hard disk with a clean clone you made and the backups of your daily work.
And then reformat the infected drive. (I've talked about cloning and backups
5. Don't leave your computer on and on the Internet. Turn it off when you
go sleep or out to dinner.
Get a Mac. So far, Macs haven't targeted by the bad guys. This tip contributed
by Mac fan, Dan Good.
most expensive house is for sale. It's 56,500
square feet on 4.6 acres in the ritzy Holmby Hills part of Los Angeles. Some
of the ceilings are 30 feet high. There's a bowling alley, wine cellar, wine
tasting room, gift-wrapping room, a humidity-controlled silver storage room,
China room, library, gym, a barber shop, beauty salon, seven bedrooms, five
fireplaces, four wet bars, media room, tennis court, fountains, waterfall,
pool, spa, reflection pool and a pool house with kitchen, 16 car ports, rooftop
rose garden and a citrus orchard.
Front or back view.
Back or front view. The place makes you
wonder what God could do, it only He had the money.
little spider will keep you (or your children) amused for hours.
Two Gay Guys are walking through a zoo...
They come across the gorilla and notice that the male gorilla has
a massive erection. The gay men are fascinated by this. One of the men just
can't bear it any longer, and he reaches into the cage to touch it.
grabs him, drags him into the cage and mates with him for six hours, non-stop,
while the zoo attendants stand by helplessly.
When he's done,
the gorilla throws the man out of the cage. An ambulance is called and the
man is taken away to the hospital.
A few days later,
his friend visits him in the hospital and asks, "Are you hurt?"
"AM I HURT?"
he shouts, "Wouldn't you be? He hasn't called............he hasn't written.
rules on income taxes.
Income taxes are normally due on April 15th, unless that date falls
on a Saturday or Sunday, in which case they are due on Monday the 16th or
However, I have been told that rule has recently been changed for this and
for the next 4 years, tax payments will not be due until you are nominated
to a cabinet position.
with your tax adviser to confirm.
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 on this site. Thus I cannot endorse, though some
look 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
Michael's business school tuition. Read more about Google AdSense,
here and here.