Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Thursday, March 9, 2006: Funds or
managers -- you must manage them. And you must manage them with the
same discipline you manage stocks. That means 15% down and you're out. But
it also means you must follow your manager's "logic," watching
like a hawk what the manager is buying and why. One of my managers loaded my
account with newspaper stocks. Despite all his other excellent moves, his "logic"
on newspapers simply doesn't hold water. He says they are "value"
stocks. In fact, they valueless stocks, with a business model -- print media
-- rapidly falling apart. But the manager is obsessed with them and won't let
go. I should have dumped this manager months ago -- despite his previous good
record. Managers do go awry.
I write this to
remind myself that patience is often not a virtue with managers
-- especially if they have some bee in their bonnet and won't let go. And their
stocks are making a 45 degree downward spiral.
One should also remember that the world of money managers has exploded. Hedge
fund managers typically get 20% of the fund's upside. This encourages
some of them to take huge risks. In contrast, mutual fund managers simply get
a piece of the fund value -- not its upside. This encourages them to take fewer
risks, and pay more attention to preserving your capital.
has the smell of a Cockroach stock:
See one cockroach today, you'll see another in a few days, then another and
another. Pretty soon you know there's something seriously wrong. Companies become
cockroach when they report unusual stuff that reeks of even more serious problems,
of more cockroaches. Last night Google said it agreed to pay as much as $90
million in legal fees and advertising credits to settle a lawsuit filed against
it that it knowingly overcharged for online advertisements and conspired
to continue doing so. Remember Google's motto is "Do no evil."
Google Chief Executive Eric Schmidt told analysts last week that Google has
staff and systems to guard against click fraud and that Google reimburses advertisers
when such fraud slips through. "It is not a material issue for the company,"
Yup, and pigs will fly. That's why Google has agree to pay $90 million
to settle a click fraud law suit -- the first.
Meantime, the New York Times' Andrew Ross Sorkin writes:
most closely watched company showed a bit too much leg last week. Google mistakenly
posted internal financial projections on its Web site, the company said in
a regulatory filing late Tuesday. Accidents happen, but this gaffe came barely
a week after the search-engine heavyweight sought to clarify some
not-so-rosy comments by its finance chief and ended up sowing even greater
confusion over its prospects.
Throw in Googles
recent public scolding over its activities in China it, along with
other major search engines, came under fire from United States lawmakers for
tweaking software to endear themselves to the government there and
Google is looking like a company that all of a sudden cant make any
of the right moves.
I am short a small
number of Google shares.
amazingly bad car: I rented a Lincoln Town Car form Hertz
for my California sojourn. It was the best Hertz had, it said. I'm not a car
person. But as I drive this totally awful car, I realize what's wrong with Detroit
in general and Ford, its maker, in particular. The Town Car flops around
the road, refusing to hold a straight path on the highway. Its uncomfortable
seats give me backache in 15 minutes. Its trunk is an abortion. Getting luggage
in and out from the deep hole is an instant severe backache. My favorite design
idiocy is there's nowhere to put your left foot. No ledge. No
indent. No nothing. My left foot flops in a perfect vacuum. My house-guests
rented a Toyota Corolla. It has a ledge for your foot. It gives 50% more miles
per gallon. Corolla's MSRP starts at $14,105. The Town Car MSRP starts
at $42,875. Ford has got to be kidding!
Our Lincoln Town Car -- Ford's large, clunky, bouncy, gas guzzling, badly-designed,
It gets better.
From today's Wall Street Journal,
General Motors Corp. ran a series of ads across the U.S. showing Cadillacs
being driven in snow. The decision to do so was made by the giant car maker's
executives in Detroit, where on Christmas Day, temperatures hovered just above
The ads also
ran in Miami, a vibrant car market where GM has bombed for the past
15 years. As Christmas dawned, temperatures there started climbing into the
GM is struggling
under a financial burden created by monumental pension and health-care obligations.
But it's also having a hard time persuading Americans to buy its cars. One
reason: GM's cumbersome and unresponsive bureaucracy, the one that ran the
snow ads in Miami, has for years failed to connect with the tastes and expectations
of consumers outside the company's Midwestern base.
....As a result,
GM has a paltry 13.8% of the retail market in South Florida, a slide it is
now trying to reverse. The problem is repeated in the U.S.'s rich, coastal
metropolises where Japanese and European auto makers first set up dealerships
in the 1970s and 1980s. There, overseas car makers exploited consumers' memories
of GM's unreliable and unattractive mass-market vehicles.
... In Miami, GM is in third place, behind Toyota Motor Corp. and Ford Motor
Co. Toyota began tailoring marketing to Hispanics in the 1980s. Ford started
similar efforts in Florida and California about 15 years ago. None of GM's
vehicles are among the top 15 vehicles registered in the greater Miami area,
according to J.D. Power's Power Information Network. Miami's most popular
car is Honda Motor Co.'s Accord.
On a recent
Friday night in front of Nobu, a trendy Japanese restaurant located in South
Beach Miami's exclusive Shore Club Hotel, Miami residents were driving to
the valet entrance and down Collins Avenue. Lexuses, Mercedes-Benzes and Porsches
were everywhere, and there wasn't a GM vehicle in sight.
... In an interview
last year, GM Chief Executive Rick Wagoner said it was critical that GM halt
its two-decade-long slide in big coastal cities such as Miami. "We have
a very specific strategy to address these markets, one by one, East and West,"
said Mr. Wagoner, who doubles as the head of GM's North American auto operations.
As for the company's
complex structure, he made few apologies, arguing that a global auto maker
needs such a "matrix"-style organization. "People really have
trouble because they want to know who's in charge," Mr. Wagoner said.
"And the answer is going to be, increasingly: It depends."
For the Journal's
entire gruesome article,
click here. I have no idea what's holding GM up:
Even better: GM's chief Executive Rick Wagoner declined to be interviewed by
the Journal for its story today. Can you imagine running a company and declining
to talk to a reporter from a newspaper with a circulation of 1.9 million readers
-- most of whom own at least one car. In contrast, Toyota continues to surge:
The amazing ViewSonic monitor: I bought
ViewSonic VX922 19" monitors from Buy.com for my California sojourn.
My ViewSonics arrived safely. They perform well. They're ultra-bright. The best
part is their 2 millisecond response. That makes them the fastest monitors I've
ever seen. They're incredible. Only $367.95 a piece. Click
The ViewSonic VX922 lacks one small feature. The stand is fixed. You can't
raise and lower it. You can tilt it.
You can buy bigger monitors. They'll cost you more and you'll need a graphics
card capable of driving the higher resolution. You must run flat screen
LCD monitors at their native resolutions. You cannot change resolution as you
can on a glass monitor. The ViewSonic VX922 monitors are 1280 x 1024 pixels,
which most laptops and my VillageTronic PC card easily drive.
factoids -- Oil producers:
1. Russia 19% of world output.
2. Saudi Arabia 18%.
3. Iran 8%.
be careful taking Ambien.
From the New York Times:
nation's best-selling prescription sleeping pill, is showing up with regularity
as a factor in traffic arrests, sometimes involving drivers who later say
they were sleep-driving and have no memory of taking the wheel after taking
the drug. In some state toxicology laboratories Ambien makes the top 10 list
of drugs found in impaired drivers. Wisconsin officials identified Ambien
in the bloodstreams of 187 arrested drivers from 1999 to 2004. ... A spokeswoman
for the F.D.A. said the drug's current label warnings, which say it should
not be used with alcohol and in some cases could cause sleepwalking or hallucinations,
were adequate. "People should be aware of that," said the spokeswoman,
to evaluate an employee:
These are actual quotes (well, maybe) taken from United States Federal
Government employee performance evaluations. They're delicious. All of us know
people like this. Enjoy.
my last report, this employee has reached rock- bottom and has started to dig."
2. "I would not allow this employee to breed."
3. "This employee is really not so much of a has-been, but more of definite
4. "Works well when under constant supervision and cornered like a rat
in a trap."
5. "When she opens her mouth, it seems that it is only to change feet."
6. "This young lady has delusions of adequacy."
7. "He sets low personal standards and then consistently fails to achieve
8. "This employee is depriving a village somewhere of an idiot."
9. "This employee should go far, and the sooner he starts, the better."
10. "Got a full 6-pack, but lacks the plastic thingy to hold it all together."
11. "A gross ignoramus -- 144 times worse than an ordinary ignoramus."
12. "He doesn't have ulcers, but he's a carrier."
13. "I would like to go hunting with him sometime."
14. "He's been working with glue too much."
15. "He would argue with a signpost."
16. "He brings a lot of joy whenever he leaves the room."
17. "When his IQ reaches 50, he should sell."
18. "If you see two people talking and one looks bored, he's the other
19. "A photographic memory but with the lens cover glued on."
20. "A prime candidate for natural de-selection."
21. "Donated his brain to science before he was done using it."
22. "Gates are down, the lights are flashing, but the train isn't coming.
23. "He's got two brain cells, one is lost and the other is out looking
24. "If he were any more stupid, he'd have to be watered twice a week."
25. "If you give him a penny for his thoughts, you'd get change."
26. "If you stand close enough to him, you can hear the ocean."
27. "It's hard to believe he beat out 1,000,000 other sperm."
28. "Some drink from the fountain of knowledge; he only gargled."
29. "Takes him two hours to watch '60-minutes'."
30. "The wheel is turning, but the hamster is dead."
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.