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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 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.

Google 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," he said.

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:

The Internet’s 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 Google’s 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 can’t make any of the right moves.

I am short a small number of Google shares.

An 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, overpriced monstrosity.

It gets better. From today's Wall Street Journal,

In December, 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 freezing.

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 high 70s.

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 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 here.

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.

Oil factoids -- Oil producers:
1. Russia 19% of world output.
2. Saudi Arabia 18%.
3. Iran 8%.

Please be careful taking Ambien.
From the New York Times:

Ambien, the 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, Susan Cruzan.

How 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.

1. "Since 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 won't be."
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 them."
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 one."
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 for it."
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."

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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