Harry Newton's In Search of The Perfect Investment
Technology Investor. Harry Newton
9:00 AM EST, Monday, March 9, 2009. The
BIG questions of the day:
Has the plummet in stock prices produced bargains yet?
Will the U.S. print so much new money that there'll be hyperinflation (like
in Germany in the 1920s) and the dollar will lose all its value?
Should we all be hoarding gold ingots in our basement?
What should we do with the cash that's burning a hole in our pockets, i.e.
is not invested, or as Wall Street likes to say -- hasn't "been put
Will the U.S. dollar continue to be strong against other currencies?
Are we really in better shape than the rest of the world?
The Hayman Capital
Master, L.P. has done extraordinarily well for its investors. Since its inception
in February of 2006 it has returned 340%, while the S&P 500 has returned
-42.37%. The annual returns were 20.6% for 2007, 216.64% in 2007, 6.13% in
2008 and 9.03% year to date for 2009. On March 2, J. Kyle Bass, the managing
partner, wrote a 26-page letter to his investors. In the letter, he wrote:
There will be a time to get bullish (my guess is many years from now.).
We believe that the U.S. (and in fact, the world) is in an ongoing debt
inflationary spiral that will likely continue for some time (possibly years).
+ The greater concern is the potential inflationary time bomb that grows
as government continue to borrow, print and "stimulate." What
happens to inflation when the velocity of money goes from zero to 100?
+ Just how big is the global debt tidal wave? ... The results of our study
are nothing short of shocking."
entire 26-page letter is nothing short of brilliant. If you do nothing today,
you must read J.
Kyle Bass's paper.
and Pieces of Statistics.
+ American car sales have dropped to an annual pace of nine million,
from some 17 million in 2007.
+ In February,
168,000 more manufacturing jobs were eliminated, bringing losses over the
last year to 1.2 million. In Michigan, where the troubles of the auto industry
have been particularly traumatic, the unemployment rate sits at 10.6 percent,
the highest of any state in the nation. There's an interesting piece on Lawrence,
Mass, an erstwhile manufacturing center with 13% unemployment at present in
Wall Street Journal.
+ There are
now 12.5 million people out of work, and the jobless tally has swollen by
4.4 million since the recession began -- and by 2.6 million in the past four
+ Banks are
now selling properties at such low prices many below what they sold
for in the 1920s you have to wonder why they bother to foreclose at
all. (The F.D.I.C. estimates that each foreclosure costs a bank on average
$50,000, more than if they were to do a loan modification.) ... Cleveland
plans to tear down 1,700 houses that are abandoned and beyond repair, but
the cost is steep -- about $8,000 a home. -- These stats from a cover story
Boarded Up," in Sunday's New York Times.
from a U.S. Airways survivor who went down in the Hudson River.
your families as never before and go to great lengths to keep your promises.
2. Be thankful and grateful for everything you have and don't worry about
the things you don't have.
3. Keep in shape. You never know when you'll be called upon to save your
own life, or help someone else save theirs.
4. When you fly, wear practical clothing. You never know when you'll end
up in an emergency or on an icy wing in flip flops and pajamas and of
absolutely no use to yourself or anyone else.
-- Gerry McNamara
The coach had put together the perfect team for the Detroit Lions.
The only thing that was missing was a good quarterback.
He had scouted
all the colleges and even the Canadian and European Leagues, but he couldn't
find a ringer who could ensure a Super Bowl win.
Then one night
while watching CNN he saw a war-zone scene in Afghanistan. In one corner
of the background, he spotted a young Afghan Muslim soldier with a truly incredible
arm. He threw a hand-grenade straight into a 15th story window 100 yards away.
He threw another
hand-grenade 75 yards away, right into a chimney.
Then he threw
another at a passing car going 90 mph.
to get this guy!" Coach said to himself. "He has the perfect arm!"
So, the coach
brings him to the States and teaches him the great game of football.
And the Lions go on to win the Super Bowl. The young Afghan is hailed as the
greatest hero of football, and when the coach asks him what he wants, all
the young man wants is to call his mother.
he says into the phone, "I just won the Super Bowl!"
I don't want
to talk to you, the old woman says. "You
deserted us. You are not my son!"
think you understand, Mother,"
the young man pleads. "I've just won the greatest sporting event
in the world. I'm here among thousands of my adoring fans."
me tell you!" his mother retorts. "At this very moment, there are
gunshots all around us. The neighborhood is a pile of rubble. Your two brothers
were beaten within an inch of their lives last week, and I have to keep your
sister in the house so she doesn't get raped!"
The old lady
pauses, and then tearfully says, "I will never forgive you for making
us move to Detroit!"
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
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