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Harry Newton's In Search of The Perfect Investment Technology Investor. Harry Newton

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9:00 AM EST, Tuesday, May 12, 2009. Sentiment has turned lousy again. The timing of the upcoming stockmarket downturn is uncertain (though yesterday was severe). There is now widespread consensus that we'll be retesting the March lows. If you're up on recent investments, take profits now. For reference, this shows the bear market, from its beginnings in fall of 2007, and the March/April 2009 bounce:

Reasons for new pessimism: My friends. My discussions with investors, and also:

From Richard Russell:

Have we seen stocks selling at great values or below known values in this bear market? Let's take a look at previous bear market bottoms.

In July 1932, the Dow sold at a yield of 10.2%.

In June 1949, the S&P sold at a yield of 7.6%

In December 1974, the S&P sold at a yield of 5.1%.

In April 1980, the S&P sold at a yield of 5.7%.

In September 1982, the S&P sold at a yield of 6.3%.

And what was the yield on the S&P in March 2009 (the "supposed" bear market bottom)? The yield on the S&P in March 2009 was 3.58%, hardly indicative of the bottom of a great bear market. Actually 3.58% is more what I'd expect at a market top. The current S&P dividend is now 2.45%.

From Meredith Whitney:

The consumer has less money. The underlying core earnings power of the major banks is negligible. There has been zero fundamental improvement. Upcoming earnings will manufactured. Short consumer retailing. Hold cash. Great assets coming up for sale later this year.

Check out her fascinating interview on CNBC yesterday with Maria Bartiromo.

From Bloomberg:

May 12 (Bloomberg) -- Economists downgraded their projections for a recovery from the deepest U.S. recession in half a century, now seeing the jobless rate exceeding 8 percent through 2011, a Bloomberg News survey showed.

For the full Bloomberg piece.

Where are interest rates going? From AP:

WASHINGTON (AP) -- With the economy performing worse than hoped, revised White House figures point to deepening budget deficits, with the government borrowing almost 50 cents for every dollar it spends this year.

The deficit for the current budget year will rise by $89 billion to above $1.8 trillion -- about four times the record set just last year. The unprecedented red ink flows from the deep recession, the Wall Street bailout, the cost of President Barack Obama's economic stimulus bill, as well as a structural imbalance between what the government spends and what it takes in.

As the economy performs worse than expected, the deficit for the 2010 budget year beginning in October will worsen by $87 billion to $1.3 trillion, the White House says. The deterioration reflects lower tax revenues and higher costs for bank failures, unemployment benefits and food stamps.

For the current year, the government would borrow 46 cents for every dollar it takes to run the government under the administration's plan. In one of the few positive signs, the actual 2009 deficit is likely to be $250 billion less than predicted because Congress is unlikely to provide another $250 billion in financial bailout money.

From Porter Stansberry:

U.S. Treasury bonds have fallen over half a percentage point in the past seven weeks, the biggest fall since 1994. Mortgages rates on 30-year fixed loans are back to more than 5%... This sets the stage for a showdown between the government's lenders (bond buyers) and the Federal Reserve, which wants interest rates to remain low. The Street (BlackRock, American Century, Federated, and Pioneer Investment) thinks the Fed will buy Treasury bonds again (like it did last month) in order to force rates lower. Your editor thinks, no matter what the Fed does, long-term interest rates are going much higher and the bond market is going to get crushed. ...

Or if you prefer more tangible investments, consider buying artwork to combat inflation. According to Sotheby's, a recent auction of lower-end (but still expensive by normal standards) artwork brought in $23 million. One of the bidders at the sale, a private London art dealer, Ivor Braka, speculated, "Perhaps people are anticipating global inflation, and want to put their money into something tangible... At the moment there is more money being produced than paintings."

Bargains in real estate? I figured by now you'd be able to find properties yielding 10%? Take the rents. Deduct the expenses. Figure your gross profit on the total price of the property and you'd see 10%. Today, we're lucky to see half that. I'm asking around, checking and searching. The consensus:

1. Banks are holding onto their crappy properties because of their TARP monies, their fear of government bureaucrats (what will they decide tomorrow?), and the fear that selling cheaply might open the floodgates of forcing them to report their balance sheets as they really are -- miserable.

2. Private sellers are still in total denial as to what their properties are worth. They think old prices. "My property is different."

3. There are few bank loans available to finance buying a property. Hence few sales. Few comps (comparables). Item: A friend has his property loan approved five months ago. Along the way the bank provided multiple assurances, "We're doing the loan." Last Friday, the bank called, said the loan was off. The bank had "no money."

4. The difficulty (impossibility?) of making sane projections. Where will rents be a year, two years, three years from now? Today, even written, cast-in-stone leases are being rewritten. Every retail store is telling its landlord, "We need a reduction in rent or we'll go out of business." Landlords are responding with lower rents, thus lowering the value of their property. And what rate will you finance at? And what will the rate be in five years time?

5. Finding the person in charge of a building loan is often almost impossible. Remember "the good old days"? Loans were made, then bundled with other loans (it was called securitization), then split into various tranches and then sold to buyers all over the world. Meantime, Lehmann Brothers who was king of that business went broke. Good luck finding today someone who can make a decision on a property.

The biggest problem remains that bankers -- especially the 20 biggest -- are like deer in the headlights. Frozen. Unwilling to sell their foreclosed properties. Unwilling to make new loans. Unwilling.

My real estate mavens tell me today is the worst real estate market they've ever seen -- and that includes the late 1980s/early 1990s with the savings and loan crisis.

All the above is journalism generality. You may fluke a loan. Your banker may be small, local and actually doing business. The New York Times has a story today on community banks, "We’re Dull, Small Banks Say, but Have Profits."

Deer ticks -- part 3: Reader Glenn Perkinson emails:

I know you have received many tick remedies. Here is another. I have a farm and am out very often during the tick season, so I frequently have the little buggers embedded.

I remove them with superglue. Coat the tick with several layers extending beyond the body of the tick. About the size of a fingernail. When the glue is dry peel it off. The tick has no pressure at all exerted on it so no fluids are squeezed into you. You might pull a few hairs out but the method has never failed for me.

Wash your hands frequently. The Centers for Disease Control and Prevention says hand washing is the most effective way to stay healthy. But many people don't do it often enough, or long enough, to be effective, according to today's Wall Street Journal:

Wash your hands every time you use the bathroom. Every surface presents an opportunity for germs to hitchhike out. "Who thinks to clean the latch on the inside of the stall door? Try nobody," says Jim Mann, executive director of the Handwashing for Life Institute, which advises food-service providers around the world on best hand-hygiene practices.

Also wash your hands whenever you change a diaper, pick up animal waste, sneeze, cough or blow your nose; when you take public transportation, insert or remove contact lenses, prepare food, handle garbage and before eating. Few people are as conscientious as they should be. Mr. Mann recalls being in meetings to discuss hand hygiene: "Everybody shakes hands. You finish the talk, and everybody runs for the food line. Nobody washes their hands."

How to do it. Soap and water is the gold standard. In a recent study in the journal Clinical Infectious Diseases, researchers in Australia doused the hands of 20 health-care workers with human H1N1 flu virus. Soap and water removed slightly more virus than three alcohol-based hand rubs. When volunteers didn't clean their hands, most of the virus was still present an hour after exposure.

It's the mechanical process of washing that's so effective. Soap molecules surround and lift the germs, friction from rubbing your hands loosens them, and water rinses them down the drain.

Experts recommend using warm water -- mainly for comfort, so you'll wash longer. Use liquid soap if possible. Bar soaps can harbor germs, though they'll likely rinse off with water.

Use enough soap to build a lather. Lace your fingers together to cover all the surfaces. Rub the fingertips of one hand into the palm of the other, then reverse. Keep rubbing for as long as it takes to sing "Happy Birthday" twice. (Some experts prefer "Row, Row, Row Your Boat." But any tune will do as long as it lasts at least 15 seconds.)

"The typical 'splash and dash' that most people do doesn't do anything," says Mr. Mann.

Rinse thoroughly. Residual soap can make hands sore. Leave the water on while you grab a paper towel and use it to shut off the faucet. Take it with you to use on the door handle as well.

For the entire Journal article.

The Perfect liquidity Investment. Friends had their "perfect" yacht built in South Africa. They flew down, picked it up. They're now sailing it back to Rhode Island and, courtesy the magic of satellites, sending daily email updates to their desk-bound friends state-side. Latest:

Never did see Ascension Island, too far over the horizon. All we really wanted to do was make sure we didn't hit it

And where, pray tell, is Ascension Island?

Other emails have mentioned how "peaceful" it is out there. I don't make this stuff up.

Jay Leno's political quips:
+ The White House announced today that Vice President Joe Biden has laryngitis. Yeah. They said that he has a rare strain they hope lasts until 2012.

+ In Louisiana a porn star named Stormy Daniels is now embarking on a listening tour of the state of Louisiana. She’s considering running for the Senate. A porn star running for the Senate. Porn to politics. That’s kind of a lateral move, isn’t it?

+ Federal authorities are now investigating how John Edwards spent his campaign money. Well, we know what he didn’t spend it on — condoms!

+ The economy is so bad, John Edwards is giving his mistress I.O.U.’s.

+ Miss California went to a gay wedding just for the free food. That’s how bad the economy is.

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, click here and here.