Harry Newton's In Search of The Perfect Investment
Technology Investor. Harry Newton
AM EST, Wednesday, May 13, 2009. The worst
investing mistake you can make is to pile good money after great money. An
investment is doing great. So you put more money into it. Wrong. Take money
out. Keep your allocation steady. What was last year's great investment
will be this year's bust. I speak from bitter experience, having put much
to much money into commercial real estate when times were wonderful.
lesson for our own investing. Last night
PBS ran an hour special on Madoff. The investor interviews were sad. Madoff
was brilliant. He swore everyone to secrecy. If you questioned anything, he'd
say, "If you don't like what we're doing, I'll send you your money back."
That was enough to intimidate everyone into staying, and sending more.
message was that no one did any real due diligence on Madoff, especially the
feeder funds that channeled billions into Madoff. They spent their time rounding
up investors, and pocketing gigantic fees for their efforts. They did no due
diligence. Some of the feeder funds were schlocky -- essentially Madoff creations
-- but others were the creme de la creme of the European (especially Swiss
) investment world. Nobody did any due diligence. They lived for the fees.
of of them never told their investors where they were putting their money,
i.e. with Madoff. In fact, Madoff specifically told them "Don't put me
in your prospectus."
In short, most
of the investors didn't know what they were investing in. They trusted the
funds. But the funds didn't know (or care). They were rolling in gigantic
fees. And the SEC was looking the other way. Interestingly, if you're advising
on investments and have 15 or more investors, you have to register with the
SEC. Madoff had thousands, but never registered with the SEC. You'd think
the Feds could have at least figured that one out.
The irony is
that Madoff's Ponzi scheme could easily have continued for another 20 years
-- had it not been for last fall and the flood of redemptions, which were
not caused by Madoff but by other honest funds falling apart.
You can watch
the entire Frontline Bernie Madoff program.
downturn in global trade is frightening. Two
U.S. railroad freight traffic is running about a fifth lower than a year ago.
It is one of several less-obvious indicators that all isn't well, despite
the financial-market rally since early March. The
slump in weekly rail traffic reflects sluggish industrial activity and consumption.
Shipments of industrial products are down almost a third in the past year,
while raw materials like coal, metals and crops also show steep drops. The
pace of decline has picked up relative to the first quarter's 16% fall.--
Wall Street Journal.
One of the largest fleets of ships ever gathered
idles here just outside one of the worlds busiest ports, marooned by
the receding tide of global trade. There may be tentative signs of economic
recovery in spots around the globe, but few here.
cargo ships some up to 300,000 tons, with many weighing more than the
entire 130-ship Spanish Armada seem to perch on top of the water rather
than in it, their red rudders and bulbous noses, submerged when the vessels
are loaded, sticking a dozen feet out of the water.
So many ships
have congregated here 735, according to AIS Live ship tracking service
of Lloyds Register-Fairplay, a ship tracking service based in Redhill,
Britain that shipping lines are becoming concerned about near misses
and collisions in one of the worlds most congested waterways, the straits
that separate Malaysia and Singapore from Indonesia.
The root of
the problem lies in an unusually steep slump in global trade, confirmed by
trade statistics announced on Tuesday.
China said that
its exports nose-dived 22.6 percent in April from a year earlier, while the
Philippines said that its exports in March were down 30.9 percent from a year
earlier. -- The
New York Times.
a new flat-screen TV? I love Samsung TVs. I saw their new LEDs
last night. They're spectacular. They're just under two inches deep, perfect
for the wall. But Samsung tells I should wait a few months. They have even
more spectacular ones coming.
Wall Street Journal for $99 a year. Reader Rick Wymore received
a 52-week renewal to his Wall Street Journal subscription for $99, plus one
dollar more for a year of SmartMoney. His "professional courtesy discount"
showed that others were paying $759 for the same 52 weeks! (There are really
dumb people in the world.) He emails me,
not a teacher or student, just a struggling business owner. Professional
courtesy my ass, it's just a way to keep subscription numbers up to bring
in the high priced ads. Like you say, print is in big trouble."
he got his discount because he is handsome.
1: Don't pay more than $99. Do not pay the $349 they offered as a renewal
to me. Or the $759 that rich morons pay.
2: Professors and students (and lucky struggling business owners out west)
pay only $99.
3: But free is the best. You really don't need a print subscription
to the Wall Street Journal. You can read it all online and via the free emailed
newsletters they send you.
to get Word to open your last file. Right click
on your Word shortcut. Left click on Properties. And add a space and the word
/mFile1 after the target -- where you see WinWord.exe.
in the world are the Zhivagos now? God bless Google. Give it a
few coordinates and it will find you in the middle of nowhere. Here is where
my intrepid yachting friends are now. I find this whole thing so far out that
it's become fascinating.
adventure out there. They broke a pole holding up a sail, which then fell
partly overboard. But they got the sail back. Reports the email:
sticking with planes.
trick, as Philip said to me several times, was to not tear it - and not
to fall overboard while trying to get the sail up..The tough part at the
end was the hoop and its sail sock -- which were acting like a sea anchor.
That's something you put in the water when you're in really heavy weather
and you want to slow the boat down. The real sea anchor we have is more
like a parachute, but there are bucket-like sea anchors. That's how the
hoop and sock were behaving. There was a lot of pressure on the hoop and
sock, and we didn't want to damage it as we brought it up. So we worked
with the surges as the waves came under the boat, and got it on board.
are getting pretty salty. There's a salt film on just about everything,
so you end up using towels and tea towels on the cushions and chairs. Otherwise,
the wind is continuing to hold, and we are making our way northwest or southwest,
depending on the wind direction."
know where this is? Or is it Photoshop? Someone's
fantasy? I want to play there.
grateful for where you live. My friend grew
up in Zimbabwe, served in the army, bought property, bought materials to build
his dream house. Then it all fell apart. He now lives in South Africa. We
hadn't heard from him in eons. Then, an email:
that living in my part of the world means that stability and security are
a not to be taken for granted. Zimbabwe is a sad tale of woe, but that's
all I can say...MANY thousands have died at home, all at the hands of POL
POT type militia set up by Mugabe's secert police and army and he has buckets
of blood on his hands. He refuses to even acknowledge any of it and publicly
refused to apologise for ordering it all originally.....and still he's allowed
to travel to the UN. We don't even talk about it now....as he will continue
to do all of this regardless. The western governments, let alone his fellow
African leaders still will not censure him or curtail his movements...effectively.
recent New Yorker cartoons:
It's a beautiful day in New York. Now, if only we all didn't have hay fever.
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.