Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM EST Tuesday, May 2, 2006: Go
to your broker, you'll be shown the stocks, funds and bonds his company allows
him to show you. It will be a small part of the actual number that you can find
yourself by going online or reading the Wall Street Journal or Investors
Business Daily. But it will still be a tiny part of the entire investing
universe. I'm staggered at how many people rely on their "friends"
for investment ideas. I favor (in order)
+ Diversification within the industry you daily operate in, and therefore understand
+ Finding "bird dogs" who operate in an investment subspecialty they
operate in daily and understand intimately.
+ Bonds for those times when you're queasy. Follow my favorite philosophy, "When
in doubt, stay out." Or better stay in bonds or short-term floaters.
Most importantly, do not blindly accept the investment recommendations
of your rich friends. I once lost $1 million on a recommendation of the president
of the World Bank. Can't get any better than that! My only compensation was
that he lost $10 million.
How gullible is the American
investor institution? True story: my friendly investment banker reports an IRR
of of around 1% over five years on Fund III -- far less than you could earn
in savings bank. And yet they are able to raise $1.3 billion on Fund
IV -- a testimony to brilliant salesmanship and the desperation of institutions
to invest their ever-flowing money from 401 (k), IRAs, pensions, etc.
the world's largest bank "lost" me $237,610.80. A true
story of remarkable incompetence. Citigroup is the world's largest bank and
probably the world's largest financial institution. Many years ago they bought
a successful brokerage company called SmithBarney, which I have an account with.
Perusing their online system late last night, I noticed that
Citigroup was showing that I had a $237,610.80
loss on my 2,000 shares in Canadian
Oil Sands Trust. According to Citigroup, the shares had overnight fallen from
$151.78 to $32.98.
Of course, they hadn't fallen. They'd actually risen. Citigroup -- the largest
and most sophisticated bank in the entire world -- had simply forgotten to credit
me with 8,000 extra shares. Canadian Oil Sands Trust had simply split its shares
five for one and had started trading on a post-split basis on May 1 -- which
was yesterday. In fact, I have an unrealized profit of actually $26,235.
By the way, I still like this stock. It trades on the Toronto Stock Exchange
-- in case your broker can't find it.
I love big banks -- Part 736. From a reader:
yourself a patent:
My friend is an orthopedic surgeon but he makes more money from patents on his
hip and knee replacements that he ever made as a doctor. My endodentist has an
idea for an neat gadget for his profession. And my friend, a teacher, has a neat
idea for changing the face of online education. I smile and suggest "File
yourself a patent." They flinch and say it'll cost millions. No, it won't.
All US patents are now online. You can even file your own patent online, without
the help of a lawyer. Go to the United States Patent. And Trademark Office --
click here. Search for
patents on ideas similar to yours. Copy the format... And away you go. Today I
read that Visto is suing Research in Motion for alleged violation of four Visto
patents. RIM settled its previous patent infringement lawsuit by paying NTP $612.5
million. Visto said that the fat NTP settlement was a major factor in deciding
to sue RIM.
Bank of America charged my credit card account $35 for exceeding my credit
limit by $115. I called to object. I was told, That is our policy and
that I should monitor my purchases so I don't exceed my limit. I asked,
"Doesn't BOA just decline the merchant's request if the pending purchase
amount max's out my credit limit"? The answer was, "To prevent embarrassment,
we sometimes let people exceed their limit, but we then apply a $35 charge".
Guess what I
did with my BoA card?"
As Mae West said, "I've been poor and I've been rich. Rich is better."
Some of her other delicious quotes included:
+ He who hesitates is a damned fool.
+ His mother should have thrown him away and kept the stork.
+ I generally avoid temptation unless I can't resist it.
+ Too much of a good thing is wonderful.
+ Between two evils, I always pick the one I never tried before.
+ Love conquers all things except poverty and a toothache.
world's greatest toothbrush:
The Oral-B Pulsar
If time in dentists' chairs qualifies me for anything, it's recommending toothbrushes.
This one is called the Oral-B Pulsar. And it has a battery which vibrates the
head. It's the best toothbrush I've ever used -- including the $100+ over-priced
Sonicare which my wife loves. The Oral-B Pulsar costs $5.99.. I bought eight
on the weekend and bargained the manager of our local Eckerds down to $4.99
by simply asking for a bulk discount. My chutzpah has no bounds.
Yesterday, my endo removed the crown on my tooth number 15, unscrewed the post
from the root (that took 2 hours) and released a flood of yuchy stuff that had
been building up for who knows how long. Instantly my pain disappeared. Good
news: we may save my tooth. As I explained to my endodentist, "I like my
tooth. I'm attached to it." He corrected me, "No , Harry, it's attached
is not a picture of all my readers: My dear friend and reader Dan
Good sent the photo to illustrate the column's "demographics." That's
him second from the right trying to look interested.
Dan Good, in drag, second from the right.
world's greatest comeback line.
If you ever testify in court, you might wish you could have been
as sharp as this policeman.
He was being cross-examined
by a defense attorney during a felony trial. The lawyer was trying to undermine
the policeman's credibility....
-- did you see my client fleeing the scene?"
A: "No sir,
but I subsequently observed a person matching the description of the offender,
running several blocks away."
-- who provided this description?"
A: "The officer
who responded to the scene."
Q: "A fellow
officer provided the description of this so-called offender. Do you trust your
sir, with my life."
your life? Let me ask you this then officer. Do you have a room where you change
your clothes in preparation for your daily duties?"
A: "Yes sir,
Q: "And do
you have a locker in the room?"
A: "Yes sir,
Q: "And do
you have a lock on your locker?"
A: "Yes sir."
Q: "Now why
is it, officer, if you trust your fellow officers with your life, you find it
necessary to lock your locker in a room you share with these same officers?"
A: "You see,
sir -- we share the building with the court complex, and sometimes lawyers have
been known to walk through that room."
erupted in laughter, and a prompt recess was called.
The officer on
the stand has been nominated for this year's "Best Comeback"
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.
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