Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Friday, May 6, 2005: One
in a hundred. That's the odds. I got these odds from my real estate syndicator.
They check out 100 deals, to bid on 10, to buy one. The ratio has stuck in my
brain. I now apply it to all the "deals" that I look at -- from stocks
to syndications, from private equity to individual real estate properties. It
makes the time I've just "wasted" -- checking out and rejecting a deal
-- more palatable. It's part of the process. Don't feel bad.
When he heard I was buying two apartments, my friend Dan Good said "You
don't need to become a landlord at your age."
So, back to the drawing board on the two apartments I was going to buy.
+ In the same building as my daughter's new apartment. She and her boyfriend can
play landlord and repairperson.
+ Undiscovered part of downtown Boston, which must appreciate.
+ With extravagant assumptions of achievable rent and no reserve, I could only
raise my cash-on-cash projected return to over 4%. My friends in real estate say
they won't look at a deal with less than an 8% cash-on-cash return.
+ On a square foot basis, I checked the comps (comparables). The apartments weren't
super-cheap. They were in line.
+ I still got to collect rents.
So much for that idea. Thank you Mr. Good.
To assuage my soul, I bought a few JetBlue (JBLU), which promptly fell
a few pennies. The chart looks OK and the airline is doing well.
bank interest rates: Bank of America pays 0.60% a year. J.P. Morgan
pays 0.75%. Money market accounts at your friendly broker typically pay under
0.50% to 0.70%. My little Independence Community Bank (ICBC) pays 2.25%.
Emigrant Savings Bank pays 3.25%
through its EmigrantDirect.com. Click
The BIG news is that the seven-day, triple tax-free New York City non-AMC
variable rate floaters are presently paying 2.98%. That's gigantic and
Today's imponderable: In an Internet world where information is only a click
away, how can there be such huge differences?
TriPath's Conference call went well: The
company is on track, growing strongly and introducing new products. Better yet,
the stock is back over $7. One day this stock will be discovered and be bought
for $20 or more. I continue to like the management.
Ford and GM bonds are cut to junk. This
means the rating agencies say the bonds are super risky -- the companies might
default on paying interest on them and perhaps not pay the principal back. It
also means the bonds are falling in price and the yield (obviously) rising.
The highest yielding GM bond today (I checked this morning with Todd) is about
11.48%, but it will probably rise today as the bonds fall further. Imagine
GM paper yielding 12%+! This chart from today's Wall Street Journal:
The oldest scam in the world. Your company
receives a $868 invoice from "World Telecommunications Database" for
your listing. Your company pays it because it looks legit. It isn't. The invoice
comes out of Switzerland, where they don't have seem to have laws about postal
fraud or have much honesty about avoiding taxes in numbered bank accounts, etc.
fear that is driving car design. As I wrote yesterday, "Psychologists
believe that 9/11 caused a profound change in the level of fear we Americans
now cart around. That fear is manifesting itself in many things -- including
the design of cars which are taking on tank-like characteristics. Lots of protective
metal, high doors, small windows, heavy threatening front grill, etc.."Yesterday
I ran a photo of the new Chrysler 300. Look at these two. The trend continues.
The Honda Element
Ford SYNus concept car
Good news. I can buy this 1992
used Armored truck for only $37,800. Perhaps it will be my next vehicle?
Interpreter, the movie:
It's a fun action movie, whose plot makes no sense in the end. But while it's
running, it's engrossing. Catch the pounding, tension-building music. Fascinating.
Take the kids.
Nicole Kidman plays an interpreter at the U.N. The movie has great touristy
scenes of New York City. Makes my City look almost human.
My favorite headsets: I've
always hated headsets. But the technology has improved. They're lighter, more
comfortable and sound better. Motorola's Bluetooth headset comes in many variations.
You got to have a Bluetooth-enabled cellphone. Sadly, there aren't many.
Motorola Bluetooth -- $60 to $90.
favorite corded headset is the $15 Chameleon.
It plugs into the 2.5 mm headset jack on your phone. Many cordless and corded
phones (like my favorite Panasonic 4-line digital) have a headset button which
turns your headset on and off. For the Chameleon, click
Smart are you?
following short quiz consists of 4 questions and will tell you whether you are
qualified to be a professional. Scroll down for each answer. The questions are
NOT that difficult. But don't scroll down UNTIL you have answered the question!
1. How do you
put a giraffe into a refrigerator?
The correct answer
is: Open the refrigerator, put in the giraffe, and close the door. This question
tests whether you tend to do simple things in an overly complicated way.
2. How do you
put an elephant into a refrigerator?
Did you say, Open
the refrigerator, put in the elephant, and close the refrigerator?
Open the refrigerator, take out the giraffe, put in the elephant and close the
door. This tests your ability to think through the repercussions of your previous
3 The Lion King
is hosting an animal conference. All the animals attend... except one. Which
animal does not attend?
The Elephant. The elephant is in the refrigerator. You just put him in there.
This tests your memory. Okay, even if you did not answer the first three questions
correctly, you still have one more chance to show your true abilities.
4. There is a
river you must cross but it is used by crocodiles, and you do not have a boat.
How do you manage it?
You jump into the river and swim across.
Have you not been
listening? All the crocodiles are attending the Animal Conference. This tests
whether you learn quickly from your mistakes.
According to Anderson
Consulting Worldwide, around 90% of the professionals they tested got all questions
wrong, but many preschoolers got several correct answers. Anderson Consulting
says this conclusively disproves the theory that most professionals have the
brains of a four-year-old.
Send this to your
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
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will help pay Claire's law school tuition. Read more about Google AdSense,
here and here.