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Harry Newton's In Search of The Perfect Investment Technology Investor. Auction Rate Securities. Auction Rate Preferreds.

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8:30 AM EST Thursday, May 8, 2008: I'm on a list. Random brokers call me randomly with hot tips. They have great pitches. "We're making a move on..." They're always so solicitous. "How are you Mr. Newton today?" In the old days, I'd hang up on them. These days, I listen. I squeeze their hottest tips out of them, and put them in my little spreadsheet. I follow their "progress."

And the results of my "research?" ... Drumroll. Not one tip of the past six months has gone up. Yup. I would have lost money on every hot tip.

I've also applied the same research to my friends' hot tips. Guess what? Their hot tips do even worse. Some of my friends have The Reverse Midas Touch in spades. Everything they touch (and recommend to me) turns instantly into shit.

I think I should write a book, "Which Garden Path Would You Like to Led Down? And other great investment strategies."

The most useful investment tool. It's Google alerts. Sign up for free at The alerts won't be comprehensive. Think of them as a newspaper tailored for you with just the information you're interested in -- not what some left-wing or right-wing, pinko or commie, of a child editor feeds you in your local newspaper. Did I say the newspaper industry was dead?

Don't mess with it. There's an old rule in the computer industry: If it works, don't mess with it. Microsoft has just released something called SP3 (Service Pack 3) for Windows XP. Microsoft recommends you install SP3 because it provides more protection and 1,174 patches and hotfixes. I didn't make that number up. I have not installed it. But reading ComputerWorld makes me fearful. There are potential problems -- from your computer may simply not work after you've installed SP3 to a host of incompatible driver problems. If your XP is working fine -- and mine are (I have several machines with XP on it them) -- don't tempt fate by installing SP3.

Most importantly, turn off the software that's called "Automatic Updates." You don't want Microsoft messing up your machine while you're at lunch. What blew me away: the XP SP3 stand-alone installer weighs in at an incredible 316 megabytes. That's a lot of code. To me, that looks like a brand-new replacement operating system. That's not a gamble I want to make. For more, read ComputerWorld.

South Pacific is a love story, with a twist. The war is on. US Navy nurse Nellie Forbush falls in love with local plantation owner, French émigré (and murderer), Emile De Becque. Meanwhile, Lt. Joe Cable has fallen in love with young Liat, daughter of the irrepressible Bloody Mary, played by a lady from Hawaii (and voice of PBS Hawaii). Both couples' happiness is threatened by the war and by their own racial prejudices. Yes, South Pacific is a story of racial prejudices. Fortunately there are dozens of talented U.S. Navy recruits who break into glorious song and dance at just the right moments.

This is the first Broadway revival since its premiere in 1949. See it if you can. We saw it last night. One place to get tickets is

The latest on ARPS: As everyone knows, I have $3.5 million stuck in "cash-like" auction rate preferreds. When I reached new heights of boredom with incessant ARPS raving, a kindly reader suggested I move my ARPS ravings to another site. I did. It's now on, which now has a four times larger readership than this site. In misery, there is comfort.

The idea of that site was simple: Help other investors. Coordinate their strategies -- namely harass the issuers. And there is some good news in today's Wall Street Journal.

MUMBAI, India -- Merrill Lynch & Co. Chief Executive John Thain said he expects auction-rate securities held by the investment bank's clients to be fully refinanced within one year by the issuers, giving customers access to their cash. ...

"So far, the securities held by customers in our system, about 23% of the total has already been refinanced, and so I expect, over the next 12 months or so, we will see the securities get [fully] refinanced by the issuers and the customers get their money back," Mr. Thain said at a news conference in Mumbai (the new name for Bombay).

In the past few days, I've added a huge amount of information to my ARPS site. If you're in this mess, you should read it.

Meantime, my ego has no bounds. I must share with you, my friends, a piece Dow Jones Newswires did on the site

Blog Gives Angry Auction Investors Voice


NEW YORK -- Frustrated brokerage customers have been around as long as Wall Street, but in the era of blog-enabled personal expression, they've gotten new ways to vent.

Among the results: Nuveen Investments executive Bill Adams now has his phone number posted on the Web along with the entreaty, "Tell him to redeem your ARPS or you'll never ever do business with Nuveen again. And ditto for your friends."

Nuveen declined to comment on the posting or to make Adams available. Adams didn't return a phone message left with his assistant.

When the market for auction-rate preferred shares, or ARPS, collapsed in February much about the story resembled past Wall Street blow-ups. A supposedly blue-chip investment hit trouble, small investors felt they had been duped, while brokerage and money management firms, fearing lawsuits, issued public blandishments as they worked to clean up the mess.

In the past, disgruntled investors called regulators or signed on to class-action lawsuits. Now that blogs, or Web blogs, have become a facet of everyday life, some are also putting themselves onto the front lines.

Adams' number is on, a site run by Harry Newton, who himself has $3.5 million locked up in auction-rate securities. Newton's site has become a clearing house for auction-rate information, including media articles, links to firms that help investors sell their holdings on the secondary market, and 10 different lawsuits against various securities firms.

Newton, a retired founder of several telecommunications trade magazines who works out of his home office on Manhattan's Central Park West, says he started the auction-rate site after sensing that wall-to-wall coverage of the auction-rate market was tiring readers of his other Web page, "Harry Newton's In Search of the Perfect Investment."

It's not difficult to find information about auction-securities in the blogosphere. New York-law firm Levi & Korsinsky LLP, which has filed several suits on behalf of investors, set up its own site,, linking to news articles and other resources. Countless general interest investing blogs have also opined on the issue.

But Newton's blog is an unusual example of single-minded investor advocacy. On it, he openly debates which tactics investors should use to cajole closed-end fund firms that issued auction-rate preferred shares, into redeeming their securities.

"The issuers will eventually redeem our ARPs -- if and only IF we bring sufficient pressure on them," he writes. "Pressure on the issuers needs to come from the brokers, from you and I, from the regulatory authorities, from the courts and from the press."

While what effect, if any, Newton's effort will ultimately have on the outcome of the crisis, is still unclear, he does appear to have won fans among some other investors looking for company in their misery. Not only does the site chronicle his own travails, it also includes testimonials from others.

One, identified as Thomas J McCormick, explains how he "bit the bullet" and sold at an 11% discount.

Another, listed as Lori Nielsen, describes her efforts at "'badgering'" a contact at Merrill Lynch. "I've been sending e-mails and making phone calls (even to his personal cell) the last few weeks and have even mentioned "the "L" word" (lawyer)," she explains.

Newton says he spends several hours a day on the phone speaking to frustrated auction-rate investors, including some who have been in tears and others who say they hadn't known brokers bought them auction securities until their money was stuck.

Despite reaching dozens of investors who share his predicament, Newton, like other bloggers who aim to influence the media and Wall Street, at times seems impatient with extent to which his efforts have shaped the public debate.

When one article by Pulitzer-prize winning New York Times reporter Gretchen Morgenson skipped aspects of the crisis he considered important, he didn't mince words, dubbing the article "sloppy financial journalism."

Among his complaints: "She certainly never called me and clearly has never bothered to read this site."

Given a chance to revisit his comment, Newton explained it was, "tongue-in-cheek." His only goal: to get his money out of auction-rate securities.

TALK BACK: We invite readers to send us comments on this or other financial news topics. Please email us at

(Ian Salisbury is one of five Getting Personal columnists who write about personal finance; he covers topics including exchange traded funds and separately managed accounts.)

---By Ian Salisbury, Dow Jones Newswires; 201-938-5219; ian.salisbury

Why I'm obsessed with Lyme Disease. My friend told me yesterday his wife has had Lyme Disease for 20 years and can't shake it. She's now on a low dose of antidepressants. What's it like? "She's not the woman I married." It's really sad.

From Connie Strasheim, author of the book, The Lyme Disease Survival Manual, which I mentioned in yesterday's column:

If you notice you have been bitten and see the characteristic bull's-eye rash, you should go to a doctor and go on antibiotics immediately. Your physician should prescribe six weeks of antibiotics, and no less. If your doctor says that two weeks, or even a month, is sufficient, find another doctor! Four weeks, in many cases, has failed to eradicate the infection, and if you don't get rid of it in the early stages, then you will need to take years of antibiotics, and the infection will be extremely difficult (if not impossible) to get rid of.

OK. It's tasteless, but funny (and wholly appropriate for today's world)

New rules, from Bill Maher

New Rule : Stop giving me that pop-up ad for! There's a reason you don't talk to people for 25 years. Because you don't particularly like them!? Besides, I already know what the captain of the football team is doing these days - -mowing my lawn.

New Rule: Ladies, leave your eyebrows alone. Here's how much men care about your eyebrows: do you have two of them? Okay, we're done.

New Rule : Just because your tattoo has Chinese characters in it doesn't make you spiritual. It's right above the crack of your ass. And it translates to 'beef with broccoli.' The last time you did anything spiritual, you were praying to God you weren't pregnant. You're not spiritual. You're just high.

New Rule : Competitive eating isn't a sport . It's one of the seven deadly sins. ESPN recently televised the U.S . Open of Competitive Eating, because watching those athletes at the poker table was just too damned exciting. What's next, competitive farting? Oh wait!? They're already doing that. It's called 'The Howard Stern Show.'

New Rule: No more gift registries. You know, it used to be just for weddings. Now it's for babies and new homes and graduations from rehab. Picking out the stuff you want and having other people buy it for you isn't gift giving, it's the white people version of looting..

New Rule : When I ask how old your toddler is, I don't need to know in months. '27 Months.' 'He's two,' will do just fine. He's not a cheese. And I didn't really care in the first place.

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.

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