Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Friday, November 11, 2005:
Stockmarkets rose strongly yesterday. No one knows why. The trend of late has
been upward. Maybe this is the beginning of of a fourth quarter boomlet?
The BIG urgency now is to reassess every one of your holdings. Disasters
are happening super-fast. And resulting price drops wipe out years of hard-won
gains. Big companies seem prone. Big technology companies are especially prone.
I instance them because yesterday's favorites often have only one virtue: Wall
Street is familiar with them. That means they get researched and recommended,
Or stocks which flounder around forever, but never go anywhere, like Microsoft:
The BIG news is the explosion of the Cockroach Stocks:
Companies become cockroach when they release unusual, bad news. Typically the
news smells of scandal, stupidity or greed. Examples of cockroach stocks: AIG,
Fannie Mae, Research in Motion (patent problems) and Guidant (faulty
The expression cockroach stock comes from the habits of New York apartment cockroaches.
You see one. You kill it (i.e. solve that problem). Three days later another
one appears... and another. Endless bad news.
Then there are the BIG companies whose management has simply failed to keep
up. We call them Dinosaur Stocks. It's amazing how fast dinosaurs like
General Motors and Wal-Mart are falling out of bed.
Or even The
New York Times, which has yet to figure that paper is dead:
Fact is major new forces -- like the Internet or rising energy costs -- have
broadsided these companies. Their tired, antique management cannot keep up.
There is a tendency to buy one of these erstwhile giants because they're now
"cheap." This is akin to catching a falling knife. It's a game fraught
When in doubt, stay out.
Imaging brought its roadshow to town yesterday: They rented a fancy
hotel room. They schlepped in all their fancy new equipment. They got all their
management talking. The major result: It gave boredom a whole new meaning. I
left early to play tennis.
Bottom line: Saleswise, they're doing great. Financially they're doing great.
Technically they're doing brilliantly. Their equipment is super-special. The
stuff they make saves lives. Their new equipment will save even more
lives. Yesterday there weren't any case histories. "The SEC and the
FDA won't allow us," they told me. There weren't any women who were
now alive because TriPath had caught their cancer early on. There weren't any
actresses pumping for early cervical cancer testing. There were just endless,
humorless gray-suited Ph.Ds droning on in polysyllables and acronyms that would
put their most ardent fan (i.e. me) to sleep. It worked. I fell asleep. It was
Suffice, the stock
is $6.90. I've paid as much as $9.23 for the swath of TriPath
Imaging I own. They're on track to earn really big bucks -- like become ten
times their present size and the stock selling for $60. My latest "strategy"
with TriPath is to forget about it for five years. By then, they'll have found
some analysts from big Wall Street houses to cover it, some institutions will
"discover" it and pump the price up or some big pharma company --
like Johnson and Johnson - will buy them.
was right about Whole Foods. It dropped yesterday,then bounced back.
Genius. See yesterday's column. Click
Wonderful advertising: The
headline on an ad for American Laser Centers (which does hair removal):
too short to spend it shaving."
woman and the parrot:
A woman went to a pet shop and immediately spotted a large, beautiful
The sign on the
cage said $50.
"Why so little,"
she asked the pet store owner.
The owner looked
at her and said, "Look, I should tell you first that this bird used to
live in a house of prostitution and sometimes says some pretty vulgar stuff."
The woman thought
about this, but decided she had to have the bird any way. She took it home and
hung the bird's cage up in her living room, and waited for it to say something.
The bird looked
around the room, then at her, and finally said, "New house, new madam."
The woman was
a bit shocked at the implication, but then thought "that's really not so
When her two teenage
daughters got home from school the bird saw and said, "New house, new madam,
The girls and
the woman were a bit offended, but then began to laugh about the situation considering
how and where the parrot had been raised.
A short while
later the woman's husband came home. The bird looked at him and said, "Hi,
A man and his wife were sitting in their living room when the man
said: "Just so you know dear, I never want to live in a vegetative
state dependent on some machine. If that ever happens, just pull the plug."
His wife got up and unplugged the TV.
will probably happen to all us soon:
was a demon in her wheelchair and charged around the nursing home, taking corners
on one wheel and getting up to maximum
speed on the long corridors, shouting "Vroom, Vroom!" and making believe
she was once again driving her car on the freeway. Because the poor woman was
one sandwich short of a picnic, the other residents tolerated her. Some joined
in to help her live her fantasy.
One day, Ethel
was speeding up one corridor when a door opened and Kooky Clarence stepped out
with his arm outstretched. "STOP! Police!" he shouted in a firm voice.
"Have you got a license for that thing?"
Ethel fished around in her handbag and pulled out a Kit Kat wrapper and held
it up to him.
"OK" he said, and away Ethel sped down the hall. As she took the corner
near the TV lounge on one wheel, Weird Harold popped out in front of her and
shouted, "STOP! Police! Have you got proof of insurance?"
Ethel dug into her handbag, pulled out a drink coaster, and held it up to him.
Harold nodded, and said, "Carry on, ma'am."
As Ethel neared
the final corridor before the front door, Crazy Craig stepped out in front of
her, stark naked with a very sizable erection.
"Oh, good grief," cried Ethel, "Not the Breathalyzer again!"
+ Dumb reasons we hold losing stocks. Click
+ How my private equity fund is doing. Click
+ Blackstone private equity funds. Click
+ Manhattan Pharmaceuticals: Click
+ NovaDel Biosciences appeals. Click
+ Hana Biosciences appeals. Click
+ All turned on by biotech. Click
+ Steve Jobs Commencement Address. The text is available:
Click here. The full audio is available. Click
+ The March of the Penguins, an exquisite movie. Click
+ When to sell stocks. Click
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
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