Technology Investor 

Harry Newton's In Search of The Perfect Investment Newton's In Search Of The Perfect Investment. Technology Investor.

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8:30 AM Monday, November 28, 2005: Electronics is where Christmas will be this year. Item: My country supermarket was selling 20 inch flat screen glass TVs for $80, portable DVD players (with screen) for $79 and combo DVD/VCR players for $75. Truly amazing "must-buy" prices.

Friday was "Black Friday," so called because in the old days, the Friday after Thanksgiving was when retailers "profits" turned black for the year. Today is Cyber Monday, so called because it's the day we order all our Christmas presents on-line, on the Internet.

As I wrote on Friday, there is a minor tech boom going on. Companies like Microsoft, Dell, Intel, Texas Instruments and Best Buy have been moving up. The reason is twofold:

+ Great new "must-buy" gadgets -- iPods, giant TVs, neat digital cameras, satellite radio, cheap laptops and now, Microsoft's Xbox 360. (For more on Xbox, click here.
+ Some talk about how "cheap" tech stocks have become. Cramer has been hammering on the "tech boom."

In reality, they're going up because there's a "story." This year 2005 has been full of "stories." A few select stocks (think Avian flu) bounce for a little while and them come crashing back. If you want to play this game, you need to recognize you're playing the short-term -- like a week or two. Maybe a month at the most. For this "tech boom" I'd want to be out by the last trading day of the year. A bundle of all the stocks I mentioned above would probably give you a nice pop between now and December 30. Be careful, though. Sell them on the first sign of something awry.

Most mergers don't work: I once invested in a leveraged buyout fund that was managed by investment bankers. There is a big difference between them and me. When things go wrong, I fix them the old-fashioned way -- sell harder, cut expenses, introduce new products, etc. When things go wrong, they "fix" them by merging the disaster, often with another disaster.

Why should I expect any different? They were trained to do this. Their fees for doing it are so handsome. Moreover, they typically don't get paid -- until the merger is done. That colors their "advice." They often say nice things about lousy deals. The lesson for investors is clearly to avoid companies that are doing large (and often stupid) mergers (e.g. eBay after its purchase of Skype). To continue this theme, here's an excerpt from a piece by Andrew Ross Sorkin in Sunday's New York Times:

WHEN he announced his company's $13.5 billion acquisition of Veritas Software last year amid an avalanche of criticism, John W. Thompson, the chairman of Symantec, insisted to analysts that the deal made "eminent sense." Gary L. Bloom, the chairman of Veritas, went on the offensive too, with a variation of the same stump speech.

Both men, of course, have been eminently wrong. Symantec's shares are worth only 54 percent what they were before word of the deal spread. Veritas, which as the seller was supposed to receive some sort of premium, has also left its shareholders shockingly underwater; if they had kept their shares in the combined company, the value of their holdings would be down 21 percent.

But not everyone is crying in their Cheerios when they read the stock pages: Goldman Sachs, which advised Veritas to take this undeniable disaster of a deal, made off with $26.1 million, according to Dealogic, a firm that tracks industry data. Lehman Brothers, which told Symantec's board members that the deal was a brilliant idea, also pocketed an eight-figure fee for its handiwork.

Sadly, this was not an isolated event on Wall Street. There is often a huge disconnect between the success and failure of deals and the enormous fees that banks get for making them happen. Consider the granddaddy of merger debacles, America Online and Time Warner. Salomon Smith Barney, now part of Citigroup, worked for AOL and walked away with $60 million; Morgan Stanley advised Time Warner and made $75 million. Shareholders lost more than $80 billion.

In the first three quarters of this year, investment banks made $11 billion, according to Dealogic. If you believe the academic studies that say only half of all deals create value, that is a lot of fees for what is often bad advice.

Safety tips for women. My daughter found them. My wife talked about them all weekend. Pass these 10 tips onto the women in your life.

1. Tip from Tae Kwon Do: The elbow is the strongest point on your body. If you are close enough to use it, do!

2. Learned this from a tourist guide in New Orleans. If a robber asks for your wallet and/or purse, DO NOT HAND IT TO HIM. Toss it
away from you.... chances are that he is more interested in your wallet and/or purse than you, and he will go for the wallet/purse. RUN

3. If you are ever thrown into the trunk of a car, kick out the back tail lights and stick your arm out the hole and start waving like crazy. The driver won't see you, but everybody else will. This has saved lives.

4. Women get into their cars after shopping, eating, working, etc., and just sit -- doing their checkbook, making
a list, etc. Don't do this. The predator will be watching. This is the perfect opportunity for him to get in on the passenger
side, put a gun to your head, and tell you where to go. Get into your car, lock the doors and leave.

5. If someone is in the car with a gun to your head, gun the engine and speed into anything. You'll wreck your car. Your Air Bag will save you. If the person is in the back seat they will get the worst of it. As soon as the car crashes, bail out and run. It is better than having them find your body in a remote location.

6. How to get into your car in a parking lot, or parking garage:
A.) Be aware: look around you, look into your car, at the passenger side floor, and in the back seat.
B.) If you are parked next to a big van, enter your car from the passenger door. Most serial killers attack their victims by pulling
them into their vans while the women are attempting to get into their cars.
C.) Look at the car parked on the driver's side of your vehicle, and the passenger side. If a male is sitting alone in the seat nearest
your car, walk back into the mall, or work, and get a guard/policeman to walk you back out.

7. ALWAYS take the elevator instead of the stairs. Stairwells are horrible places to be alone and the perfect crime spot. This is
especially true at NIGHT!

8. If the predator has a gun and you are not under his control, ALWAYS RUN! The predator will only hit you (a running target) 4 in
100 times; And even then, it most likely WILL NOT be a vital organ. RUN, Preferably zigzag.

9. As women, we are always trying to be sympathetic: STOP. It may get you raped, or killed. Ted Bundy, the serial killer, was a
good-looking, well educated man, who ALWAYS played on the sympathies of unsuspecting women. He walked with a cane, or a
limp, and often asked "for help" into his vehicle or with his vehicle, which is when he abducted his next victim.

10. Better paranoid than dead. Someone just told me that her friend heard a crying baby on her porch the night before last, and she called the police because it was late and she thought it was weird. The police told her "Whatever you do, DO NOT open the door." A serial killer has a baby's cry recorded and uses it to coax women out of their homes.

How to make PDFs: I wrote about this on Friday. This morning I expanded it. PDF stands for portable document format. It's a universal computer file standard. This means if you send someone a PDF file, they should be able to view it on their computer -- PC or Apple -- and on some cell phones like Blackberries and Treos. Most computers these days come with Adobe Reader, a simple free program to read PDF files. If you don't have one, click here.

Making PDF documents is a different matter (unless you have a Mac, in which case it's easy.) For the Windows PC, there probably 500 programs. None do a perfect job. Which means they often mess up complex diagrams, shadowing, etc. The best way of making perfect PDF documents - i.e. ones that look exactly like the original -- is to use an expensive program like QuarkXpress and have it save your document in PDF format. Microsoft eschews PDF (at least for now). So you can't save any Microsoft Office document in PDF format. That means a trip to a third party PDF doc maker. Among the many I've tested, the best value for the money is a piece of software called PDF Printer Driver. You can download a trial version of the software, but it will put a small plug for itself on every page it converts to PDF. Or you can pay $9.95 (which I did) and buy the real thing. To use it, you simply "print" your material to a file, to a place on your hard drive, not to a piece of paper. It couldn't be easier. For more, click here.

If you rarely need to convert a document to a PDF, there's an another way. Send your document to They'll convert it for you and return your new PDF document as an attachment to an email. Click here.

There is one other issue with PDFs. If someone sends me a PDF file -- say for a prospectus -- I like being able to excerpt words, mark up the document with yellow highlighting or add a little note with questions to myself. For that I've been using Adobe Acrobat. Its only problem is that it's expensive -- $300. If you're curious you can get a 30-day free trial, click here.

I've recently discovered something called Jaws PDF Editor, which seems to have everything Adobe Acrobat has and a little more, namely the ability to pull out, insert, delete and shuffle pages around. Best of all, it costs only $43. For a free trial, click here.

How to solve the vegetative state.
A man and his wife were sitting in the living room and he said to her, "Just so you know, I never want to live in a vegetative state, dependent on some machine and fluids from a bottle. If that ever happens, just pull the plug."

His wife got up, unplugged the TV and threw out all of his beer.

Recent column highlights:
+ Dumb reasons we hold losing stocks. Click here.
+ How my private equity fund is doing. Click here.
+ Blackstone private equity funds. Click here.
+ Manhattan Pharmaceuticals: Click here.
+ NovaDel Biosciences appeals. Click here.
+ Hana Biosciences appeals. Click here.
+ All turned on by biotech. Click here.
+ Steve Jobs Commencement Address. The text is available: Click here. The full audio is available. Click here.
+ The March of the Penguins, an exquisite movie. Click here.
+ When to sell stocks. Click here.

Harry Newton

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. That money will help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
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