Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
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
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,
+ 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.
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:
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.
tips for women. My daughter found them. My wife talked about them all
weekend. Pass these 10 tips onto the women in your life.
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.
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.
1. Tip from
Tae Kwon Do: The elbow is the strongest point on your body. If you are close
enough to use it, do!
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
LIKE MAD IN THE OTHER DIRECTION!
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
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.
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.
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
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
If you rarely need to convert a document to a PDF, there's an another way. Send
your document to PDFOnLine.com. They'll convert it for you and return
your new PDF document as an attachment to an email. Click
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
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
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
His wife got up,
unplugged the TV and threw out all of his beer.
+ 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
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.