Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM EST, Friday, October 12, 2007: Where
were you on October 19, 1987, when the market crashed? And what did you do?
What did you learn? Send me an email. .
friend tells me he was in the next cubicle from a fellow who had spent $6,000
on way-out-of-the-money put options/futures contracts on the S&P or the
Dow (he doesn't remember which). The fellow had been buying them every month
for the past 12 months and letting them expire worthless each month. But this
day his $6,000 options were now worth $12 million. The fellow cashed out, quit
and retired simultaneously. (He later lost most of the money gambling on gold
From Jim Kingsale,
my oil guru -- read his blog,
Energy Investment Strategies:
I was in the
office of my cable television company. I owned few stocks and even less cash
so the crash made little difference to me. On the other hand, I did stop in
after work to see my brother in law who ran a hedge fund at the time and seemed
at bit nonplussed. I opined that the crash seemed like a healthy correction
of a frothy market (hence the perceived need for "portfolio insurance"),
not an event with legs based on some fundamental economic condition.
Could it happen again? I suppose, as you say, that with the quantity of hedge
fund money out there and no information as to how their computers are programmed,
another technical crash is possible, but I'm more concerned about a potential
dollar panic where everyone tries to get out of dollar denominated assets
at the same time. I tell myself that a dollar collapse will benefit oil, where
a lot of my investments are centered. But I know in my heart that when the
stock market crashes everything crashes with it. Do you know any good ways
to buy portfolio insurance? Jim
for todays insight on the 1929 & 1987 crash.
at least one Wall Street bull will be pointing out that U.S. stocks only correct
every 58 years, based on the statistical data points and that
we have until 2045 until the next correction. So, that means,
BUY, BUY, BUY!!!!!
I have been
a long time reader yet I am sadly a first time e-mailer to you.
From your writings on your website, it seams to me that maybe you have the
15% rule slightly askew. In this rule, you write about leaving investments
that have lost 15%, yet I do not recall reading about when to leave investments
that are 15% winners. Which leaves the bigger question, for any investors*,
I lost/gained X% in (fill in the blank amount of time) ______. What
should I do? Sell, and how much/Buy, and how much? As you have mentioned
in your articles, Wall Street has computer systems that do the math,
but they do the math on both bulls (positive) and bears
(negative), based on statistical parameters and formulas that can be easily
controlled and executed by any modern computer system. I would like to see
such sophistication to the small investor. One example I can think of is,
more flexibility in online brokerage trading. The online brokerages could
provide service that goes beyond stop loss and limit orders, to such things
as market events and time-lines. If you know of any
online brokerage that does any service close to such things, PLEASE, let me
I look forward
to our conversations,
Dear Brian, the
question of when to sell is hard. Since the name of this game is stockpicking,
not market timing, the "sale" key seems to me when things change for
the worse at the company. An illogical earnings decline. A key executive departure.
A cockroach event like the SEC asking the company questions, etc.
That said, when
the market turns sour, it will probably bring down your favorite stocks. And
then it's good to take a little profit off the table. In fact, it seems to me,
it's always good to take some off the table and play with the bank's money.
Have tech stocks reached their peak for now?
This needs more
thought. Possibly over the weekend. Thoughts from readers?
makes critical semiconductor chips for Apple's iPhone:
Infineon's financial results have, of late, been awful. I wonder if Apple's
purchases can help this company?
Stay away from Windows Vista. I repeat,
Do not use Microsoft Windows Vista. If you buy a new PC or laptop, ask
that it comes with Windows XP SP2 (that's service pack two). From my techie
friend who programs for a living (and is very good at it):
in my opinion, is really not an option for real users! or any users for that
matter. I run WinXP Pro, Max OS X 10.8 and MS Windows server 2003 only. Of
those I prefer the MAC OS X.
man who just died is delivered to a Louisiana Mortuary wearing an expensive,
expertly tailored black suit. Bubba the Mortician asks the deceased's' wife
how she would like the body dressed. He points out that the man does look very
good in the black suit he is already wearing.
The widow however,
says that she always thought her husband looked his best in blue, and that she
wants him in a blue suit. She gives Bubba a blank check and says, "I don't
care what it costs, But please have my husband in a blue suit for the viewing."
The woman returns
the next day for the viewing. To her delight she Finds her husband dressed in
a gorgeous blue suit. The suit fits him perfectly. She says to Bubba, "Whatever
the Cost, I'm very satisfied. You did an excellent job And I'm very Grateful.
How much did you spend?"
To her astonishment,
Bubba presents her with the Blank check. "Dere's no Charge," he says.
I must pay you for the cost of that Exquisite blue suit!" She says.
ma'am," Bubba says, "it din't cost me a Ting. You see, a Deceased
gentleman of about your husband's size was brought in shortly After you left
yestaday, and he was wearing an attractive blue suit. I Asked his missus if
she minded him going to his grave wearing a black suit instead, and she said
"It make no difference as long as he look nice."
"So, I jus
switched da heads."
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 .
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