Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM Tuesday, October 25, 2005: Yesterday
stocks surged. No one knows why. The press wrote it was because Wall Street
loved Ben Bernanke's nomination to succeed Alan Greenspan. That was a convenient
happening. The good thing about Bernanke is he said he would continue Greenspan's
policies -- attacking inflation and ignoring bubbles. He said nothing about
stopping Greenspan's rate hikes. But Wall Street was guessing -- with a drop
in bond yields -- that he might. The reality is that inflation is surging as
energy and higher food costs take their toll. Greenspan doesn't retire until
early 2006. There's potential for another rate hike, or two.
No one really
knows what yesterday's surge meant. Is the gain the beginning of the third quarter
rally? Or just a bull blip in a bear market? Earnings for the third quarter
should be up 15.8%, which is good. Until yesterday the stockmarket hadn't
reacted with glee. The market is still down for the year. I'm crossing my fingers
-- while remaining optimistic and opportunistic.
I bought a little
Novavax (NVAX), a hot drug maker, that allegedly has a quicker way of
making a vaccine for the avian flu. They own patents on
a way to make commercial quantities of vaccines without injecting chicken eggs.
They will be presenting at 11 AM tomorrow at the The C. E. Unterberg,
Towbin, Life Sciences Conference, which runs today and tomorrow at New York's
Palace Hotel. For a full schedule, Click
here. I'm betting most of the presentations will be available via Webcast.
Check the company's own web site.
Novavax (NVAX) on a roll.
I also sent some money to a real restate syndication on a a couple of office
buildings in Cincinnati. They're cheaper and offer better returns in the middle
of the country versus the two coasts which are overpriced.
My friend just
returned from a real estate jaunt in Germany. He says things are perking up
there. Companies have tightened up. Earnings have improved. Real estate is attracting
interest as Germany inches into the 20th century with new rules on sale/leasebacks
and, ultimately, even trading REITs. Money is pouring into German commercial
real estate. Countries like Poland and the Czech Republic also look attractive
and are securing U.S. Institutional monies.
In short, I'm continuing my slow diversification program -- most recently into
commercial real estate and commodities, through a fund called Strategic Commodities
Fund. This thing is run by Gresham Investment Management, a small group
of talented guys who are knowledgeable about commodities. The fund is marketed
by Lehman Brothers, which has broad sales skills but, fortunately, doesn't mess
with the management of the fund. .
Community Bank (ICBC) gets bought at $42. I
hope many of you kept your shares in my favorite bank. Yesterday, ICBC announced
Sovereign Bancorp was buying it for $42 a share -- roughly $10 above
last night's close. Congratulations Alan Fishman, ICBC's head.
Research in Motion slides a little more.
Yipee. RIM said it could face a court order to stop selling its popular Blackberry
handheld in the US, following the latest ruling in a patent dispute. RIM said
that the U.S. Court of Appeals in Washington refused to delay proceedings to
enforce an injunction at the request of U.S.-based software firm NTP, which
claims the popular Blackberry device infringes on its patents. The Canadian
firm earlier this year agreed to a $450-million settlement with NTP, which had
claimed it owned the patents to the technology used in Blackberry devices. But
the deal fell through later and NTP took the matter back to court. An injunction
could be a huge blow to RIM, which gets about 70% of its revenues from
U.S. Blackberry users.
It couldn't happen to a nicer company. The more I use my Verizon Blackberry,
the more I dislike it.
RIMM on the way down. Way down, I hope.
gullible are Harvard Business School graduates?
Plenty! A fellow called "Rod Lutron" calls up, claims to be
part of our class of '69, tells a tale of woe -- divorce, bitchy mother-in-law
tying up all his money, his business doing OK but short-term lack of money
because of mother-in-law, ... can we lend him a couple of thousand? Five years
ago he pulled the same story. A bunch of graduates (including me) sent him some
money. We never got the money back. Five years later he's back with the same
story... Of course, there is no Rod Lutron. It's a scam. Ironically not one
of the HBS graduates -- including me -- ever checked his bona fides... The perils
of not doing your due diligence, again.
Daniel Amen on Improving the Brain: Some excerpts from Newsweek.com:
In his latest
book, Making a Good Brain Great, Amen explains how bad
eating and poor exercise habits, sleep deprivation and stress
can actually endanger or impede the brains ability to function. The good
news? By making small changes like replacing fatty foods with lean proteins
and green leafy vegetables or finding ways to lower stress levels you
can actually make your brain perform better.
improve the brain?
Amen: Yes. We did a study on a Kundalini Yoga form of meditation that showed
enhanced activity in the prefrontal cortex-the executive, decision making part
of the brain.
Can you recommend a diet or some reading materials so that I may improve
my brain functions such as memory.
Dr. Daniel Amen: Here are 7 simple brain promoting tips:
1. Increase water
intake (the brain is 80% water)
2. Calorie restriction (eat less, live longer obesity is a risk factor
for Alzheimers disease)
3. Eat fish and take fish oil (to enhance omega three fatty acids)
4. Lots of dietary antioxidants to prevent free radical damage and premature
5. Eliminate toxins, such as too much caffeine or alcohol
6. Pick the top healthy brain foods and put them in your diet every week, such
as blueberries, oranges, avocados, salmon, spinach, walnuts, beans, red bell
peppers, yams, and yogurt.
7. Plan snacks that are healthy and nutritious, such as dried fruit or turkey
jerky (free of preservatives)
of mental exercise can we do to improve our brain function?
Amen: Do something that you do not know how to do
that is what is best
for you. Break the routine, get out of the box, cross train at work, learn to
dance. The studies have shown that people who are lifelong learners have
better memories over time.
I did a lot of drugs 25 years ago. I know I probably damaged my brain. I
now eat healthy, exercise 5 days a week, and read a lot. Does the brain heal
itself after years of abuse?
Amen: Yes, the brain can improve over time. That is the good news. The bad
news is that past drug abuse may prevent the brain from being its best, which
is the reason not to start in the first place.
I've heard conflicting reports about coffee. Some say a cup a day is good
for you and actually increases your blood flow.
Amen: Several SPECT studies state that caffeine clearly constricts blood
flow to the brain, which over time is bad for it. It is also addictive in higher
amounts. I think a cup or two a day is not a problem, but more than that is
How much essential fatty acids (such as cod liver oil, olive oil, etc.)
are needed daily for the brain in children 5-9 years old and 60 year old adults?
Amen: I recommend 500mg a day of purified fish oil for children and a 1,000mg
a day for adults and much higher doses when I am trying to treat mood
disorders, ADHD, or memory problems.
How bad is alcohol for the brain? I've read that a glass of red wine a day
is actually good for you. But is it true that alcohol "kills" your
Amen: Alcohol is only good in small doses, a glass or two a week. Daily
drinking is associated with a smaller brain. When it comes to the brain, SIZE
Ten Reasons Golf is better than Sex. (Frankly
I prefer tennis. But this morning I feel very sore. Yesterday I killed a 25-year
old at singles yesterday. But the effort took its toll.) Now, for my golf friends:
#10 - A below
par performance is considered damn good.
#9 - You can stop in the middle and have a cheeseburger and a couple of beers.
#8 - It's much easier to find the sweet spot.
#7 - Foursomes are encouraged.
#6 - You can still make money doing it as a senior.
#5 - Three times a day is possible
#4 - Your partner doesn't hire a lawyer if you do it with someone else.
#3 - If you live in California, you can do it almost every day.
#2 - You don't have to cuddle with your partner when you're finished.
---- and the #1 reason why Golf is better than Sex...
#1 - If your equipment gets old and rusty, you can replace it.
+ 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
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