Technology Investor 

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

Previous Columns
8:30 AM EST, Wednesday, October 31, 2007: Oil, gold and many commodities are at peak and clearly going higher. After being basically flat last year, my commodities fund is now up 20% this year. I'm thinking I'm a genius for sticking with it. (Or just bone lazy.) The big growth in commodities consumption comes from India and China -- especially China which grew over 11% in the latest quarter -- if you can believe Chinese government statistics.

An interesting oil site is --which dubs itself as independent energy valuation. They just released a paper called Meter Reader -- the Black Swan, in which they argue "The probability of our vision of $150 oil in 2010 being achieved may be higher than is priced in the market." They take a bunch of oil stocks and figure what the stocks would be worth (net present value) if oil were $150 a barrel. Every one is higher -- usually two to two and a half times. For example, BP would be worth $216 instead of its present $87, Chevron would be worth $243 versus $105 today. Check it out. It's an interesting paper.

The most fascinating presentation I heard in Istanbul was from a company called ProLogis (PLD), which dubs itself, "The world’s largest owner, manager and developer of distribution facilities." I hear words like "unlimited demand" and "unique market niche" -- providing distribution services to multi-national companies. I need to do more checking. But the chart looks neat:

Sell your business; Try to avoid escrow: When you go to sell a business, the potential buyer does (or should do) oodles of due diligence. When he buys your business, the buyer often puts 10% (or so) of the purchase price into escrow, only to be released to you a year later. Escrow is done to protect the buyer against something untoward that you hid. But what happens if the buyer screws up so fast that the business is now (12 months after he bought it) effectively valueless? He'll claim it's all your fault. Then he'll hold up the escrow and demand something for his troubles. The lawyers will mess around. And finally the judge or the adjudicator will decide (hopefully in your favor).

This has just happened to me. One of my private equity funds sold a very successful, growing online retailer. The new owners anointed young children completely devoid of either retailing or online experience as the new managers. They lectured the old management (but didn't listen to the old management), who promptly left for greener, happier pastures, only to be replaced by inexperienced neophytes. Now the new managers, looking to cover their asses, are employing at vast expense, lawyers, who are attempting to blame their mess on us. Ultimately we'll win and they'll pay all our legal fees. But in the meantime my money sits in escrow, gathering dust.

There are obvious lessons here. The primary one being to document all the idiocies the new buyer commits -- so you have the evidence if you do end up before the adjuticator or the judge. I guess the second one is don't sell businesses to people who are going to mess them up in less than a year.

Tonight is Halloween: Kids will be out. Some tips:

+ Have a safe costume:
+ Avoid toy guns and knives – they could be mistaken for the real thing.
+ Wear costumes that are light in color and short enough to avoid tripping.
+ Place reflective material on the costume, so drivers can see the kids. .
+ Avoid masks – use face paint instead for better visibility and peripheral vision.
+ Carry a flashlight.
+ Never eat unwrapped candy.
+ Give kids money, not candy. Kids don't need the extra sugar.

My favorite Halloween cartoons:

This movie really was a stinker. Or how technology sometimes smells.
A movie shown in New York City on December 8, 1958, Behind the Great Wall, was not only a travelogue of China, but also had an "odor track" where different smells were released into the ventilation system during scenes from different parts of that country.

The first several times the odors were released, the audience was pleased. But as each new fragrance combined with the old it began smelling so badly the audience ran from the theater, coughing and heaving.

Why am I amused?

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. Please note I'm not suggesting you do. That money, if there is any, may help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
Go back.