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 Wednesday, September 21, 2005: The Fed raised rates, as I suspected. Its words:

Output appeared poised to continue growing at a good pace before the tragic toll of Hurricane Katrina. The widespread devastation in the Gulf region, the associated dislocation of economic activity, and the boost to energy prices imply that spending, production, and employment will be set back in the near term. In addition to elevating premiums for some energy products, the disruption to the production and refining infrastructure may add to energy price volatility.

While these unfortunate developments have increased uncertainty about near-term economic performance, it is the Committee's view that they do not pose a more persistent threat. Rather, monetary policy accommodation, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity. Higher energy and other costs have the potential to add to inflation pressures. However, core inflation has been relatively low in recent months and longer-term inflation expectations remain contained.

The Committee perceives that, with appropriate monetary policy action, the upside and downside risks to the attainment of both sustainable growth and price stability should be kept roughly equal. With underlying inflation expected to be contained, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability.

In the past, the Fed has overshot in tightening and loosening. Think of the Fed as an airconditioning system -- always trying to find the happy medium. Except the medium is not as precise as a temperature of 70 degrees.

Higher interest rates will start to affect real estate. Good time to reassess your real estate exposure. Re-finance. Sell, etc.

How much due diligence? The company has disruptive technology. Its super technology will change the way paint is sold worldwide, and, in the process, make itself a fortune. But, it won't raise enough money to fulfil its promise. (It's worried about dilution.) It hasn't cottoned onto Newton's Marketing Laws:
+ For every $1 you spend on engineering, you need to spend $10 on marketing and sales.
+ You'll go down the wrong marketing path three times before you finally get it right the fourth time.

That's a brief summary of yesterday's three hour in-field meeting. I visited an installation. Great technology. Not enough money. Not enough marketing. This is common among technology startups many of whom think they can bring their product to market for the shoestring they invented their technology with. And that's the lesson for us seeking the perfect investment. Get excited about the technology. But focus on "Does the company have the resources to fulfil its promise?"

Which commodities fund? I promised more about commodites today. It will have to be tomorrow. Some readers have suggested ways of investing in commodities -- from mutual funds to buying them individually. If you have ideas, email them my way, please. I'm mulling.

Real estate "bargains": The hyper growth in commercial real estate values has been primarily on both coasts. Now the focus is shifting to the center of the country where properties are cheaper -- Memphis, St Louis, Cincinnati, etc.

Time to kill my son: Every few days he turns up carrying a book. I read a few pages, get engrossed and lose a night's sleep. The boy has impeccable taste. This is his latest one. Blame today's short column on Michael. I'm exhausted.

Another stupid Bubba joke:
Bubba's pregnant sister is in a serious car accident causing her to fall into a deep coma. She awakens after nearly six months and sees that she is no longer pregnant. Frantically she asks the doctor about her baby. The doctor replies, "Ma'am you had twins - a boy and a girl and your babies are fine. Your brother came in and named them."

The woman thinks to herself, "Oh no! Not Bubba; he's an idiot!" Expecting the worst, she asks the doctor, "Well, what's the girl's name?" "Denise," the doctor answers. The new mother thinks, "Wow! That's a beautiful name! I guess I was wrong about my brother. I really like the name Denise."

She then asks the doctor, "What's the boy's name?" The doctor replies, "Denephew."

Recent column highlights:
+ 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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