The Deipnosophist

Where the science of investing becomes an art of living

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Location: Summerlin, Nevada, United States

A private investor for 20+ years, I manage private portfolios and write about investing. You can read my market musings on three different sites: 1) The Deipnosophist, dedicated to teaching the market's processes and mechanics; 2) Investment Poetry, a subscription site dedicated to real time investment recommendations; and 3) Seeking Alpha, a combination of the other two sites with a mix of reprints from this site and all-original content. See you here, there, or the other site!

30 April 2006

Tips for Google Calendar

For many years now, nigh a decade, I have relied on Microsoft Outlook as my scheduling calendar. No more. Now I use Google Calendar. There are many reasons for this; some obvious, some less so. A crucial difference for me, however, is my ability to access Google Calendar while away, from anywhere I can access the Internet... and with no need to lug with me my computer. Thus I can readily and easily check appointments, even create new ones or update others.

You will note my increasing usage of Calendar in this blog's sidebar; specifically under "I will be at..." More items will appear once I work out some of the bugs; i.e., my minimal knowledge of HTML, etc.

This post has some interesting "tips" on how to better utilize Google Calendar...

Since I’ve been an early user of Google Calendar for a few months now, thought I’d share a few tips that may make the jump a little smoother for others. Some tips may seem obvious, other tips may be completely new to you. Specifically, I’ve noticed hesitation by Mac users in trying Google Calendar, which I’ll address in a few Mac-only tips sprinkled in with the rest.
-- David M Gordon / The Deipnosophist

28 April 2006

A few words about Microsoft

Whereas I merely raked Microsoft/MSFT over the coals in this post, -- arguably, unfairly so -- Barry Ritholtz rips the company a new orifice (and with similar arguments)...
"From a tech standpoint, their products are kludgy and unimpressive; Their strong suit is not innovation -- it is relentless, incremental improvement, eventually leading to a decent if underwhelming product."
"They continue to lose market share to Google in search (Don't believe the vaporware hype); Their blogging product is a ghetto; MSN continues to lag, losing share and money; X-box is a multi-billion dollar loser (no one else would have/could have thrown so much cash at merely hurting Sony); They keep pushing back Vista -- thats a function of how sprawlingly large and apparently disorganized they have become as an organization; Oh, and I am still awaiting their iPod killer, first mentioned by them about 30 months ago. I remember the days when the mere mention of Microsoft moving into a product area would disrupt the comeptition, force delays in other company's purchases, and crush competitor's stock prices. The vapor announcements have lost their punch; that strategy is no more."
Read Barry's complete (and witty!) post here.
-- David M Gordon / The Deipnosophist

New products from Google

A great day for 3D
Last month we
told you that @Last Software had joined the Google fold. Today we’re releasing Google SketchUp, a free version of our 3D modeling software, which makes our long-time vision of making 3D accessible to everyone a reality.

We’re still offering
SketchUp Pro 5 for design professionals like architects, designers, builders, art directors and game developers. Both Google SketchUp and SketchUp Pro 5 enable you to place models in Google Earth; Pro users get some additional features.

The new Google SketchUp is for the do-it-yourselfer, the hobbyist — really anyone who wants to build 3D models for use in Google Earth. Go ahead and model that new kitchen, or deck, landscape your virtual garden, or impress your teacher with a roller coaster or medieval castle. When you’re finished, place your model in Google Earth. There! The beginning of a virtual world. Warning: don’t start messing with this stuff after dinner because your first experience could be an all-nighter… making an idea come to life in 3D can be very addicting.

And what could be better than that? Well, sharing your work with everyone else through the
3D Warehouse. Accessible through both versions of SketchUp, 3D Warehouse enables you to upload, search, browse, view, and download SketchUp models. Just as you do with Google search, enter some keywords and the 3D Warehouse shows you all your options. Grab the one you want and import it into your model. (Note that the Warehouse is not stocked up yet — so model something yourself and upload it for all the world to see.)

Visionaries, utopians, virtual world builders: your time has come.


Google Maps in Europe
We're excited to announce that we have just launched beta versions of Google Maps for France, Germany, Italy, and Spain. These sites include the full suite of interactive street maps, driving directions, and integrated local business search. This has been a global effort with Google teams in Paris, Hamburg, Milan, Madrid, New York, Mountain View, Kirkland, Sydney, London, Dublin, and Zurich working together for much of the past year to build a truly "local" product.

Accompanying this release, we have greatly improved high resolution imagery coverage for Europe in both Google Maps and Google Earth. Check out the Eiffel Tower in Paris, Olympiastadion in Berlin, and the Grand Canal in Venice.

To give you a preview of what's to come, we've also rendered street maps for many other countries in Europe. Developers, you can incorporate these maps and imagery into your own websites using the free Google Maps API Version 2.

27 April 2006

Seeking Alpha

Seeking Alpha is "the leading network of stock market blogs for professional investors, industry participants and sophisticated individuals." The site is a product of David Jackson's creation and imagination. (David was a sell-side analyst at Morgan Stanley.) David saw
"an opportunity to build a network of sector web sites that provide filtered, edited and ticker-ized stock opinion and analysis. is the hub of the network, but each article resides on a sector specific web site that readers can subscribe to via RSS or email. The opinion and analysis for the sites comes from research analysts, money managers, financial advisors, industry insiders and smart individuals, many of whom write their own blogs. SeekingAlpha also carries charts and conference call transcipts, which makes it a"must-read" site for investment professionals."
Seeking Alpha deserves your attention for many reasons. Visit the site, and discover those reasons for you becoming a frequent visitor.

In a final note, and as David explained to me,
"... there are now about 100 contributors to SeekingAlpha. I invite only those people to become contributors who I think are really good. I'm not saying this to be snooty or for flattery, but rather because, as the volume of free content on the Internet rises, filtering of good from less-good content becomes more and more important, particularly infinance where quality and integrity are so critical."
So, in full disclosure, comes the 'news' that The Deipnosophist makes the cut for inclusion. It is my honor to be included among the investment luminaries David has gathered. Now I really have my work cut out for me!
-- David M Gordon / The Deipnosphist

24 April 2006

Rack 'em up!

I had hoped this post would upload before today's market opening; alas, it has not. (And that is after several hours of trying!) -- David

As the market moves forward into its seasonally weak period (mid-April into mid-October), I thought I would share several of the opportunities that top my hit parade. Some of these I own already, others I wait on for better, more opportune moments to purchase. Price declines do not, in and of themselves, frighten me away because I expect, even embrace, volatility. In fact, volatility encourages me -- so long as it remains within a well-defined and correctly identified intermediate term area pattern.

Most of these companies below already will be familiar; my favor does not change based merely on price oscillations. Great investments endure for more than a day or two, even for more than a season or two.

Apple Computer/AAPL: Continues to build an intermediate term base. Expect short term oscillations to occur within the pattern, and profit from them, either by trading short term or accumulating your long term investment during the periodic bouts of short term weakness. The low of the pattern at ~$60-57 should stem any decline.
Advanced Micro Devices/AMD: Likely now nears the low of its intermediate term base at ~$30. Thus, there remains less price decline albeit plenty of additional time to lapse before the long term up trend resumes.
Google/GOOG: What can I say? The bears simply lack historical perspective. Their loss.
Intuitive Surgical/ISRG: Remains within its intermediate term base. Will buy more on a test of the mid- to low-90s.

Marvell Semiconductor/MRVL: Remains within its intermediate term base. A breach of ~$53 changes that picture. Also within its intermediate term base, the low of which should prove to be ~$32-30. Obviously, it is near that level now.

SanDisk/SNDK: Yes, SNDK too is within its intermediate term base. The low of that pattern (~$52) should stem any deeper price declines.
Starbucks/SBUX: Its powerful long term up trend re-exerted its primacy about 6 months ago. Do you recall my posts from 7 and 8 months back exhorting you to buy the shares at the then steal of ~$23?

(There are, of course, other potentially excellent investments. Did I neglect to update any for which you are interested? Please post your questions as a reply, and I will offer my comments in response.)

Do you detect a pattern? Many of these possible opportunities remain within their individual intermediate term bases. IF the market hits its seasonal bout of weakness, prices of the current leaders (extended in price, time, and trend) will decline, sometimes suddenly so. Seemingly without warning. But the patterns for such episodes of "sudden failure" are building now. Pay attention to the subtle clues broadcast to all! Meanwhile, those stocks already within their intermediate term bases will decline little, if at all. (Just the typical oscillations, as the area pattern builds to completion.) So, if you desire long term investments but with lessened risk as I do, seek (and purchase) those stocks building intermediate term bases but within a long term uptrend.

As investors, we choose our opportunities. There is no one right way to achieve investing success; there are, in fact, a multitude of ways. My path is only one way. I seek my opportunities from volume patterns: the greater the average daily volume, and the more interest displayed (especially from institutional investors), then the more interest from me. I suffer no ego problem with buying something for which other investors show a clear preference. Does finding an investment that noone has ever before heard of somehow speak to my intelligence? I think not; moreover, I no longer have anything to prove to others, leave alone myself. (I have enough problems as it is!)

So sustained volume in a stock catches my eye, as do green eyes and blond hair when I regard women. Go figure. Obviously, I make the assumption that investors, but especially institutional investors, have done their due diligence. And it is the nature of that assumption that causes me to favor this approach -- I might be smart (okay, let's pretend) and think my intelligence superior. The market, however, might think otherwise and sell down a position I own and favor, etc. I prefer to align my interests with the ongoing vote of the market. I seek the preponderance of the evidence, not the solitary, not even the singular.

From that beginning level of interest, I move to the next level: where in its continuum does the stock currently fall -- up, down, or sideways? And within what periodicity? That knowledge tells me whether I should hurry with my analysis, or have time to deliberate more. Then I investigate the company, its fundamentals, its opportunity. If the company and its stock make the grade, I add it to my monitor. And then wait for the moment germane to my needs within its current continuum.

Remember, this is my methodology; it is not necessarily appropriate for you. I do not run screens, I do not shop from among the new highs/lows list, etc. That analysis is the tail wagging the dog, or so I perceive. The same applies to fundamental analysis, which in some applications is akin to driving with the rear view mirror.

That said, here is a new opportunity. Let's pretend I am not previously familiar with it...

Rackable Systems/RACK is engaged in the development, sales and marketing of high-performance, low-power-consumption servers. In many ways servers are simply fancy computers. In fact in many small companies a dedicated PC is used as a server. Servers are used primarily for data storage and access and as front-end interfaces to high-speed internet connections. In this latter function they are usually referred to as web servers, but they also host more specialized services such as load-balancing, policing security protocols, application servers and a score of other functions. Servers are all computers, but, at least in a commercial setting, all computers are not servers. Servers have to carry heavy loads. They are often multi-processor boxes, containing massive amounts of memory and attached storage. They also will typically have a variety of specialized interfaces which allow them to connect to high-speed internet and storage networks.

In large businesses these servers are typically set in an air-conditioned room where large banks of servers are located, and into which typically high speed network and internet lines enter and connect. Who outside the company truly knows how many servers a company like Google might have, but it is most assuredly in the thousands, probably tens of thousands.

In such large configurations, putting generic PC’s into such rooms would not be at all practical. The two most notable problems are space and heat. A bank of 10,000 typical PC boxes would be a rat’s nest of wires and connections, would be rather large, and would generate a massive amount of heat which would need to be dissipated. To address the space problem racks were developed. Racks are nothing more than specialized shelving which hold slimmed-down powerful PC’s and other components. They also contain hardware for efficiently and neatly connecting the various wires that need to go between these servers and between the servers and the network.

Rackable servers are nothing more than very powerful thin PC’s that are made to fit directly onto a standard rack. While racks address the space problem efficiently, they only exacerbate the heat problem, as the dense packing of these servers provides less air to dissipate the tremendous heat that such high-powered machines generate.

Rackable Systems manufactures rackable servers which efficiently address this heat problem. Its proprietary system uses DC power rather than the typical AC power. They also externalize the rectifiers which convert the incoming AC power to DC power. As a result their servers are very heat-efficient. Without internal power supplies their servers generate less heat than conventional servers with the added benefit that the rectifiers can be located apart from the server racks and near cooling sources – so that the temperature around the servers is kept lower.

This not only results in lower costs for operating the data center (a very significant cost for a large center) but the cooler servers operate more efficiently and with less wear and tear. This increases reliability and reduces downtime from blown components. It also further addresses the space problem, since cooler servers can be located closer together allowing for more servers in a given space.

[click image to enlarge]

The first items I note: its average daily volume is ~835,000 shares and the shares have enjoyed a sustained and powerful uptrend for the past 6 months. So the stage is well set for my interest: the market likes it, I like the company and its opportunity, and I need only wait on an opportune moment to purchase. If I were to purchase this current setup, I would acknowledge the necessity for a meaningful correction, and thus enter the position on the appropriate signal only as a trade. Once I own the investment, I can manage it in accord with how its chart builds day by day. At this particular moment, however, the odds are 50/50 whether accelerated up trend line A will continue to prove relevant. If it does not hold (and I doubt it will), then look for tests of the 50-day simple moving average (sma), and, failing to hold there, trend line B. In each instance, the intermediate and long term up trends would remain in force. But should the price slice through crucial support at trend line B, then a deeper test toward, but not necessarily as deep as, the 200-day sma would follow soon thereafter.

Does price volatility mean the stock should not be purchased during weakness? If you are solely a price momentum trader, then no do not buy this opportunity, or any other, except on strength. (Never weakness, however.) But if you are a long term investor, then you prefer to purchase price weakness in the periodicities lesser than the one important to you. (Of course, the moment that particular picture changes, then you change your tactics.)

Never allow yourself or your portfolio to get caught behind the 8 ball. Rack 'em up!
-- David M Gordon The Deipnosophist

23 April 2006

The Last Assassin

Author Barry Eisler scores nothing but net with THE LAST ASSASSIN, the fifth book in his continuing series about John Rain, assassin for hire.

Whereas John Rain ages in these books -- his reflexes slow, his mind roams about over unfamiliar terrain -- Eisler grows in auctorial talent. And where the earlier novels carried a punch with each new episode, this novel lingers on the palate like the single malts Rain favors, as it explores in increasing depth several characters but especially those of Rain, Delilah, Dox, and Tatsu.

Eisler is at top form when he aims a heat lamp on Rain's tradecraft...
"I've never liked doing a job in a new place. You don't know how to get in and out undetected, you don't know what tools you'll need to access the target, you don't know where you'll stick out and where you'll be able to just fade into the background or disappear in a crowd. To compensate, I start by studying the area from afar, move in only when I've learned as much as possible, and always arrive early enough to become familiar with the local terrain before it's time to act. Tactics like these have kept me alive, and even relatively prosperous, during a quarter century of doing the thing I've always been best at. But this time the preparation was reflex, not necessity..."
John Rain's problem in this novel is that the unfamiliar terrain he thinks he is talking about is Barcelona. He believes he is up to the task. Unfortunately for Rain, there exist no maps or tradecraft upon which to rely when the unfamiliar terrain instead is that of the heart.

Eisler swoops into the setting like a master film director shooting an extended introductory scene with the camera on a dolly; first here, then there, as the camera follows the character and with no cuts away. This technique can be either magisterial or braggadocio; Eisler to our good fortune is the former.

In this novel, Rain has several assumptions horrifyingly shattered, including one quite crucial to his belief structure. (Hmm, better make that two.) And so he becomes lost, both literally and figuratively; mentally, emotionally, and intellectually. Bereft, even cast adrift -- but never, not even once, abandoned by his friends. (Eisler puts in good time discussing the nature of friendship.) It will require every skill at Rain's command to emerge unscathed, and alive. Without giving away any surprises, Rain is not successful in his multiple quests. Even when he is successful, the result is not what he thought would occur. Is it perhaps the Law of Unintended Consequences that strikes back? Or "He who sows the wind shall reap the whirlwind."

This novel represents a departure from the series mold; immediately obvious from the change in title format. No longer foot-loose and fancy-free, Rain feels the weight of the world oppressing his every decision, past, present, and future. Within its pages, Barry Eisler stretches his auctorial wings, taking his readers on a flight of fancy with characters we care about: how they live and die, as much as whether they live or die.

THE LAST ASSASSIN, will be published on 1 June. Buy it. Read it. Enjoy it.
-- David M Gordon / The Deipnosophist

21 April 2006

A peek behind the curtain

Have you ever wondered what is it that makes computers work? Going to this site reveals all. (Link courtesy of Zara Elis.)
-- David M Gordon / The Deipnosophist

Cool website

This website will be familiar to those readers who have seen THE POWERS OF 10. Nonetheless, it is way cool!
-- David M Gordon / The Deipnosophist

Consumer price inflation still elevated

The interesting commentary that follows is from Scott Grannis, Chief Economist at Western Asset Management.
-- David M Gordon / The Deipnosophist
Since inflation pressures started rising in mid-2003, there have been two consistent themes: headline inflation has been in the 3-4% range, while core inflation has been hugging 2%. The difference is almost completely explained by oil prices, which have more than tripled over the past four years. The Fed has insisted that the core measure of inflation is the only thing that matters, and since core inflation hasn't moved higher, both the Fed and the market have breathed a sigh of relief. Energy prices are apparently not being passed along to other prices. Once oil stops going up, headline inflation should head back down and everything should be fine.

But will it? The attached chart adds the "median CPI," as calculated by the Cleveland Fed, to the mix. The "core" measure of inflation takes energy and food prices out of the calculation, since they are the most volatile components of the CPI on a month-to-month basis. The "median" CPI takes all of the things that have either gone up a lot or down a lot out of the mix, and focuses on what those in the middle are doing. This is supposed to do a better job of picking up underlying trends than either the core or the headline measure, but nothing's perfect. Whatever the case, the median CPI has moved up of late, suggesting that maybe higher energy prices are finding their way into other things.

[click image to enlarge]

One of the more interesting features of the commodity price landscape in recent years has been the very strong and positive correlation between energy prices and non-energy industrial commodity prices. All prices have gone up, and they continue to rise. Higher energy prices are not crowding out prices for industrial metals, for example; indeed, copper has more than doubled in just the past year. This contrasts to the negative correlation that existed between these price groups in the late 1990s, when monetary policy was restrictive. If monetary policy is still accommodative, as the rising prices of gold, energy and most industrial commodities suggest, then a cessation of energy price inflation might provide more leeway for non-energy prices to rise in the future.

20 April 2006

Google Announces Q1 2006 Results

Well, so much for the naysayers.

This earnings report simply blows away all the forecasts, public, private, and whisper; official and unofficial. Google/GOOG last traded (in after-hours trading) at $445.00 +$30 from today's close. In a word, wow!

The conference call is on now.
-- David M Gordon / The Deipnosophist

MOUNTAIN VIEW, Calif., Apr 20, 2006 (BUSINESS WIRE) -- Google Inc. (NASDAQ:GOOG) today announced financial results for the quarter ended March 31, 2006.

"Google had an exceptional quarter with strong growth and profitability, from both Google properties and the network," said Eric Schmidt, CEO of Google. "We are driving this growth through investments in our infrastructure and our people, product innovations that attract new users, and relationships with advertisers and partners around the world. The strength of our business model gives us the opportunity to invest in our business, allowing us to maintain and grow our market leadership."

Q1 Financial Summary
Google reported revenues of $2.25 billion for the quarter ended March 31, 2006, an increase of 79% compared to the first quarter of 2005 and an increase of 17% compared to the fourth quarter of 2005. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs, or TAC. In the first quarter of 2006, TAC totaled $723 million, or 32% of advertising revenues.

Google reports operating income, net income, and earnings per share (EPS) on a GAAP and non-GAAP basis. The non-GAAP measures are described below and reconciled to the corresponding GAAP measures in the section below titled "About non-GAAP financial measures."

-- GAAP operating income for the first quarter of 2006 was $743 million, or 33% of revenues. This compares to GAAP operating income of $570 million, or 30% of revenues, in the fourth quarter of 2005. Non-GAAP operating income in the first quarter was $887 million, or 39% of revenues. This compares to non-GAAP operating income of $718 million, or 37% of revenues, in the fourth quarter.

-- GAAP net income for the first quarter was $592 million as compared to $372 million in the fourth quarter. Non-GAAP net income was $697 million, compared to $469 million in the fourth quarter.

-- GAAP EPS for the first quarter was $1.95 on 304 million diluted shares outstanding, compared to $1.22 for the fourth quarter, on 304 million diluted shares outstanding. Non-GAAP EPS was $2.29, compared to $1.54 in the fourth quarter.

-- Non-GAAP operating income, non-GAAP net income, and non-GAAP EPS in the first quarter of 2006 are computed net of certain material items: stock-based compensation (SBC) and estimated plaintiffs' attorneys' fees related to the proposed settlement of the Lane's Gift class action lawsuit. In the first quarter, the charge related to stock-based compensation was $115 million as compared to $58 million in the fourth quarter of 2005, which was also excluded from non-GAAP calculations. Plaintiffs' attorneys' fees related to the proposed Lane's Gift class-action lawsuit settlement are estimated to be $30 million. In the fourth quarter of 2005, the contribution to the Google Foundation of $90 million was excluded from the calculation of non-GAAP operating income, non-GAAP net income, and non-GAAP EPS. Tax benefits related to SBC charges, the estimated plaintiffs' attorneys' fees, and the contribution to the Google Foundation have been excluded from non-GAAP calculations. The taxbenefit related to SBC was $27 million in the first quarter and $14 million in the fourth quarter. The tax benefit related to the estimated plaintiffs' attorneys' fees in the first quarter was $12 million. The tax benefit related to the contribution to the Google Foundation in the fourth quarter was $37 million. Reconciliations of non-GAAP measures to GAAP operating income, net income, and EPS are included at the end of this release.

Q1 Financial Highlights

Revenues -- Google reported revenues of $2.25 billion for the quarter ended March 31, 2006, representing a 79% increase over first quarter 2005 revenues of $1.26 billion, and a 17% increase over fourth quarter 2005 revenues of $1.92 billion. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs, or TAC.

Google Sites Revenues -- Google-owned sites generated revenues of $1.30 billion, or 58% of total revenues. This represents a 97% increase over first quarter 2005 revenues of $657 million and an 18% increase over fourth quarter 2005 revenues of $1.10 billion.

Google Network Revenues -- Google's partner sites generated revenues, through AdSense programs, of $928 million, or 41% of total revenues. This is a 59% increase over network revenues of $584 million generated in the first quarter of 2005 and a 16% increase over fourth quarter 2005 revenues of $799 million.

International Revenues -- Revenues from outside of the United States contributed 42% of total revenues, compared to 38% in the fourth quarter of 2005 and 39% in the first quarter of 2005. Foreign exchange rates had an immaterial impact on sequential international revenue growth. Had foreign exchange rates remained constant from the first quarter of 2005 through the first quarter of 2006, our international revenues would have been $65 million higher.

TAC -- Traffic Acquisition Costs, the portion of revenues shared with Google's partners, increased to $723 million in the first quarter. This compares to TAC of $629 million in the fourth quarter. TAC as a percentage of advertising revenues decreased to 32% in the first quarter from 33% in the fourth quarter.

Other Cost of Revenues -- Other cost of revenues, which is comprised primarily of data center operational expenses, including depreciation expense, as well as credit card processing charges, increased to $181 million, or 8% of revenues, in the first quarter, compared to $148 million, or 8% of revenues, in the fourth quarter. Other cost of revenues also included stock-based compensation of $2 million in both the first quarter of 2006 and the fourth quarter of 2005.

Operating Expenses -- Operating expenses, other than costs of revenues, were $607 million in the first quarter. Operating expenses included $284 million in headcount-related and facilities expenses, $112 million in stock-based compensation, and $50 million in advertising and promotional expenses, of which $25 million was related to distribution deals. In addition, stock-based compensation and estimated plaintiffs' attorneys' fees related to the Lane's Gift class-action lawsuit of $30 million are included in operating expenses, but excluded from non-GAAP calculations.

Stock-Based Compensation -- In accordance with a new accounting rule, FASB Staff Accounting Bulletin No. 107, stock-based compensation is no longer presented as a separate line on our income statement. The stock-based compensation is now presented in the same lines as cash compensation paid to the same individuals. Stock-based compensation recognized in prior periods has been reclassed to conform with the presentation in the current period. In the first quarter, the charge related to stock-based compensation was $115 million as compared to $58 million in the fourth quarter. The increase in stock-based compensation was primarily related to the adoption of FAS 123R related to stock-based options expensing.

For the full year, we expect stock-based compensation charges for grants to employees prior to April 1, 2006 to be $370 million. This does not include expenses to be recognized over the remainder of the year related to employee stock awards that are granted after April 1, 2006 or non-employee stock awards that have been or may be granted. We currently anticipate that dilution related to all equity grants to employees will be approximately 1% to 1.5% per year.

Operating Income -- GAAP operating income in the first quarter was $743 million, or 33% of revenues. This compares to GAAP operating income of $570 million, or 30% of revenues, in the fourth quarter. GAAP operating income includes stock-based compensation, the estimated plaintiffs' attorneys' fees related to the proposed settlement of the Lane's Gift lawsuit of $30 million in the first quarter, and the contribution of $90 million to the Google Foundation in the fourth quarter. Non-GAAP operating income in the first quarter was $887 million, or 39% of revenues. This compares to non-GAAP operating income of $718 million, or 37% of revenues, in the fourth quarter.

Net Income -- GAAP net income for the first quarter was $592 million as compared to $372 million in the fourth quarter. Non-GAAP net income was $697 million, compared to $469 million in the fourth quarter. GAAP EPS for the first quarter was $1.95 on 304 million diluted shares outstanding, compared to $1.22 for the fourth quarter, on 304 million diluted shares outstanding. Non-GAAP EPS was $2.29, compared to $1.54 in the fourth quarter.

The share count of 304 million is as of March 31 and does not include 5.3 million shares issued in the offering completed early in the second quarter. The additional shares will be reflected in the second quarter 2006 share calculations and in subsequent quarters.

Income Taxes -- Our effective tax rate for the first quarter was 27%. We expect our effective tax rate for 2006 to be approximately 30%.

Cash Flow and Capital Expenditures -- Net cash provided by operating activities for the first quarter totaled $825 million as compared to $658 million for the fourth quarter. In the first quarter of 2006, capital expenditures were $345 million. Free cash flow, an alternative non-GAAP measure of liquidity, is defined as net cash provided by operating activities less capital expenditures. In the first quarter we generated $480 million in free cash flow.

We expect that the growth rate in capital expenditures in 2006 will be substantially greater than the revenue growth rate for the year. We expect the majority of investment to be focused on IT infrastructure including servers, networking equipment, and data centers, as well as real estate and campus facilities.

In accordance with FAS 123R, excess tax benefits related to stock-based compensation, which totaled $77 million in the first quarter, are now classified as a cash flow from financing activities, rather than as a cash flow from operating activities. This requirement will reduce the amounts we record as net cash provided by operating activities and free cash flow, and will increase the amount we record as net cash provided by financing activities. Total cash flow will remain unchanged from what would have been reported under prior accounting rules.

Reconciliations of free cash flow to net cash provided by operating activities, the GAAP measure of liquidity, are included at the end of this release.

Cash -- As of March 31, 2006, cash, cash equivalents, and marketable securities were $8.43 billion. This balance does not reflect the additional $2.07 billion raised in the offering that closed in early April.

We also completed the investment of $1 billion in AOL in early April, and the balance of $8.43 billion does not reflect the impact of the cash investment.

On a worldwide basis, Google employed 6,790 full-time employees as of March 31, 2006, up from 5,680 full time employees as of December 31, 2005.

Eye-opening chart

[click image to enlarge]

There is certainly sufficient history included (in the chart above) to give investors pause for concern. Then again, never view the markets as a monolith. (As I often state.) There always are opportunities to be found... and had.
-- David M Gordon / The Deipnosophist

Google doodle for today

... is in honor of the birthday of Joan Miro, the renowned Spanish painter of surrealist works, whose subject matter was drawn from the realm of memory and imaginative fantasy.

The doodle is itself a great tribute.
-- David M Gordon / The Deipnosophist

19 April 2006

To the point

I am way, way behind on many items, and no less the updating of this blog. I do not want to be remiss and fail to note recent market action, especially for a handful of recommendations previously featured. Thus, this post -- brief and to the point...

Apple Computer/AAPL: Remains within its intermediate term base but looks better with each new day's price bar. Reports after the close today. Looks good.

Google/GOOG: GOOG too remains within its intermediate term base, but price action becomes increasingly (and obviously) positive. Reports after the close tomorrow.
Marvell/MRVL: Although it too remains within its intermediate term base, it is breaking out now above multiple thresholds of resistance. (These points of resistance cluster between $59.75 and 61). A close above $61 changes the dynamics to increasingly positive.
SanDisk/SNDK: SNDK too remains within its intermediate term base, and continues to look great. Reports after the close on Thursday.

More anon. I promise. (Insert here sheepish grin emoticon.)

-- David M Gordon / The Deipnosophist

18 April 2006

"We interrupt this regularly scheduled broadcast"

Please accept my apologies for my recent absence. I have been dealing with a recent crop of personal matters, which arise like the sudden spurt of weeds in the springtime. My back is killing me from pulling them all by the roots, but the task is almost complete.
-- David

17 April 2006

Long TIPS are looking very cheap

The following commentary is by Scott Grannis, Chief Economist at Western Asset Management.
-- David M Gordon / The Deipnosophist
Both real and nominal 10-year yields are up to levels not seen since 2002. 10-year Treasury yields have broken through 5%, and 10-year TIPS yields are almost 2.5%, just shy of the 2.6% "Grannis Barrier" I postulated awhile back. My theory was that a real yield of 2.6% on long-maturity TIPS was the equivalent of a "true" real yield of 3.1% (since the CPI overstates inflation by 0.5% per year), and since 3.1% is the economy's long-term real growth potential, at that point TIPS become nominal GDP bonds. In other words, the return on a 10-year TIPS purchased today should be very close to the nominal growth rate of the economy over the next 10 years. That is a pretty attractive proposition, since it is also guaranteed by the U.S. government.

If real yields rise much further, then the long-term return potential of TIPS will rival the returns on equities, especially on a risk-adjusted basis, since the long-term growth of after-tax corporate profits is quite unlikely to exceed the long-term growth of nominal GDP. Demand for TIPS should therefore strengthen if real yields rise. For the past year, long-term TIPS yields have risen pretty much in line with the rise in nominal yields; both are up about 100 bps from last year's lows. But if 10-year nominal yields continue to rise from here, it is likely that real yields will rise by less, and potentially by much less. That is equivalent to saying that further rises in nominal interest rates from today's levels should be largely driven by rising inflation expectations.

What this means, in short, is that the downside risks to owning TIPS diminish the more real yields rise. This is quite different from nominal bonds, whose yields can rise without theoretical limit. Investors should thus find long-term TIPS increasingly attractive as real yields rise from today's levels, even if nominal bonds become increasingly less attractive.

TIPS should also find some support given the ongoing rise in commodity, real estate, gold and energy prices. That breakeven spreads on long-term TIPS have not budged over the past two years despite a 20% rise in industrial commodity prices, a 25% rise in housing prices, a 50% rise in gold, and a 100% rise in oil is interesting, to say the least.

Long-term TIPS are thus attractive from two perspectives: real yields are appealing at current levels, and TIPS do not appear to be pricing in any significant risk of inflation, despite the ongoing rise in the prices of most tangible assets.

[click image to enlarge]

14 April 2006

Paris, by night

Click here for an amazing, 360˚ view of Paris.

NB: the scroll bar. (And do not neglect to turn on your speakers for traditional, if not mildly annoying, Parisian music.
-- David M Gordon / The Deipnosophist

13 April 2006

Google Calendar

The Google Calendar product announcement...
-- David m Gordon / The Deipnosophist
We're all busy people. Whether it's work or play, school or family, every day is filled with stuff that takes time. Keeping track of schedules isn't easy, and frankly we haven't been too happy with the tools available. So we invite you to try Google Calendar -- a tool that simplifies keeping track of events, special occasions, and appointments -- whether they’re on your own agenda or on the calendars of contacts who opt to share their schedules with you.

First, we tried to make it fast and easy. You can add events just by clicking and entering one line of simple event information. No muss, no fuss, no cumbersome forms to fill out. And it’s integrated with Gmail so you can add events mentioned in messages to your calendar with just one click.

Second, we wanted to make sure you could use it to see all the events in your world. It’s drop-dead simple to see calendars from your friends and family, or calendars you find with the built-in calendar search tool, right next to your own calendar. You can choose to share as much or as little of your own calendar, too.

Third, we focused on helping events come alive. You can turn any event on your calendar into an invitation just by adding the email addresses of your guests. They can see and respond to your invitation, whether or not they use Google Calendar themselves. Event reminders by email and text message to your mobile phone help you remember what’s on your agenda.

Finally, we kept it open. Google Calendar supports the iCal standard so it cooperates with many other calendar applications, enabling you to easily get event data in and out. Also, webmasters can add customized Google Calendar event reminder buttons to their pages, letting visitors quickly add copies of events to their calendars.

We thought it was about time to let you take a look.

12 April 2006

Federal finances still healthy

The following analysis is by Scott Grannis, Chief Economist at Western Asset Management.
-- David M Gordon/The Deipnosophist
One of the most bullish indicators of the economy's health, federal tax revenues, continued to expand at a 14% annual pace in March.

In real terms, this is the fastest pace of growth that we have seen in many decades. It reflects very strong growth in corporate profits, personal incomes, and capital gains. It is not subject to distortion, revision, or bias, as it represents cold hard cash flowing into Treasury coffers. Tax burdens (taxes divided by GDP) have recovered from very low levels as a result, and are now almost at their average level for the past 40 years. Government spending, meanwhile, has been growing at a 7-8% pace, lifting spending relative to GDP also back to average levels. Bush hasn't vetoed any spending bills yet, but he can't be accused of expanding government with reckless abandon, at least in an historical context. The budget deficit is a relatively modest 2.5% of GDP, down from 3.7% two years ago (and down sharply from where it was projected to be), and net federal debt held by the public has been just under 40% of GDP for the past 5 years or so.

It's hard to get exercised about numbers like these.

[click on images to enlarge]

23 "winning" investment habits

Interesting article. Many readers will recognize immediately content herein that include the selfsame lessons I attempt to teach, here and elsewhere. (NB: the 23 lessons at article's end.)
Tier outlines their 23 "winning" investment habits - tactics and strategies that he believes other investors can learn from, though he claims that his work is no "get-rich-quick" book.

Many of these "habits" seem to fly in the face of conventional Wall Street wisdom: for example, Buffett and Soros do not diversify. And when they buy, they always buy as much as they can.

Both will say that making predictions about the market or economy has virtually nothing to do with investment success.
Continue reading here.
-- David M Gordon / The Deipnosophist

11 April 2006

Persistent Search

Another essay from Bill Burnham that explores the fascinating world of "Search" as it continues to morph from its past uses to its future...
"What do you get when you marry ping servers and RSS with stored queries? A whole new type of search that is destined to become the search industry’s next big battleground: Persistent Search. While Persistent Search presents search companies with difficult new technical challenges and potentially higher infrastructure costs, it also gives them powerful mechanisms for building much stronger user relationships which may increase the value of their advertising services. Simply put, Persistent Search allows users to enter a search query just once and then receive constant, near real-time, automatic updates whenever new content that meets their search criteria is published on the web. For example, let’s say you are a stock trader and you want to know whenever one of the stocks in your portfolio is mentioned on the web. By using a persistent search query, you can be assured that you will receive a real-time notification whenever one of your stocks is mentioned..."

"From a business and competitive perspective, Persistent Search has a number of very attractive aspects to it relative to traditional ad-hoc queries. Traditional ad-hoc search queries tend to result in very tenuous user relationships with each new query theoretically a competitive “jump ball”. Indeed, the history of search companies, with no less than 5 separate search “leaders” in 10 years, suggests that search users are not very loyal. Persistent Search presents search companies with the opportunity to build rich, persistent relationships with their users."
Continue reading Bill's article here. And, in other Google/GOOG news, is the following tidbit (via
Google buys new, Australian made search engine technology reports that a new search engine has been developed at the University of New South Wales, and has been bought by American internet giant Google. A PhD student at the university, Ori Allon, spent six months crunching the numbers, and he came up with a new algorithm that will significantly speed up the search process. Heading up the research team was Dr Eric Martin from the University's Computer Science Department.
-- David M Gordon / The Deipnosophist

Google to Announce Q1 2006 Financial Results

What: Google/GOOG will report its financial results for the first quarter ended March 31, 2006

Date: Thursday, April 20, 2006

Time: 4:30 PM ET/1:30 PM PT

Webcast: The live webcast of Google's earnings conference call can be accessed at The webcast version of the conference call will be available through the same link for ~2 weeks following the conference call.

08 April 2006

Vertical Search and "walled gardens"

Bill Burnham offers yet another fascinating observation of the continuing morphing of Google from only search to ....

"There has been a lot of commentary about Google Real Estate’s beta launch earlier this week. It turns out that Google also is quietly testing a similar service for cars and jobs as well. Both the real estate launch and the car launch take data from Google base and integrate it with Google Maps, providing a consumer friendly front end to the database. (My guess is that the appearance of both services this week probably has something to do with the release of Google Maps’ 2.0 API). With the launch of these Google Base front-ends, Google is clearly putting into place the major pieces required to support its vertical search platform. Broadly speaking, such a platform requires 4 major pieces..."
Continue reading Bill's article here. (Really, is it any wonder why eBay/EBAY has become so ridden with fleas that it now barks in the night?)
-- David M Gordon / The Deipnosophist

07 April 2006

Windows: The New Classic

Has Apple Computer become once again Apple Computer rather than Apple iPod?

John Gruber writes fascinatingly about the suddenly and brilliantly changed dynamics of the personal computer world. In the favor of Apple.

“Holy shit!” seemed to be the consensus reaction to Boot Camp’s debut yesterday; it was my reaction, at least. But like many seemingly shocking announcements from Apple in recent years, after just a few hours, it now seems so… obvious... But now that it’s here, Boot Camp does seem like an obvious move for Apple, no? It’s a low-risk, no-lose proposition for them, and but the potential upside is huge. The old equation - decades old - is that most computers ran Windows (or, if you go back far enough, DOS) and some other ones, the ones from Apple, ran Mac OS. As of today, the new equation is that all computers can run Windows, but some, the special ones from Apple, also run Mac OS X. (Including other PC operating systems like the various Linux distributions doesn’t really change the equation.) The distinction between these two equations may strike you as subtle, but the difference is potentially momentous. The point is that it recasts Macs from being “different” to being “special”. (italics mine - dmg)
Continue reading
here John Gruber's excellent and insightful essay. (You gotta love his X marks the spot comment.) John explains, although not explicitly, why this most recent company strategy, seemingly so obvious (especially in retrospect), resulted in a spike of the stock price. (And why that move is nowhere near complete. So place aside your technical analysis, allow for oscillations -- and hold on!)

[click image to enlarge]

Suddenly, it becomes increasingly apparent that Microsoft/MSFT's hegemony is threatened on all fronts; not only does Google/GOOG badger them in search (and increasingly on the desktop) and Linux with the OS, but now Apple/AAPL has the effrontery to state, "We are back in the fight for the hearts and minds of computer users everywhere!" For a 30-year old, Apple Computer suddenly has the swagger of an adolescent. Steve Ballmer's recent exhortations re the iPod ("That is a market we want to be in."), Google and search, etc, increasingly appear as so much baying at the moon; Microsoft/MSFT, like Rome 1500 years ago, must now feel the heat of the hordes, the barbarians are at the gates. Who, I wonder, manifests as the Vandals, Goths, and Visigoths? And so it begins...

I prefer not to become too rhapsodic, at least not too quickly and so easily, so I would love to hear from you re this topic; please consider this post as an open thread. Offer your comments and insights, professional and/or personal, re the two operating systems -- which is better, and why -- and why this most recent move by Apple/AAPL is simply brilliant. Or not.
-- David M Gordon / The Deipnosophist

06 April 2006

The Drive

Are you at a loss for what to do during your next trip to Las Vegas? Tired of the casinos, the buffets, and the same-old, same-old? Have you, in other words, seen it all?

Well, the answer to your question is here -- especially (arguably) for men. But you better had hurry; this 'attraction' could be here for only 6 months.
-- David M Gordon / The Deipnosophist

05 April 2006

Time now to wake up?

The comment below is from Investors Business Daily© (IBD); the supplied chart basis weekly price bars...
"ResMed/RMD has been a long-time leader in IBD's Medical-Products group. The stock recently cleared a cup-with-handle pattern during the week ended March 24 (Point 1).

[click on image to enlarge]

"Its buy point was 43.53, 10 cents above its Feb. 8 intraday high. The correction from peak to trough was a mild 14%. The handle area showed ideal action, drifting lower in light volume (Point 2). Post-breakout price action has been equally impressive. Notice the recent tight trading. ResMed/RMD could be forming a "three-weeks tight" pattern. When a three-weeks-tight pattern occurs, a stock normally closes within 1% of its previous weekly close over a period of three weeks. ResMed/RMD will need big volume to get through another potential buy point at 44.87, 10 cents above its Mar. 21 intraday high." - Ken Shreve
Okay, me (dmg) again. Readers know I too perceive this chart as a cup and handle pattern, but not precisely the same as IBD's Ken Shreve measures it. Why is that? Look at the Daily Graphs (a sister company to IBD) chart (below) basis the daily price bars...

[click image to enlarge]

Note that area 1 in the chart represents what Mr Shreve perceives as the handle. However,
● The share price fails to breach resistance at the rounded-higher price of $43;
● Even if the investor chooses to view area 1 as the handle portion of the pattern, the rules for the pattern stipulate the handle does not typically endure for 6 weeks. (Which itself is fully half of the elapsed time of the cup portion!) Handles typically endure for 1-3 weeks. Not to be a martinet, but the rules for patterns are of equal importance to their appearance. (NB: today's apothegm in the sidebar to the left)

The cup & handle pattern is a continuation pattern, which means that, upon breaking out of the pattern, the prevailing trend of the greater periodicity reasserts its primacy. In this instance, up. All of which means that his perceived handle (my area 1) is itself part of the cup (area 2 in my chart). And that the breakout from the cup (point 3) ushers in the correctly-identified handle (not identified, but obvious) of the past 2+ weeks.

More important, the shares seem poised to break out above the congestion pattern of the past 2+ weeks, based on yesterday's
● Price reversal (gap down opening, lower price, reversal, positive price change, and a close on or near the day's high);
● The time aspect for the handle is near its typical expiration (1-3 weeks);
● The mention in today's edition of IBD (the analysis from which I quote above a snippet)
a probable breakout from the handle today. If this occurs, then Mr Shreve's "three weeks tight" pattern will fail to be. And instead what investors will have will be a stock that leaves behind its intermediate term base of the past 4+ months and resumes its long term up trend, still in force.

My intention with this post is not to find fault with the analysis of other investors. I merely illustrate how two intelligent people can view the same set of facts and arrive at distinctly different conclusions. If anything 'troubles' me, it would be the reliance on breakouts. (Not really, however; to each his or her own.) How many breakouts does an investor require before finally feeling sufficiently comfortable to buy? Moreover, is noone able to recognize at a glance the prevailing long term up trend? Fortunately, readers of this blog have enjoyed ample opportunity to purchase shares -- and at favorable prices compared to those soon to come -- before the next "potential buy point at $44.87, 10 cents above its March 21 intraday high."

I own the shares. Do you...?
-- David M Gordon / The Deipnosophist

03 April 2006

An odd factoid

On Wednesday, at two minutes and three seconds after 1:00am, the time and date will be 01:02:03 04/05/06... Something that will not happen again for another millenium. Alas, I will not be here.
-- David M Gordon / The Deipnosophist

02 April 2006

Prisoner of Redmond

A fascinating essay -- engaging, warm, and with a surprising barb (or two) at its end. And about a renowned personality -- or three.

Read it here.
-- David M Gordon / The Deipnosophist

01 April 2006

100 top tips for living

The Times of UK published this listing of 100 Top Tips for Living ~1 year ago. I liked it so much that I emailed it to... myself. And I am glad I did because it is no longer available to read online. I hope you derive as much benefit from these 'rules' as I have, and do.
-- David M Gordon / The Deipnosophist

100 top tips for living

It's the 100th issue this week of Body & Soul, The Times Saturday supplement. To celebrate, here are 10 tips for a better life from 10 of Soul's leading experts.

SIMON CROMPTON: Body maintenance

1 Get married and live happily ever after — statistics show that single men in particular are at significantly greater risk of death than men in a permanent relationship.
2 Take good quality omega oil (cod liver, flax seed, etc) capsules every day — there’s evidence it improves your brain power, reduces rates of heart and stroke, and possibly helps prevent Alzheimer’s.
3 Yes, it’s boring, but don’t smoke. It’s the single most avoidable cause of illness and death so it’s pretty pointless worrying about your health if you’re still puffing away.
4 Get to understand food labels — the more you know about what goes into food and what it does to you, the more manufacturers will have to ensure that it is healthy.
5 Exercise regularly, but don’t go mad — remember that as you get older the cartilage in your joints becomes more brittle. The last thing you want is to be laid up for months on end.
6 Believe in something — there is increasing evidence that those who attend church tend to have lower blood pressure and live longer.
7 Be aware of your body — what’s normal and what’s not. Doctors believe that people benefit more from being aware of sudden changes, or anything that is not normal, than having regular health screens. Go to the doctor if something does seem unusual.
8 Do what your doctor says. Up to half of those who are prescribed medicines don’t take them properly. Research indicates thousands remain ill or die as a result.
9 Look after your teeth. Not only does toothache destroy your quality of life but recent studies have shown that those who neglect their dental health tend to die earlier.
10 Remember moderation in all things. If you’re eating three cream cakes every day you know that there’s going to be payback. The same applies to taking handfuls of supplements.


11 Always find something kindly and enthusiastic to say about your partner’s sexual performance. Never start any aspect of your mutual sex life with a negative remark.
12 Never, ever make a joke or humorous reference about your partner’s genitalia, secondary sexual characteristics or performance, however kindly intended or amusing. Any joke counts as rejection.
13 Don’t initially volunteer information about your fantasies. Better to talk about a third party’s fantasies, such as those found in Nancy Friday’s book My Secret Garden, and take the discussion from there.
14 Tell your partner what you enjoy. Some partners don’t like to be thanked — sex is not a social service — but let your partner know when it has been a success.
15 Vary the routine. Keep boredom at bay and thereby prolong the delightful stage of love known as lust.
16 Condoms, femidoms, spermicides, subliminal anxiety? Cut to the chase and go for a sexual health check-up together. It’s the single most liberating sex act on the planet.
17 Telepathy is no one’s strong point so ignore your inner people-pleaser and tell your partner if something is, or isn’t, working for you. There are no prizes for sexual reticence so say what you want and don’t fake your feelings.
18 Reciprocate. Remember that going south is a two-way ticket, as is, getting on top, finding the KY in the bathroom cupboard and sleeping in the wet patch.
19 Plan ahead. Make lists of techniques you want to try, or toys you want to buy and allocate a date in the future to each one. Heighten the anticipation by sending each other coded reminders beforehand.

20 Have an affair — with each other. Don’t let work, kids and domesticity get in the way of your sex life. Meet in a hotel room once a month. Drink champagne, have a bath together, and pack four weeks’ worth of sex into one night.

THE MIND GYM: Keep your brain fit

21 Open your eyes. From scenery to people, temperatures to sounds, take it all in. Remember your surroundings and test yourself later to see how good you were.
22 Focus. Give whoever you are with or whatever you are doing your full attention.
23 Listen and ask questions. Use all the information you hear to draw a conclusion.
24 Surround yourself. Build a network of people around you that ask questions or even challenge you and help you discover new things.
25 Look on the bright side. Research shows that optimists live longer. If the glass is usually half-empty then work on viewing it as half-full.
26 Experiment. Try different things out and be open to as many new experiences as you can, from painting to paragliding, sailing to singing.
27 Take time to reflect. After a big meeting at work or a row with a loved one. What have you learnt? What could you have done differently?
28 Set yourself goals. Make sure you stretch yourself at least once a week, whether by learning a poem or completing a crossword.
29 Break your routine. Avoid getting stuck doing the same old things.
30 Challenge your assumptions. When you have a view or an idea think of what its exact opposite would be and see where it takes you.

ANNA SHEPARD: Going green

31 Clean the fridge to make the motor run for shorter periods, saving energy and cash.
32 Cool off by turning your thermostat down by one degree — you won’t notice the difference in temperature but you will save 10 per cent on your heating bills as well as reducing CO2 emissions.
33 Buy furniture made from “good wood”. Good wood must be certified by the Forest Stewardship Council (FSC) to guarantee sustainability. About 50 per cent of John Lewis’ garden furniture this year carries the FSC logo.
34 Fill up the washing machine before you run a cycle to save energy and water.
35 Save energy by filling out a home energy questionnaire (; 0800 512012), which will recommend cost-saving, energy-efficient measures.
36 Ecover cleaning products can be refilled at select stores — call 0845 1302230 for your nearest. This avoids using energy to recycle containers.
37 Plant power can be harnessed with a house plant. Spider plants, palms, peace lilies and chrysanthemums come out on top for absorbing indoor pollution.
38 A water-saving hippo can save three litres (five pints) of water every time you flush (
39 Ditch the junk mail by contacting Mailing Preference Service (; 020-7291 3310).
40 Install a meter, which will reduce water usage by an average of 20 per cent and reduces costs by £41 a year (according to Ofwat).

DR COPPERFIELD: At the doctor’s, don’t...

41 Take up one of the day’s “emergency” slots with a problem your mother could kiss better.
42 Show up 15 minutes late for a 10-minute appointment and feign horror and surprise when you’re told you won’t be seen.
43 Use medical terms you don’t understand; “chronic” does not mean “severe” — and not all headaches are migraines.
44 Ask for a second opinion before you’ve heard the first one.
45 Describe the tablets you take as, “They’re sort of off-whitey blue and egg-shaped”, rather than remembering their names.
46 Ask whether it’s safe to take Chinese herbal remedies with your prescription drugs. (Ask Dr Wu, he might know and we don’t really care.)
47 Insist that you can tell when your blood pressure is high because you feel “giddy”.
48 Tell your GP that he looks awful and ought to see a doctor when he’s crawled in to work with the ’flu.
49 Forget to mention that you’re allergic to penicillin until your GP has finished writing the prescription.
50 Ask your GP to tell lies on insurance claim forms or to backdate doctor’s certificates (for all he knows you could have been on a Caribbean cruise last week).

IRMA KURTZ: Rules of engagement

51 Be polite. Intimacy does not justify discourtesy; “please” and “thank you” and “sorry” are words of love, too.
52 Keep something of your own, a passion or pastime. To rely on another for all your joy is to assign an inhuman burden.
53 Never say “you should” to your partner when what you mean is “I want you to ...”
54 When in love remember to be unromantic: about contraception, for instance, and in due course about finances and possibly offspring.
55 Hold hands in public sometimes; this is a continental habit that is not without charm and significance.
56 For every minute you talk, spend two listening, not just hearing: taking in what the other is saying and what it means.
57 Forgiveness is as important as fidelity but fidelity is essential to monogamy and forgiveness an occasional requirement, best kept in reserve.
58 You cannot change your partner’s behaviour until you change your own reaction to it.
59 To accept another with love is to accept all the baggage that person carries, make room for it and help to unpack.
60 Smell good. Eat garlic only when your partner does too.

BRITISH HEART FOUNDATION: Burn off those calories by...

Figures are for 30 mins exercise for someone weighing 68kg
61 Running at 16kmh/ 10mph — 525 calories.
62 Playing football — 292 calories.
63 Swimming (at 50 yds a min) — 315 calories.
64 Weight-training (including short recoveries) — 382 calories.
65 Handball — 345 calories.
66 Basketball — 330 calories.
67 Skipping — 428 calories.
68 Squash — 308 calories.
69 Cycling (1.6km/1 mile in 4.6 mins) — 300 cals.
70 Cross-country skiing — 495 calories.Note: Depending on an individual’s fitness levels, this intensity may not be able to be sustained for the full 30 minutes.

DR JANE COLLINS: Kids’ wellbeing

71 Aim for a healthy diet for the whole family, but always leave room for treats. A healthy diet for children is not exactly the same as for adults because of the needs for growth.
72 Five portions of fruit or vegetables a day applies to everyone once a child is eating three meals a day.
73 Children of all ages need lots of excercise. Exercising with their parents and seeing their parents exercise is likely to encourage them, even during the teenage years.
74 Immunisations protect children from serious illnesses. Preventing illness makes sense.
75 Babies and children are screened for serious illnesses and/or problems at various stages in their development. Having these done is important for health.
76 If your child does become ill, go with your instincts and be confident in your own judgment — you know your child.
77 Do ask doctors and nurses about the different options available if your child is ill.
78 Temporary behavioural problems are common. Most can be dealt with by talking with your partner about what is acceptable from your children, and then taking a consistent line.
79 Don’t pressure your children with your own unrealistic expectations.
80 Access to a first-aid kit and Calpol, or its equivalent, will help you deal with the unexpected.

DARIAN LEADER: Conquer those neuroses

81 If you are phobic, try to choose a rare or extinct animal to be terrified of. And remember that fear of something known is always better than anxiety of the unknown.
82 If you are obsessive, and certain you’ve left the iron on when you leave for work, follow a simple rule: take the iron to work with you.
83 If you are a control freak and hate letting go, dance just once at a party so you can cite it later in your defence.
84 If you have disturbing dreams featuring someone you know, think twice before telling them. It’s not silence that’s golden but tact.
85 If you get angry at the most trivial slight, stop to think. Could you be searching for injustices to add to your list?
86 If you make slips of the tongue, don’t try to hide them. They often bring out what you really want to say.
87 If you feel encumbered by your neurotic symptoms, don’t hide them. Try to live them as comic rather than tragic.
88 If your neurosis is getting too much, seek help. Find a shrink. But which one?
89 To find a good therapist, first try using word of mouth — if a friend has been helped, find out by whom. Failing that, go through your GP.
90 The unconscious needs a bit of friction to emerge, so keep in mind that you are not looking for a new best friend in a therapist, and choose another if it doesn’t work for you.

JOHN NAISH: And finally, health hazards

91 Cellphone elbow — victims fear they are having a stroke, however, John Fernandez, of Rush University, says that holding mobiles too long pinches the ulnar nerve in the elbow, which can severely weaken hands.
92 Christian cancer — devout churchgoers may contract cancer from inhaling church incense, caution Maastricht University researchers, as it can contain high levels of carcinogens.
93 Memoir madness — keeping a diary raises your risk of headaches and anxiety, says a Glasgow Caledonian University study. Reflective writing causes distress, it seems, which gets even worse if you keep rereading your accounts of your daily traumas and adventures.
94 Winners’ woe — hold the celebrations, the fans of winning teams are much more likely to be assaulted 24 hours after matches than losers, say casualty researchers in Cardiff.
95 Shaky Pins syndrome — can you never remember your cash-card number? It’s not forgetfulness, it’s security-protection code overload syndrome, argue Melbourne University neuropsychologists.
96 Playtex peril — men who remove lovers’ bras can rip their fingers off, reports the British Journal of Plastic Surgery. Apparently, 40 per cent of men have a dangerous grasp of clasps.
97 Corpse confusion — Cotard syndrome makes people believe that they are dead, melting or turned to stone. One recent sufferer repeatedly attempted suicide to prove he was dead.
98 Terminal airport disease — living near an airport doubles your suicide risk and boosts by 60 per cent your chance of accidental death, according to a ten-year study of Los Angelinos.
99 Nostril no-no — beware washing in tropical streams on adventure holidays. The Hong Kong Medical Journal says that leeches can crawl up nostrils, causing persistent nosebleeds.
100 News blues — TV bulletins can make you clinically depressed. Just 15 minutes can plunge morale to the point of confusion and anxiety, claims Nottingham Trent University.

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