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 October 2006


Well, there would have been no way I could limit successfully my tendency for logorrhea when answering these two comments from "Struggling to regain lost momentum." So instead I caterwaul at unlimited length here. Let's discover together how pithy I might be...
"That is quite a list! I thought I remember you once suggesting that an investor should have about eight stocks maximum. Did I recall the statement wrong or have you expanded your stock universe?
That would be nine stocks, Ray, not a mere eight! There are many reasons for this lengthy list, foreshortened though it might be, each included in the original post:
• "A list of those stocks I monitor, accumulate, or own." The emphasis here would be "monitor" -- although in fact I do own most of these stocks, many also perform double duty as signifiers of tension on the tape.
• "The opportunity created from the fluctuations in price." If the price is down short term, I buy. Forgive me, but I cannot restrain myself (in truth, I no longer even try!) from purchasing long term winners during short term price declines.
• "Because an investor never knows which one or ones will lead higher the portfolio value." This sentiment is about as clear as it gets without supporting connective tissue; herewith, however, the connective tissue... I might own 30 or 40 stocks, obviously well in excess of a mere 9, but I downsize initial positions. Why? Because noone, me included, knows which one or ones will take the reins as portfolio workhorse (rising the highest, quickest, and with the least grief). As the lead horses betray themselves, I sell down to the ~9 leaders, and then concentrate my monies into those few. My objective is not to be perfect, not even to be correct, only make money. And, as such, I do not seek the market to ratify my analysis, but instead only request it create my opportunities to buy and sell via the continuing fluctuations in price. (Note, for example, my reply to Brian B in the comments thread of the earlier post.) So...
• "I purchase when the price is good." The continuation of the item above.

One more item, not mentioned:
• My objective in these portfolio lists always is to cut across market sectors and groups, stocks obviously trending and those obviously basing (or topping), large and small cap, growth and value. No single investor's answer is correct for all investors; in this lengthy list, each person will find an opportunity that especially resonates for him or her.

"Sometimes I need a good smack! Subtlety often eludes me. Thanks for your reply. Lots to think about, because I do feel lost right now. What is so easily clear to you, is not so easily clear to me. I struggle to understand your meaning regarding time frames and market periodicty. (italics mine -- dmg) Reducing my position size is good advice. I think that could help reestablish my shaken confidence. Your previous advice to buy inflection points has helped me. WHEN I follow that advice, it has worked out fairly well. Recognizing true inflection points is not always as simple for me. I saw some good inflection points in August but held back, had I followed your advice and bought those points, I would have been very well rewarded. Much easier to realize in hindsight."
Yes, all true. Unfortunately, your answer lies more in the realm of psychology rather than technicals or even technique; this is largely because the markets have scarred you. Let's hope not permanently.

I recognize you flailing; seeing patterns, set-ups, even opportunities, but you disbelieve them, disbelieve your analysis... believe only that if you buy the opportunity is doomed to head lower. You must get your mind off the decline of 2000-2002, and remember the advance prior. (You made a lot of money during those heady days, no?) Yes, you lost a lot of money during the bear market, but what you truly lost is your innocence. You stand before a personal inflection point, one quite seminal: either re-capture your lost innocence or focus on only one side of the market. And then wait for your new opportunities.

That is what investing is, after all -- waiting. You wait for the particular opportunity to set-up, then you await the completion of that set-up, and finally you purchase and then wait on its completion of the new up (or down) trend. Investing is 10% elation, 10% deflation, and 80% frustration. Get used to it.

Almost 15 years ago, I endured a similar destruction to my my portfolio value -- and my emotional tenacity. I still could see the opportunities, but no longer could I hold on during the mildest and most short term of declines. Sheesh. I put into place stops so tight that I practically forced myself into a pattern of losing. That only worsened the situation, as you could imagine. Stops are supposed to protect against losses, not guarantee them! (Note the difference between losses and losing. I suffered both.)

What do I do now? (As differentiated from how I cured myself.)
• I recognize the market (prices; opportunities) always oscillates. Hence, these fluctualtions create my opportunities.
• I focus my investments (not my perceptions, nor my perspectives!) on one side of the market, the long side.
• I identify long term winners, qualified as both the company and the stock.
• I seek short and/or intermediate term pullbacks in price to accumulate said positions.
• I never confuse my time frame with the markets' periodicities.
Okay, that last item seemingly requires additional explication. I believe most investors view their investment positions and opportunities epochally; he or she attempts to carve a slice of time that has beginning, ending, and trajectory (trend), and profit from same. Alas, the market continues its meandering way, never even stopping to see that you or I even exist. That is why you sell a winner, and watch with horror as it continues climbing in price without you aboard. And vice-versa, of course. Because I do this investing gig professionally, I seek two objectives
Build net worth. This goal is achieved via my investments not my trading;
Generate income (to pay bills, don'cha know!). This goal is achieved via my trading, not my investments.

With those twin goals in mind, I must never allow myself to grow confused between those objectives, the concommitant time frames, and the market's many price swings to and fro. For example, Google/GOOG is a net worth builder, and thus I hold it as a long term investment. However, it is also a perfect trading stock (huge volatility, massive liquidity, proper side of the trend, etc) so I also trade it. I cannot confuse these two purchases, however; thus, I delineate the specific time expectation, in addition to stop and objective levels, for my trading opportunity. Contrarily, the investment position is one more of time than price; granted time, the price objective will fulfill itself. Capice?

If your objective remains to view the market as carvable epochs, then always align your time frame with the market's specific periodicity. If, for example, you prefer to day trade (open and close a position the same day), then align that time frame with the intra-day price bars. Always keep in mind that all periodicities greater than your time frame must head in the same general direction; you purchase long, then each larger periodicity must be in upside gear. It is only those periodicities less than your time frame that should run counter to your time frame and longer term objective.

Thus is your opportunity born. It is always thus.

btw, the Roman attribute of discrimen is the ability to judge a situation and to take right action without being sidetracked by peripheral considerations. If the word sounds familiar, it should -- it gave rise to our present day discriminate. (Note how this word's meaning has been hijacked by present-day society!)

-- David M Gordon / The Deipnosophist


28 October 2006

Trick or treat?

This game is devilish -- devilishly fun and devilishly ingenious. It tests your knowledge of movies, especially horror movies. So it is particularly apropos for Halloween. However...

Well, as one friend (who has an especially deep knowledge of all movies) says, "After 9 minutes and a score of only 12, I went mad. Humph! I like the game, but I'll never eat another M&M."

Care to betray your score...?
-- David M Gordon/The Deipnosophist

27 October 2006

Struggling to regain lost momentum

Certainly, the absence of my market thoughts has become obvious the past 3 months. Would it surprise you if I admit to behaving like a cat on a hot tin roof with respect to new blog posts?

I seek neither your sympathy nor your adulation, but the acrimony surrounding
the Rackable Systems/RACK debacle did sadden and distress me. In the end, that controversy made me gun-shy from sharing my thoughts and insights re the markets. Too, in RACK's wake, this site's readership plummeted; it continues to reach for new lows. I wonder now for whom I make this effort. So, yes, I have not felt especially inspired to continue to plug away. Until the past few days, however, when two separate emails arrived...

"I liked your comments about seeking and finding opportunities in all markets. The older I get the more I am concentrated on that notion. Which got me to thinking about all the very smart perma-bears you and I have encountered in our many (some would say TOO many) years of watching markets. Two names come to mind immediately: Jim Grant and Bill Flenkenstein. They are both very smart, fun to read, and one would definitely go broke if one listened to their advice. I think back to Chuck Almon -- you remember him. Or Richard Russell. You could certainly add to the list. What I realized about all these smart people was that they only had one kind of market that they liked enough to commit to: A market that was dramatically overvalued. They didn't even like the bottom in 2002. They required 1982 multiples. Which got me to thinking about the fact that for most of our investing lifetimes, "the market" is not at extremes. Most of the time it's somewhere in a gray zone. If you want to make money over a lifetime, you must find opportunities in the gray zone. You only get a few '82s or 02's and you can't make a career out of waiting for them. Or a living."
"Congrats for what? For listening to your advice? For following thru with your verbal proclamations and your written proclamations (at The Deipnosophist) regarding Google/GOOG? I merely listened and acted on what you suggested. Maybe holding on thru the ups and downs was my decision alone... but I would not have had the opportunity to hang on had I not invested first - and that idea was planted in my brain by you. So to you I say thank you. You made an amazing call on an amazing stock. I owe you."
And then I realized the truth of it: I write for me. That you even read these posts honors me. There might be 1000 readers or only one reader, but it gladdens me if my efforts offer help or guidance to even one of you (or two, as quoted above). That recognition -- that my insights have value, both literal and figurative, academic and practical -- inspires me. So I say, "Thank you!" to these two writers.

And so without further ado, I get up off my (money-making) ass, and attempt to post as I once did, beginning with this reader's question...

"I have no clue what this chart is telling you. When I attempt to divine what a chart is telling you, I am usually 180 degrees wrong. Lately everything I thought the charts were telling me has been dead wrong. I have been basically on the sidelines since late August (except for some Oct puts that will all expire worthless this Friday), because I thought the charts were presaging another test of the Jun/Jul lows before pressing upward to test resistance. In spite of the tape proving me so completely wrong, I still have a bad feeling about these recent new highs. Like the telltale symptoms of the flu before it really hits and you start barfing your guts out. A couple of these things which may possibly be what you are alluding to, several indexes: SOX and DOW Transports are not participating fully yet in the rally to new highs. the S&P is lagging somewhat for the first time. This could just be sector rotation, or could it be part of what is making me queasy. I do not know what to make of this market, I am completely confounded at the moment! My gut is telling me to stand aside for now and that is what I am doing, for better or worse."

Uh-oh, you have become lost. Only it is not the market that confounds you, but you yourself. It is ever thus, for each of us. I have read each of your comments posts, and discern several items:
1) You have taken care to recognize the market's many squiggles. Good for you. Unfortunately, you fail to take the next step and place those squiggles into context. Why the hell do you want to short a ~$37 stock (Verizon/VZ) for ~$1.50 of downside when that same stock builds a major bottom? Your objective should be to seek the shallow, short term decline to purchase the stock!
2) The decline of 2000-2002 has scarred you. Never again will you hold a stock as it declines, as you just know that decline will continue all the way to $0. Thus, you lean into the market so close that you not only miss the forest for the trees, you also miss the trees for the bark. In fact, you miss the bark for leaning in to see those gnarls...
3) You have lost all sense of time (your investing time frame, the market's corresponding periodicity). This causes you to ignore (not purchase) a bull market because prices increase (fit that rise into your time frame!), or to sell short for a shallow decline a stock emerging from a massive long term bottom, or to explain everything away because you do not 'get it'.

Get over it. All of it. Discern who you are, what your objectives are, what time frames are meaningful to you, align your time frames with the market's periodicity, discern the trend inside and outside of your time frame, and then invest accordingly. And appropriately.

Some items you might want to incorporate into your methodology:
1) The market has no knowledge you exist. It is not out to get you.
2) Investing is risk; it self-denotes as such. Not investing for silly reasons is not the avoidance of risk but the height of folly.
3) Get in there; get your hands dirty. If you feel uncomfortable, downsize your position size to a level that should you lose it will not hurt you financially or emotionally. Should you instead be correct, the profit will bolster you emotionally, albeit affecting your finances only marginally.

I promised another reader (that would be you, Jeff) a list of those stocks I monitor, accumulate, or own now. Most of these company names will be familiar from previous blog posts. My list rarely changes; what does change is the opportunity created from the fluctuations in price. Down, and I buy. Up (as most of these are), and I make money...
Ambercrombie & Fitch/ANF -- purchased in mid-August (see CMG comment below)

American Commercial Lines/ACLI
American Healthcare Services/AHS
Apple Computer/AAPL
aQuantive/AQNT -- The chart setup states the stock should leave behind $30 sometime soon -- and not look back. Earnings, reported next Thursday, could be the catalyst.
Chipotle Mexican Grill/CMG -- Is today where ANF was in mid-August. I accumulate rapidly this stock; I perceive each short term pullback to be an opportunity to purchase. And will not endure.
Coca-Cola/KO -- a good looking base on yet another China 'play'
Genentech/DNA -- A massive base.
Google/GOOG -- What can I say? Except chuckle rudely at the imbeciles who continue to miss this stock. Let 'em talk it down. A few of us will make money with it.
Heinz/HNZ -- What a gorgeous base the past ~5 months! On the monthly chart, the base shows as a flag pattern, which means the coming breakout counts to the low-50s. I will take that profit... and then some.
Intuitive Surgical/ISRG -- Huge base a-building.

Isis Pharmaceuticals/ISIS
Johnson & Johnson/JNJ -- By now, each of you have tired of reading me drone on about this company/stock as my poster child of a growth stock. But it is. And it only continues.
Kimberley Clark/KMB
Level 3/LVLT
PF Changs/PFCB
Research in Motion/RIMM -- Accumulated between $65 and $70, when the analysts fretted this stock was headed to $0. Um, I believe you idiots -- er, analysts -- should change your mind before the stock continues to defy your expectation and roar ever higher in price.
Under Armour/UARM -- I believe this stock will prove a huge winner in the coming months. It already has been so.
Urban Outfitters/URBN
Whole Foods Markets/WFMI

Why so many stocks? (There are other stocks, of course, but this list became unwieldy for its length so I shortened it.) Because an investor never knows which one or ones will lead higher the portfolio value. Too, I prefer no aggravation, no grief, nothing but reward. I no longer gnash my teeth debating the merits of this market advance vs that market decline. If I am a long side investor, then I purchase when the price is good. And right. You can see from this list I have some sizable winners. There are several others for which I have high hopes (UARM, etc). Only time will tell. I like the odds, however.

I seek your comments and questions, as each would help me write the next post...
-- David M Gordon / The Deipnosophist

23 October 2006

Headline and core inflation converging at 3%

The commentary that follows is by Scott Grannis, Chief Economist at Western Asset Management.
-- David M Gordon / The Deipnosophist
Due to huge declines in gasoline prices, the CPI fell 0.5% last month, while the core (ex food and energy) rate rose 0.24%. Since September '05 was dominated by a huge increase in energy costs in the wake of Katrina, the year over year rate of consumer price inflation tumbled from 3.8% in August to just 2.1% in September. The core CPI, however, has now accelerated to 2.9% in the past year (and has risen at a 3.2% pace in the past six months), from a year over year rate of 2.0% last year. The Cleveland Fed's Median CPI (which throws out those items that increased or decreased the most) has accelerated from 2.3% last year to 3.5% in September. Barring further significant declines in energy prices, I'm guessing that the headline CPI will rise about 3% this calendar year. That will put most measures of the CPI in the ballpark of 3% by December.

Interestingly, while many people might guess that soaring energy prices have been leading the inflation charge for the past four years, it is actually the case that energy prices have been bringing up the rear. The consumer price index rose about 6% less than the core CPI from early 1984 to February 2002, mainly because oil prices languished below $30 the whole time, while all other prices were (on average) steadily rising. Oil's price surge since then has brought the real price of oil back to roughly the same level as 1984 (thus more closely matching the average rise in all other prices), and that in turn has helped the headline CPI close the gap between the core and headline inflation indices to only about 2% today.

So maybe core inflation really is the thing to watch, as the Fed has been insisting, since core inflation has been out in front of oil prices for quite some time. Core inflation pressures bottomed in 2003 at about 1%, and core inflation is now running about 3%. Whether inflation turns down next year as the market expects (TIPS breakeven spreads project the CPI will average only 2% or so for the next few years) is the key question now. The bond market seems to be operating under the assumption that big declines in energy and housing prices, coupled with a significant slowing of economic growth, will pull core inflation down, but history suggests this is not necessarily going to happen. Big declines in inflation have traditionally occurred in the wake of recessions, and most recessions, in turn, were the result of a major tightening of monetary policy. With the exception of the flat/inverted yield curve, the sensitive monetary indicators of inflationary pressures that I consider most important to watch (e.g., gold, the dollar, swap spreads, the real Fed funds rate, commodity prices) are saying that monetary conditions today are not tight enough to result in any significant disinflationary pressures over the next year or so. Indeed, there is little to suggest that core inflation is unlikely to continue to drift higher.


17 October 2006

Industrial production still strong, both in the US and globally

The following commentary is by Scott Grannis, Chief Economist at Western Asset Management.
-- David M Gordon / The Deipnosophist

U.S. industrial production fell by 0.6% in September, but is still up 4% over the past year, even after factoring out the Katrina-related decline of last September; this is about the same pace as the past 3 years. The Federal Reserve estimates that capacity utilization at U.S. factories is about 82%, a level that in the past has tended to provoke a tighter monetary response from the Fed than we have seen to date (in terms of the real Fed funds rate).

European industrial production has accelerated noticeably in the past year, up from almost flat growth last summer to 5.2% over the past year. Japanese industrial production expanded 5.9% in the 12 months ended August, decisively breaking out of a slump which began in the early 1990s. Overall, this amounts to very healthy supply side conditions in the global economy.

Despite all the talk of a collapse in commodity prices, raw industrial commodity prices are setting new all-time highs almost every day, and are up fully 26% over the past year. This suggests that the demand side of the global economy is also quite strong.

[click on image to enlarge]


Interesting perspective

If a picture is worth 1000 words, then what is this chart's worth?

[chart courtesy of Biryini & Associates. Click to enlarge.]

For the record, I could not care less about the number of angels that could dance on the head of a pin. I seek -- and find! -- opportunities in all market conditions.

-- David M Gordon / The Deipnosophist

13 October 2006

Imperial History

"Who has controlled the Middle East over the course of history? Pretty much everyone. Egyptians, Turks, Jews, Romans, Arabs, Greeks, Persians, Europeans... the list goes on. Who will control the Middle East today? ..."

This 90 second video is absolutely fascinating.

-- David M Gordon / The Deipnosophist


10 October 2006

Does confusion reign at Google?

The questions flood my inbox. Since mid-January (its all time high trade), questions have been rife, fast, and furious: "What ails Google/GOOG shares...? Certainly (obviously), the stock no longer acts as a leader."

What can I say? Despite my continuing bullish stance as limned repeatedly here and in the Wall Street Journal interview. (See link in sidebar.) And despite my repeated warnings during Q4 2005 (most in conversation with reader, "AP") that this type of price action could occur at any time -- and that such price action would reflect merely a high level consolidation, etc. And an opportunity to purchase.

That the stock has meandered throughout 2006 seemingly affords people the opportunity to conclude finally that the egg comes before the chicken; that there is no there there (at the Googleplex). Consider, for example, this article from the LA Times (URL embedded in colophon)...

Los Angeles Times
Google Puts Lid on New Products
Realizing that its myriad services are confusing users, it will focus on refining what it has.
By Chris Gaither
Staff Writer
October 6, 2006

MOUNTAIN VIEW, Calif. — In another sign of Google Inc.'s growth from start-up to corporate behemoth, the company's top executives said Thursday that they had begun telling engineers to stop launching so many new services and instead focus on making existing ones work together better.

The shift is a major departure from Google's previous strategy of launching new services rapid-fire and highlights the 8-year-old company's struggle to stay focused during swift growth.

Co-founder Sergey Brin is leading a companywide initiative called "Features, not products." He said the campaign started this summer when Google executives realized that myriad product releases were confusing their users.

"It's worse than that," said Brin, Google's president of technology. "It's that I was getting lost in the sheer volume of the products that we were releasing."

More than 50 products in various stages of development are available across Google's websites. There are so many that the company has collected 35 on a site called "More Google products," which includes digital maps, instant-messaging software, programs that speed up Web surfing and even a search engine for mail-order catalogs.

Analysts said Google was fighting a problem that had historically plagued technology giants, many of which became so enamored with innovating that they forgot to create products that people would really use.

"They created a bunch of crap that they have no idea what to do with," Rob Enderle, principal analyst with Enderle Group, a Silicon Valley consulting firm, said of Google. "What a huge waste of resources."

Google admitted this year that its internal audits discovered that the company had been spending too much time on new services to the detriment of its core search engine.

The initiative's primary goal is to make Google products easier to use, especially by packaging disparate products. For example, said Chief Executive Eric Schmidt, Google plans to combine its spreadsheet, calendar and word-processing programs into one suite of Web-based applications.

Google became famous for its simplicity, winning millions of fans with a mostly white home page and simple search box.

Flush with cash after its initial public stock offering two years ago, Google scooped up hundreds of software engineers and began releasing new services at a dizzying pace.

"The result occurred precisely because we told these incredible engineering teams to run as fast as possible to solve new problems," Schmidt said. "But then that created this other problem."

Surveys showed that Google users could recall a half-dozen or so products, Schmidt said, but "they cannot remember 35."

The company does not plan to tell engineers to halt all new products, Google said, nor does it plan to kill little-used services.

Rather, the effort is more focused on future development. After launching the initiative this summer, Schmidt said, Google canceled several services in development — which he would not describe — and instructed their creators to instead make them features in other products.

"That is a big change in the way we run the company," Schmidt said, describing Google's previous attitude as, "Just get this stuff built and get it out — don't worry about the integration."

Enderle, the analyst, said that attitude showed as search engines such as and start-up introduced innovations that Google lacked.

Small slices
Key players' share of the online mapping market, based on number of website visits
Mapquest: 56.3%
Yahoo Maps: 20.5%
Google Maps: 7.5%
MSN Virtual Earth: 4.3%
Google Earth: 2%
Others: 9.4%
Source: Hitwise

Perhaps. Consider, however, that Google has purposefully obfuscated in the past in its quest to befuddle its competition. Why should this time be any different? This all seems as so much spin to my jaded eyes. The confusion too many diverse products from the Googleplex brings to bear confuses this singular company nary a whit. (The prior sentence has its meta-purpose.) It does confuse most observers, however, in their quest for readily apprehendable answers; desirous of a triptych that will take them to there from here.

This next article is surprising in that its author is...

The Information Factories
The desktop is dead. Welcome to the Internet cloud, where massive facilities across the globe will store all the data you'll ever use.

"But industry has returned to The Dalles, albeit industry with a decidedly postindustrial flavor. For it's here that Google has chosen to build its new 30‑acre campus, the base for a server farm of unprecedented proportion. Although the evergreen mazes, mountain majesties, and always-on skiing surely play a role, two amenities in particular make this the perfect site for a next-gen data center. One is a fiber-optic hub linked to Harbour Pointe, Washington, the coastal landing base of PC-1, a fiber-optic artery built to handle 640 Gbps that connects Asia to the US. A glassy extension cord snakes through all the town's major buildings, tapping into the greater Internet though NoaNet, a node of the experimental Internet2. The other attraction is The Dalles Dam and its 1.8‑gigawatt power station. The half-mile-long dam is a crucial source of cheap electrical power – once essential to aluminum smelting, now a strategic resource in the next phase in the digital revolution. Indeed, Google and other Silicon Valley titans are looking to the Columbia River to supply ceaseless cycles of electricity at about a fifth of what they would cost in the San Francisco Bay Area. Why? To feed the ravenous appetite of a new breed of computer."

... George Gilder on
the dawning of the petabyte age. Arguably "surprising" as to its author and his insights. Google/GOOG is not just a company with the best search engine but rapidly morphing in its quest to be...

Well, by now you have a better understanding of the company's objective. And precisely why I have been so resolutely bullish on the continuing opportunity this company manifests. It might not be easy, but try not to allow purposeful obfuscation to obscure the clarity of your long term vision.
-- David M Gordon / The Deipnosophist

08 October 2006

Fun sites!

• Now you too can be Jackson Pollack... Even me! (Click any key and/or move your cursor to begin.) Sheesh, I like the results of my efforts; perhaps I missed my calling!

• "When the cat is away, the mice will play." What your computer does while you are away...

Check out the Birthday Calculator for all sorts of fun facts about you and your birthday.

• Find out what your name means and says about you.
-- David M Gordon / The Deipnosophist


07 October 2006


That was my immediate reaction, as a friend and I began to test the viability of a new software program to transfer files, Pando. His reply...

"[No, but] very, very cool. I've been thinking about ways to deal with this problem (emailing large attachments) for a long time. I've had a few ideas but nothing as elegant as this. Using Bit Torrent is the key, as it eliminates entirely the need for network addressable storage which most people don't have (and those businesses that have been formed to provide it to consumers have quickly discovered it's a rotten business.) The key question is: how well does it work when either the sender or receiver is using a real hardware firewall. I know mine doesn't work with most Bit-torrent technologies without a lot of fiddling that I'm unwilling to do. Firewalls should not be a problem for sending machines (but that doesn't mean it can't be a problem). But the receiver having a firewall could definitely present complications."

Okay, so perhaps Pando is not magic, but it does work like a dream. We have tested many file transfers, including files of ~300 megabytes. In each test, the transfer took seconds. Get Pando! It is free of charge; it has no ads, no spyware, etc; it will ease your life. No more wasting time with slow file transfers. I regard this program sufficiently highly to include a permanent link in the sidebar. btw, Pando is the type of company Google would purchase in a heartbeat rather than the hyped $1.6 billion purchase of YouTube. (More on this topic early next week.)

If you still wonder about Pando's value to your life, read the article by Walter Mossberg (below)...
-- David M Gordon / The Deipnosophist
Wall Street Journal
July 12, 2006; Page D5
An Easier Way to Send Large Email Attachments

Free Application Helps To Avoid Clogging Inboxes; Speeds Still Might Vary

How many times have you wanted to email a large attachment -- like a bunch of digital photos, an album of songs, or a hefty video -- but didn't do so because it exceeded your email provider's, or the recipient's, limits on attachment size, or because it might max out the recipient's mailbox?

This frustration is growing increasingly common as better digital cameras produce bigger photos and large video clips, and digital music becomes more widespread. Computer hard disks have grown nicely to accommodate these files, but limits on the size of email messages haven't. And, even if you could send such large attachments, it can take forever to send them via email, partly because broadband upload speeds lag far behind download speeds.

Instead of suffering the frustration of a bounced email, many folks have resorted to Web-based services like Shutterfly or Kodak EasyShare Gallery or or Google Video for sharing digital photos and videos. They upload the files to these sites, then send links to their friends and family. But this method has major drawbacks. The recipients don't get the full-size files on their own computers, and sometimes must register with the sites to view your material.

This week, we tested a new, free, application called Pando that aims to solve this problem without requiring you to use an intermediary Web site. Pando lets you email huge attachments -- up to one gigabyte each -- to anyone, without breaching email size limits, or clogging anyone's inbox. It comes in versions for both Windows and Macintosh computers

It sounded fishy to us, too, but Pando, from Pando Networks Inc., performed really well in our tests -- even in its current "beta," or trial, stage. It's simple, fast, and effective, and it solves the large-attachment problem.

Pando works by merging the mechanism of email with its own small program and a modified version of BitTorrent, a back-end file-transfer system best known until now for speeding up the downloading of large, unauthorized files, like pirated movies.

Here's how you use Pando. First, you download and install the small Pando program. Then, you select the files you want to send. These can be any type of files you want, or even whole folders of files. Then, still using the Pando software, you type in the addresses of the recipients, the subject, and a message. The software then does three things: it creates a Pando Package, a small special file that instructs the recipient's computer on how to fetch the files; it sends an email containing that package file, plus any text you want; and it uploads the files to a Pando server.

On the recipient's end, an email is received in his or her normal email program containing the Pando Package as a tiny attachment (one huge 94 megabyte attachment we sent required only a 22-kilobyte attachment). The recipient just opens the Pando Package attachment, and it in turn launches the Pando software, which then downloads the files or folders you sent. The first time the recipient receives a Pando email, he or she will have to download and install the Pando software. There's a link in the email to the download site.

Once downloaded onto the receiver's computer, all Pando files can be found in a special folder that Pando automatically creates. In Windows, it's called My Pando Packages and is in My Documents. On the Mac, it's called Pando Packages and is in the home folder. The files are also listed in the handy Received list in the Pando software.

As a bonus, Pando can sometimes transmit these large files faster than your email program or Web browser could. That's because it uses a modified version of the speedy BitTorrent technology.

We downloaded and installed Pando in just a few minutes. Opening the small Pando email attachment from Microsoft Outlook on Windows or Apple Mail on the Mac prompted a little Pando window to pop up, in which all sent and received files were organized. This window is simple, showing a thumbnail image and text description of each file. A list of received files shows who sent the file and when; the sent list shows to whom you sent files and when.

We started out big, sharing a 95-megabyte, high-resolution video. You must create a username and password to send using Pando, which we did, entering our email and first and last names. A simple "Send New" icon opens the email-like form, where we dragged and dropped this big video file.

No Pando Package can total more than one gigabyte, and an automatic tally shows you how large the Package is becoming as you drag and drop more files into it.

The Pando software program allows users to send large email attachments without running afoul of normal size limitations. Another way to send files using Pando is by right-clicking on any file or folder in your computer and selecting a "Send With Pando" option that appears after the software application is downloaded. Selecting this also opens the familiar sending window. But this works only in Windows.

The 95-megabyte video took eight minutes to upload, and nine minutes to download -- impressively fast times. Another Pando Package filled with 44 high-resolution digital photos totaling 65 megabytes took six minutes to upload, and six minutes to receive.

But Pando can't entirely overcome slow Internet connections, so your speeds may vary considerably. This is especially true on the uploading side, as even broadband cable and DSL connections typically offer upload speeds that are a fraction of their download speeds. In our tests, at our office and homes, our download and upload speeds ranged from 30 kilobits per second to 250, depending on where we were and when we were testing.

Even if you didn't see any speed improvement with Pando, you'd still benefit from the sheer ability to send huge attachments. That's a big deal.

On July 25, Pando Networks will introduce a special plug-in for Outlook, making it even easier for users to send huge files without worrying about inbox congestion. And the company also has plans to introduce plug-ins for Web-based email programs like Google's Gmail and Microsoft's Hotmail.

If you're tired of bounced emails, and of using Web sites to share your personal videos or photos, Pando is a straightforward solution that anyone can understand in a matter of minutes. It's a great solution to a vexing problem.


05 October 2006

Time-tested trading rules - Linda Raschke

Excellent summation of many trading/investing rules by the redoubtable, Linda Bradford Raschke can be viewed here.
-- David M Gordon / The Deipnosophist

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