Yesterday’s gift suggestion was a $13.57 book that could help the recipient beat the market. Today let’s step it up a notch. But first, following up on yesterday’s suggestion . . .

Kevin from MIT: ‘Does this book’s so-called magic formula really beat dollar cost averaging into a few index funds? Is it worth buying the book to find out that it doesn’t?’

☞ It seems to me you could dollar-cost-average with the ‘magic formula’ as well, steadily adding to your portfolio month in and month out whether the market is up or down.

(That’s where the power of dollar cost averaging comes in. By investing equal dollar sums when the market is up or down, you wind up buying more shares when they’re cheap, fewer when they’re dear. Thus, if the market merely ends up where you started, you actually come out ahead.)

One practical way to build the kind of portfolio the ‘magic formula’ suggests might be through folioFN.

I haven’t used folioFN myself and would like to know what kind of experience any of you may have had.

And now . . .


You may think that, because they are expensive or because your man is not big on music, that Nanos are a no-no. Well, here’s what you need to know-know. These tiny iPods are really cool even for those without rhythm. Mine is filled with dozens of audiobooks. And I’m beginning to get the hang of podcasts.

(PODCASTS: First, you download iTunes for free. You should do that, anyway, even if you have no MP3 player yet. It’s a great way to listen to commercial free radio on your computer, as well as lots of other stuff. Next, from time to time, you subscribe to free podcasts . . . for example, if some organization you support promises fascinating weekly interviews with living legends. Next, whenever you connect your iPod to your computer, it automatically transfers the latest podcasts to your iPod. Now, you’re in line at the supermarket and a woman up ahead of you is arguing over coupons and everyone else is getting nuts over the delay – except you, who are happily listening to Al Gore giving the sort of speech that surely would have won him the presidency if he had made it in 2000 instead of last month.)

And here’s the cool thing about the Nano that I don’t think your old, bigger iPod has: a setting to speed up audiobooks – and without making the reader sound like a contralto. I am listening to David McCullough read me 1776, only I am listening to 11 hours and 32 minutes of reading in 9 hours and 13 minutes. (To really speed it up, I could have opted for the six-hour abridged version and read it in less than five.)

So you’re not just giving the gift of music or of literature. You’re giving the gift of time.


So he beat you to it and already scored a Nano. Ah, but did he go the extra $39 and get these? They’re a really clever design that hang the Nano around your neck, eliminating a lot of wire tangle. But judging from user reviews Apple has posted (‘horrible,’ ‘the worst product ever’) you may feel they are overpriced – and better for walking than jogging. Other users, like me, gave them 4 or 5 stars.

And while we’re listening to books . . .

Harriet Eilber: ‘I just want to thank you for recommending I resisted the whole iPod transition from my regular books-on-tape. But my husband got me an iPod and accessories for car and speaker for kitchen, etc., and I have mastered the learning curve of downloading – and I love it!’

☞ Full disclosure: I own no stock in (or Apple), though I once did and may again some day.


One of the things Cramer cited in his recommendation of Nitromed stock Monday evening was a study that projected possible BiDil sales of $637 million two years from now. That would certainly make the stock a raging bargain here. But this was based on an estimate that 34% of the 750,000 African Americans with congestive heart failure will be taking BiDil (and at full price). Yet the very same firm that made this calculation had, in July, estimated that only 20% of the 750,000 would be at a stage where doctors might be inclined to adjust their medication . . . so that it is of these 20% that 34% might be switched to BiDil. So you’d want to cut that $637 million down to 20% of $637 million, or a sales estimate of $127 million . . . for a firm that projects annual expenses of $120 million or so . . . making the company marginally profitable. (‘This 20% number,’ writes my guru, ‘is confirmed by the Phase III study that lead to BiDil’s approval in the first place, in which 20% of placebo patients were found to be ‘failing their medicines’ and thus, in need of an alteration/addition.’)

Except that this calculation seems not to allow for the patients who will be getting BiDil free or on the company’s $25-a-month voucher program, or for the possibility that doctors or insurers will switch a good number of folks from BiDil to its two widely available and much, much less expensive generic components. So even $127 million may prove wildly optimistic.

So far, of course, BiDil sales have been way below Wall Street estimates.

Anything can happen; and even if my guru is right, it could happen after the expiration of your puts. But if you bought them with money you could truly afford to lose . . . well, you know the drill.


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