If you’re already a computer whiz, or a teenager, forget this. But if you’re an idiot like me:
Step one: Click here and download Apple’s free iTunes software. I’ve put it on my IBM Thinkpad. Free!
Step two: Copy all your CDs onto your computer. (So long as they’re your CDs, you’re not violating anyone’s copyright.)
[To make this easy, once you have iTunes installed and running, choose the option that automatically copies a CD to the iTunes library when you insert it … and ejects it when it’s done, ready for the next. This is great, because it happens in the background while you’re using the computer to do your expense account. To set this option, select Preferences from the iTunes EDIT menu and then – on the GENERAL preferences tab – select ‘Import Songs and Eject’ from the pull down menu.]
Step three: If nothing else, you now have a copy of your entire CD collection on your computer. To hear something you like, just click and it plays while you’re doing your e-mail. This can be easier than going to the living room to find the CD. And if you’re in a hotel room in Delhi, or in a deli near your hotel – or away for the weekend at your summer place – you can listen to any of your CDs without actually having had to take them with you.
Thus endeth the free steps. But if you do no more than this, it could be fun. With most CDs, iTunes automatically enters the Composer, Song Title, Album Title, Genre, and more, allowing you to search in lots of ways, rank the songs, create play-lists, and more.
Step four: Go crazy. Blow 99 cents on some favorite song or snippet of classical music you love but don’t have handy. A click from iTunes takes you to Apple’s on-line music store. Another few clicks finds the song. And – except for the couple of minutes it takes the first time to sign up for an account – it’s yours faster than Merlin can say magic. Albums are typically $9.99, cheaper than most CDs. And, yes, if your computer has a CD read/write drive, you can make a hard copy (for your own use).
Step five: If you don’t already have good speakers for your computer, click here to buy a pair. They are from Bose, designed for this purpose, $99 for the pair. Merry Christmas!
Step six: If you’ve been really good this year, ask Santa to bring you an iPod. Or wait a few months – tease yourself with giddy anticipation – and buy one after the prices come down a bit more. There’s no guarantee that they will, of course, but with Dell jumping into the market with a 20GB competitor that’s already $100 cheaper than Apple’s 20GB iPod, at $299, I’d expect so.
(Right now, a 10 gigabyte Apple iPod will cost just under $300 and hold about 2,500 songs. For another $100, you double the memory. For another $100, you double it again – 40GB, or 10,000 songs.)
An iPod is about the size of a deck of cards and, once you get the hang of it, is amazing. All your CDs fit on this one deck of cards, which fits in your shirt pocket as you walk around the supermarket or pound the treadmill or drive to the mountains.
It knows the time and date, so you can use the ‘sleep’ feature to fall asleep with it and then wake to the music of your choice with its alarm.
It lets you download books from Audible.com. Regular readers will know I am a big fan (and, full disclosure, a shareholder). I’m currently reading Walter Isaacson’s biography of Ben Franklin – Franklin would have been delighted by the iPod.
I think iPod lets you keep your calendar on it and copy big files onto it (I’m still on page 1 of the user’s guide, so don’t hold me to this part).
And there’s an add-on you can buy that lets you use it as a tape recorder, for time-stamped memos or interviews for later playback.
Another option lets you offload and store photos from your digital camera.
The Dell competitor may be easier than the iPod to hook to a PC (I don’t know), but the only real challenge I had with my iPod was in upgrading my Thinkpad from its old inadequate USB ports to the newer, 40-times-faster USB2 slots. This seems best done NOT with the $109 PCMCIA card IBM sells, with its clumsy dongle (don’t ask; it’s clumsy and it’s a dongle) but with this $30 card or this $36 card from newegg.com that requires no dongle and works just fine. (The cheapest iPod will require a $19 USB2 connector; the more capacious models don’t need it.)
Step seven: Consider – with all the usual caveats that this is very risky and the general level of the market is high here and you really, really could lose your money – buying a few shares of Apple stock. Or, if we get lucky and it drops a point or two or three, the Apple 20 January 2005 LEAPs.
LEAPs are long-term options. These LEAPs (symbol ZAAAD) currently cost about $420 each and give you the right to buy 100 shares of Apple – which closed last night at $21.15 – at $20 per share any time before mid-January, 2005. (Last week, with Apple a point lower, each LEAP was only $360.)
This is obviously risky, but let’s say you were able to buy 8 of them for $3,000 and Apple stock did poorly and you lost the full $3,000, which in your federal-and-state tax bracket actually cost you $2,000 (because the first $3,000 in losses can be used to lower your taxable income).
OK – them’s the breaks.
But what if, a little more than a year from now, Apple were $38? I am absolutely not predicting that. But I do think Apple is a great brand, an innovative company with no debt and a loyal following . . . and it was so easy to click just now and buy Peter Paul & Mary’s Album 1700 for $9.99. If that happened – and I truly, truly am not predicting it, and would have no credentials to do so even if I were predicting it – your 8 options would allow you to buy 800 shares at 20 and, simultaneously, sell them at 38, for an $11,400 profit on your $3,000 investment, turning that $3,000 into $14,400 . . . or about $12,750 after the long-term capital gains tax you would owe.
Well, I’m getting carried away. Start with steps one through three for now. I can’t get in too much trouble with those. [Thanks to the estimable Tom Rielly and the estimable Bryan Norcross for teaching me about things like iPods and dongles.]
Quote of the Day
That I'm their competition.~Famed hedge fund manager Michael Steinhardt, when asked the most important thing an investor could learn from him.
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