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8:30 AM Tuesday, August 30, 2005: My son Michael is aggressively into saving, which is why we have no cereal -- preferring to eat my food than his own. He did major research and "discovered" two Vanguard funds he liked: the Vanguard International Value Fund (VTRIX), and the Vanguard Mid-Cap Index Fund (VIMSX). I bought a little also. And, lo and behold, both are up -- more than sufficient to replace the cereal. Last night I bought a little more of the International Value Fund, since it had gone up the most. My "Open Refrigerator Policy" is working. Many of Vanguard's funds come in a cheap version. They call them "Admirals" shares. The minimum purchase is higher.

Going straight to jail: Eight former KPMG executives (including the firm's former No. 2 exec) and an ex-partner at Sidley Austin (a huge law firm) were indicted as the auditing firm, KPMG, admitted it sold fraudulent tax shelters to wealthy clients (including one of my friends). KPMG itself is paying $456 million in penalties -- which won't be tax deductible and cannot be paid with insurance proceeds. The only reason the government is not going after KPMG directly is that that would destroy KPMG, as it destroyed Arthur Anderson in the Enron scandal. The lessons for the rest of us remain:

1. Never believe experts.
2. Question everything they tell you.
3. Get them to put everything they recommend in writing.
4. Always learn enough to be dangerous.
5. On serious matters (i.e. anything to do with money), consult several experts.
6. When in doubt, believe your own gut.

Cockroach stock, Abercrombie & Fitch: Last night the president and COO said he plans to leave the company. On Monday, The Wall Street Journal reported that the company's chairman and chief executive, Michael Jeffries, had sold oodles of stock before reporting bad things to shareholders. Here's the Journal's chart.


I wonder what comes next for Abercrombie & Fitch? Mark my words: There will be more bad news. This has all the markings of the classic Cockroach Stock. For the Journal's Monday piece, click here.


Sex sells: I don't make this stuff up. Freizeit, a German lifestyle magazine, sold out in a day when it offered vouchers for a free session in an Austrian brothel, reports Ananova.com. ''Prostitution is legal in both countries. The ad promised 'half an hour free sex with a lady of your choice' for anyone who cut out the coupon and brought it with them on their next visit.'' Some readers were ''shocked,'' but that did not keep many others away from the Salzburg sex shop, which reported a spike in business thanks to the ad.

London Zoo has unveiled a new exhibition -- eight humans prowling around wearing little more than fig leaves. Homo Sapiens, London Zoo's newest exhibit are seen in their enclosure.

"We have set up this exhibit to highlight the spread of man as a plague species and to communicate the importance of man's place in the planet's ecosystem," a London Zoo spokesman said. The scantily-clad volunteers will be kept amused with games and music. "I actually think the fig leaves will be enough to cover us up, it's no worse than a swimming pool," said volunteer Simon Spiro, 19, from New Malden, Surrey. Spiro, selected from dozens of hopefuls in an Internet competition, said he was excited by the prospect of monkeying around on the zoo's Bear Mountain. "I'm a veterinary student so the idea of working for a zoo was something that appealed to me. "I'm not worried by the fact it might be cold and rainy. I've brought pocket Scrabble in case we're bored."

New business opportunity: An Indian firm which rents out wedding guests says business is booming. The Best Guests Centre, at Jodhpur in Rajasthan, caters to families who fear they will fall short of guests at weddings. It hires out guests, either traditionally dressed or wearing smart western clothes, according to requirements and budget. The guests dance and try to impress with their etiquette without letting anyone know they are being paid for it. Proprietor M. I. Syed briefs his staff about the groom, the bride and their families before the wedding to avoid a faux pas. He told The Statesman: “The breaking up of joint families and lack of affection among relatives also creates a demand for paid guests. "Such families need to hire guests to make up for the fewer number of relatives available for attending the marriage.”

Exercise and its benefits: My sister who is totally lovable, but sedentary and overweight, asked me recently why I had become obsessive about daily exercise? My answer: It makes me feel good, may make me live longer and I think, makes my brain work better. The Wall Street Journal today confirms my feelings:

In recent weeks, President Bush's active exercise regimen has come under fire. Lost amid the controversy is a growing body of evidence showing that exercise is good for the brain as well as the body. Ever since a physical exam in July deemed the 59-year-old president to be extraordinarily fit, a series of columns and cartoons have portrayed him as riding a bike when he ought to be running the country. Adding force to the criticism was a report that the president asked a potential Supreme Court nominee to describe his exercise program.

This criticism would be unimportant if it were merely political. But anyone who works out an hour a day is likely to discover that many people in sedentary America regard exercise as the province of the vain and irresponsible. Those who engage in it are often seen as devoted more to their physiques than to their kids or their careers.

Yet the science behind exercise increasingly shows that it provides a short-term boost to the ability to process data, among other functions. Acute bouts of exercise have also been found to reduce depression and anxiety, illnesses that can dampen mental functioning. Over time, exercise has been shown to help ward off the mental effects of aging, perhaps even Alzheimer's.

Those findings suggest that exercise ought to be prized in any employee whose job requires quick thinking and good judgment. Of course, exercise doesn't guarantee that President Bush or anyone else will make good decisions. "There is no evidence that you are wiser if you are physically active," says Rod K. Dishman, a professor of exercise science at the University of Georgia.

Still, a flurry of studies has shown a link between exercise and mental performance. A 2005 study in the Journal of Exercise Physiology looked at how 884,715 fifth-, seventh- and ninth-graders scored on a state-mandated fitness test in California. Then it compared those numbers to the reading and math performance of those students on a standardized achievement test.

Guess what? The fittest students had the best test scores. For example, the average math score of students who achieved only three of six fitness goals was 48; kids who achieve all six fitness goals had an average math score of 60. "Results indicate a consistent positive relationship between overall fitness and academic achievement," said the study. "As overall fitness scores improved, mean achievement scores also improved."Of course, no researcher is suggesting that exercise can replace intellectual exertion. Rather, it can enhance it.

That effect can be quick. A 2003 article in the journal Acta Psychologica analyzed dozens of studies on the short-term cognitive consequences of exercise. "The empirical data provide compelling support for the view that aerobic exercise can facilitate cognitive functioning," specifically information processing, concluded the article, called "The Effects of Acute Bouts of Exercise on Cognition."

For some exercisers, the cognitive benefits often arrive even before the workout is over. When author and entrepreneur Thomas Boettcher swims, he keeps beside the pool a plastic bag containing pen and paper, to jot down inspirations that strike during his workout. "Swimming enhances my pattern of thinking," he says. ...

Other research has shown that exercise can make the brain act younger. Dr. Kramer, who directs the Biomedical Imaging Center at the University of Illinois, has had seniors undergo magnetic resonance imaging scans before and after six months of aerobic exercise. The results of the tests suggest that exercise produces patterns of brain activity of the sort typically seen in 20-year-olds, Dr. Kramer says.

Women are superior.
A man and his wife were having some problems at home and were giving each other the silent treatment. Suddenly, the man realized that the next day, he would need his wife to wake him at 5:00 AM for an early morning important business flight.

Not wanting to be the first to break the silence (and LOSE), he wrote on a piece of paper, "Please wake me at 5:00 AM." He left it where he knew she would find it.

The next morning, the man woke up, only to discover it was 9:00 AM and he had missed his flight. Furious, he was about to go and see why his wife hadn't wakened him, when he noticed a piece of paper by the bed. The paper said, "It is 5:00 AM. Wake up! "

Men are not equipped for these kinds of contests.

Great US Open tennis on TV. The TV schedule is below.

Recent column highlights:
+ US Tennis Open TV Schedule. Click here.
+ Manhattan Pharmaceuticals: Click here.
+ NovaDel Biosciences appeals. Click here.
+ Hana Biosciences appeals. Click here.
+ All turned on by biotech. Click here.
+ Steve Jobs Commencement Address. The text is available: Click here. The full audio is available. Click here.
+ The March of the Penguins, an exquisite movie. Click here.
+ When to sell your stocks. Click here.


Harry Newton


This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads. Thus I cannot endorse any, though some look mighty interesting. If you click on a link, Google may send me money. That money will help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
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