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8:30 AM EST, Thursday, April 26: The Dow is exploding. But so are the ideas. I'm currently overwhelmed with new "perfect" investments. They range from real estate projects to high-tech, from distress debt to new consumer products. All investment portfolios should have stuff which is not mature, i.e. early on. That's where the big rewards are. That's also where the BIG risks are. Limit your exposure to perhaps 5%. Here are quick thoughts on assessing new ideas:

1. Watch out for fantasy numbers. These came in yesterday:

Maybe they'll happen. Most likely, they won't.

2. Who's the guy? Has he been successful before? Is he honest? Do you trust him? Once he's got your money, he's got it. (Da!) Getting it back is not easy. The word "impossible" is appropriate.

3. Has he got skin in the game? My new rule of thumb: He should have at least 20 times his own money in than what you invest. If not, he's probably looking to bloat the deal / fund and make his money off fees, not off returns.

3. What's the structure of the deal? I've seen deals where the boss makes out, though you lose money.

4. What's the leverage? Borrowing money can enhance returns -- for example, in real estate. But it can also dramatically increase the riskiness, giving you no room to maneuver when things go awry.

5. What's the valuation you're getting in at? I've seen startups without patents valued at $25 million.

6. What are the financial growth assumptions? Do they make a modicum of sense? (See above.) In real estate, we look at cap rates going in and assumptions of cap rates going out. They shouldn't be markedly different.

More on hedge funds. Twenty years after Bonfire of the Vanities, Tom Wolfe checks in on the new masters of the universe and finds them even coarser and ruder than their predecessors could have ever imagined. The Pirate Pose is in the first issue of Portfolio Magazine. It's a fun, free read.

I've been hurtful. I've run a zillion bad lawyer jokes, thinking they were funny. Last night I'm catching up on some reading. I read a Wall Street Journal piece by a professor of law at Georgetown University. The piece called, "Three Cheers for Lawyers," hits me hard. It argues that, without decent lawyers, the three Duke lacrosse players accused of rape would be today be in big trouble. I had seen the kids on "60 Minutes." I was convinced that they were innocent. But between my belief and getting them off was a major chasm, whose width I had grossly underestimated. The piece made one significant point:

For better or worse, we have an adversary legal system that relies for its proper operation on having competent lawyers on both sides. In every case I knew about where an innocent person had been convicted, there had been an incompetent defense lawyer at the pretrial and trial stages.

I thought back to all those Innocence Project exonerees I'd met and how they all told me they'd been assigned defense lawyers by the state, and how many of their lawyers had slept through their trial, thus guaranteeing their conviction. The article continued:

Our criminal justice system does not rely solely on the fairness of the police and prosecutors to get things right. In every criminal case, there is a professional whose only obligation is to scrutinize what the police and prosecutor have done. This "professional" is a lawyer. The next time you hear a lawyer joke, maybe you'll think of the lawyers who represented these three boys and it won't seem so funny. You probably can't picture their faces and don't know their names. (They include Joe Cheshire, Jim Cooney, Michael Cornacchia, Bill Cotter, Wade Smith and the late Kirk Osborn.) That's because they put their zealous representation of their clients ahead of their own egos and fame. Without their lawyering skills, we would not today be speaking so confidently of their clients' innocence.

These lawyers held the prosecutor's feet to the fire. Their skillful questioning at pre-trial hearings revealed the prosecutor's misconduct that eventually forced him to give up control of the case and now threatens his law license. They uncovered compelling exculpatory evidence and made it available to the press; they let their clients and their families air their story in the national media.

There is no rule book for what prosecutors call "heater" cases like this one. Navigating the law, politics and publicity in such case is an art not a science. These fine lawyers displayed all the skills and tenacity that made me want to be a criminal trial lawyer after watching the television series, "The Defenders," when I was 10 years old.

My daughter, Claire, will graduate from law school on May 25. I'll be there, glowing with pride. Sorry, Claire, about all those hurtful, bad lawyer jokes. No more, I promise.

How to zap the crap on that brand-new PC: The computer trade press has taken up the cudgel of computer crap. Walt Mossberg's written about it. I've written about it. Now comes:

April 25, 2007 (Computerworld) -- When you take a brand-new Windows PC out of the box, it's shiny and scratch-free, but on the PC's hard disk, it's a different story entirely. Most major hardware makers clutter their systems with preinstalled applications, browser toolbars, search settings and utilities -- not to mention self-launching advertisements enticing you to try out even more software.

In essence, they have sold your PC to the highest bidder long before you take it out of the box. Instead of having Windows defaults or your own preferences, the system is set up to maximize the profits of the computer maker and its business partners at the expense of your convenience.

All this extra unwanted software takes its toll on system performance and reliability. Each time the system starts, many of the applications run in the background. While running, they may access the Internet to find updates or change the behavior of standard Windows functions. These freeloaders also take up system resources such as processor, memory and disk space, resulting in longer start-up and shutdown times.

You know if you have a problem by looking at the taskbar on the bottom right of your screen. If it's cluttered, you've got crap. I'm running XP. I have the time and only icons: One shows I'm not on wireless. The other shows I'm connected on a landline network (in this case via cable modem). The easiest way to get rid of crap is to:

1. Uninstall software you don't want.
2. Run MSCONFIG and unclick stuff you don't want. (You can always turn it, if you find later you need it.)

You should also read the Computerworld piece, How to zap the crap on that brand-new PC.

More fallout from Imus
There will only be 49 contestants in the Miss Black America Contest this year because no one wants to wear the banner that says, IDAHO.

The Amazing Claude
It was entertainment night at the Senior Center and the assembly room was packed because none other than The Amazing Claude, the world's greatest hypnotist, was heading the evening's entertainment. The lights dimmed, the spotlight lit the stage as The Amazing Claude came out.

"I'm here to put you into a trance," said the Amazing Claude. "I intend to hypnotize each and every member of the audience."

The excitement was almost electric as The Amazing Claude withdrew a beautiful antique pocket watch from his coat. "I want each of you to keep your eye on this antique watch. It's a very special watch. It has been in my family for six generations," said The Amazing Claude, and then began to swing the watch gently back and forth while quietly chanting, "Watch the watch, watch the watch, and watch the watch..."

The crowd became mesmerized as the watch swayed back and forth, light gleaming off its polished surface. Hundreds of pairs of eyes followed the swaying watch, until, suddenly, it slipped from the hypnotist's fingers and fell to the floor, shattering into a hundred pieces.

"SHIT!" said The Amazing Claude ...

... It took three days to clean up the Senior Center.

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. Please note I'm not suggesting you do. That money, if there is any, may help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
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