You're not going to believe this: But Smith Barney, the brokerage subsidiary of Citigroup, has published its "Top Pick for 2005" and it's -- wait for this -- Time Warner (TWX). Citigroup's four "key reasons:"

First, in a potentially weaker advertising year (2005 versus 2004), TWX has low ad exposure relative to peers. Exposure is in Cable Networks, the Internet, and magazines, which should be the three best performing ad mediums in 2005.

Second, TWX will post among the best OIBDA (whatever that is) and free cash flow growth in 2005 vs. peers. We look for 10% FCF (free cash flow) growth to $3.6 billion in ’05, which would be the 4th straight year of over $3.0 billion in FCF. Greater predictability will boost valuation, and raise the likelihood of return of cash to shareholders.

Third, final resolution with the SEC/DOJ facilitates greater financial flexibility for pursuing strategies, which could include enlarging the cable footprint.

Fourth, starting in ’07, increased digital video recorder penetration should drive a shift of ad dollars away from television towards the Internet, helping AOL. DVRs also help reduce cable churn, while creating another revenue stream.

Now read the fine print: Citigroup gets money from Time Warner for investment banking, "non-investment banking, securities related" and other unspecified things. Citigroup owns a big chunk of shares in Time Warner. And "an officer or director of Time Warner serves as a director on Citigroup's board."

The relationship between Citigroup and Time Warner is so incestuous and the four "key reasons" so flimsy you wonder why they bothered publishing this nonsense. ... But you really know why. Today, there'll be thousands of Smith Barney brokers getting on the phone to their unsuspecting clients and telling them, in hushed, excited tones, of their firm's Top Pick. "Buy it now," they'll say.

I want to puke.

You're not going to believe this, part II: Michael Eisner, head of Disney, hired his best friend Michael Ovitz as Disney's new president, then, within days figured he'd made a gigantic mistake, fired Ovitz and finally paid him a severance package of $140 million. For Eisner's sterling performance, the board gave him a bonus of $8 million and stock options worth $770.9 million. I've never owned Disney and never will with Eisner in charge. I've run companies, some successfully. Based on what I read, I wouldn't hire Eisner to organize a queue for an outhouse. You MUST read the entire Eisner/Ovitz story in the January 10 issue of the New Yorker. You can't get it online.

Looking forward to this new year: This has been floating around the Internet:
The year is 1904 ... one hundred years ago.

+ The average life expectancy in the U.S. was 47 years.
+ Only 14 percent of the homes in the U.S. had a bathtub.
+ Only 8 percent of the homes had a telephone.
+ A three-minute call from Denver to New York City $11.
+ T here were only 8,000 cars in the U.S., and only 144 miles of paved roads.
+ The maximum speed limit in most cities was 10 mph.
+ Alabama, Mississippi, Iowa, and Tennessee were each more heavily populated than California.
+ With a mere 1.4 million residents, California was only the 21st most populous state in the Union.
+ The tallest structure in the world was the Eiffel Tower!
+ The average wage in the U.S. was 22 cents an hour. The average U.S. worker made between $200 and $400 per year.
+ A competent accountant could expect to earn $2000 per year, a dentist $2,500 per year, a veterinarian between $1,500 and $4,000 per year, and a mechanical engineer about $5,000 per year.
+ More than 95 percent of all births in the U.S. took place at home.
+ Ninety percent of all U.S. physicians had no college education. Instead, they attended medical schools, many of which were condemned in the press and by the government as "substandard."
+ Sugar cost four cents a pound. Eggs were fourteen cents a dozen. Coffee was fifteen cents a pound.
+ Most women only washed their hair once a month, and used borax or egg yolks for shampoo.
+ Canada passed a law prohibiting poor people from entering the country for any reason.
+ The five leading causes of death in the U.S. were: 1. Pneumonia and influenza 2. Tuberculosis 3. Diarrhea 4. Heart disease 5. Stroke
+ The American flag had 45 stars. Arizona, Oklahoma, New Mexico, Hawaii, and Alaska hadn't been admitted to the Union yet.
+ The population of Las Vegas, Nevada, was 30.
+ Crossword puzzles, canned beer, and iced tea hadn't been invented.
+ Two of 10 U.S. adults couldn't read or write.
+ Only 6 percent of all Americans had graduated from high school.
+ Marijuana, heroin, and morphine were all available over the counter at corner drugstores. According to one pharmacist, "Heroin clears the complexion, gives buoyancy to the mind, regulates the stomach and bowels, and is, in fact, a perfect guardian of health."
+ Eighteen percent of households in the U.S had at least one full-time servant or domestic.
+ There were only about 230 reported murders in the entire U.S.

Imagine what it may be like in another 100 years.

God is Watching
Children were lined up in the cafeteria of a Catholic school for lunch. At the head of the table was a large pile of apples. The nun made a note, "Take only one, God is watching."

At the other end of the table was a large pile of chocolate chip cookies. Moving through the line a boy wrote another note to leave by the cookies, "Take all you want, God is watching the apples."

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:
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