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8:30 AM Monday, November 7, 2005: The Journal today speaks of a fourth quarter rally. It will happen because it most always has:

Why do stocks rise in the fourth quarter? Says the Journal, "Some think it is a holdover from days when farmers deposited money in banks after harvests. Others say it is anticipation of the January flow of retirement money into stocks. Still others say it is because many companies book most of their sales and profits in the fourth quarter, as clients buy ahead of the new year."

Today's USAToday is worried about earnings, "Already 61 members of the Standard & Poor's 500 index have warned they won't earn as much in the fourth quarter as Wall Street forecasted, Thomson Financial says. That's nearly three times the number saying earnings would be better than expected. That's a concerning fact if you consider last year at this time there were only 1.8 warnings for every positive outlook."

Despite the warnings, says USAToday, S&P 500 companies are still expected to post 14.5% growth in the fourth quarter and 14% in the first quarter, says Howard Silverblatt at S&P. In fact, the estimate for fourth-quarter growth is actually 0.8 percentage points higher now than it was in August.

At our weekend College retreat, the president of the College told us he had noticed a decline in parent income as shown on college admission applications. He was worried about what higher energy and higher food prices might do to the family budget.

Cautious optimism seems in order. Companies are not stupid. They see tightening family incomes and they'll tighten operating budgets.

TiVo has a little new appeal: It has new management. It has some new ideas -- teaming up with Yahoo. It will soon announce some neat new products. The best news is that Hollywood and the network broadcasters are no longer the intimidating, debilitating force on TiVo it has been. What with its moves with Apple movies, you can smell change coming to Hollywood. To my mind, TiVo is a much better delivery and sales vehicle for Hollywood movies than Apple.

How to search your "desktop." Once "desktop" was your PC's desktop, i.e. its opening screen. Now it's everything on your hard disk. Every Internet search engine company -- from Google to Microsoft to Yahoo-- is now fielding a search engine for your hard disk. The idea is to find stuff inside your files. Windows doesn't do that. It barely lets you find stuff by their name.

You can survive without these desktop search tools -- if you're disciplined about where you put stuff on your hard disk. They are useful if you're increasingly frustrated that you can't find things as fast as you would like. To know:

1. Google, Yahoo and Microsoft's search engines are first generation. There's a lot wrong with them. To wit, they offer few options, for example, what you can and can't index. None find everything. Most don't highlight what you're looking for, i.e. yellow marker it.

2. All search engines need to index what they search. Indexing takes time, sometimes several hours. The resulting index takes up hard disk space. But the good news is that they only index when your PC is idle.

I've installed all three. I'm not impressed with any of three to keep them around. The simplest is Microsoft MSN Search. Get it here. My preference is a commercially available product called dtSearch. Buying it will cost you $199. (Google's, Microsoft's and Yahoo's are free.) You can make dtSearch do a lot more. And it highlights inside the file what it finds. This feature alone saves huge time. You can install a 30-day evaluation copy of dtSearch. Click here.

The French have a problem.
The news: Rioting across France hit a new peak with more than 1,400 vehicles burned in an 11th night of unrest, as youths fired birdshot at police and hurled Molotov cocktails at churches, schools and a daycare center.

The problem: Young people in the poor neighborhoods incubating the violence complain that police harassment is mainly to blame. "If you're treated like a dog, you react like a dog," said Mr. Diallo of Clichy-sous-Bois, whose parents came to France from Mali decades ago. The youths have singled out the French interior minister, Nicolas Sarkozy, complaining about his zero-tolerance anti-crime drive and dismissive talk. (He famously called troublemakers in the poor neighborhoods dregs and ruffians.)

The interpretation: Unless there is a big change in attitude and policy, the situation will get worse and this type of thing will become regular, though on a smaller scale. New York Times articles have it right, says my Paris lawyer friend, "This is like 60s in US, except that France isn't prepared to confront its own racism."

What doesn't Costco sell? In between warming trays, waffle makers and crock pots, you'll also find...

Greetings from midstate New York: I took this photo early Sunday morning 300 yards from my midstate new York country house. It was blissful.



I took the photo with my new Canon SD450, which NewEgg is now selling for less than I paid for it on eBay. It's $299. Shipping is only $5.95. Click here. I paid a total of $349. Idiot me.

The story of the superb Italian cookies
An elderly Italian man lay dying in his bed. While suffering the agonies of impending death, he suddenly smelled the aroma of his favorite Italian anisette sprinkle cookies wafting up the stairs. Gathering his remaining strength, he lifted himself from the bed. He slowly made his way out of the bedroom, and with even greater effort, gripping the railing with both hands, he crawled downstairs. With labored breath, he leaned against the door frame, gazing into the kitchen.

Where, if not for death's agony, he would have thought himself already in heaven, for there, spread out on waxed paper on the kitchen table were literally hundreds of his favorite anisette sprinkled cookies.

Was it heaven? Or was it one final act of heroic love from his devoted wife of sixty years?

Mustering one great final effort, he threw himself towards the table, landing on his knees in a crumpled posture. His lips parted. The wondrous taste of the cookie was already in his mouth.

The aged and withered hand trembled on its way to a cookie at the edge of the table, when it was suddenly smacked with a spatula by his wife.....

"Back off!" she said, "They're for the funeral."

Recent column highlights:
+ Dumb reasons we hold losing stocks. Click here.
+ How my private equity fund is doing. Click here.
+ Blackstone private equity funds. 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 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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