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8:30 AM Tuesday, October 18, 2005: The lesson emerges: Decent due diligence takes oodles of your time. If you don't have the time, say NO. Preserving your capital is far more important than seizing the latest, hot opportunity. Now add to due diligence a deeply cynical view of "regulation" as a protection for your monies.

From today's Wall Street Journal, "Who regulates Refco? The answer is that Refco may have fallen through a deliberate crack in the regulatory system that has been known about and debated for years. Like many large banks, investment houses and other U.S. financial-services institutions, Refco has several subsidiaries. Some are regulated; some are not. The parent company is regulated to the extent that all publicly traded companies are subject to oversight by the Securities and Exchange Commission and the New York Stock Exchange, where Refco's stock is traded. Regulators require that the parent maintain a certain amount of capital in its regulated securities and commodities-trading units."

But that oversight doesn't happen when the boss is a creative or crooked, or both. Refco was the classic cockroach stock. Parts of Refco are now in bankruptcy.

Due Diligence -- A Continuing Series: I wonder how much due diligence Rupert Murdoch's people did before they agreed to pay $580 million for MySpace.com. A reader, the president of a mortgage brokerage company, writes yesterday, "One of my younger loan officers spends a great deal of time on MySpace as he tells me its a forum for business exchange. After observing him for the past 4 months, I see MySpace as site where a individual can advertise his/her availability for a threesome."

I replied: "You mean a threesome for sex?"

And he replied, "Yes, my loan officer would abruptly leave as such impromptu opportunities would turn up for him, actually somewhat regularly."

Intrigued, I floated around MySpace a little and found it dripping with sex ads.

More Due Diligence: BusinessWeek has an article on yet another hedge fund (called Wood River Capital Management) which lied about its auditors, lied about its bookkeeper and lied about prime broker. The article quotes Barry P. Barbash, a former director of the SEC's investment-management division, "A lot of times what passes for due diligence is really unverified hearsay."

Henpecked husbands. An Italian man sentenced to nine months of house arrest begged the judge to jail him. He explained he wanted to avoid his wife's nagging. "I need some peace," pleaded Ahmed Salhi, an Algerian immigrant. The judge said he fully understand and jailed him.

Free people: "When people are free to do as they please, they usually imitate each other." -- Eric Hoffer.

An apple a day, if well aimed, keeps the doctor away. -- P.G. Wodehouse.

SmartMoney's Save Hundreds on Your Heating Bill.
BARRING AN UNFORESEEN MIRACLE, this year's home-heating bills will likely be a lot higher than last year's — which were a lot higher than the year before. According to the Energy Information Administration (EIA), a typical homeowner in the Northeast — where two thirds of oil-heated homes are located — can expect to spend an average of $1,675 this winter season, a 31% increase over last year. Homeowners who use natural gas will be spending more, too, with the EIA predicting a 46% increase over last year, to $1,480.

But before you start loading up on some extra pairs of mittens to wear around the house, know this: With a few simple steps, you could slice hundreds off your annual energy tab. Here are five ways to cut costs.

1. Schedule a Check-Up
Regardless of the type of heating system you have, it needs an annual check-up by a professional. ... If your heat is delivered through a duct system (the most common heating system in the U.S.), you aren't off the hook once your annual checkup is complete. You need to continue to clean or change the filters regularly,

2. Buy a Programmable Thermostat
After a cold commute, you like to open your door to a toasty home. And you hate waking up in a cold bedroom. But that doesn't mean you need to have the heat blasting day and night. ... With a programmable thermostat, you can heat your home at various temperatures throughout the day, allowing the house to be cooler when no one is home or when everyone is asleep.

3. Plug Up Leaks
Imagine a water balloon with lots of little pinholes in it. Chances are, your house is like that balloon — slowly but surely losing heat to tiny leaks. And a lot of little leaks can add up to one big bill. Doors and windows are the most obvious culprits. But you also should check electrical outlets, ceiling fixtures, ducts and your attic door. ... A simple test suggested by the Department of Energy is to light an incense stick and hold it up near suspect leaks. If the smoke goes horizontal, you've found a leak.

4. Add Insulation
Many homes — particularly those that are more than 20 years old — lose lots of heat because of poor insulation. And because heat rises, the No. 1 problem area is your attic. Other areas that could need more insulation are your basement, crawl space, floor and walls.

5. Upgrade Your Appliances
If you have home-heating appliances that date back to the Reagan administration or earlier, it could be time to think about an upgrade. Replacing an outdated model with one that has earned the Energy Star label (Energy Star is a joint program run by the Environmental Protection Agency and the Department of Energy) could cut your home-heating costs significantly. Energy Star furnaces, for example, are 15% more efficient than standard models.

SmartMoney's 25 Extreme Energy-Saving Tips
1. Appliances and Lighting
Appliances and lighting account for 28% of the typical household's annual energy use. Here's what you can do to conserve.

Lighting
* Replace incandescent light bulbs with compact fluorescent bulbs. On average, they use 66% less energy.
* Keep bulbs clean. Dust can cut light output by as much as 25%.

Cooking
* When preheating an oven, don't let it sit empty for longer than necessary, and don't open the door to check on food. Every time you do that, you lose 25% of the heat.
* Use a microwave oven instead of a regular oven. You'll burn 40% less energy.
* Keep the inside of your microwave clean. It will cook your food more efficiently.
* Use the smallest pans possible. It takes energy to heat them.
* Use lids. They help the food cook more quickly by keeping steam inside.
* Use glass or ceramic pans in ovens. They heat faster than metal pans.

Washing machine, dryer
* Wash and dry full loads, and don't over-dry clothes.
* Keep the dryer's lint filter clean.
* Wash laundry in cold water instead of hot, unless you're dealing with very dirty loads.
* Don't add wet items to a load in the dryer that has already been started.

Dishwasher
* Wash only full loads. It costs exactly the same to wash one dish as a whole load.
* If your dishwasher has an air-dry feature, use it.
* If you wash by hand, rinse dishes in groups rather than one at a time, and don't leave the water running.

Refrigerator
* Check refrigerator temperatures by putting one thermometer in a glass of water in the center of the fridge and another between packages in the freezer. You're losing money if temperatures are lower than 37-40 degrees for the main compartment and 0-5 degrees in the freezer.
* Cover and wrap food. Uncovered food and liquids release moisture and drive up electricity costs.
* Let hot food cool before putting it in the fridge. This way the fridge will use less energy to cool it down.
* Keep the freezer full. It's more efficient than an empty freezer. If necessary, fill up the space with plastic containers filled with water.
* If you have a second fridge that's not being used, unplug it. It can cost about $130 a year to keep it plugged in.

2. Water heating
Water heating is the third-largest money-eater in your home, accounting for 16% of annual energy consumption. Remember: you're paying for the water and you're paying to heat it. You should:

* Lower your water heater temperature from 140 degrees to 120 degrees. You'll cut your water heating costs by 10% to 15%. Unfortunately, if you have an older-model dishwasher that doesn't have a booster heater (a device that heats up the water to the temperature the dishwasher needs to clean the dishes), you should leave the water heater set to 140 degrees to make sure the bacteria on your dishes are good and dead.
* Insulate your storage water heater tank. You'll save 4% to 9% on water heating costs.
* Drain the sediment from the bottom of the water heater tank every one to three years.
* Install low-flow shower head and faucets. They use one-third to half the water used by regular shower heads. You can cut your water use and water heating costs by an average 15% to 30%.
* Take short showers (and preferably, no baths — showers use less hot water).

This is truly awful
This may come as a surprise to those of you not living in Las Vegas but there are more Catholic churches there than casinos. Not surprisingly, some worshippers at Sunday services will give casino chips rather than cash when the basket is passed.

Since they get chips from so many different casinos, the churches have devised a method to sort the offerings.

The churches send all their collected chips to a nearby Franciscan Monastery for sorting and then the chips are taken to the casinos of origin and cashed in.

This is done by the chip monk.

Jewish History
According to the Jewish calendar, the year is 5766.
According to the Chinese calendar, the year is 4703.
This means that for 1,063 years the Jews went without Chinese food.
These were known as the Dark Ages.

Recent column highlights:
+ 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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