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8:30 AM Thursday, September 22, 2005: Off to Detroit last night for a talk today. Northwest Air is only 1 1/2 hours late. My new friend, the McKinsey consultant sitting next to me, tells me 50% of his flights are late. He flies all the time. What a miserable job. The higher he climbs the McKinsey ladder, the more successful he gets, the more he flies and the more agony he enjoys. He probably got four hours sleep last night. He looked awful, a sickly gray color.

I'm here to give a talk to a bunch of corporate telecommunications managers. They install phones, pay bills and "manage" expenses. It's a totally thankless job. No president has ever thanked a telecom manager for dial tone. But every president gets hopping mad when they don't have dial tone, or worse, get a busy. These days corporate telephone bills remain among the worst managed corporate expenses. Items:

+ Most bills are wrong in the phone company's favor. Companies are routinely billed for equipment and services they don't have. I've seen refunds of over $1 million.
+ Companies are often billed for services at prices way above what the phone company's salesman agreed.
+ Wireless is an egregious ripoff, with individual user bills way above what the corporate wireless deal is.
+ Call directory assistance. You can easily pay $2.75 to look up a number. That expense can add up in a big lazy company. There are services that will bill your company 42 cents a call.
+ Most users accept their phone company's recommendations: "You need another T-1." Most recommendations are made to fill salesman's quotas, not to benefit users.
+ Every user wants his own expensive telecom perks, like a Blackberry, broadband on his laptop, a fax at this desk, and a call center to answer his customers' queries.

My friend Jon Giberson runs a telecom software company. He'll give you a thousand horror stories. Click here.

Heh, sometimes I get it right: Here's what's happened to the QQQ since I recommended to sell it short in September 15's column.

It will probably fall some more today. Then I'd cover. Take your profits. Toast me this evening in your celebration dinner.

Ask and ye shall receive -- Part 456 (again): I asked my savings bank yesterday to bump my account to 3.3% from the previous 3%. They agreed. They didn't offer, nor do it automatically. Eternal vigilance and heavy begging are my middle names.

Investing in Startups. Beware the marketing Gotcha: Yesterday I wrote:
+ For every $1 you spend on engineering, you need to spend $10 on marketing and sales.
+ You'll go down the wrong marketing path three times before you finally get it right the fourth time.

A reader writes,

As a marketing consultant, I can tell you from experience with multiple clients that YOU ARE ABSOLUTELY RIGHT. People that invent stuff are always "in love" with their product, and they think that all they have to do is let the world know that it exists and the world will flock to their door. Wrong!"

Why you should NEVER invest in Pitney Bowes: I sold this company exactly 8 years. It's taken Pitney Bowes 8 years to figure its overpriced meter is missing! What diligence! What competence.

Another sad storm. More lessons: You need water, food, flashlights, medicine and backups. From the Washington Post:

The rescue effort began two days after the city flooded, and interim technology manager Rajeev Jain entered the building not knowing what to expect. The ground floor of the New Orleans school system headquarters was under three inches of water, and when he headed upstairs, he saw that the fourth-floor ceiling was damaged and leaking.

Jain hailed police to sledgehammer through a locked door. He found what he was looking for in a storage closet: 170 dry and apparently undamaged computer backup tapes storing recently updated payroll records and other critical financial information.

Working from an International Business Machines Corp. data recovery center in New York, Jain and colleagues from Alvarez & Marsal Business Consulting LLC were able to recreate the school district's computer system from afar. Last week the school system resumed issuing paychecks to New Orleans teachers.

As the Gulf Coast cleans up after Hurricane Katrina, computer consultants, data recovery companies, and government and business officials say the area was apparently spared the worst when it comes to the condition of the computer records and backup systems.

Government institutions and large companies generally had adequate backup systems in place and data-recovery contracts with firms such as IBM to help rescue damaged data tapes and rebuild software systems. The best-prepared had backup files stored on computers outside the hurricane zone. ...

Disaster recovery has become a $6 billion share of the computer industry as companies and governments have taken to heart the lessons of lightning strikes, floods and other incidents, such as the Sept. 11, 2001, terrorist attacks. Unlike physical assets such as a building or inventory, lost information can be impossible to replace and can make it nearly impossible for a business to reopen.

Major companies such as IBM and SunGard Data Systems Inc. have entire corporate campuses devoted to data recovery. Concerns about file protection have even shaped government decisions about where to put offices. In May, the Agriculture Department, for example, said it planned to move the payroll and other operations of its National Finance Center from New Orleans to Kansas City, Mo.

The agency noted in announcing the move that computer operations in New Orleans "have significant exposure to risk" -- and indeed the facility's operations had to be shifted to off-site backup locations after the hurricane.

Not everybody was protected.

Kyle Mickelson, who runs a computer repair and support business in Gulfport, Miss., said that a number of his clients did not have backup accounting or customer records and lost all that information in the storm. He has also taken in dozens of water-damaged computers and hasn't been able to recover data from any of them.

Others who thought they had made adequate precautions found that the magnitude of Katrina overwhelmed even the best planning.

Jacqueline Mae Goldberg, a personal injury lawyer who practiced in New Orleans, said she created backup files and stored them at her home. In an e-mail she said both places were wrecked by the storm. ...

By hook or by crook:
A pirate walks into a bar. The bartender says, "You look terrible. What happened?"

"What do you mean?" said the pirate, "I feel fine."

"What about the wooden leg? You didn't have that before."

"Well, we were in a battle and I got hit with a cannon ball, but I'm fine now".

"Well, ok, but what about that hook? What happened to your hand?"

"We were in another battle. I boarded a ship and got into a sword fight.

My hand was cut off. I got fitted with a hook. I'm fine, really."

"What about that eye patch?"

"Oh, one day we were at sea and a flock of birds flew over. I looked up and one of them pooped in me eye."

"You're kidding," said the bartender, "you can't lose an eye just from some bird poop."

"Ay, but it was my first day with the hook."

Recent column highlights:
+ 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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