There's just something about the New Year that gets people thinking about investing.

Stockbrokers know this as well as we do, so don't be surprised if that voice at the other end of the line is looking to shill some "can't-miss" investment. Hey, there's always the chance the owner of that voice is one of the good guys, but we wouldn't bet our financial futures on it.

Neither should you. Investing is a must, but if it sounds too good to be true, it might just be a scam. How to be sure? Our resident cynic Dayana Yochim has a few ideas in Don't Plunge Into Stocks.

In today's Motley Fool Take:

Motorola's Loss, Tyco's Gain

If you're an executive, Tyco(NYSE: TYC) is a nice place to work. Former CEO Dennis Kozlowski pulled down Grasso-esque compensation. Of course, a Manhattan jury will decide if he really just looted the corporate treasury.

As for his successor, Edward Breen's pay package is in accordance with Tyco's long tradition of executive compensation. At the end of 2003, his take sits at about $172 million. Not bad for less than two years' work.

Then again, it was a gutsy move for Breen to leave his job at Motorola(NYSE: MOT) -- passing up the possibility of becoming CEO -- and move to Tyco, which at the time was mired in scandal and verging on Chapter 11.

Big loss for Motorola. In short order, Breen has staged an incredible comeback at Tyco. With Breen at the helm, the stock has surged from $7 to $26.

This week, Tyco's CFO declared a goal of $3 billion in cost cuts for the next three years. He also wants to halve the company's debt load to about $10 to $12 billion. Until this is accomplished, there will be no major M&A activity.

Remember, Tyco, as we know it, is the result of more than 2,000 acquisitions. Empires are not built without complications. The impetus of the cost cutting is to simplify the corporate structure on three fronts: $1 billion in purchasing efficiencies, $1 billion in "Six Sigma" programs, and $1 billion in working capital improvements.

It's ambitious, but in light of his performance so far, Breen has Street cred. If anything, the goals are likely to be exceeded.

There's no excuse for Kozlowski treating Tyco as his personal piggy bank. Yet, he did create a pretty fat pig, which gushes lots of cash (a cash pig?). Yes, Kozlowski did create a mini-General Electric(NYSE: GE). What the company needed was a top-notch operator, and Breen fits the bill.

Quote of Note

"You can't have everything. Where would you put it?" -- Steven Wright

Netflix's Swelling Competition

DVD by-mail rental king Netflix(Nasdaq: NFLX) continues to ride a wave of success. This morning the company announced that it ended 2003 with almost 1.5 million subscribers -- a 74% increase over 2002!

In Netflix's widely tracked home market, the San Francisco Bay Area, household penetration grew to 5.9%, up from 5.4% in the prior quarter, and up from 3.8% last year. While critics keep looking for Netflix's good fortunes to end, household penetration continues to grow. With national penetration at just 1.3%, the opportunity ahead looks promising, although Netflix's competition is muddying the outlook.

Investors will want to pay attention to two sharks in the by-mail DVD market. Wal-Mart(NYSE: WMT), which launched its service in June, offers a Netflix-like plan for $18.76 a month -- $1.23, or 6%, less than Netflix. Viacom's(NYSE: VIA) Blockbuster matches Netflix's monthly rate but allows customers to have four movies out at a time instead of three. It's too early to determine if either service will take a bite out of Netflix's growth.

The movie studios are testing the rental business waters, too. Disney-owned (NYSE: DIS) MovieBeam, in limited markets, offers an in-home receiver that provides 100 new video release and high-demand movies for a monthly subscription fee of $6.99, plus $2.49 to $3.99 per movie for a 24-hour rental. Most of the major studios offer their movies through MovieBeam.

For movies downloaded over broadband to your computer, Movielink is the star. A joint venture between Metro-Goldwyn-Mayer(NYSE: MGM), Sony(NYSE: SNE), Time Warner(NYSE: TWX), Viacom, and soon-to-be General Electric's(NYSE: GE) Universal Studios, it costs from $2.99 to $4.99 for a 24-hour movie rental.

With competition from so many heavyweight corporate names, including the content providers themselves, you'd think Netflix's stock would reflect the threats. Not so, though. While Netflix is about 8.5% off its all-time high of $61, it's still substantially above its 52-week low of $9.60. Plus, it sells for an amazing 43-times the highest analysts' estimates for 2004.

Given the tsunami of competition aimed right at Netflix, savvy investors should consider David Gardner's advice for Motley Fool Stock Advisor subscribers and sell here. Netflix's current price assumes too many happy endings.

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A Bitter Pill for Amerisource

The year started on a sour note for the major drug distributors. AmerisourceBergen(NYSE: ABC) took the worst of it this past week, with a major contract loss that shook up investors across the industry today as questions and speculation buzzed.

The drama unfolded when AmerisourceBergen announced what many viewed as a surprise loss of a major federal contract to rival McKesson(NYSE: MCK). Amerisource plummeted as management was forced to issue a significant downward revision to its fiscal 2004 earnings guidance.

Amerisource had controlled the Department of Veteran Affairs' contract -- which was important enough to the company's revenues that any possibility of its loss was cited as a risk factor in its latest 10-K -- for five years. The nearly $3 billion annual deal is now McKesson's for the next two years, with the possibility of two three-year extensions.

On Friday, shares of McKesson and Cardinal Health(NYSE: CAH) both dropped, as investors absorbed the news, and a variety of concerns emerged about the industry at large, including a possible price war that would threaten profit margins. Forbes gave investors further cause to question McKesson's prospects, pointing out costs associated with infrastructure and working capital requirements related to the new contract.

Amerisource shares traded down nearly 5% at $53.45 Friday morning, while McKesson dropped almost 3% to $31.24, and Cardinal Health slid 2.4% to $59.70.

Clearly, Amerisource faces a major challenge to replace the lost revenue from the contract. Whether the sell-off elsewhere in the sector overstated the challenges facing the industry remains to be seen.

Discussion Board of the Day: Healthcare

Are investors going to get caught in the crossfire of an industry price war? Or are investors overreacting? Let us know on the Healthcare discussion board. Only on Fool.com.

More Fool News

For a list of all our stories from today, see Today's Headlines.

And Finally...

Today on Fool.com, Zeke Ashton has New Year's Resolutions for Investors and Rick Munarriz takes a light look back at The Year That Was.

Contributors:
Bob Bobala, Robert Brokamp, W.D. Crotty, Sam Edwards, Paul Elliott, Mathew Emmert, Jeff Fischer, Jeff Hwang, LouAnn Lofton, Alyce Lomax, Bill Mann, Selena Maranjian, Dave Marino-Nachison, Rex Moore, Rick Munarriz, Reggie Santiago, Tom Taulli, Dayana Yochim