Word on the street is that some in Warren Buffett's inner circle have been encouraging him to let the cast of Queer Eye for the Straight Guy give him a makeover, and one of his friends has even been pushing the idea with Bravo bigwigs.

Buffett says he's never seen the show. He might not be the Fab Five's perfect candidate, either. Last we checked, he wasn't sporting a mullet. Besides, isn't Dairy Queen chic?

In today's Motley Fool Take:

J&J Makes the Day

By Alyce Lomax (TMF Lomax)

Some investors got just what the doctor ordered today. Johnson & Johnson(NYSE: JNJ) reported a strong first quarter. Despite much-touted competition and questions, sales for its Cypher drug-eluting stent are still going strong, and the company booked healthy gains in its consumer and pharmaceuticals area as well.

Johnson & Johnson said first-quarter net income came in at $2.5 billion, or $0.83 per share, as compared to $2.07 billion, or $0.69 per share, in the same quarter a year ago. Revenues were 18% higher, at $11.6 billion, with a positive currency effect of 5.4%. The company also upped its guidance for 2004, to $3 per share.

Pharmaceutical sales were up a healthy 15.2%, based on the strength of medications like antipsychotic Risperdal and antiepileptic Topamax, while consumer sales gained 14.3%, including popular products like Tylenol and Aveeno. In addition, surely Atkins-friendly sweetener Splenda, another J&J product, contributed to the healthy showing.

Mathew Emmert, the Foolish name behind Motley Fool Income Investor, recently pointed to J&J as a healthy choice for investors searching for stable growth and income over the long term. Earnings like today's show the strength of the company, which he pointed out tends to do well regardless of economic conditions.

One of the major issues facing Johnson & Johnson continues to be how it will fare in the "stent wars," namely in relationship to its standing against archrival Boston Scientific(NYSE: BSX), which is in the process of launching its Taxus stent. J&J recently teamed up with another rival, Guidant(NYSE: GDT), to shore up its competitive stance. It makes sense, as Boston Scientific has gone out of its way to claim it can rapidly snap up 70% of the stent market.

How's that faring? The Taxus stent was launched in late March, and Johnson & Johnson's first quarter ends at the end of March. So, while the Cypher continues to hold its own, it's the second-quarter numbers that will give investors a better idea of whether the stent is suffering at the hands of Boston Scientific.

That's a major issue for Johnson & Johnson: increasing rivalry, generic and otherwise, for certain products; that's why the company recently said it planned to double research and development expenditures in 2004 -- to beef up its product pipeline. Regardless, the current quarter reminds investors that J&J has some very good days.

Alyce Lomax does not own shares of any of the companies mentioned.

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Wo ndering About Magellan

By Selena Maranjian

A recent Money magazine article asked a question that's on the minds of many mutual fund investors: "Can Magellan Bounce Back?" Magellan is the 41-year-old flagship mutual fund of Fidelity Investments, managed during its prime by Peter Lynch, whose success with the fund attracted so much attention and capital that Magellan became the nation's largest mutual fund.

Times have changed, though. The fund has underperformed the S&P 500 over the past five years, and money has flowed out of it. (Though it remains huge. With more than $65 billion in assets, it's among the five largest stock funds out there.) What went wrong? Well, manager Bob Stansky made some calls he probably regrets. In recent years he lightened up on technology-heavy companies, which have been doing well, in general, lately, and he loaded up on pharmaceuticals, which have been lagging.

There are probably some other issues at play, too. For starters, like many funds, Magellan owns chunks of a lot of companies -- more than 200, in fact. If you're an investor with a personal portfolio, do you think you'd fare best by spreading your money over 200 stocks, or over your 10 best ideas? (We think so, too.) It's surely hard to have the same confidence in stock No. 198 as you do in your top 20 stocks, and if you have less confidence in something, why invest your hard-earned money in it?

One answer to that question is that with large mutual funds, they often have to spread themselves thin. If your fund is worth $66 billion, investing that amount evenly in just 10 companies would amount to $6.6 billion in each firm. Most companies in America are not worth anywhere near $6.6 billion in their entirety, and funds can't buy whole companies or enormous chunks of them. Consider, for example, that Krispy Kreme Doughnuts(NYSE: KKD) has a market value of just about $2 billion, total; Stanley Works(NYSE: SWK), $3.5 billion; Hasbro(NYSE: HAS), $4 billion; and Wendy's(NYSE: WEN), $4.75 billion. Heck, even Tiffany(NYSE: TIF) and Office Depot(NYSE: ODP) sport market caps below $6.6 billion.

So size does get in the way of mutual fund performance, though some big funds still have managed to fare fairly well. Before you invest in any mutual fund, learn more about them in our Mutual Funds Center. Consider investing in index funds, too, as they tend to outperform the vast majority of stock funds.

Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article, but she does own some shares of Magellan. (So, perhaps she owns a few shares of some of them, via Magellan.)

Di scussion Board of the Day: Coca-Cola

The beverage and snack powerhouse is facing some serious heat from CalPERs. Is CalPERS going too far by withholding its support for certain board members? Talk about it with other Fools on the Coca-Cola discussion board.

Microsoft Getting Warm and Fuzzy?

By Seth Jayson

Ever since Bill Gates' infamous, whiny, and grammatically challenged 1976 "Open Letter to Hobbyists," Microsoft(Nasdaq: MSFT) has had a reputation for doing what it takes to step on, or over, any obstacles, whether those were consumers or competition. Over the years, this has led to a litany of litigation on a dizzying array of charges, with recent cases involving class action concerns in Minnesota, and the well-reported $613 million European Union penalty, which hinged on anti-competitive behavior, or the European suspicion of it.

Could the sheer volume of court time be prompting a change of heart? It's certainly starting to look like the Redmond bad boy has gone soft recently. The day after April Fool's Day, Microsoft announced a $1.6 billion payout to Sun Microsystems(Nasdaq: SUNW) to settle claims over Java and established a groundwork for future cooperation.

So, what's the deal with the latest payout? Yesterday's was worth $440 million, and it's all about the future, or copy-protecting downloadable content. It settles InterTrust's three-year-old patent-infringement suit against Microsoft that alleged broad violations of its technology from several Microsoft products.

The most obvious application of such technology is DRM, or digital rights management. Even if you've been living under a rock, keeping the outside world at bay with a pair of sound-canceling headphones, you should be aware that Microsoft is scrambling to stake a claim to the online music turf. Efforts include a partnership with Loudeye(Nasdaq: LOUD) and other projects to try to control unauthorized duplication of downloaded media files.

Overall, these look like smart moves for Microsoft. Sure, they're expensive, but laying the foundation for the future of media commerce isn't going to be cheap, and the firm will be in a much better position to profit if it's not always on the defensive.

Fool contributor Seth Jayson has defended Microsoft on the Fool pages several times, but he still swears at Windows XP several times a day. He has no stake in any firm mentioned above. View his Fool profile here.

Qu ote of Note

"Men willingly believe what they wish." -- Julius Caesar

Mo re on Fool.com Today

Performance and experience are two musts for any champion mutual fund. Find out from Shannon Zimmerman if Your Funds Are Worth Owning.... And we can't get enough information about housing, that's for sure -- especially with the conflicting word on real estate out there. Dayana Yochim asks, Who Cares About the Housing Bubble? Because if you went in for the right reasons, you'd come out on top.

In other news:

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