It's Friday the 13th. But apparently stocks weren't spooked, as the major indexes headed for high ground in afternoon trading. Perhaps they sensed Hurricane Charley was coming.

Also today, Julia Child died at the age of 91. The six-foot-two chef introduced French cuisine to the American masses via her television show and popular books. A fine teacher who wasn't afraid to make mistakes in the kitchen -- even with an audience in view -- she preached moderation but warned that the health-food craze was taken too far in America. "What's dangerous and discouraging about this era," she told the Associated Press in 1989, "is that people really are afraid of their food. Sitting down to dinner is a trap, not something to enjoy. People should take their food more seriously. Learn what you can eat, and enjoy it thoroughly." Amen.

Have a good weekend. Stay clear of the hurricane, black cats, and any ladders that beckon you to walk under them.

In today's Motley Fool Take:

Dell's Oh So Swell


Bill Mann (TMF Otter)

It is time for the five remaining people who think that Dell(Nasdaq: DELL) is not the class of the PC industry to sit down. After warnings at direct competitor Hewlett-Packard(NYSE: HPQ) and poor results at tech bellwetherCisco(Nasdaq: CSCO) put technology investors on notice, Dell turned in a gem of an earnings report last night.

Dell, a Motley Fool Stock Advisor pick, is the class of the business: It's all that and a side of slaw. Now, the question of course is whether this is the particular mountain that anyone would want to be king of. Is being the best company in the PC industry the equivalent of being "King Rat," the most influential prisoner in James Clavell's semi-biographic tale about the fetid Changi Prison from World War II? Is this the neighborhood you want to be in?

Here's what I love about Dell reports -- they have no problem grinding their stiletto heels into their competitors, noting for example that Dell's growth in sales in Europe, the Middle East, and Africa was 30%, "12 points higher than the average of other companies in the region." Yeah, take that, "other companies."

Of course, last year's comparables weren't exactly an enormous hurdle for Dell, as the summer quarter of 2003 was fairly soft, with more difficult comparisons coming in the fall. And Dell's sequential results showed some positive and some negative, including fairly tepid growth of 1.4% on the top line. I note that Dell continued to aggressively repurchase its own shares, deploying almost $900 million in the quarter to retire shares, $2 billion plus for the year. In the past, these repurchases have essentially served the purpose of masking the dilution from stock option grants -- thus far this year, though, the diluted share count is dropping. Also, Dell's accounts receivable continue to grow faster than revenues -- not a great trend.

There was some optimism that Dell's boffo quarter would help lift up the entire technology sector, if not the stock markets in general. Lousy results from Analog Devices(NYSE: ADI) probably helped scotch hope that this would happen. This is probably for the best, for though Dell's quarter was certainly a good one, it was good for Dell, and not the entire industry. This was a great quarter all told, but it should be remembered that what's good for Dell might not be good for much anyone else. Certainly not HP.

Bill Mann owns none of the shares mentioned in this story.

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IBM Wants Help


Tim Beyers

In the wake of a few high-profile firings at rival Hewlett-Packard(NYSE: HPQ), a weaker outlook at Cisco(Nasdaq: CSCO), ongoing problems at Intel(Nasdaq: INTC), and a general malaise enveloping the entire tech sector, IBM(NYSE: IBM) yesterday announced it would add 18,000 workers before the end of the year, and that's not including acquisitions.

This is the third time IBM has raised its hiring expectations this year. Management now says its total head count should reach 330,000, the company's highest total since 1991, two years before it hired Lou Gerstner as CEO to institute a turnaround. Does that mean the firm is headed for the same whitewater Cisco and others have faced? Hardly.

As Fool Bill Mann has pointed out, Cisco is contending with rising inventories and a glut of hardware that hasn't yet been absorbed by customers who loaded up during the dot-com days. IBM doesn't face this problem. Just look at Big Blue's most recent quarterly results. Inventories and receivables were down from the end of 2003, and services made up nearly 50% of revenues.

That's right; IBM is increasingly making its money off the expertise of its people instead of from products that need to be boxed up and shipped somewhere. No wonder the firm is hiring.

One-third of the new staff will likely be based in the U.S., while the rest will beef up IBM's overseas workforce, which has recently benefited from outsourcing. Seedy as that may sound, it's important to remember that outsourcing is a complex issue. Indeed, according to a report, IBM claims that outsourcing and new internal training programs have allowed the firm to trim layoff estimates while bolstering the workforce in other areas.

The bottom line for investors is simple: Not all tech companies are created equal, and not all tech investments are bad. The business model counts for a lot, and IBM seems to be hitting its stride at the right time. Unfortunately, the stock is no bargain. Its dividend trails the market average, and it trades for 13 times IBM's free cash flow when compared with enterprise value. IBM has grown free cash flow roughly 5% annually over the past three years. Still, the lesson is clear. While others might be due for a beating, tech companies providing vital services -- including IBM, AMZN), and eBay(Nasdaq: EBAY) -- are on solid ground.

Fool contributor Tim Beyers owns no interest in any of the companies mentioned, and you can view his Fool profile here.

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Is Google Overexposed?


Rick Aristotle Munarriz (TMF Edible)

There may be something far racier than Miss September in the latest issue of Playboy(NYSE: PLA). The Securities and Exchange Commission might be tempted to skim past the centerfold this time and dig into an interview with Google founders Larry Page and Sergey Brin. The two sing the company's praises in the interview. That may seem like perfectly natural behavior, but it may have run afoul of the cooling-off period that the SEC abides by to make sure that companies aren't hyped by insiders just before they go public. Earlier this year all it took was one overzealous interview to delay the CRM) market debut.

Playboy is defending the interview by claiming that it took place back in April, just before Google had officially filed to go public. However, Google's best defense may be that everyone's been talking about Google lately. Whether you love it or hate it, good luck in trying to call for a quiet period in the middle of a decibel-busting rock concert.

Ultimately it's but one more gaffe in an awkward path to going public. It's like the opening sequence to the old Dick Van Dyke Show, with one errant ottoman after another. Page, Brin, and other unmentionable four-letter-words have been muttered over the past few months as this amazing company with a questionable valuation has stumbled its way towards an IPO that may price the company in the ballpark of $35 billion.

How much is Google worth? We'll know soon. The bidding process starts today with the Dutch auction results set to be announced next week. No doubt about it. This is one wacky offering. It's an ironic one too in that it will make rival Yahoo! (Nasdsaq: YHOO) even richer given its Google stake of 6.6 million shares.

Perhaps it's just fitting that this long and winding road should rifle its way through the pages of Playboy. This is also the same issue that features the controversial interview with Terrell Owens as the flamboyantly outspoken receiver questions his former quarterback's sexuality. It left signal-caller Jeff Garcia needlessly defending his lifestyle in what amounted to "I'm not gay. I'm Canadian." Oh, brother. Grow up, people!

In all this my heart goes out to Scarlett Keegan. Who? Well, Miss September 2004, of course. Will she even be noticed, smack dab in the middle of the page-turning controversies? She's a redhead aspiring to become a Bond girl. Her turnoffs include cheesy pickup lines. You know, like "Do you want in on the Google IPO?"

Incidentally, here are some of the headlines for this story that I actually nixed along the way.

  • Google in the Buff
  • Private Parts in Public Places
  • Airbrushing Google's Curves
  • Miss IPO
  • Google Talks Dirty
  • Knights in Plight's Satin
  • Google's Center Folds

If you have a favorite -- or want to come up with one on your own -- please join us over in the Google discussion board. Only on

Longtime Fool contributor Rick Aristotle Munarriz has Terrell Owens on his fantasy football team. He behaves just fine there. He does not own shares in any of the companies mentioned in this story.

Quote of Note

"If you wish to know what a man is, place him in authority." -- Yugoslav Proverb

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