The BIG news this morning about Microsofts (NASDAQ: MSFT) offer to buy Yahoo Inc. (NASDAQ: YHOO) for $44.6 billion has been thoroughly covered all over the media including numerous posts on our site, so I will not pile on or repeat what you can find elsewhere.

Short and sweet: My view is the perfect timing of the offer, not the offer itself, is the news. Microsoft has been rumored to be chasing Yahoo for quite some time and apparently from the substantial offer it made today (60% over yesterdays closing price) money has not been the issue. Obviously Steve Balmer and friends are willing to pay up -- way up!

The timing of the offer hits Google Inc. (NASDAQ: GOOG) when they are down - way down! Google has lost a third of its value over the last month and it has lost its momentum going forward. The stock is down substantially today even though the company reported solid growth. That is a significant change in the playing field. Balmer, a very aggressive businessman has decided to make his move now, potentially stealing the momentum on Wall Street.

According to an ominous story on Bloomberg.com this morning, the recession is already here. It makes the argument that in many sectors of the economy, corporate profits were severely depressed in the third quarter.

In order to protect the bottom line, many companies have announced wholesale lay-offs in the tens of thousands. They are looking to every department to cut expenses and staff and often just eliminate entire departments. There is no doubt that this shake-out is happening because a day has not gone by in the past six months that we have not read about the falling dominoes of the economy.

The housing market, which was ripe with speculators and dreamers (of home ownership or huge profits) fueled by cheap financing which has disappeared, is now in full retreat. The depressed housing and credit markets were the first to show signs of weakness, followed by mortgage lenders who did not have to announce lay-offs, they just closed their doors. The home builders are not building, and the suppliers like Lowe's Co. (NYSE: LOW) and Home Depot (NYSE: HD) on the retail end and Caterpillar (NYSE: CAT) and USG Corp (NYSE: USG) on the wholesale end are feeling it.

My in-laws have been using Apple (NASDAQ: AAPL) computers forever. I have been using Microsoft (NASDAQ: MSFT) Windows-based machines, because most of our software and that of our engineering consultants was not supported on Macs. This extended to our home/studio. Well, a few years ago my daughter (remember, the iPhone enthusiast?) got an Apple notebook, then my wife did, then six months ago my 11 year old got one. iMacs are taking over the house.

Apple has made a lot of strides in the past 18 months to make all this switching much more easy. From using Intel processors, to adopting Windows options, to improving the operating system and already having the historically superior machine in terms of stability, anti-virus environment, better graphics and sound integration and more innovation on all levels.

So what does the Microsoft-based Windows PC offer me? As far as I can figure out, there are two advantages. The first is price: Apple charges extra for the cool factor, as it does with everything it produces. Although you have to give Apple credit for innovation and its R&D efforts, that has a cost. Microsoft is not known for innovation. The second thing a Windows PC offers is the greater number of programs available. The second attribute is bound to change as more and more people buy Macs and software companies and developers look to grow with that end of the market.

After all these years it finally happened: My 77-year-old mother decided she wanted to get a computer.

For years, she thought it would complicate her life and waste time (sort of true) so she resisted the idea. But now the time has come for her to enter a life of digital communication. Do you have any holdouts in your family?

Already the complications begin. Apple (NASDAQ: AAPL) released its new Leopard operating system October 26, and we were considering setting her up with a laptop and wireless home network. However, I am told that it would be able to help her remotely if we get her a Microsoft (NASDAQ: MSFT) Windows based system. I have to check this out. The family debate is in progress.

I have a mixed marriage, with my wife sporting an iMac while I "make do" with a Toshiba notebook. I am the holdout in our family. My kids have Macs. Who knows, next time I may switch. This trend bodes well for Apple.

It appears that my mom was starting to feel left out. Every time one of her friends asks for her email address, she has to explain she is not online -- but now she can add "yet," because she will be soon. For years, we have been sending her faxes of things we wanted to share, so the time has come for one of the last holdouts to get with the program. I wonder when she'll set up her Facebook page? I just hope the world wide web can handle the additional load!

Today Google Inc. (NASDAQ: GOOG) is the top Internet search and advertising property there is -- No Question! Yesterday it was something else. Why do investors believe that everything now ends with Google? Have we already reached the end of the internet revolution. Maybe we just think Google has locked up the next stages as well.

Yahoo Inc. (NASDAQ: YHOO) started with two graduate students from Standford University and was all the rage. Google started with two graduate students from Stanford University and now it is all the rage. Do we think Stanford is running out of bright graduate students all of a sudden? I would call them and make an inquiry but surely they would not take me seriously.

Has Google perfected Internet advertising? I don't think so, do you? Will Yahoo, Microsoft Inc. (NASDAQ: MSFT), eBay (NASDAQ: EBAY), News Corp (NYSE: NWS) and all the international players concede an inch of ground more than temporarily?

I am not saying that Google won't eventually conquer the Internet world, (because I do not know) but this feat is by no means as certain as the market currently seems to believe: driving the price of GOOG up $95 per share as I write this story, on no news, in about eight weeks.

What if politics was like the stock market and you could buy politicians you like and sell the ones you didn't without envelopes of sequentially numbered small money orders in the same Chinese handwriting or cold cash hidden in the freezer?

For those rich enough -- they can buy a politician or two. The rest of us probably could rent a couple minutes of time with a big campaign contribution, and get lots of promises from a politician. Knowing the integrity of politicians and the value of political promises I am not sure how good of an investment politicians turn out to be.

Maybe you are one of the people smart enough to pick up a couple of bucks around the office at election time with bets on who is going to win. I have to admit I lost the last political bet I made. Good thing it was only a buck. What if there was a stock market where you could buy and sell shares in the candidates? The candidates would move up and down every day and those of us who are financial analysts could quantify the likelihood of people winning based on how bets are placed.

Now I am not into horse racing, poker or sports betting; but I do have to check up on the political bets every once in a while. With real money on the line there is a big incentive to be right. If you do not like the odds you can jump into the market and take the other side of the action. So what do the bookies think is going to happen in the coming election? Well it appears that Clinton is the favorite for the Democratic nominee with 67.8% and the Republican Rudy Giuliani leads the GOP with 35%.

There has been more than speculation that Yahoo (NASDAQ: YHOO) is near the center of Microsoft's (NASDAQ: MSFT) radar screen, but perhaps AOL-Yahoo would be better fit. Maybe a deal for AOL will be more likely once Jeff Bewkes replaces Richard Parsons as chief executive of Time Warner (NYSE: TWX). (The Wall Street Journal reported today that Bewkes is likely to take over from CEO Dick Parsons as early as Jan. 1, 2008).

One reason Microsoft does not own Yahoo already is that Yahoo is expensive. Maybe Yahoo has another path to follow. Maybe Yahoo and Time Warner could help each other out. If Time Warner set AOL free to merge with Yahoo than their combined forces might be a better competitor for both Google (NASDAQ: GOOG)and Microsoft.

The current five year deal between AOL and Google made Google the seach engine for the site and since it forked over $1 billlion for 5% of the business, the valuation if it were independant would be $20 billlion. More importantly at the time it was reported that 10% of Googles revenue was generated through AOL. That certainly was incentive to get a deal done. I have seen no current data on this but if it is somewhere in the vicinty then a Yahoo/AOL combination would reduce Googles stranglehold on search and add it to the new company. It might represent as much as a 20% swing in traffic and revenue.

If Yahoo were to be acquired by Microsoft, it would become a part of what is now a very large conglomerate. One that should give some thought to it's own lethargy. Microsoft is losing money on numerous hardware ventures and might be better off refocusing on software, both online and in the business environment. Now that Parsons is stepping aside to let Bewkes lead pehaps there will be the energy and insight to make a move.

Plenty of investment guru's have suggested buying on fear and selling when greed reaches its pinnacle. Well I think the fear side is self evident but I'm not hearing about many analysts who are brave enough to buy right now. As a matter of fact I only hear that this would be a very foolish time to invest in the financial sector, in particular, any stocks with sub-prime or "Alt-A" mortgage exposure.

For this reason, contrarian that I am, I thought I would speak out about my recent BAD CALLS, or at least very premature calls, and start tracking them for all to see -- accepting the ribbing, tomato-throwing and blunt comments about the error of my ways.

I own four of the five stocks I will be following for the next year, Bear Stearns (NYSE: BSC), IndyMac Bancorp Inc. (NYSE: IMB), Popular Inc. (NASDAQ: BPOP), and Washington Mutual (NYSE: WM). I wrote favorable comments on each and in the case of WM, more than once. Needless to say, I am under water on all of them. I do not own Countrywide Financial (NYSE: CFC) but it will make for a fine pace car in the middle of this storm.

In June of 2006, after a month of writing for BloggingStocks, I wrote about our original "Great 8" stocks. Amazingly this is my 300th story - never thought that was possible. It's been fun and educational. During the last few months I started three special sections with the coaxing of Amey Stone and with the coaching of Sarah Gilbert. I decided to go back to the beginning and review the original "Great 8" again and see how my discussion points panned out.

In the past year the Federal Reserve Board has sat on the fence leaving interest rates untouched, however, their hemming and hawing has moved the market at times as fear and greed and speculation had the usual effect of jiggling the market from time to time. Housing starts have fallen steadly to scary levels in some parts of the country. The Iraq war is still on the front pages as the death toll increases and President Bush's influence evaporates.

In last year's report I said "there are no bargains yet, but there are some very interesting developments in the fundamentals" - - so what now?

Apple Inc (NASDAQ: AAPL) was the big winner to the upside in the past year followed by Google Inc. (NASDAQ: GOOG). Time Warner Inc. (NYSE: TWX) aided by the influence of Carl Icahn, major stock buy-backs and changes in AOL and the cable business, has also performed well. The following were the four things that seemed noteworthy at the time. All of them were relevant to what happend.

1. TWX has a very low price-to-book ratio.
2. GE has powerful products to sell -- literally: aircraft and standby power engines, water resource management and equipment. Plus it has a strong dividend.
3. WMT had a very low price-to-sales ratio before and it is still extremely low at .64. While the stock price is going nowhere and has not for years they seem to be creating more shareholder equity. They are a huge company so the prospects are that they move up slowly over time but are not goin to be exciting to watch -- unless they are building one next door to you house.
4. GOOG has an extraordinary return on invested capital (ROIC).

Here's my take on all eight stocks:

This will conclude the whittling process of the 30 Dow Jones Industrials with the last six below. Although the Dow has done very well in the last six months there still appears to be plenty of value here from everything I am able to surmise.

So far I have whittled the Dow down to six stocks: Alcoa Aluminum (NYSE: AA), American International Group (NYSE: AIG), Caterpillar Inc. (NYSE: CAT), The Walt Disney Company (NYSE: DIS), Exxon Mobil (NYSE: XOM) and The Home Depot (NYSE: HD). You can link to the previous posts, Part 1, Part 2, Part 3, Part 4 or Part 5 for your own review and comments.

Pfizer (NYSE: PFE) is a tough one for me to review because there are a lot of mixed signals in the data and the market about Pfizer concerning its pipeline of products. Most notably it has a P/S of 4.14 (TTM) which would place it outside of my consideration by a factor of two under most situations. This is a result of declining sales, but the decline has not hurt earnings in a big way, so the P/E has been coming down as a result. The P/E is about average for the DOW but historically low for Pfizer. If the "pipeline" is truly bare then this trend will continue. However, the stock is supported by a 4.2% yield, almost no long-term debt, and trailing margins that are HUGE at about 40%. Back to the less than appealing issues: PFE has a price-to-cash-flow ratio of almost 15, too high for me. In the long run Pfizer may be a great hold. If you are looking for a solid dividend payer with resistance to much downside risk it would be great for your Roth IRA, but here and now, it might be a short term value trap. In the absence of an acquisition or great new drug where is the upside?

I have now completed reviewing half of the stocks in the Dow Jones Industrial Average in search of value. To my surprise five of the first fifteen seem to be value propositions, five appear to be fairly valued but upside potential does remain and the last five -- who knows? Serious Money: Whittling away at the Dow -- MMM, AA, MO, AXP, & AIG: Part 1 was published this morning. Parts 2 through 7 will follow daily.

After months of rising stock prices and new Dow record highs being reached on a regular basis, I was not expecting to find that there was any value left. I have been relatively optimistic since last year posting DOW 14,000 here we come! but the rate of increase has accelerated beyond what I envisioned.

James Cramer of the TheStreet.com early in the year wildly projected that the Dow would reach 14,000 this year. A year ahead of my own more tempered view, and I definitely thought he was going out on a limb at the time. Now it would seem easily in reach and perhaps what I thought was sticking my neck out was too conservative.

Perhaps it was the years of stagnating stock prices for Microsoft (NASDAQ: MSFT), J.P. Morgan Chase (NYSE: JPM), Citigroup (NYSE: C), General Electric (NYSE: GE), 3M Corp (NYSE: MMM) , International Business Machines (NYSE: IBM) and others that finally built up a head of steam and came alive in the last six to eight months. That and global expansion that all the large cap stocks are able to capitalize on. Well, investors and the sun are shining on the Dow so enjoy the ride and be ever watchful.

Those of you who are new to BloggingStocks can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well.

It occurred to me recently that we probably have entered a new age of ubiquitous piracy. A world that sneaked up on us quite unobtrusively, little by little permeating everything, and until recently, we did not realize we had been hijacked. There must be exponentially more pirates operating today, both in overall quantity and as a percentage of the world population, than there has ever been at any time in history.

Last week Alan Abelson wrote in his Up and Down Wall Street column (Barron's, subscription required) that 80% of the software sold in China was pirated. No kidding - and he quipped that software companies should be happy because that meant they were paying for the other 20%. Oh boy! - this is sure to please Adobe Systems (NASDAQ: ADBE), Intuit Inc (NASDAQ: INTU), and Microsoft Corp. (NASDAQ: MSFT). The billions of dollars lost to piracy in one year is certainly more than all the doubloons ever high-jacked on the highs seas.

Software is not the only thing being pirated, everything is being pirated. One could make the argument that in China, and even worldwide pirated goods would easily make up the largest business ever known if it was a single enterprise.

Every day there are numerous stories, articles and blogs about how Microsoft Corp. (NASDAQ: MSFT) is in trouble because its search and advertising models cannot compete with Google Inc. (NASDAQ: GOOG). We hear that Microsoft is so far behind, and so inferior, that it might be in a quagmire from which it can't escape. In other words, Microsoft has become stodgy and passe'.

Steve Balmer, the Chairman and chief advocate for Microsoft exclaims constantly that this is not true and the world is blind to the power of Microsoft -- "just you wait and see!" He appears exasperated every time the comparison comes up and the question is posed as to how he will compete with the Google onslaught.

My first two posts on this site last year were about Microsoft and Google. I was thinking about last year and decided to look back and see how the year unfolded for the two companies. Here are the surprising results. Microsoft actually was the better stock investment over the last 12 months, rising about 35% to Google's 26.5% (25% better). It does not appear that Microsoft investors have been suffering all that much!

Furthermore, MSFT is paying a dividend and GOOG is not. I would also argue that Microsoft, while not a bargain right now, is fairly valued and that Google is at least 10% over-valued on fundamentals despite a spectacular earnings report. From my perspective, given the risk factors inherent in the younger Google, it may be even more over-valued. Certainly its stock price would suffer more on an earnings miss.

This just goes to show you that all the noise in the market place is just that -- a lot of noise, because Microsoft is doing just fine. I do not own shares of either stock and have never held any position in either, but if I was to buy one today it would be Microsoft, it is the better value and safer bet after months of market appreciation.

Those of you who are new to BloggingStocks can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well.

Once again the Dow is up and the NASDAQ is down. Yesterday I posted Dow up, NASDAQ down -- the run to quality continues and today it looks like more of the same. The Dow closed at 13,383.84, up 37.06, and the NASDAQ closed down 21.15 to 2,525.29.

Although the Dow was up, my own portfolios had more losers than winners, even though I do not have many tech or internet plays. The good thing about that: I may be able to pick up some stocks that are on my watch list that have been just out of the range but now look like more of a bargain. Value investors should all be doing the same thing; watch your watch list and, if you do not have one, create one.

I think it is not just Dow stocks that did well, but also very large companies that are doing better. While the Dow consists of large cap dividend-paying companies, it also includes two NASDAQ stocks: Intel Corp (INTC), down $0.11 to $22.01, and Microsoft Corp. (MSFT), up $0.03 to $30.90, so even that presents a mixed message.

If I was an analyst I would be writing that this market; with each of the indices heading down a different path; is in search of some 'leadership' or 'conviction'. In the absence of such we are drifting and muddling along without a rudder. To me that is another indication that things may be topped out. Still, I maintain that all that is just Wall Street lingo, and I am not an analyst, so I say just stick to watching stocks one by one strictly investing on a fundamental basis.

Those of you who are new to BloggingStocks can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.

Each passing generation seems to accept a greater level of intrusion into its life. When George Orwell wrote 1984, most people were aghast at the level of scrutiny by "Big Brother"-- this doesn't seem to be the case anymore! We accept that cameras follow us all day long, our email is screened and our wireless communications are not protected by the constitution. We accept that the president does not need a warrant to tap our phones if he thinks we are a risk to national security, or even just says so ... or perhaps we do not accept that last.

Our great grandchildren will have access to information about us that will give them insights never before imaginable. They will understand what made us tick better than ever before. There will certainly be internet archaeologists. They exist now, but they're called data miners.

Some day soon you may have an internet memory chip in your head that is installed at birth, giving you instant access to all data ever created -- a real memory chip. As scary as it sounds, it may be coming. Each generation accepts a greater level of techno insidiousness; just look at all the people happy to have a phone sticking out of their heads. Perhaps people will first have cell phones implanted in their heads before memory chips. Not only will it happen, but future generations will ask their grandparents why they wouldn't want such a thing.