Vol.2 Issue 9 September 1st, 2005
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of the Month:
are approaching what is traditionally the nastiest month for
stocks. Since 1928, the S&P 500 has declined an average of 1.3%
during September. That's the worst record of any month."
Lisanti, editor, The Outlook
Oil Crack Your Nest Egg? 10 Steps to Protect Your
Retirement NOW. By Natalie Pace, founder, NataliePace.com.
About China? Trade Is the Pathway to World Peace,
according to Jim Michaels, former Editor of Forbes magazine.
Q&A with Mr. Michaels.
Yin & Yang of the Yuan $ Decoupling. By
Meri Anne Beck-Woods.
Estate Party Policy. Tempted to Crash the Real
Estate Party? 5 Tips to Make Sure You Drive Home Safely…
it Marketing or Selling? By Chellie Campbell. You
need to make sales that create income, or you won't
be in business for long. Here's How.
Outlook: Investing Gimmicks and the Price of Oil.
By Kelley Wright, Managing Editor, Investment Quality
is the Value? By Kelley Wright, Managing Editor,
Investment Quality Trends Newsletter.
Investment Club: An Appetizing Venture. by Nancy
Noel Marra (excerpt from Nancy's novel).
11 Common Investing Mistakes.
Beautify Your Bottom Line. Gains are Good in your
401K and Easy as 1-2-3, When You Tap Into Your Feminine
Side, and Forget about Mind-Numbing Charts. By Natalie
can Do Better Than Baidu With Other Google Acquisition
Targets. Article and Stock Report Card by Natalie
Hype.The new verb that is changing the world, and
why the password is sell AT&T now. By Natalie Pace.
News On Stocks, Starring Take Your Profits and Readjust
Your 401K to a More Defensive Position. by Natalie Pace.
Oil Crack Your Nest Egg?
Natalie Pace, #1 stock picker in the US, with 66% annualized gains
(according to TipsTraders.com, an independent ranking agency)
Steps to Protect Your Retirement NOW
hard truth is that if you didn't understand what you were checking
off when you enrolled in your 401K or if you have a large amount
of stock in the company you work for, you are as vulnerable to
a market downturn TODAY as you were in 2000-2002. The markets
still haven't recovered to their 2000 levels, and while the risks
have shifted, from worries of deflation to worries of inflation,
there is still enough volatility in the economy (oil prices, terrorism,
inflation, rising interest rates) to spark a sell-off. That doesn't
mean the Apocalypse or the Depression is just around the corner,
but merely that the money you put into your 401K could go down
- and between 2000-2002 portfolios dropped by 20-70% -- whereas,
if you are properly diversified, you can protect yourself.
Protect yourself now.
Jones Industrial Avg.
of us are looking for millionaire tips, and ignoring the most
fundamental and important treasure that we already have stored
in our retirement plans. Learn how to properly protect and grow
your nest egg, and you lay the foundation for prosperity.
Did your broker
or human resources person tell you about diversification and how
it protects your portfolio from a fall-out in any particular sector?
As Maria Bartiromo said in an interview last February, "It's important
to always have a horde of cash for emergencies. Then you have
your long-term retirement plan, your cash account and an account
for stocks, where you can take on risk. How much risk depends
upon your age."
So, how do
you protect and grow your nest egg? First consider a few important
trends that may seem whimsical, but are in fact key.
was the Top Performing Asset in 2000.
teams employ great defense, as well as offense. (Dennis Rodman
has five NBA championship rings.)
hare wins the 100-yard dash.
the Hut rules the universe (by acquiring or sidelining the hare).
Now, how can
these strange aphorisms help you protect and grow your 401K? It's
easier than you might think, and, if you're lucky, you won't even
need a calculator (although you will need an appointment with
your certified financial planner and/or human resources person).
on Investment. Find out your return on investment in your
401K over the last 5 years. Visit your broker, certified financial
planner or your human resources person and ask them to provide
you with the percentage gains that your portfolio has earned
since January 2000, along with the percentage gains you have
earned over the life of your portfolio. This will give you an
idea of how well your investments have been performing, how
vulnerable your portfolio is and where you might wish to cash
out, should you choose to protect more of your hard-earned retirement
your financial planner, broker or human resources person starts
using acronyms and market vernacular that you don't understand,
remain true to your request and get the numbers that you need.
As George Orwell notes, "The great enemy of clear language is
insincerity." If you have to check the numbers on your own,
multiple your monthly dollar contribution by how many months
you've been contributing. Hopefully, your nest egg is bigger
than that amount, and you can subtract your contributions to
find out how much your investments have earned. If your contributions
are bigger, then subtract your total nest egg value to find
out how much you have lost. For example, if your 401K has a
total of $5,000, and your contributions were $4,000, you've
made a 25% return. If that return is over one year, you've done
great! If that return is over 10 years, that's lower than what
you would have received in a money market account, where you
would have had no risk. The money markets are a line item on
your 401K. Make sure you have some of your nest egg protected
Diversification. Find out how much of your 401K is in a
money market account. As a general guideline, you should have
a percentage equal to your age in completely SAFE territory.
Today, safe territory is the money market account, where you
can achieve bond like returns with no risk. If you are 50 and
you have all of your 401K invested in mutual funds (or even
more than 50%), you might not have enough money to retire on,
especially in the event of a downturn. Unfortunately, that was
the case for many former Enron and Global Crossing employees.
By putting an appropriate percentage into the money markets,
you ensure that at least that portion of your portfolio will
NOT go down. If your financial professional has not adequately
advised you about portfolio diversification, you might consider
finding one who will be proactive about your best interests.
Read my article, "Brokers and Lovers, It Pays to Pick a Good
One," in Vol. 2, issue 4 for 10 questions you need to ask when
interviewing the perfect financial partner.
While bonds are traditionally considered to be "safe," when
interest rates rise, bonds go down, and can produce negative
returns. For this reason, many money managers today point to
money markets for bond-like returns and no risk, as the safe
haven for your portfolio. Timothy Middleton, a commentator for
MoneyCentral.MSN.com writes, "The simplest way to reduce risk
in a portfolio is to hold a significant fraction of it in cash.
Money-market accounts and Treasury bills have essentially zero
When looking to readjust your portfolio, prune out the weeds!
What are the weeds? Certainly mutual funds that are losing money,
but also companies with extremely high debt/equity ratios (auto
manufacturing, airlines, Fannie Mae, Freddie Mac, steel manufacturers,
auto parts), extremely high pension liabilities (see the end
of this article for a list of companies), companies that could
be severely impacted by high oil, metal and medical prices (retail,
including Wal-Mart, auto parts manufacturers, steel manufacturers).
Choose index funds over mutual funds, and weight more to small
and mid cap, over the larger companies, especially any company
founded before 1980, which may be carrying a lot of pension
fund liability. As a general guideline, choose Eastern Europe
over Europe and Hong Kong, Singapore and Taiwan over Mainland
China. Paul Woods, the CEO and President of Odyssey Advisors
money managers, will be writing an article for the October ezine
with his index funds picks, designed especially for those of
you who have limited choices in your 401k.
Take your profits! If you have an area of your portfolio that
has done extremely well, consider locking in the gains by cashing
out of the holding. What are great gains? A-list stock pickers
are boasting of 15% annualized gains. If you've made more than
that on a stock, you've done well. That doesn't mean that you
want to blindly pull out your profits at 15%, but in a market
that is expected to perform modestly year over year, great gains
are made in shorter windows. The more actively you prune your
portfolio, the more beautiful it will become.
Profits in Shorter Windows. "This is a stock picker's market.
Some sectors will perform better than others because there is
this imbalance in supply and demand--energy, for instance and
drilling and exploration," Robert Hormats, Vice Chairman, Goldman
Sachs International, said in an interview on 2.8.05. You are
not going to want to day-trade with your entire portfolio, but
if you want to see better returns, consider taking a small portion
and actively managing it. To ensure greater returns, find a
stock newsletter with a great reputation for picking stocks
and follow their advice. Don't blindly follow Jim Cramer or
Motley Fool or Louis Navallier. Check out the returns and find
the publication/person who best fits your own philosophy. NataliePace.com,
BuyBackLetter.com, IQTrends.com all have outstanding performance,
as measured by independent organizations, and each operates
under a different philosophy.
the Top Performing Asset in 2000. Just thought we'd repeat
that fact. Get liquid, and be generous with the percentage of
cash (money markets) you have in your 401K. Consider adding
more than your age to the percentage. (In bear markets, you
want to be more conservative.) Why? Liquidity allows you the
flexibility to buy when/if there is a market downturn in any
sector - stocks, bonds or real estate. That way, while others
panic that they can't pay their bills, you'll be patient and
wait for an affordable price. The buy low, sell high dream is
made possible with forethought - i.e. Getting liquid so that
you are in a position to buy low.
Estate. "Buying residential real estate right now is like
buying stocks in March of 2000." Richard Cripps, chief market
strategist, Leggs Mason Capital Market. Don't buy high, banking
on the future being as outstanding as the past. Chances are
that you are chasing gains that have already been made. Read
Steve Dietrich's article, "Buying
Real Estate in Today's Market," for tips on what to consider
if you're interested in buying real estate today.
the Hut. "Companies with the smallest market capitalizations
produce the highest returns. As companies get bigger, returns
go down until you get to the blue chips, which produce the lowest
returns of all." Paul Woods, President and CEO, Odyssey Advisors,
money managers. It's important to remember the other part of
the aphorism, however. Blue chips, like Jaba, are less vulnerable
than the hare. They are stabilizing forces. Make sure your blue
chips aren't weeds, however. In general, companies founded after
1980 are in a better position than those founded before, when
benefit-based pension plans were popular. Today, Microsoft and
Genentech have replaced AT&T and General Motors as stable,
blue chip companies. Read the article, "Skype Hype" in this
month's NataliePace.com ezine, to learn more about the problems with
on the Hare. "Many of you have retirement plans or 401Ks
that offer a choice of investments. In making these allocations,
if you focus on smaller companies and value, you're likely to
have to work fewer years and end up with a larger nest egg at
retirement." Paul Woods, President and CEO, Odyssey Advisors,
money managers. Do not put all your money in a small cap value
fund. Diversification is an important way to protect your portfolio.
Cashing in Options and/or Stock in the Company You Work For
Now. It isn't a profit until you cash it in. How many times
did you hear stock braggarts talking about how much money they'd
made on AOL in early 2000? AOL went from $90 down to $10 and
Time Warner (owns AOL) is still hovering at $18. Global Crossing
employees lost everything. Talk to your human resources person
about any terms or conditions that might prohibit you from cashing
in some of your company stock, and consider cashing in at least
a portion, as quickly as possible, before the ripple effect
of high oil and energy prices starts limiting the spending power
of consumers and thus the bottom line of corporations.
K Penalties. If you are worried about being penalized for
making changes to your portfolio, consider two things. 1) You
may be able to roll your 401K over to a brokerage without penalty,
especially if it is held in an old employer's account and/or
the current employer has recently made changes to the plan.
2) Is the penalty a small price to pay for ensuring that you
are adequately protected? Don't wait too long to reallocate
some of your position to a safe haven, especially if you have
almost all of your retirement in mutual funds and none in the
money markets. There have been a lot of losses incurred over
the past few years by people worried about paying taxes or penalties.
am I Emphasizing Defensive Strategies?
sizable gains in consumer spending of recent years have been accompanied
by a drop in the personal saving rate to an average of only 1
percent over 2004—a very low figure relative to the nearly 7 percent
rate averaged over the previous three decades." Alan Greenspan,
Chairman of the Federal Reserve Board. The Home Equity Line of
Credit (read here: consumer ATM machine) can't keep spitting out
Prices Aren't Going Down
next few years may be stressful ones for energy consumers, as
stretched and uncertain supplies of oil and other conventional
energy sources face the growing demands of a rapidly expanding
world economy," according to Ben S. Bernanke, the new chairman
of Bush's Council of Economic Advisers, in a speech
on 10.21.04. The experts have known this for over a year.
Might be Lying About Inflation
CPI as calculated may not be a conspiracy but it's definitely
a con job foisted on an unwitting public by government officials
who choose to look the other way or who convince themselves that
they are fostering some ... New Age Economy." Bill Gross, Chief
Investment Officer, PIMCO Bonds.
need Consumer Price Index numbers to tell you that you can't afford
gas any more or that your recent property tax bill nearly stopped
your heart. Have you been tempted to take a loan out on your 401K
to pay property taxes, or to remodel or to get to work? Are you
siphoning off living expenses from the Home Equity Line of Credit
that you had earmarked for buying an apartment building? How are
you making that higher tuition payment, or that higher medical
insurance premium or--and hopefully this doesn't apply to you--those
unexpected medical costs?
The fact is
that, even with the highest oil prices (inflation adjusted) in
history, no one seems willing to admit that inflation is running
hotter than Mt. Etna. How does this happen? Whether it is because
the reports don't include the most expensive items in your budget
(food, gas and housing) or because most of Wall Street is on vacation,
you can bet that the party cannot go on forever. It's almost guaranteed
that market professionals, if they were in the office, would have
pushed the sell-off price down significantly August 12th, when
oil prices hit $67/barrel. Trading volumes were weak, as they
typically are in summer, while Wall Street professionals sunned
in the Hamptons.
If those assumptions
sound too speculative for you, consider the similarities between
today's market and the market of 1979, when oil prices where hitting
record highs, and other global risks, like terrorism and nuclear
waste, were exploding across world headlines.
Chart of Ford Motor Company, Dow Jones and the S&P 500 in
Open Market Committee expects inflation to be flat or to decline
and for growth to be strong.
Market Drop. 3-Mile Island. Partial core meltdown occurred in
Middletown, Pennsylvania. This was big news and sparked a nuclear
fallout phobia in the U.S.
-1% Market Drop. OPEC significantly raises the price of crude
oil. High energy prices spark inflation. The fallout in the stock
market was shorted lived, however, and the markets continued to
advance over the summer.
Chairman Paul Volcker sworn in as head of the Federal Open Market
Committee. Markets continue to look strong.
The Chrysler Corporation asks the U.S. Government for $1 billion
dollars to avoid bankruptcy.
Markets drop -10-12%. Major monetary policy reform issued to allow
flexibility for more robust policies to counter inflation. This
special meeting of the Feds was scheduled in secret and on very
short notice. The next regularly scheduled meeting of the FOMC
was supposed to have taken place on October 16, 1979.
Markets drop -2%. Iranian militants seize U.S. embassy in Tehran,
ultimately holding staff hostage for 444 days.
The S&P 500 finishes the year with +10% gains (on the Santa
rally). The Dow Jones Industrial Average finishes out the year
After falling over 60% since October 1979 and staying there for
over two years, the stock of Ford Motor Company begins to heal.
So, what happens
when inflation soars, interest rates strangle the housing market
and bonds enter a bear market? Does the money run over to stocks?
Not traditionally. People are staggering to fend off their creditors.
Many have to cash out stock positions in order to stay afloat.
(Are you seeing this in any of your friends yet?) As James Tobin,
Nobel Laureate in Economics, noted in his Nobel Memorial lecture
on December 8, 1981, "Belief that inflationary periods will be
stagflationary because of counter-inflationary monetary policies
would lead households seeking hedges against unemployment and
lowered real wages to short-term dollar-denominated assets bearing
market interest rates… rather than to equities or long-term bonds."
inflation by raising interest rates and deflating the housing
run is a bitter pill to swallow. It always puts someone's dream
of becoming a millionaire to rest, at least temporarily. If you
want to make sure that your nest egg isn't the one in the infirmary,
take steps to protect and beautify your bottom line now.
as last December, three respected economists affiliated with the
Federal Reserve wrote a paper analyzing Chairman Volcker's strategies
for containing inflation, "attempting to draw lessons for the
present day from the October 1979 policy reform," specifically
because "it seems necessary to classify the essential characteristics
that made Chairman Volcker's FOMCs successful at fighting
inflation and setting the stage for Chairman Greenspan's FOMCs
to finish the job." The authors, David E. Lindsey, Athanasios
Orphanides and Robert H. Rasche (see below for their bios)
concluded that, "The plan while undoubtedly not perfect, turned
out to be pretty good… And, perhaps as important, it instilled
a focus on controlling inflation and inflationary expectations
as an enduring aspect of Federal Reserve monetary strategy." To
Reform of October 1979: How it Happened and Why",
by David E. Lindsey, Athanasios Orphanides and Robert H. Rasche,
click on the title.
With Projected Pension Benefit Obligations that Exceed Equity
Suisse First Boston, "the Magic of Pension Accounting,"
Tire & Rubber Co.
States Steel Corp.
20 of the
S&P 500 companies that are most deeply in the red on pension
Lindsey, before his retirement in 2003, was deputy director of
the Division of Monetary
Affairs at the Board of Governors of the Federal Reserve System.
is an adviser in the Division of Monetary Affairs at the Board
of Governors of
the Federal Reserve System, a research fellow of the Centre for
Economic Policy Research, and a fellow of the Center for Financial
Studies. Robert H. Rasche is senior vice president and director
of research at the Federal Reserve Bank of St. Louis.
Is the Pathway to World Peace, according to Jim Michaels, former
Editor of Forbes magazine. Q&A with Mr. Michaels.
Group Vice President-Editorial of Forbes Inc
"Trade is a path to peace. Japan & Germany in the aftermath
of World War II show that you can gain a lot more through trade
than you can through war. Trade has been the greatest antidote to
war since World War II." Jim Michaels
-- Concerns of Outsourcing and the amount of T-bills held by the
Chinese have many Americans concerned. What's your take on the
current state of affairs?
Jim -- First,
let's drop back and let me point out that all major wars were
countries trying to expand and gain control of resources and markets.
After WWII, systems were set up to encourage free trade. The result
was that Germany and Japan, who tried to win prosperity by arms
and had their heads handed to them, won prosperity by trading.
Neither country wants to go to war again.
think that should allay fears of a conflict between the U.S. and
Jim -- The
answer is the same as it was in the aftermath of World War II,
if we engage China in business and trade, there is no need for
conflict. We're much less likely to bomb each other because we'd
be bombing our own property. By achieving prosperity through trade,
there's no motivation to do it through war. Our common interests
are far greater than our antagonisms.
our common interests?
Jim -- The
Chinese benefit in jobs and huge exports. For the United States,
by manufacturing in China, American companies bring costs way
down and become more competitive in the world than others who
don't. Dell and Hewlett Packard are manufacturing in China and
Southeast Asia. American companies create huge numbers of jobs
here. We've thrown our lot together.
the biggest concern--that American jobs are being lost to the
Jim -- American
plants have closed, but far more jobs are created here by the
prosperity of the companies. And there are tremendous benefits
for the American consumer. Most garments are made abroad. American
consumers get goods at a far lower price than if there were manufactured
here. It does create tensions, but the benefits far outweigh the
irritations. It's hard to tell that to some poor man or woman
who loses a job.
said that the Treasury bill debt to China and its provinces is
at almost a trillion dollars.
Jim -- It's
close to that. It's a huge amount of money. However, buying our
Treasury bonds keeps interest rates down. It is a principle reason
for the housing boom. Interest rates are way below what there
were 15 years ago. If the Chinese had not been willing to fund
the U.S. housing market, no one would be able to afford their
concerns that the U.S. is heavily indebted to the Chinese, and
that makes us extremely vulnerable to their whims?
Jim -- As
John Dessauer said, "If we start excluding the Chinese, putting
obstacles to economic development, they are more likely to turn
to aggression to get what they need."
Trade is a
path to peace. Japan and Germany in the aftermath of World War
II show that you can gain a lot more through trade than you can
through war. Trade has been the greatest antidote to war since
World War II.
James W. Michaels
is Group Vice President-Editorial of Forbes Inc. Previously, he
had been Editor of Forbes magazine since July 1961, retiring
in January 1999. During his tenure as Editor of Forbes,
the magazine's circulation grew from 321,000 to 765,000. Mr. Michaels'
dispatches on Gandhi's assassination have been reprinted in Simon
& Schuster's A Treasury of Great Reporting (a compendium
of the "100 greatest news stories of all time"). Mr. Michaels
holds a B.A. in Economics (cum laude) from Harvard College (1943).
He is a graduate of Culver Military Academy.
Yin & Yang of the Yuan $ Decoupling.
Meri Anne Beck-Woods
the Yin-yang symbol or Taijitu (太極圖),
representing yang. It is a symbol that reflects the inescapably
of all things in nature,
a common theme in Taoism.
No quality is independent of its opposite, nor so pure that it
does not contain its opposite in a diminished form: these concepts
are depicted by the vague division between black and white, the
flowing boundary between the two, and the smaller circles
within the large regions. (Source Wikopedia.com)
On July 21,
2005, China unpegged the Yuan from the U.S. dollar, and while
the magnitude of change was small it was a symbolic victory for
U.S. and European critics of China's unfair trade advantage based
upon its undervalued currency...
2004 election year candidate Kerry and incumbent Bush both threatened
controls on trade to increase the price of Chinese goods. Treasury
Secretary John W. Snow repeatedly called for an upward revaluation
of the Chinese Yuan relative to the dollar. The US global trade
deficit (goods and services) widened from $375 billion in 2000
to an estimated $575 billion in 2004 (source: U.S. Bureau of Economic
of being valued solely against the dollar, the Chinese Central
Bank's Governor Xhou Xiaochuan stated that the Yuan would be valued
against a basket of currencies, depending on the amount of foreign
trade conducted, with the specific countries represented in the
basket (Reuters 8/18/05). This implies that China's biggest trading
partners, currently the U.S., Europe, Japan and South Korea, would
have currencies making up the basket for valuation purposes. According
to Deutsch Bank in Singapore, the dollar would have an estimated
30 per cent weighting in the basket, the yen and euro 20 percent
each, and the South Korean won 10 per cent.
States, unfortunately, for many years now, has borrowed from Yin
to pay Yang with an increasing federal deficit, global trade imbalance,
and dependency on foreign governments to invest in U.S. dollar
denominated notes and bonds... Think of China as a vacuum cleaner
with increasing power to collect natural resources, such as oil
and other industrial growth building blocks, at an ever increasing
speed and lower cost than its trading partners... This is largely
due to China's impressive economic growth as reflected in the
Bloomberg LP Economic Forecast Summary shown below:
GDP (% change)
Rate Rmb:US$ (avg)
ramifications for both the U.S. & China are both positive
and negative. For U.S. consumers and American companies the price
of Chinese goods will increase and lessen imports. While this
will help the trade deficit, there could be a negative impact
resulting from higher prices and more concern about inflation.
For China, existing debt to other nations is reduced and the cost
of all those natural resource materials just got cheaper. Many
economists, including Ben S. Bernanke, the new chairman of Bush's
Council of Economic Advisers, cite the Chinese economic growth
machine as a primary reason for increasing prices in crude oil,
copper, and steel.
Some of the
darker results of revaluation for China would be a slow down in
growth based upon more expensive exports and a possible increase
in unemployment as other emerging market countries like Indonesia
and India have a stronger competitive position, reducing the number
of manufacturing jobs. American companies, like Wal-Mart, will
see an immediate increase in the cost of goods sold, impacting
profitability and earnings growth.
upward measured revaluation is geared towards lessening the impact
of more speculative investment activity by leading hedge funds
around the world, which could cause major movement in the value
of the Yuan. Also the large percentage of U.S. debt owned by China
is now lower in value, and the future investment choice for China
might not be U.S. Treasury notes and bonds but euro currency debt
instruments. According to the U.S. Treasury Department, China
is the second largest holder of US Treasury debt, approximately
$291 billion, second only to Japan. A sell off of U.S. dollar
holdings could negatively impact the bond market as many countries
such as Russia , India, and South Africa are suspected of diversifying
their foreign exchange reserves according to the latest Bank of
International settlements report.
industries have suffered from the absence of enforcement of intellectual
property rights particularly the movie, music, software, and industrial
segments of the economy. The so called "China Factor" has been
blamed for current record high oil prices by the US Energy Department
saying the sharp increase of China's oil imports constitutes one
of the major reasons for the price hike in the world oil market..
Estimates by the Canadian Energy Institute (CEI) state that in
2001 and 2002 the 10 countries of OPEC (Iraq not included) had
a spare capacity of 4-5.5 million barrels per day, but that figure
dropped to 2.9 million barrels per day in 2003 and 2004 saw an
even larger drop to 1.9 million barrels.
To oil producing
countries, the Yuan revaluation and the revaluation of other Asian
currencies would mean the US dollar's devaluation. Their revenues
from oil exports will shrink as a result and they will have to
sell more oil to achieve the same revenue levels. At the same
time alternative fuel sources are becoming more reasonable relative
to the current price of oil at $63.27 dollars per barrel. According
to Bloomberg LP from 2/18/05 to 8/18/05 the average price of a
barrel of oil has been $56.705, with a high of $66.86 on 8/12/05
and a low of $48.43 on 2/18/05.
have been trying to buy US oil companies without much success
and well known brands like Maytag. Intervention by the U.S. Government
to prevent this type of acquisition does not augur well for continued
free trade. One of the segments of both the U.S. and Chinese economy
most severely affected would be the Textile and clothing industry.
The textile industry in the US pays average hourly wages (in dollars)
of $10.08 versus $0.88 in China according the US annual Survey
of Manufacturers and China Statistical Yearbook.
Yin and Yang
just like the US and China can be seen as a process of transformation,
which describes the changes between the phases of a cycle. What
to do? The Chinese symbol for Chaos is a combination of the symbol
for risk and opportunity. The bottom line impact on a lower valued
dollar and higher valued Yuan is negative for the bond market
and mixed for the stock market due to the combination of potentially
higher interest rates and a better competitive advantage in exports
for US companies. Alternative fuels, heavy manufacturing equipment,
and technology will see increasing demand. China will have to
be more productive and less dependent upon exports to continue
the high level of growth achieved in the past.
Last but not
least will there be a stock market bubble in Chinese companies
comparable to the NASDAQ meltdown in recent years with Chinese
stocks like BIDU (Baidu.com) a company that operates an Internet
search engine and offers algorithmic search, enterprise search,
pay for performance and news, MP3, and image searches? After an
IPO on 8/4/05 ADR's (American Depositary Receipts)offered at $27
per share the stock increased five-fold to $153.98 on 8/8/05 ,
closing that day at $122.54 and is currently trading at $82.48
on 8/18/05. No earnings, no dividends, a pre-tax margin of only
11.26% but a gross margin according to Bloomberg of over 70%.
So fasten your seatbelts, it's going to be a bumpy ride.
Beck-Woods is Chairman and CFO of Odyssey Advisors LLC, an independent
investment advisory firm specializing in equity and fixed income
management for individuals, entrepreneurs, families, endowments,
and non-profit institutions. She can be contacted at email@example.com.
has been obtained from sources believed to be reliable however
Odyssey Advisors LLC does not warrant its completeness or accuracy.
Opinions constitute our judgment as of the date of this material
and are subject to change without notice. This material is not
intended as an offer or solicitation for the purchase or sale
of any financial instrument. Securities, financial instruments
or strategies mentioned herein may not be suitable for all investors.
Estate Party Policy:
Natalie Pace, founder NataliePace.com
to Crash the Real Estate Party? 5 Tips to Make Sure You Drive
pass a newspaper, attend an event, talk to your neighbor or grab
coffee at the water cooler without hearing of someone wanting
to buy real estate. Or how much someone has made in real estate.
At the same time, I haven't heard the word bubble tossed around
by pundits so much since 2000. Speaking on CNBC, Paul McCulley,
PIMCO's portfolio manager, said plainly, ""Mr. Greenspan recognizes
that he has a bubble in the property market... The level of interest
rates is what he's after now. He wants the 10-year yield
to go up."
So, what do
you believe and how can you pass up the opportunity to put no
money down, borrow at 40-year lows and have enough money left
over to pay off your credit cards? Like your parents warned you
when you were a teenager, "Just because you CAN do it doesn't
mean that you should do it." Just because lending policies are
so loose these days that all you need is a beating heart, doesn't
mean that you should be signing on the bottom line. If you can't
afford to pay more tomorrow, and are hoping that real estate will
continue to rise so that you can sell for a profit in a few years,
you might end up losing something you never really could afford.
BANK ON your real estate costing you more in the coming year—through
higher mortgage payments and higher property tax bills-- especially
if you don't have a fixed rate loan.
The tips below
are designed to help you make a decision that will pay off over
the long run, regardless of which direction real estate goes in.
that real estate does have significant regional influences. The
unfortunate victims in New Orleans and the surrounding areas are
painfully aware of that fact this week. Unlike stocks, which can
lose their total value (in the event of bankruptcy) but no more,
with real estate you could be liable to repay a loan, even if
you no longer have a home.
Real Estate Party Tips
Don't Drink the Punch. It'll only give you a hangover.
Everyone else is going to swarm around the punch because it looks
beautiful, tastes sweet and frankly because everyone is swarming
around the punch bowl. In actuality, the punch is watered down
liquor designed to serve a lot of people, not a quality drink
designed to delight the elite.
When you see
a swarm of people, you want to be the one serving the punch (and
drinking the pure, better label champagne on the side). If you're
selling the punch, then you are now a successful businessperson.
If you are buying the punch, outbidding or outmaneuvering the
person next to you to be first in line, you are still buying watered
down alcohol, and likely paying more than you would for the premium
brand without the frozen juice added.
this have to do with real estate? You're hearing that interest
rates are going up, that land values are very high and that inflation
may be increasing. After the 1989 Japanese housing bubble, which
was just as feverish as real estate in the U.S. is today, housing
prices tanked for 13 straight years. The Asian Stock Market Crash
of 1997 brought about a crash in real estate, largely because
the fastest growing economies (like Thailand) were borrowing foreign
money and guaranteeing that money with real estate assets that
were overbuilt. Not so different from the US today, when so much
of our T-bills are held by the Chinese, personal savings are at
an all-time low (1%) and banks are lending above the value of
the property to people with less than great credit histories.
the hype. If you think you have to buy real estate right now,
be sober about it. Buy something that you can afford. Opt for
a down payment that will allow you to lock in your fixed rate.
Make sure that owning the property makes sense for the long term,
seven or more years.
a Driver Before You Start Drinking. Don't expect the host
to get you home safely. S/he's going to be too busy caring for
all of the guests at the party.
Who is your
best designated driver in today's economy? A talented, experienced
financial advisor with no DUIs on her record. How do you find
one or make sure that the one you have is sober and responsible?
and Lovers: It Pays To Pick a Good One" for tips, and check
with the NASD to see if s/he has had any complaints in the past.
on the real estate or mortgage broker to be the most sober professional
in the room. The real estate party has been going on for years,
and they have to be a little high by now. Additionally, broker
means salesperson, and these professionals are paid on commission.
They tend to you and then have to move on to serve the other guests
at the party.
the Kids. The last thing you need at your party is a bunch
of inebriated teenagers trying to drown one another in the pool
and vomiting on the tapestry. I cannot tell you how many horror
stories I've heard of someone turning over her portfolio to a
golf buddy, or a nephew or a spouse who recently got his/her broker
license or a degree in economics. The reasoning, I guess, is to
be nice to family, show support for your spouse and/or get closer
to your golf buddy. Don't use your retirement plan to be nice.
That goes completely out the window the minute they lose your
first dollar any way.
Go with experience
instead. As your nest egg grows, you can begin moving up the money
food chain. If you've got less than $100,000, you might be stuck
talking with your human resources person and getting information
on your own (through NataliePace.com, Forbes, Fortune, Money,
Investor's Business Daily, etc.). If you have more than $100,000
in your nest egg, interview money managers, who will actively
manage your portfolio for you. Odyssey
Quality Trends and David
Fried of the Buyback Letter are all money managers.
inviting a teenager to the gala, invite a celebrity and everyone
has a great time. (See below for how to get a celebrity to attend
to your finances.)
Celebrities! Celebrity sightings are fun for everyone and
make for great party conversation. So, there's the fun of it.
On the other hand, however, many celebrities are really good at
their craft. I've seen Jennifer Aniston and Michele Pfeiffer without
makeup on, and, well, they are simply a whole lot more beautiful
than most of us. Henry Kissinger is a lot smarter than most of
us. Robert De Niro and Meryl Streep are two of the best actors
of their generation.
there are celebrities in the financial world, and you can invite
them to your party for less than you might think. NataliePace.com's contributing
writers are at the top of their game. (Kelley Wright has the #1
risk-adjusted returns over the last 5 years. Steve Dietrich lectures
at the prestigious UCLA Anderson School.) For the price of a tank
of gas, you can travel all year on great information at NataliePace.com,
and we are not the only publication out there. Find the one that
suits your style best. Try NataliePace.com, Forbes, Money, MoneyCentral.msn,
IQTrends.com, BuybackLetter.com, Investor's Business Daily… Get
a celebrity to advise you on the economy and where to put your
money and watch what a great time you have!
Beauties Than Beasts. This might not have any correlation
at all, but if you give me a moment, I think we'll find one. Simply,
it's better to have more beautiful women in the room. Why? One
hot guy can entertain a trio of beauties, whereas if all the guys
are crowded around one girl you're asking for a shootout.
lesson here is diversification. Are you investing everything in
real estate? Does your nest egg have only mutual funds in it?
That's never a good idea. Sure you can make a case for an all
girl pajama party or an all guy bachelor party, but those are
off-the record events that have the potential of getting too wild
and blowing up in your face. Let's just pretend they never happened.
There are a lot of beasts out there in the economy today - terrorism,
rising interest rates, rising inflation, high land values, high
stock markets, high P/Es, high debt, rising tension, rising pension
plans, rising oil prices. The only way to make this party any
fun is to start adding the beauty now.
How do you
add beauty to your portfolio? Index funds are more beautiful than
mutual funds. Money markets are more beautiful than bonds. Fixed
rates are more beautiful than variable rates. Cash is more beautiful
than credit. Get liquid NOW before you need to, and don't take
equity out of your home and stick it blindly in the stock or bond
Quality Trends link:
it Marketing or Selling?
You need to make sales that create income,
or you won't be in business for long. Here's How.
working from home, running your own small business, it is vital
to understand the difference between marketing and selling. I
found this out when I hired a woman to help me make sales in my
workshop business. She was bright, fun, and energetic and I was
very optimistic about her being able to enroll additional people
for my Financial Stress Reduction Workshops. But I soon found
out that although she was happily marketing me wherever she went,
she was not making any sales. She was attending networking meetings
and telling everyone what a great workshop I had, encouraging
people to call me. She thought up great ideas for promotional
giveaways, advertising displays, attendance at conventions. But
those things cost me money. They didn't make me money.
After a couple
of months, I asked her how many prospects she had that might enroll.
She said she had talked to lots of people. "How many people have
said, ‘Yes, I'm coming on this date,' and paid the money?" I asked.
"Well, no one has done that," she replied. Then I asked her to
make out a list of how many follow-up calls she was going to make
to all those prospects and ask them to enroll, and how many she
expected to say yes. She dug her heels in at that point, and said,
"Wait. That's not what I want to do. I don't want to have a quota!"
I explained that in order to pay her, she had to make me some
money by closing some sales. After some discussion, we agreed
that we saw the nature of the job differently, and agreed to part
experience, I made a checklist to make sure I was always conscious
of what was "Marketing" and what was "Selling". Whether you are
doing the sales yourself, or have someone assisting you to do
it, you need to make sales that create income, or you won't be
in business for long. Here is my checklist:
description of product or service
benefits to a particular buyer
close, no money paid
closed, money paid
check, credit card
thank you/request referrals
you're ready" statement
will you be ready?" question
gotten: interview prospect
can I talk to today?"
wants to buy today?"
of features: when, what, where, etc.
benefits provided for this buyer
Tuesday, Wednesday, Thursday, Friday, Saturday or Sunday
think that attending networking meetings, putting an ad in a newspaper
or directory, or hanging out a business sign is enough, that you
can then just sit back and wait for people to call you. But even
interested parties need to be motivated to take action. Call them
and ask a lot of questions—find out what they need and if you
can help them with that. When you show them that your product
or service can help them alleviate their pain or give them the
pleasure they're looking for, they will be happy to hire you,
and all your clients will praise you and pay you.
Lincoln said, "Things may come to those who wait, but only the
things left by those who hustle."
Campbell is the author of "The Wealthy Spirit: Daily Affirmations
for Financial Stress Reduction". She created and teaches
the Financial Stress Reduction® Workshops on which her book
is based in the Los Angeles area and gives programs throughout
the country. Her free e-newsletter is available at www.thewealthyspirit.com.
Permission granted for use on NataliePace.com.
Investment Outlook: Investing Gimmicks and the Price of Oil.
Kelley Wright, Managing Editor, Investment Quality Trends
Washington, D.C. The D.C. Money Show. August 12, 2005
Wright, Managing Editor,
Investment Quality Trends Newsletterl
drive into D. C. from Reagan Airport seemed almost familiar because
I've seen so many of the landmarks in the movies and news stories
that were filmed here. Nonetheless, my first glimpse of the Washington
Monument and the dome of the Capitol up close did elicit an emotional
response, which quite frankly surprised me considering how much
I've railed against some of our government institutions. I realized
then that the institutions are not the country or its people;
we the people are the country and as for this person, I'm proud
to be an American.
Wardman Park Marriott is in a picturesque setting, surrounded
by beautiful trees and traditional architecture; very east coast.
When you walk inside your feet sink into the plush, forest green
carpet and you immediately notice the cherry furniture and hard
wood wainscot; very tony and upscale, nothing like the glare and
glitz of Las Vegas (where the last Money Show was held). "Wow,"
I thought to myself, "We aren't in Kansas anymore, Toto."
the mezzanine floor to the escalator down to the convention area
I was wondering if the layout would be different from the Las
Vegas Money Show, and then I saw a familiar display from an investor
"services" company that I know had to cost about $25,000. This
display has the black and white pictures of about a half-dozen
"gurus," that were professionally posed and used stage lighting,
remember a conversation I had with one of the principals of this
company about the possibility of IQ Trends becoming one of the
"partners" of the service. At the end of the day I decided we
weren't a good fit because our Service is the star and it isn't
about me as a personality. This company felt different because
for them it's all about the personalities, which would explain
why none of those newsletters show up as top performers, except
for one who does well during bull rallies.
the right of the convention area doors was the display from one
of the daily financial newspapers with all their familiar advertising
and handouts, encouraging attendees to come to their free seminar
on how to profit using their system. This is where Show attendees
get the big white bags, in which they put all the freebies they
get from the various exhibitors booths.
you cross the last few feet of floor to the main entrance of the
exhibit floor and then it hits you.
back my friends to the show that never ends. We're so glad you
could attend come inside, come inside." - Emerson,
Lake and Palmer
one sees is row after row of exhibitors hawking everything from
astrological stock picking systems to opportunities to franchise
high-tech water softeners. Like ants in a maze the attendees scurry
up and down the aisles picking up their info sheets, listening
to sales pitches and grabbing Hershey kisses from the candy bowls.
yes, the greatest collections of investment ideas in the country
in one place. Oi vay!
(IQ Trends) are never going to win any beauty contest. Our criteria
are so strict, our standards are so high, our universe is small
and our approach requires patience and discipline. Heaven help
us, how boring.
leads us to the question of what do you want from investing? Do
you want to be entertained, go on a rollercoaster ride or make
money? Some folks actually do want to lose money because they
have some psychological issues they are trying to work out from
their childhood and losing money in the markets helps facilitate
the end of the day everybody gets what they want from the markets.
For us we just want to protect our principal, earn a return on
investment and grow our capital over time. Nothing flashy, very
blue collar; just American, thank you.
I guess oil prices do matter after all. $67 per barrel is nothing
to sneeze at, but I don't think that's the high. No, the high
has yet to be hit and it will be a while, probably months and
maybe even years.
sure, there will be sell offs and the price will dip back into
the low $50's and the pundits will claim it all over and done
with, but don't buy into it. I know. I wish the Select Blue Chips
that are benefiting from all this were in the buying area but
they aren't, so trust the system.
know subscribers are frustrated with so few new opportunities.
Trust me; you don't know frustration until you have to find something
new and interesting to write about every fifteen days!
thought we were going to get a break in the logjam with interest
rates moving up and it looked like the utilities and REIT's were
starting to roll over. For sure there were some minor corrections
but then the bonds started to rally again. Remember I called for
a move to about 4.35% on the 10 year Treasury? Well it went all
the way to 4.40% just to show who is in charge and then started
to decline. A check of yields shows the 10-year closed at 4.23%.
thought yields would languish up there a little longer and maybe
they will go back. If so those yields might start to compete with
the after tax return on some dividends and start looking pretty
good. Then some folks might start cutting losses with some positions
and we'll start to see some changes in the categories.
thing is for sure we can't go indefinitely with the market so
overvalued that there are only 16 stocks in the Undervalued category.
Something has to break; either price has to come down or dividends
will have to rise dramatically, but either way some value has
to make its way into the market.
have been working with an old associate, Jim Kropp, who is an
expert on REIT's. As a matter of fact he runs a couple of them
for the folks at Public Storage. Jim has forgotten more about
REIT's than most have collectively known and I have asked Jim
to work with us on our system to see if we can't modify it a bit
to adjust for the idiosyncrasies of REIT's that differ from the
industrials we typically work with. I like REIT's and believe
they belong in IQ Trends, they just need to be valued differently
and I want to do it correctly. If all goes well look for a new
feature that is strictly on REIT's and reports on them in their
Quality Trends (at IQTrends.com) is rated the #1 Top Performing
Newsletter for five-year risk-adjusted returns by Hulbert's Financial
Digest. That's no small feat, considering the Wilshire 5000
has posted negative annualized returns of -1.4% for the past five
years, while Investment Quality Trends has booked an impressive,
annualized 16.6% gain. If you are interested in accessing Mr.
Wright's newsletter and to post those kinds of gains yourself,
go to www.IQTrends.com.
is the Value?
Kelley Wright, Managing Editor, Investment Quality Trends
this issue we submit the third and final segment of our feature
on broad market segments. For those who missed the First-August
issue there are nine broad industry sectors that contain thirty-one
industry categories that further consist of two hundred fifteen
Metals and Mining
Food and Beverage
Aerospace and Defense
Materials and Construction
the previous issue we found that of the approximate two thousand
five hundred forty three stocks in the Financial, Healthcare and
Industrial Goods sectors only seven stocks, Citigroup (NYSE: C),
Old National Bancorp (NYSE: ONB), Washington Mutual (NYSE: WM),
Arthur J. Gallagher & Co. (NYSE: AJG), American International
Group (NYSE: AIG), Merck (NYSE: MRK) and Masco Corp. (NYSE: MAS)
are at their historic area of Undervalue.
this issue we explore the Services, Technology and Utilities sectors.
The first industry category in the Services sector is Diversified
Services, which contains ten industry groups. Of the three
hundred six stocks that fall within these groups none are undervalued.
The next industry category is Leisure, which contains seven
industry groups. In these groups are one hundred thirty eight
stocks of which two are undervalued; Bob Evans Farms (NASDAQ:
BOBE) and Mc Donalds (NYSE: MCD). The next industry category is
Media under which are ten industry groups. In these groups are
one hundred forty four stocks of which none are undervalued. The
next industry category is Retail. Within Retail there are ten
industry groups. In these ten groups there are one hundred forty
seven stocks of which three are undervalued; Claire's Stores (CLE),
Wal-Mart (WMT), and Home Depot (HD). The next industry category
is Specialty Retail in which there are six industry groups. Within
these groups are seventy-two stocks of which none are undervalued.
Next is Transportation, which consists of seven industry groups
that hold one hundred thirty three stocks, none of which are undervalued.
The final industry category in this sector is Wholesale, which
consists of ten industry groups that hold one hundred fifty two
stocks, none of which are undervalued.
next sector is Technology which has five industry categories;
Computer Hardware, Computer Software, Electronics, Internet and
Telecommunications. Within the Computer Hardware category there
are six industry groups. Within these groups are one hundred six
stocks, of which none are undervalued. Computer Software has eight
industry groups that contain sixty-six stocks. Of these stocks
none are undervalued. Next is Electronics with eight industry
groups comprised of three hundred fifty two stocks, none of which
is undervalued. As an aside this area is the dot-com graveyard.
Next we have the Internet, which consists of three industry groups:
Internet Information Providers, Internet Service Providers and
Internet Software and Services. From these three groups come one
hundred eighty one stocks, none of which is undervalued. The last
industry category in Technology is Telecommunications, which holds
seven industry groups and two hundred fifty eight stocks, none
of which are undervalued.
final sector in this feature is the Utilities sector which consists
of one industry category: Utilities, and five industry groups:
Diversified, Electric, Foreign, Gas and Water Utilities. Within
these five groups are one hundred forty one stocks of which none
are currently undervalued. There are two stocks in Rising Trends,
Atmos Energy (ATO) and Pinnacle West (PNW) that have relatively
low downside risks, however, I suspect those yields will probably
move closer to undervalue before too long.
summarize the three sectors reviewed today we have looked at two
thousand, one hundred ninety six stocks of which five are undervalued;
BOBE, MCD, CLE, WMT and HD.
conclusion to this feature we have reviewed all nine broad sectors,
their thirty-one industry categories and their two hundred fifteen
industry groups, for a total of five thousand five hundred ninety
six stocks. Including the five referenced above and the seven
from the Mid-August: C, ONB, WM, AJG, AIG MRK and MAS, plus the
three from the First-August: SIAL, SCL and SUP are at their historic
area of undervalue.
there you have it. This was quite a research project, but very
much worth the effort. Now that we have this broad sector shell
built, well we have a little something in mind. Look for details
in the September issues of IQTrends.com.
Quality Trends (at IQTrends.com) is rated the #1 Top Performing
Newsletter for five-year risk-adjusted returns by Hulbert's Financial
Digest. That's no small feat, considering the Wilshire 5000
has posted negative annualized returns of -1.4% for the past five
years, while Investment Quality Trends has booked an impressive,
annualized 16.6% gain. If you are interested in accessing Mr.
Wright's newsletter and to post those kinds of gains yourself,
go to www.IQTrends.com.
Investment Club: An Appetizing Venture
Nancy Noel Marra (excerpt from Nancy's novel)
I mean really…
do you know anyone who wouldn't appreciate having a little extra
dough? I know I don't! And since planting a money tree is still
as elusive as ever, what other ways does that leave to make that
extra dough? Holding down two jobs? Gambling? Selling one of the
kids? No wonder people play the stock market… it seems like a
pretty sane alternative for adding to the coffers. That's exactly
the route a group of my friends and I decided to go in the late
1990's. We decided to throw our hats into the stock market ring.
None of us was really too nervous about taking the plunge: we
were ready to make money, we all had a little extra cash in our
monthly budgets to play with, and with the way the market had
been going, how smart would a person have to be to turn a profit?
Perhaps some of you found yourselves in the same situation?
event that made the seven of us original members ‘piddle or get
off the pot' was when we finished reading The Beardstown Ladies
as part of our Book Club. It was during our discussion of that
book that we were filled with a sense of urgency, a need to 'strike
while the iron was hot'. And that is how our Book Club evolved
into our Investment Club. Fortune was undoubtedly scheduled to
make its appearance in our futures!
that seven of us had been in Book Club together. Actually, our
Book Club had eight members. We had all been on a city league
volleyball team for years, playing a game a week from September
through the tournament in December. Please don't get the idea
that we're a group of athletes because that would be far from
the truth! We were the kind of team that could only be assured
of moving up the league's ranks if the opposing team was a ‘no
show'! But since we had been getting together every fall for years
we had gotten to know each other very well and truly enjoyed each
other's company. It was always kind of sad to say 'goodbye' at
the end of the season. It became a tradition with our group to
cushion the blow by having our very own annual ‘sports banquet'.
We'd schedule it in December after the tournament so that we could
reminisce about the season AND include a Christmas gift exchange.
to understand why we were all so interested when it was suggested
that our volleyball team redefine itself as a book club. Our weekly
games would transition into once-a-month book discussions, and
our annual banquet would multiply into monthly dessert sessions.
Our Book Club
was a wonderful endeavor! I think membership in the Club gave
us all an aura of being very cerebral. It just felt so good to
order our copies of the next selection from the local bookstore!
It was also rather impressive (maybe just in our own heads) when
describing to 'outsiders' about our latest selection! Besides
allowing us the opportunity to feel smart, book club membership
afforded us the chance to spread our Martha Stewart wings! We
all took turns with acting as hostess for the discussions and
also with making the desserts, so when it was our turn to do either
of these chores, our houses would finally get that something we'd
been meaning to do for months and the dessert recipe we'd choose
to contribute would be one that required much more time in the
kitchen than we would usually spend. But besides making us feel
intelligent and artsy/craftsy, Club membership made us realize
how fortunate the eight of us were to have true-blue friends.
Our Club continued
for several lively book discussions as well as through many twists
and turns of our personal lives. It would probably still be in
existence right now if it weren't for The Beardstown Ladies.
I swear that once we read that book we were never the same! We
wanted to get into the stock market! But being busy women, we
knew there would be no way to keep our Book Club going plus start
our own Investment Club too! So goodbye good reads, hello extra
So, as I said,
our Book Club had originally had eight members, but our Investment
Club was only starting out with seven. Our dear friend, Julie,
had been on our volleyball team and in our Book Club but had just
recently moved from our hometown of Boise, Idaho to Nashville,
Tennessee so she could be supportive of her husband's career aspirations.
It seems that her Dennis was bound and determined to make it to
the big time as a songwriter. Now, just as Julie was striving
to be supportive of her husband, the rest of us were trying real
hard to be supportive of Julie. In actuality, we would have liked
to advise our friend to 'cut bait'. As far as we could see, Dennis's
move to Nashville would have been a perfect time to let the marriage
move on as well - right into divorce court! None of us were members
of the ‘Dennis Fan Club' that's for sure! All we'd ever witnessed
was his lying, scheming, and pot smoking, although Julie was always
quick to tell us, "Oh, you just don't know Dennis! He has so many
wonderful qualities!" Well, he certainly was good at keeping them
hidden from the rest of the world!
continues to get back to Boise every once in a while and we all
get together whenever she does. Her latest report is that Dennis
is optimistic that it won't be much longer now before one of 'country
music's best' discovers his talent and records one of his songs.
Julie doesn't come right out and say it, but it's fairly easy
to ascertain that Dennis is still smoking pot (even though he
promised Julie he had quit) and that he continues to 'manipulate
the truth'. Anyway, although seven would have worked out just
fine as far as forming our Investment Club goes (and, looking
back now, perhaps that's the way we should have gone), we all
thought it would be better to invite a few more women to join
us (extra revenue and additional insight you know). So we all
put out some feelers: at work, at meetings, at the hairdressers.
We ended up arousing the interest of three more women: Rita, a
teacher, Paige, a woman who works for a law office, and Emily,
our 'Founders' Meeting' for the last Thursday of the month. Pam
arranged for her sister-in-law, Marilyn, to act as our stockbroker.
Marilyn's expertise would be a huge benefit to us: she would help
ensure that we organized our club right, she'd set up an account
for us with her firm, and would serve as our counsel on an 'as
needed' basis. Marilyn was nice enough to offer her firm's conference
room for our founders' meeting. Since we had scheduled for after
working hours, we would have the place to ourselves and could
spend as much time there as we wanted (plus, there's a bar across
the street, making it real convenient for us to 'seal the deal'
with a celebratory toast)!
Pam and Marilyn
greeted us as we entered the building that evening. We felt a
bit intimidated at first. This was the first time any of us had
ever even set foot inside a stock brokerage! I must say we shook
that feeling fairly quickly, though, as we nestled into our leather
swivel chairs and bellied up round the cherry wood conference
table! Talk about feeling like bigwigs! Since none of us really
knew proper protocol for this get-together, we let Marilyn take
the reins. She began by discussing the National Association of
Investors Corporation, but we were ahead of her there. We had
already known about the NAIC thanks to our perusal of The Beardstown
Ladies. So she moved onto dues. The discussion went back and
forth for quite a while; some women thought $25 a month was a
sufficient amount while others wanted to opt for $50.
ultimate goal is to make money, it only makes sense to buy as
many stocks as we can, so we'll need a big pool of money," Anna
our ultimate goal was to learn about the stock market and to spend
some time together," Ruth countered.
"And as far
as my situation goes, with Vince gone now and Whitney at college,
I don't have a real good handle on my budget as of yet," said
In the end,
we decided to make the amount $50 with the understanding that
it was not set in cement by any means. We could change the amount
at any time. After all, this was just us, not some giant corporation
or anything. We also decided that the ten of us would start the
fund rolling by investing $200 this month. Wow! Just like that,
we had $2000! If, in the future, we wanted to invite more members,
they would have to also contribute this initial $200 as well as
purchase a percentage of our portfolio.
determining who would be interested in serving as president, vice-president,
secretary, and treasurer. Paige immediately spoke up and said
that she'd like to be president. She'd be happy to act as our
liaison with Marilyn and wouldn't mind researching stocks, reviewing
articles, making recommendations, etc. And with no further adieu,
she was voted into office. Maureen pointed out that because Sheri
worked at the credit union, she would be a great choice for treasurer.
Thankfully, Sheri agreed with that observation and so that position
was filled. No one wanted to volunteer to be vice-president though
because that would mean that eventually that person would evolve
into president - and no one wanted to be president! We had all
been so surprised and so relieved when Paige offered to take that
Maybe if the ten of us agreed that the officers' terms would be
for two years, I would feel all right with being vice president,"
Anna said. "Two years would give me enough time to get comfortable
with the idea, plus two years would give all of us time to learn
so that the role of the president will lessen. I don't have a
bunch of extra time with my job."
If it was
two-year terms that would get Anna to serve as vice president,
then two-year terms were just fine with us!
I do have my trusty little laptop. I could easily take our minutes,"
So two hours
after beginning, our founders' meeting was adjourned and it was
finally time to go across the street for a toast!
to diamonds, European vacations, fast cars and friendship," I
proposed as I raised my glass of champagne. "Here, here," we all
said as we clinked our glasses and smiled at each other. "Wow!
We did it! We're actually all in business together!" Cathy said."You're
right! Now onto the important stuff… who's hostessing the next
meeting and who's going to bring the food?" asked Sheri. And with
that, our Investment Club was off and running!
Marra is the author of The Investment Club: An Appetizing Venture
. This novel/cookbook introduces the reader to ten women who want
to learn more about the stock market and begin investing (and
making) money! The storyline allows the reader an inside scoop
into each of the characters' lives. The book chronicles the stocks
they purchased and provides the recipes they use for the appetizers
they served at their Investment Club meetings. Friendship... life's
best investment! To order your copy, contact Nancy at 406.542.7742,
or by email: firstname.lastname@example.org.
11 Common Investing Mistakes.
on Analyst Recommendations. Researchers at the University
of California and Stanford found that, in the year 2000, the
most highly rated stocks had a -31% return. Those least favored
soared an annualized 49%.
Buying. Common stock shareholders are commonly wiped out
during bankruptcy because they are last on the priority list
with claims against the company's assets. Global Crossing shareholders
and employees had their assets completely wiped out after the
bankruptcy filing in January 2002, as did Enron, U.S. Airways
& World Com shareholders.
Fat. It's very tempting to buy real estate and stocks AFTER
they have fattened up, and shareholders have earned seven thousand
times their investment, but that is called CHASING MONEY. There
were people, lots of them, who bought AOL Time Warner and Priceline
at peak share prices in 2000, thinking that heavenly heights
could last forever. Chasing money in real estate, bonds and
other investments is just as risky. The mantra is buy low; sell
high. Too bad losing weight isn't as easy as losing money.
Tips. Pump and Dump schemes abound on the bulletin boards,
where shareholders (and scam artists) can ANONYMOUSLY talk up
stocks for their own gain. Hot tips are just one piece of the
mosaic. The more tiles you turn over, the more complete picture
you'll have of the company, property and/or bond you wish to
Stocks. Penny stocks that are trading off the boards (not
on NASDAQ, NYSE or the American Stock Exchange) do not meet
the standards of those exchanges and are thus inherently much
higher risk. You need to do 100X the research before investing.
These stocks are also far more vulnerable to takeovers, short
squeezes and fraud. Be very, very careful.
Headlines are written to catch your eye. If you don't read
the fine print, you are missing the most important information.
Additionally, most articles are reporting on the PAST, things
that have already happened. Past results are no indicator of
future results. It's like driving while watching your rearview
mirror instead of the road ahead. Finally, any one detail, even
today's headline news, is just one piece of a much larger mosaic.
The company might be great and just experiencing a temporary
hiccup. Don't be too hasty to buy or sell on any one tidbit
Releases. Press releases are written by professional writers
who are employed by the company that they are writing about.
Additionally, press releases are not held to the same standards
as the official corporate filings that public companies must
make with the SEC. Seek out a more complete picture before trusting
the press release. See what reputable news sources - like the
Wall Street Journal, New York Times, Washington Post, etc. -
have to say as well…
too heavily upon the advice of your broker. Brokers are
commission-based salesmen. For tips on how to find a great partner,
read the "Brokers and Lovers: It Pays to Find a Good One" article
in NataliePace.com's archived volume 2, issue 4 ezine.
and Hold. NASDAQ is off 50% from 5 years ago, Dow off 10%,
S&P500 off 20%. Three of the last five years have been losers.
You should discuss your own personal needs with your broker
and establish a long-range plan that will serve you best. Diversify
and consider having a more ample position in cash (money markets).
Placing all your chips on one sector. Discuss diversification
with your certified financial planner. As a general rule, you
want at least a percentage equal to your age in RISK-FREE investments.
You can achieve bond-like returns with no risk in the money
markets these days, thanks to advancing interest rates. (Check
the diversification in your 401K now to ensure that you are
not as vulnerable to a downturn today as you were in 2000. If
you did not put a percentage equal to your age in the money
markets a few years ago, do it now.)
Instead of freaking out, educate yourself. Prepare. The
more you know, the better choices that you will make and the
more wonderful your relationship with your financial planner
can be. As Jim Cramer of Mad Money says, "Nobody ever made any
money by panicking."
Your Bottom Line.
are Good in your 401K and Easy as 1-2-3, When You Tap Into Your
Feminine Side, and Forget about Mind-Numbing Charts.
#1 stock picker in the US
Over the past
few years, I've met a number of women who shyly admit that they
have turned over their investments to a lover, to a boyfriend,
to a husband or to a broker because they were afraid that they
just didn't know enough about it to do a good job. Of course,
in a downturn, it's always easier to blame someone else for losing
your money, and in 2000, 2001 and 2002 - all down years in the
stock market - I heard plenty of that. "My husband lost all of
our money in the stock market!!"
When the Los
Angeles real estate market fell apart in 1994, it was my husband
complaining that I had lost all of our money in real estate. Blaming
others for losing your money has no gender, but when you think
about it, can you ever really blame someone else for doing a bad
job at something you're not willing to try at all?
If I had listened
to my financial advisor in 2000, ALL of my nest egg would have
been "diversified" in mutual funds (that is not diversification)
- energy headed by Enron, Technology headed by AOL, Telecom headed
by Global Crossing, World Stocks headed by Japan. Essentially,
I would have been left with nothing. A big goose egg. Whose fault
would it be? Could I yell at him? Strangle him? Sue him? Nope,
at the end of the day, the only thing that saved me was the gut
instinct I had that he was selling me a plan that stank. It was
my money, and I saved it when I walked away.
Are you afraid
of graphs and charts? Would you rather work and spend than save
and grow your money? Do numbers bore you? Does your financial
planner bully you with big words to make you feel as though investing
is only something s/he can understand? You might be surprised
to learn just how short-term or inexperienced your broker is in
the field, if s/he uses these tactics.
The more experienced
and intelligent a financial planner (or any professional for that
matter), the more confident they are in revealing their strengths
and weaknesses. Some are great at bonds, some at protecting your
portfolio, some at stock picking, others at tax-sensitive strategies.
All of them should be, however, extremely astute in diversifying
your portfolio and understanding your goals and your risk tolerance.
All of them should be encouraging you to educate yourself, so
that together you can capitalize on areas of strength. Your ignorance
will always be a liability in rough times, when it's easy to panic
and do something stupid, so it is always in a professional's best
interest to keep you informed.
Like it or
not, even if you do have someone advising you, the final decision
is in your hands, and the more you know, the better your portfolio
will perform! If you allow anyone to "lose" your money, ultimately,
YOU, not him or her, are the one working extra years instead of
retiring. The good news is that beautifying your bottom line feels
as good as getting healthy. Now, right now, is a great time to
start exercising your financial brain and swallowing your money
vitamins. And guess what! As you get more healthy, you'll start
to realize that watching your money grow, on its own, is pretty
exciting. You might find yourself smiling when you open those
401K or broker statements, instead of filing them without even
I love buying
shoes (on sale, of course), but I've never had a bigger shopping
orgasm than in 2001, when my stock portfolio popped significantly
in three months, over 200%! Wow! What a Christmas present, especially
after the fear and fallout in the stock markets after 9.11.01.
And yes, I was one of the few who had any returns that year, much
less 200%. The broker (someone new behind the counter, there was
almost 100% turnover that year in the staff) could hardly believe
that I was there on December 27th to cash out over
Now, you might
think I'm just some fluke of a genius (and I encourage you to
think that!) but the good news is that my research strategies
rely on a lot of the things that women (stereotypically) really
enjoy doing. Yes, I am successful in a way that is very different
from my colleagues largely because I enjoy being a girl. The good
news is that all of the things that you might inherently love
to do can be very valuable in analyzing great investments in all
areas of money - stocks, bonds and real estate. So, whether you
are a gal or a guy, prepare to embrace your feminine and beautify
your bottom line.
a million questions. Think of the three pigs for just a
moment here. If you rush out and build the house of straw, the
first wind is going to knock it over, whereas, if you take the
time to plan and construct a solid safe haven, no big, bad wolf
can blow it down. How many of you rush right out and buy a stock
because you heard a hot tip? How many of you checked off mutual
funds on your 401k without knowing the first thing about MidCap
Growth funds and how much you should be sticking in the money
market? Or for those of you who are more sophisticated, how
many of you are just lining up candlestick charts, and overlooking
the basics of the business - the products, who is buying them
and who is minding the store?
the most important part of my strategy is that I look at all
investments like a mosaic. I don't plunk my money down until
I have enough tiles turned over to get a complete picture. Keep
asking questions until you are satisfied that you understand
what you are doing. Don't check off funds blindly in your 401K
or leave an enormous amount of stock in your own company in
your portfolio, hoping and praying blindly that "luck" works
in your favor. There is not a lot of luck in the markets these
days, and the sad truth is that you are just as vulnerable in
a market downturn today as you were in 2001, if you are not
smart about where you put your money. (Next month, Paul Wood
will give you some tips on Exchange Traded Funds you might select
over mutual funds in your 401k.) This is exponentially true
for those of you who are rushing out to buy real estate, without
the slightest clue of where the real estate markets in your
area are on the buy low/sell high continuum.
pay retail. What's beautiful about this one is that the
seasons of the stock market are similar to the seasons of the
shopper! Back to school sales in September are usually a good
time to look for value in the stock market, as September is
traditionally the worst performing month of the year. Also,
September precedes the Santa Rally where up to 50% of the gains
in the market are typically earned. (Beware of bewitching October,
however, the month that hosted the Depression, Black Monday
and many more horrifically dark market days.) On the other end,
January, during the after-Christmas sales, can be a great time
to look at taking your profits. And yes, I am advocating that
you meet with your broker or human resources person twice a
year, to see about readjusting your portfolio. It isn't a gain
until you cash out your profits, and the one rule of successful
investing that works EVERY TIME is buy low; sell high. By the
way, don't let your financial partner discourage you from profiting
in the stock market in shorter windows. You never want to place
too much of your portfolio at risk, however, there is a big
difference between all and nothing. You CAN afford to take a
small percentage of your portfolio and try to work it for better
gains - providing someone is willing to do the work. Additionally,
as you start paying more attention to the stock market, by working
a small percentage of your portfolio, you will have a much better
idea of solid long-term investments.
Till You Drop! The information that you have as a consumer
is valuable! It was apparent that Sears was in trouble in 2002
when it took 6 months to get a replacement coffee pot on a name
brand! My dad, a copper miner, knew that Kmart was in trouble
in 2000, when it was still getting buy ratings, when an employee
said they never received their orders in a timely manner and
that he recommended my dad buy his garden tool at Wal-Mart down
the street! K-Mart didn't have the common tool in stock, but
Wal-Mart did! Peter Lynch says, "If you like the store, chances
are, you'll love the stock." If you love the product, 1000 things
have to go right, from the executive suite down to the cashier.
If there are extended delays on anything - credits, on hold,
replacements, etc. - that is indicative of systemic trouble
in the corporation. Unfortunately, though I love Krispy Kreme
doughnuts and saw them still featured prominently in grocery
stores just three months ago, this month it appears that everyone
is buying Coldstone Creamery ice cream instead…
People, Vanity Fair and Rolling Stone. One of the top 10
signs the CEO is rolling in your dough is if s/he is seen more
often in the society pages than s/he is in the boardroom. CEOs
who hang out with rock stars and models get to pick up the tab.
(Why do you think the beautiful people want a bald guy in a
suit hanging around?). Sex and drugs and rock ‘n' roll are not
the character traits of respected business leaders. You don't
see a lot of pictures of Terry Semel (CEO of Yahoo) hanging
out with Britney Spears. Sam Waksal, pal of Mick Jaggar and
former CEO of IMClone, is now making friends with Bubba in Cell
29, after being convicted of insider trading. Character counts.
“As Kay Koplovitz says, “The CEO is the soul of the company.”
Conscious Investing. It's no accident that Reebok
and Levi Strauss were not exposed in 1996, alongside Nike, for
employing child labor. (For more information on how those companies
worked to eliminate child labor in the apparel industry, click
on Reebok.) Doing the right thing means that you don't have
expensive, embarrassing public boycotts. Additionally, happy
employees make better products, and a happy planet makes for
a better place for all of us to live. And guess what? You're
less likely to sell a great company if they run into one bit
of hard luck, because you'll believe in the vision of the company
and be invested in a greater good. Investing in greatness makes
it easier to weather the storm of a small setback. Selling in
a panic on bad news is one of the most common ways to lose money.
Sound investments - real estate, companies, bonds—do turn around
in time, even if there are one or two showers along the way.
(Note: this doesn't apply to Merck, which has a lineup of lawsuits
waiting to sink the company after the $250 million settlement
Run your ideas off of your friends. Get their take from
a consumer perspective. (Not for hot tips. See "11 Common Investment
Mistakes," another article in this month's ezine.) If everyone
you know is planning to buy a Sony Play Station Portable for
their kids this holiday season, it might be time to run the
numbers on Sony stock. (Do more than just rush out and buy on
a hunch or a survey of friends.) Oftentimes you can see popular
trends developing BEFORE the data hits the analyst's desk. Getting
in BEFORE the crowd rushes in on good news guarantees a lower
buy price and a higher sell price.
in the NataliePace.com 3-part investment recipe, you still need to
make sure that the company you are interested in is prepared
to lead the sector and to buy low; sell high. Checking the company
against the competition will require reading a few numbers and
a few charts, and checking out articles that are penned by respected
stock pickers and writers on the viability of the investment.
your bottom line by selecting the great companies and by buying
beautiful real estate, at an affordable price. Beauty is its own
return, but the gains - and yes, in investing, gains are very
good - can be enough to make you swoon!
can Do Better Than Baidu With Other Google Acquisition Targets.
and Stock Report Card by Natalie Pace
calling Baidu.com the Chinese Google, and that hype forced its
IPO on August 5th, 2005, from a starting price of $60
to $153.90 almost overnight. Unlike Google, however, which is
still selling at $287/share, near its 52-week high, Baidu, has
dropped down to $81.00, near the 52-week low. So, how low or high
can Baidu go? That may depend upon the success of two competitors,
namely Sina.com and Sohu.com.
Yahoo are certainly focused on the right emerging marketplace.
China's Internet population hit 103 million by June, second only
to the United States, according to the China Internet Network
Information Center. While the sales so far are nothing near Google
and Yahoo levels--at $1.384 billion and $1.253 billion respectively
in 2Q 2005 compared to $8.4 million for Baidu and $25.9 million
for Sohu--the growth potential is impressive, as is the rapid
spread of Internet penetration. Simply, it is the place where
cash-rich worldwide dominant players are competing to acquire
rapidly growing companies for an early-stage valuation.
itself first, Yahoo just spent $1 billion in cash for a 40 percent
stake in China's biggest online commerce firm, Alibaba.com. Speaking
on August 11th on CNBC, Terry Semel, Yahoo's CEO, said
that Yahoo has a "shared vision" with the Alibaba team and is
in it to win both short term and in the long run. Mr. Semel told
viewers that, "Asia is the fastest growing continent for the Internet.
China has the potential to be one of the most influential bottom-line
countries in the world."
raising $4 billion, by selling an additional 14.16 million shares,
which has been set aside for acquisitions. Industry insiders say
possible Google acquisition targets include Baidu.com, Verisign,
Akamai, Tivo and Skype, all of which are plausible, but could
a case be made that Sohu.com (ranked #10 in traffic by Alexa.com)
might also be a target?
The CEO and
president of Sohu.com, Dr. Charles Zhang, is arguably one of the
most respected Global Tech CEOs. He was one of the featured speakers
at the prestigious Fortune Global Forum: Next Generation Asia
in May 2001, and has received many awards since then. The Fortune
conference also featured keynote speeches by then Chinese President
Jiang Zemin and William Clinton, 42nd President of
the United States -- quite a group to share a stage with. Additionally,
for a Beijing based company, Sohu.com is proactive about meeting
Western accounting and regulatory compliance standards, including
Sarbanes-Oxley, another fact that sets Sohu apart from many Mainland
How did Dr.
Zhang become so fluent in Western capitalism? Turns out, according
to his biography, that Dr. Zhang returned to China in 1995 after
obtaining his Ph.D. from the Massachusetts Institute of Technology
(MIT) and acquired financial backing to establish his company
from Professor Edward Roberts of MIT and Nicholas Negroponte,
co-founder of the MIT Media Lab and author of the international
best seller Being Digital.
always believe what the CEO cheerleader has to say about his company,
but Dr. Zhang is unique in terms of credibility. His achievements,
responsibilities, awards and daily schedule could fill pages,
but suffice it to say that he appears to achieve a balance of
personal goals (climbing to a base camp on Mt. Everest) with political
goals (co-leading the Chinese executive delegation to support
Beijing's successful 2008 Olympic bid) and well-rounded business
practices (including women in 1/3 of senior management positions
and as one of seven on the board).
believes Sohu has a shot to compete with Baidu on search in the
Chinese marketplace. "I have strong confidence in the future of
SOHU as we celebrate the one-year anniversary of our search engine
SoGou this month. I'm very excited to see that SoGou's technology
has achieved tremendous progress in terms of music search, indexed
page search, news search as well as mapping search. With its access
to SOHU's massive user base, the growth of SoGou's traffic is
impressive. I believe SOHU is well positioned to take advantage
of the immense development potential for online search in China,"
said Charles Zhang, Chairman and CEO of SOHU.
looks attractive from the inside, attracts a lot of hits from
its core audience and is priced at $640 million, compared to Baidu.com,
which has a market capitalization of $2.571 billion. Sohu is profitable,
while Baidu is still cash negative. Baidu has more traffic than
Sohu, but, according to Alexa.com, not by much. Baidu ranks as
the 6th most trafficked site, while Sohu holds the
10th slot. (Yahoo is #1; Google is #3.)
to guess where Google is going to spend money that they haven't
yet raised, but for my buck, I'd bet on Sohu over Baidu. Of course,
if it were publicly traded, I'd be positioning some of my portfolio
in Estonia, where Skype has offices. Verisign scores high on the
report card as well, having a strong position in domains and ring
tones, so I'm adding Verisign to our Hot News List this month,
alongside Sohu. Click to review the numbers of our Google
Acquisition Targets Report Card for yourself.
SOHU.com wins my vote, but I'm not the only one betting that Sohu's
story will be a real contender on the Chinese search stage. Dr.
Zhang increased his beneficial ownership of SOHU by 282, 969 shares
in August 2005 (according to a company press release).
to find a winner in September, historically the worst performing
month of the year. However, with all of the acquisition activity
in China this summer, Sohu may be one of the stocks to soar, even
if there is a general downturn this month.
new verb that is changing the world, and why the password is sell
Do you still
have shares in AT&T? MCI? If the bombshell bankruptcies of
WorldCom and Global Crossing weren't enough to convince you that
the long distance toll highway had become a dinosaur's graveyard,
allow the former chairman of the FCC to deliver the final blow.
In an interview in Fortune Magazine on February 16, 2004,
Michael Powell, then Chairman of the Federal Communications Commission,
explained, "I knew it was over when I downloaded Skype. When the
inventors of KaZaA are distributing for free a little program
that you can use to talk to anybody else, and the quality is fantastic,
and it's free - it's over. The world will change now inevitably."
how is AT&T still getting an average 6 ranking on StockScouter,
when it has negative earnings, high debt and a competitor that
is giving away the goods for free? Is it a case of graph goofiness,
wherein analysts bury themselves in charts and don't look up long
enough to see that no one pays for long distance anymore, thanks
to Voice Over Internet Telephony? Nope. That doesn't explain it
because the quarterly earnings have been dropping for years, and
the losses last year totaled $6.05 billion (source: MoneyCentral.MSN.com).
What is probably more accurate is that the only ones investing
in long distance anymore are old school mutual funds, and because
you don't know what companies are buried behind the stock names
in your 401K, chances are that you might be one of the cavemen
holding the stock certificates. Yes, you, innocent traveler on
a dead-end highway may regret not looking at the roads signs and
forcing the driver to take a different route.
B Sold at $25.72
bought $2.24 B,
when everyone began saying, "Google it?" The new verb being added
to the world's dictionary will be Skype, and if you haven't said,
"Skype me," yet to a friend, then you are a bit behind the times.
155,188,826 behind the times to be exact (the amount of downloads
as of 8.29.05, according to the site). The main difference here
is that Internet search was a brand new area that outdated the
Dewey Decimal system, which was never a publicly traded format.
Skype could bury what little is left of the telecommunications
giants, and millions of unsuspecting investors are in danger of
going down with it, through the mutual funds of their 401Ks.
It's a bit
sobering to note that teenagers don't know what the Dewey decimal
system is. That, according to the founders of Skype, will ultimately
be the fate of MaBell, as well. "The idea of charging for calls
belongs to the last century. Skype software gives people new power
to affordably stay in touch with their friends and family by taking
advantage of their technology and connectivity investments." Niklas
Zennström, CEO & Co-founder of Skype.
It's not like
you can profit from this emerging marketplace - yet. Skype is
still a privately held company, much like Google was in early
2004. However, you can protect your portfolio from the damage
Skype is causing by meeting with your financial planner and getting
out of mutual funds and/or individual holdings in long distance
carriers, especially AT&T and MCI. Cutting your losses early
can be just as valuable to your portfolio as profits. And in a
world where gas costs three bucks a gallon, free worldwide long
distance - via Skype - could be the blessing your budget needs.
News On Stocks, Starring Take Your Profits and Readjust Your 401K
to a More Defensive Position.
are not buy/sell recommendations. Always consult a certified financial
professional before buying or selling stock.)
Stats, Facts and Educational Information:
- All year
long, I've been preaching modern portfolio theory, the importance
of diversification and how most of the really smart money managers
(like Kelley Wright of IQTrends.com) have 50% or more of their
portfolios in cash right now. Today, our Federal Open
Market Committee is alert to the inflationary pressure of high
energy prices and has already indicated a willingness to respond
rapidly if needed. Historically, the markets hate that
kind of surprise MUCH MORE than terrorist attacks. (Remember
Black Monday was sparked by changes in tax laws.)
gains, like great championship teams, are a mix of strong offense
and outstanding defense. Hunker down and get your defensive
game on. Don't worry about getting too fancy. Make sure you've
got a strong position in cash. Most Americans have less than
1% in personal savings. If this is you, meet with your financial
planner now on how to increase your cash position and better
protect your nest egg.
Meetings with your Financial Planner. Why not meet NOW?
Take in all your favorite strategies from NataliePace.com and other
top-performing money pundits.
has ranked me at the top of over 690 stock pickers. Please
email Mark Hulbert at email@example.com,
and ask his agency to track our gains as well. Hulbert's is
a well-known stock tracking organization. According to TipsTraders.com
research, NataliePace.com's returns are the best on Wall Street by
far. By helping us to achieve greater credibility, you help
us to better serve you.
is King. In 2000, cash was the top-performing asset, and
with rising interest rates, you can ensure bond-like returns
with money markets (from interest), at no risk. If you haven't
applied the lessons learned in 2000 about not having all of
your eggs (retirement plan) in one basket (all mutual funds),
you are just as vulnerable today to a market downturn as you
and October. September is traditionally the worst performing
month of the year in the stock markets and October is the month
that can be the most challenging (the month of Black Monday,
the 1929 crash, etc.). When the pros return from vacation at
the end of August, there is bound to be reaction to the price
of oil and the possibility of inflation and rising interest
rates. No one knows exactly which way the markets are headed,
but a defensive strategy may pay off now more than ever. Diversify!
It Pays to Pick a Good One. Risk tolerance, portfolio
diversification, insurance, trusts and tax strategies are some
of the many services that a great financial planner will provide
you with. For tips on finding your perfect partner, read the
article online at www.NataliePace.com,
in the archives, Volume 2, issue 4.
You'll notice that we've sealed in a number of our picks, and
kept open companies that are value-priced and/or still have
upside based upon being concentrated in favored sectors, like
energy and metals (not metals manufacturing). The companies
that we report on are for that small percentage of "trading"
in your portfolio, not for the entire nest egg. This is the
Michael Jordan part of your portfolio that scores and scores
and scores. Winning the game also means diversifying and protecting.
Media, Inc. MIX
will hold a special meeting of stockholders on September 28,
2005 at 9:00 a.m., Pacific, at Intermix's corporate offices
in Los Angeles, California to consider and vote on the proposed
merger of a wholly-owned subsidiary of Fox Interactive Media,
Inc. ("FIM"), a subsidiary of News Corporation NWS,
with and into Intermix. If you are an Intermix shareholder,
go and vote!! Watch American capitalism firsthand at work!
- This hot
news article still has the proud honor of featuring fifteen
companies that have posted positive gains, versus five that
have gone south. Of the five that have gone south, we are most
concerned with Krispy Kreme and are monitoring that distressed
company closely. If there is any pop on any bit of good news,
rest assured that KKD will close off this list very quickly.
OSIP, IMCL, JBLU, LVS - in our view, these are all great companies
with great leadership and/or products. Sometimes it takes awhile
for the rest of the investment world to realize that. Jet Blue
was taken off because airlines are in disarray with high fuel
NataliePace.com is providing you with news and important information,
but you need to consult your financial planner to determine your
best strategy for using the information. That will depend upon
your age, your retirement plan, your risk tolerance and portfolio
diversification. The stock portion of your portfolio is a higher
risk classification, where you ideally seek to gain higher returns.
As the NASD said in a recent investor alert, don't bet the farm
on the stock market. NataliePace.com is NOT a brokerage and doesn't operate
or act like one. We are an online media service with a mission
of providing the news and information you need to make better
choices in business, investing and personal prosperity.
I have listed the companies that I own under the column "NP OWNS?"
who "never pay retail," note that highlighted stocks are trading
at their 52-week lows or near the price featured in NataliePace.com's
article. It may be a good buying opportunity. The companies that
are listed below which are not highlighted may not be in a good
buying range, but they (outside of KKD, which might be a real
dud) are poised to continue performing well. There are never any
guarantees in life, and all stocks are risk-based investments.
since original feature
Stock in a great sector. If your stomach is lined with steel,
this could be a fun, rewarding, high-risk bet.
treatment and metals recovery for acid-contaminated water
in mining ind. BioteQ's customers include Breakwater Resources,
Dodge. According to the CEO, Brad Marchant, Bioteq will
PD recover 2 million pounds of copper per-year in Southern
AZ operations. BioteQ was selected by Summit
Open Space and Trails Department and the Town of Breckenridge
in Colorado to provide its technology to treat water from
the Wellington Oro Mine on 6.14.05. This company is only
trading on the Toronto Stock Exchange's TSX. Anthony Kana,
one of the founding directors retired in June. Profitable
4th Q 2004 and 1Q 2005, but expects a "small
loss" for 2Q 2005.
Global Investors Eastern Europe
vol. 2, issue 8
seems to be in the right countries, and, within those countries,
in the right, growing sectors. Easy to access information,
attention to detail on site, indicates attention to detail
in management. We're in.
volume 2, issue 4 for a feature article
Corp. is buying Intermix for $580M cash ($12/share). If
shareholders approve the acquisition on 9.28.05, the deal
is expected to close on 9.30.05. 2Q results were great.
$26.7 million for the first quarter of its 2006 fiscal year,
an increase of 59 percent over the same quarter last year.
The Company also reported net income of $1.2 million for
the first quarter, compared to net income of $130,000 in
the same period last year. Added to Russell 3000 and Russell
MicroCap indices on 6.24.05.
volume 2, issue 6 for a feature article
current price is off -130% from the same time last year.
The news for what Erbitux is doing for ovarian cancer patients
could hardly be more impressive. 2Q results were strong.
Erbitux U.S. In-Market Quarterly Sales Reached $97.8 Million,
Up 12% Over the Prior Quarter, and Up 37% Over the Second
Quarter of 2004. Net income for the second quarter of 2005
was $26.0 million compared with $24.3 million in the second
quarter of last year. Filed for FDA approval to use Erbitux
on head and neck cancer on 8.30.05.
turnaround mode. Trading at 5 year lows.
are many: SEC inquiry, layoffs, credit problems, delayed
financial filings and lawsuits. Do consumers still associate
KKD as the king of delicious? Unfortunately, though saw
KKD doughnuts still featured prominently in grocery stores
just three months ago, this month it appears that everyone
is buying Coldstone Creamery ice cream instead… On the positive
front, KKD is showing up on LBO target lists for having
a low valuation to EBITDA. The former COO and CEO are being
blamed by a special committee for "managing earnings" in
2003. Tough call. You might want to visit your grocery store
and see if the doughnuts are stale. I'm holding out for
the LBO sale.
Vegas Sands Corp.
Vol. 2, Iss. 7
Venetian, Sands Macao
mover advantage in China's Vegas!!)`
Venetian, The Palazzo, The Sands Macao, The Venetian Macao.
97% occupancy rates at the Venetian. Sands Macao earned
enough to pay off debt in one year. 2Q Net revenue grew
to $398.8 million from $266.7 million a year ago. Excluding
items, Las Vegas Sands earned $95.5 million, or 27 cents
per share, up sharply from $39.5 million, or 12 cents per
share, a year ago. Strong demand for gambling and positive
growth trends in the market, largely due to the convention
markets, which keep Vegas booked all week, and Macau, China's
1, iss. 55
is trading near 52-week high. Volatile sector. Great future.
and reconstructive products. Company raised 2005 guidance
by 15% on 4.25.05, and then raised guidance again on 7.25.05..
2Q earnings were outstanding. $22.7 M in revenue, compared
with $15.1M one year ago, and $3.6 million in net income,
compared to $1.0 million one year ago.
price fluctuations, but once Martha enters limelight, her
stock may shine.
new reality TV show, with Survivor and The Apprentice
producer, Mark Burnett, is scheduled for Fall 2005. Martha's
daytime show will launch on 9.12.05 in 96% of the US and
much of Canada. Sirius SR signed Martha to a 4-year deal
worth a reported $7.5 million/year. New MSO exec, Susan
Lyne is a veteran TV exec. Lyne says that The number of
ad pages at Martha Stewart Living is expected to show a
gain of 40% in 2Q. 'Martha's Rules' by Martha Stewart to
be Published by Rodale in October 2005. Expect Martha mania
by fall, and for company fortunes to start turning with
increased ads in magazine and licensing revs from Martha's
daytime show. www.marthastewart.com/ir.
Martha had her 1st revenue gains in 10 quarters.
2Q 2005 revs were $46.0 million, compared to $44.1 million
one year ago, on increased advertising in the mag. MSO is
projecting a third-quarter operating loss of $25 million
to $26 million and a fourth-quarter operating loss of $1
million to $2 million
in mid-range. Growth company. Volatile share price.
of the total WLA market (Synergy Research Group). Wireless
connectivity for homeowners and small/med businesses. 2Q
Profit is up 70% this year over last, on net income of $8.3
million, or 25 cents per share, up from $4.9 million, or
15 cents per share.. Revenue increased 22 percent to $107.6
million from $88.4 million in the prior-year period. BusinessWeek
named NTGR as one of its100 Hot Growth Companies. Insiders
bought $2.07 M at the $18.78 share price. Typically that
is a good sign.
issue 44. 1st featured Dec. 2002.
Company of the Year 2004 (archived edition 44). 1Q revenue
was up 72.6% over same time last year. Director Michael
Ovitz purchased 3/4 of a million in May, at $4.90. GAAP
net loss for the quarter was approximately $5.1 million
or $(0.05) per share and included non-cash charges of approximately
$2.0 million relating to the acquisition of Rendition Networks.
2Q earnings will be released on 8.31.05 after the market
near 52-week low.
2005 Company of the Year 2005. Read vol. 1, iss. 56.
of Genentech (DNA)
review panel will review Tarceva for use with pancreatic
patients on 9.13.05. Genetic based "cancer pill." 1st
and only of its kind. FDA-Approved for lung cancer last
November. Canadian regulators approved Tarceva on 7.13.05
as a treatment for advanced or spreading lung cancer in
patients who have not responded to chemotherapy. European
approval is expected in the coming months. Switzerland approved
Tarceva in March 2005. CSFB raised OSI's Tarceva sales
estimates for 2005 through 2008 to $282 million, $381 million,
$413 million and $431million, respectively, from $281 million,
$348 million, $386 million and $399 million. Investors didn't
like the acquisition of Eyetech Pharmaceuticals Inc. for
$935 million in cash and stock on Monday, 8.22.05, and the
stock dropped 21 percent. Net loss of $24.5 million in 2Q.
Revenues for the three months ended June 30, 2005 were $34.6
million compared to $11.2 million for the respective prior
demand is huge; supply is limited. RTP bought back 8.7%
of stock as of 5.05, to the tune of US$780 million, and
plans to buyback up to $1.5 billion in 2005 and 2006. Analysts
say pressure on price should continue on high demand in
China and Asia. Increased its dividend by 20 per cent. Finds,
processes and mines minerals: copper, iron, coke (from coal),
aluminum, titanium dioxide and diamonds. Rio Tinto has been
added to Jim Juback's 50 Best Stocks in the World List (eff.
9.05). Great press usually means more buyers. Hang on.
feature company, in the "You Can Do Better Than Baidu" article.
vol. 1, issue. 51
you bought at $34.50!
stock split on 8.1.05
should remain strong, while supply is constrained and demand
is outrageous. The Sunoco board also approved the buyback
of $500 million shares, bringing the repurchase option to
$674 million. Shares have been reduced by 23% over the last
5 years. Spending $275 million over 8 years to reduce SO2
and NO2 emissions by 89% in PA, OK and OH. Fined, with Valero,
$8.5 million for violating clean air laws.. Beat expectations.
2Q net income rose to $242 million, or $1.75 per share,
from $234 million, or $1.53 per share a year ago. Revenue
grew 27 percent to $7.99 billion from $6.28 billion.
Rowe Price Em Eur & Mediterranean
Vol. 2, iss. 8
Rowe Price Em Eur & Mediterranean Fund.
feature company, in the "You Can Do Better Than Baidu" article.
in Profit-Taking Range. Note: We may still like these companies
(as we do Genentech and Google) for the long term as companies,
but are taking profits before sell-out September and/or bewitching
October. We may look to add some of these great companies again,
if the price point should become attractive. In a market of modest
gains but high volatility, profits are made in shorter windows.
since orig-inal fea-ture
vol. 1, issue 52
beat earnings expectations on 7.14.05. Intel is being sued
by AMD for billions for monopolistic behavior. The suit
is expected to take years to litigate. The EU antitrust
regulators are also investigating Intel for antitrust behavior.
AMD's insiders, directors, are buying at $14.00-$15.00.
is at 52-week low.
sector is really out of favor, but JetBlue is a star. Southwest
is surviving on oil hedging more than core business. Everyone
else is in crisis mode. Expect very unhappy employees, except
those employed at Jet Blue and other newer, low cost carriers,
who are just happy to have a job.
Vol. 2, issue 2
Mel Karmazin bought $8.04 Mil at $5.36 range. Howard Stern,
NFL, NHL and Martha Stewart. Stern starts 01.06, just in
time for Christmas! 2Q 2005 beat estimates with loss of
-$177.5 million, or -13 cents per share. Revenue is up to
$52.2 million from $13.2 million a year ago. Expects 3 million
subscribers by year-end.
Trading 75% beneath March 2000 high. Sony sales are double
market cap, $69.7 B to
Times reviewer gushed over the new HD camcorder, though
it isn't cheap at $1,750. Over 3.5 million PS Portables
sold in Japan and US since Dec. PS3 to be released in Spring
2006. Upcoming films include: Rent (11.05) and the Da Vinci
Code (5.06), starring Tom Hanks and filmed by Ron Howard
and Brian Grazer, Academy Award winners for A Beautiful
Mind. Sony is recalling about 16,000 liquid-crystal-display
televisions sold only in Japan that may cause electric shock.
Adding web browser to PSPs.
closed out at $80.92, with 328% gains.
out at $292.72, with 193% gains.
closed out at $19.32, with 32% gains.
out at $51.67, with 21% gains.
note: NataliePace.com does not act or operate like a broker. We are
a media and information center. This article is intended to educate
and inform individual investors, and, thus, to give investors
a competitive edge in their personal decision-making. The publicly
traded companies mentioned in this article are not intended to
be buy or sell recommendations. ALWAYS do your research and/or
consult an experienced, reputable financial professional before
buying or selling any stock.
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