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Vol.3 Issue 3 March 1st, 2006
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of the Month:
older companies, like General Motors and Ford, they're in trouble.
It's not just the legacy costs, but their cars aren't popular.
It is a problem for the Federal government and some private
companies. We need to force these companies to have a depreciation
and contribution set aside to fund these liabilities."
Gary Becker, Ph.D., Nobel Laureate,
Professor of Economics and Sociology at the Graduate School
of Business, University of Chicago.
GM, Delphi and Delta the Beginning of Japan-like Stagnation
for the U.S.? For a Check-up on the Economy, We
Call On the Doctor, Dr. Gary Becker, Nobel Laureate
and Professor of Economics and Sociology at the University
of Chicago. Exclusive Q&A by Natalie Pace, CEO, NataliePace.com™.
of the S&P 500 companies that are most deeply in the
red on pension plans. Source: Standard & Poor's
Estate Warning: Speculators Are Being Suckered In, While
Insiders Are Cashing Out By the Millions. Article
and REITs Stock Report Card, By Natalie Pace, CEO, NataliePace.com.
Why You Don't Have to Drive Ugly Little Cars to Save
Money on Gas. By Paul Woods, President & CEO of
Odyssey Advisors, LLC.
the Most Successful Blue Chip Stock Picker on the Planet,
Geraldine Weiss, the founder of Investment Quality Trends.
By Natalie Pace, CEO, NataliePace.com™.
to Be Sexy and Fiscally Fit? Avoid Investment Pornography!
By Kelley Wright, Managing Editor, Investment Quality
a Raise Now? It Could Be a Check Mark Away. By Maya
You Starting Your Day with Rocket Fuel or Breakfast
Glue? By Gary Kobat, personal trainer and life coach.
Potato's Guide to Investing. 6 Tips for Making Money
the Easy Way. By Natalie Pace, CEO, NataliePace.com™.
Ways to Higher Pay. By Warren Farrell, Ph.D. Learn
tips from one of the most respected authors on career
advancement in the world.
Score for Companies; Need a Seat on the Board. By
Fran Lotery, Ph.D and Lois Phillips, Ph.D.
Bet Your Nest On a Nest Egg. By The Wallet Doctor.
101: When is 3% is Better Than 6%? Why Higher Interest
Rates are Good for Income Investors. By Steve Selengut.
Turning Up Green for St. Patty's Day, Err…. Except Real
Estate. Our Monthly Hot News On Cool Stocks Report.
By Natalie Pace, CEO, NataliePace.com™.
GM, Delphi and Delta the Beginning of Japan-like Stagnation for
Q&A by Natalie Pace, CEO, NataliePace.com.
a Check-up on the Economy, We Call On the Doctor, Dr. Gary Becker,
Nobel Laureate and Professor of Economics and Sociology at the
University of Chicago.
call him Doctor for nothing. For the past three years, Dr. Gary
Becker, Nobel Laureate, Economics, and professor at the University
of Chicago's Graduate School of Business, has been optimistic
about the performance of the U.S. economy, and for three years,
he's been right on the money. While others worried about the twin
trade and budget deficits, outsourcing, inflation, rising interest
rates, and sky-high oil prices, Dr. Becker cited statistics that
are, in his view, more important than those numbers for determining
economic growth - namely productivity and the ratio of debt to
gross domestic product.
in Beverly Hills at the Milken
Global Economic Conference, Dr. Becker outlined
a case for a resilient U.S. economy. Productivity was high. The
ratio of the debt to GDP was low, especially in comparison to
Europe and Japan. The U.S. was borrowing at low interest rates,
which Dr. Becker called "a good deal." And China was
merely taking away the low-skill, low-paying jobs that Americans
aren't very good at any way. "Our comparative advantage is
in knowledge-based types of goods," according to Dr. Becker,
which means that the U.S. needs to worry less about what jobs
are migrating to China and focus more on improving the education
of grades K-12. These steps may seem "far removed from the
trade-balance issue, but really, indirectly, are very important
in enabling us to respond to any trade problems," Dr. Becker
be a different story, however. Though productivity remained strong
in 2005 and real gross domestic product grew by a little more
than 3%, Federal Reserve Chairman Ben Bernanke expressed concern
to Congress, in his Semiannual Monetary Policy Report on February
15, 2006, that "steeply rising energy prices
pushed up overall inflation, raised business costs, and squeezed
household budgets." He also cited signs of a slowing housing
market and structural weaknesses in "several areas of business,"
particularly in the automobile and airline industries.
with defined benefit plans, like Ford and General Motors, are
underwater on their pension obligations by a whopping $450 billion,
while the public sector pensions are drowning by an additional
$260 billion (source: Milken Institute). The airline industry
has lost approximately $42 billion since 2000 and is carrying
over $100 billion in debt, according to Airport Transport Association
VP & Chief Economist John Heimlich. General Motors lost $8.6
billion in 2005, driven by "poor performance" and legacy
costs, according to GM Chairman and CEO Rick Wagoner. Clearly
the aging of the U.S. population, alongside escalating medical
costs and global competition is wiping out some industries, especially
those that provide rich benefit plans to their workers and retirees.
3.3 workers for each Social Security beneficiary, is the U.S.
headed toward the kind of economic stagnation that has plagued
Japan since the early 1990s? Will the legacy costs of the former
Blue Chip auto, airline and defense industries weigh down the
Dow Jones Industrial Average? Will high oil costs burn a hole
in the consumer's wallet, as the housing market cools down? Will
corporate spending take over as the fuel of the economy in 2006?
To gauge how
these pressures will affect the U.S. this year, we checked in
early with the doc, who will be a panelist again at the 2006 Milken
Global Conference in Beverly Hills in April. Is Dr. Becker, a
man who believes that poverty, misery, and crises are unnecessary,
as optimistic about the U.S. economy in 2006 as he was in 2003,
2004 and 2005?
Becker Nobel Laureate, Economic Sciences, 1992; Professor,
Economics and Sociology, University of Chicago; FasterCures
the Nobel Prize in 1992 largely for making economics more "human."
Tell us about your work that led up to the prize and how it has
impacted the world.
was my teachers at Chicago, with Milton Freidman being the greatest
influence on me. In an environment where economics was a powerful
engine to discuss all types of behavior, I started thinking about
Economics of Discrimination became my first
book. I didn't have a plan at that time, but I gradually started
doing that, and then continued to focus on education, crime, allocation
of time, fertility, the family and additional social issues. In
the ‘70s, it dawned on me what I was doing -- The economics of
human behavior. I discovered that problem by problem really.
we learned about discrimination?
don't want to discriminate have an advantage over people who do.
Also, if government raises the cost of discriminating through
policies, I showed how that would trace through the economy. Who
is mostly hurt by discrimination? Under different conditions,
that varies. Compare South Africa with the U.S., where it was
much more harmful to the discriminators (the whites). That may
have been why apartheid disappeared. It was a very inefficient
system to operate.
seeing that advantage playing out today in the metals mining sector.
Former Goldcorp Chairman and CEO Rob McEwen solved the problem
of a labor crunch by looking at women in mining and recruiting
his executive team there. Do you think that pro-minority public
policy was, perhaps, more necessary in the ‘60's than today?
has declined, but there are still disturbing rates of drop outs
in black families and Hispanic families, too. There is still a
distance to go. There was a fallback in the 1990s, probably related
to other issues, like the decomposition of the family. The breakup
of black families took off in the ‘60s. There is no question that
young blacks are suffering from that now.
encourage the government to relax/repeal Proposition 209, and
to allow universities to recruit Blacks and Hispanics?
No, I believe
the outcome for Blacks and other minorities is best if they are
treated equally with others. With the difficult family backgrounds
that many blacks have, giving them favoritism in competing for
places does them no favors. I would, however, support making special
efforts to find Blacks and Hispanics who do meet the common standard.
that poverty is "self-fulfilling," simply because some
minority groups underinvest in education, training and work skills,
such as punctuality. Would you say that wage ceilings are self-fulfilling
for women because the woman is more likely to leave the job, or
to work fewer hours, to care for the family?
ground is more level, but we can document a couple of facts. Women
are less likely to be full-time. Even if full-time, they are less
likely to work overtime. If a child gets sick, it is more likely
that the women will stay home than the man. This is even true
in Sweden, by the way, one of the most gender-balanced countries
in the world. Even in a world with no discrimination, you'll get
differentials in promotions and achievements. We've seen narrowing
because education has grown and the labor force has grown. It
used to be that women's pay was 3/5ths of men. It's now 80-85%,
if you work full-time. Women have narrowed the gap, but it is
not yet equal. At the top of every profession, it is still dominated
by men. That will be reduced, but I'd be skeptical if there will
ever be complete equality.
are going to make more of the commitment to family rearing and
those activities. I do believe a lot of that is biological, and
that is a fact. A lot of young women are taking time out when
their children are younger. A lot of women enjoy childrearing
and get other compensations within the family. The problem is
that when divorce comes, we need to see that women get compensated
enough with childcare payments and the like.
mothers are more likely to be living in poverty than any other
group, aren't they?
Unmarried mothers. And that's a group that's grown a lot in the
last 20 years.
that much of the widespread poverty, misery, and crises in many
parts of the world are unnecessary. How can we apply your research
to the benefit of mankind?
a lot of applications of it. I would mention two factors. Growing
investments in people, education and health. The government that
recognizes that the private sector can function better in a free
economy experiences the greatest growth. Look at a decentralized
China, at India, at Taiwan, and some African nations. India did
modest things in 1991, and they had a much more rapid rate of
growth than other countries. China has had rapid growth for 25
years. These things work. The devastating poverty that India had
and has less of now is absolutely unnecessary, if governments
do the right things. That can mean doing less things rather than
doing more. There are certain things that government should
do and that they don't do that well - namely education, providing
a safety net, safety and low crime.
coined as "human capital," was really the first time
that economists made a case for how important education is to
pulling nations and communities out of poverty. You say now that
K-12 education is far more important for the future of the U.S.
than worrying about outsourcing low-paying, low-skilled jobs to
China and India.
is, simply, the acquisition of knowledge, information and skills
by people. It includes things like education, training on the
job and health, being three of the most important forms of human
Nobel speech, you noted that people are not motivated solely by
selfishness or gain. Give us an example of how employers, say,
can use incentives, other than just money, to motivate their employees.
You have to
motivate employees by morale and by treating them well, and having
them feel some loyalty and commitment. They have to think it's
a team effort. If you're cutting everybody's salary, you gotta
cut your own. If you expect them to work hard, you gotta work
hard. There is growing literature on these non-monetary factors.
corporations be doing differently?
Delta executives were paying themselves certain things and asking
employees to take cuts. It was a foolish thing to do. The executives
were working hard at the time, but those are the times when you
gotta show that you are taking some of the burden as well. It
is the morale issue. I had a meeting with some of the top people
[at GM]. They are cutting a lot at the top, including the CEO's
salary. It doesn't mean a lot in terms of total costs, but it
means a lot in showing that you'll bear the burden. If they work
very hard and pull the company into profitability, that's the
time to make up for it.
Iacocca when he saved Chrysler, right? He was an American
hero. Nobody begrudged him taking a huge bonus for turning the
If you save
a company, you deserve a big bonus. If they bring Delta out of
bankruptcy and Delta starts making money, people will applaud
and the workers will start doing well.
to give individuals control of their own social security and health
savings accounts. This would certainly help corporations that
are suffering from legacy costs, but how does it help the individual?
generally confident of that because the individuals know their
interest and have that at heart. They do make mistakes, but the
government doesn't know what you want. The government is pushed
and pulled by various special interest groups, who want something
out of them. You want to give the individual an incentive to spend
on health when it is justified, but not to spend just because
it's someone else's money. When considering medical treatments,
if I have to spend $1000, I consider whether it is worth $1000,
rather than spend $1000 of their money and $50 of my money.
Americans are currently uninsured?
about 300 million people living in the U.S., so, about 13% or
so are uninsured. It's a big number. Any poor person is covered
by Medicaid, and older people by Medicare, however, many young
people have jobs and don't have medical insurance. Some of these
people now can go to emergency rooms, but you don't have much
choice of who is treating you. With tax-free contributions and
accumulation, some, maybe many, will have an incentive to set
up these plans.
you address the cost side of health care, or do you rely on market
forces? A blood test can run five hundred dollars. A hospital
stay can be in the tens of thousands. An office visit with a specialist
is booked at $500 or more…
can do it, but some of the costs have to be reined in. Most health
expenses occur in the last six months of people's lives. How do
you withhold treatments for sick and older people when the treatment
will do very little good, even if, at best, it adds a month or
two of life expectancy? Europe is said to be more caring than
the U.S., but, in that sense, they are much tougher. I think that
is a tough issue, but one we need to sink our teeth into.
let's say that Social Security and Health Savings Accounts are
controlled by the individual, but can only be invested in index
funds. Does the average American worker truly know what an index
fund is? Aren't we asking the laymen to maneuver in a fairly sophisticated
I would like
the restrictions to be broad, but some restrictions are necessary.
Otherwise, it is called the "Economic Good Samaritan"
problem. If someone at 65 is in bad shape, you help them out.
That's the case for restricting their portfolios. We have thousands
of mutual funds that would be okay for people to take.
exactly what makes everyone's head spin! Too many choices and
not enough information! How many employees actually know the difference
between a bond fund, a Blue Chip value Index and a micro cap growth
stock? We saw what happened when everyone invested in Internet
stocks in the late 1990s…
It won't matter
too much. So they check off a bond. They'll get less risk and
lower return, but they'll do at least as good as under the government
system. Small caps will add more risk in their portfolio, but
over time, that risk evens out. In the long run, it all averages
out. We allow IRAs, and they are doing reasonably well. They may
have gone too much into Internet stocks in the 1990s, but a lot
of sophisticated people did that too!! They weren't the only ones.
and legacy costs are wiping out a lot of corporations, particularly
those with unions. Standard and Poor's lists almost 40 companies
that are underfunded by a billion or more on their pension plans.
This also can be a drag on the stock markets, right?
I think it
is a serious problem. I know General Motors has an annual health
care budget of over $5 billion -- annual. That's one of
the reasons they are in trouble. They are trying to force the
union to accept co-payments and restrictions. Defined benefits
plans need to be defined contribution plans. If unfunded liabilities
for these people were taken into a general accounting, it would
show that the Federal deficit is much, much larger than reported.
Companies are in exactly the same situation. The reputable
companies fear that the legacy companies will get into trouble
and put the burden on the taxpayer. What we should be doing about
that is a good question. You'd like to see companies account
for future liabilities, as well as current. Profitability
is less than it appears because you have this debt out there,
and it should be counted as part of the debt now.
that the U.S., with an aging population, could be headed toward
a stalled economy, like Japan has suffered from. Are we on the
brink of economic decline?
We're in much
better shape than Japan. Yeah, we're aging, but much slower than
Italy and Japan and the other European countries. We have a much
higher birth rate; our birth rate is at replacement level. Japan
is lower than replacement and Europe is lower than Japan's. We
have a lot of immigration of young people. As long as we continue
to have higher birth rates and young immigrants, I don't think
we'll have that big of a problem.
are certainly companies that can't support having only three workers
for every retiree…
companies, like General Motors and Ford, they're in trouble. It's
not just the legacy costs, but their cars aren't popular. It is
a problem for the Federal government and some private companies.
We need to force these companies to have a depreciation and contribution
set aside to fund these liabilities, and deduct some from their
taxes, so that they can build up a fund.
the U.S. is not on the brink of economic collapse, though some
older companies are being challenged with "legacy costs."
And, perhaps social security can be saved by allowing individuals
to set up their own health, social security and retirement accounts.
Sounds like a plan… To keep track of Dr.
continuing research and recommendations, visit his web site
and blog. To hear more of his recommendations for strengthening
the U.S. economy, attend the Milken
Global Economic Conference. To review the companies
that are underfunded by a billion or more on their pension plans,
of the S&P 500 companies that are most deeply in the red on
& Poor's (July 2005)
Estate Warning: Speculators Are Being Suckered In, While Insiders
Are Cashing Out By the Millions.
Natalie Pace, CEO, NataliePace.com
Stock Report Card,
There's a line from a song that goes, "If you want to know
if he loves you so, it's in his kiss." Well, real estate is
experiencing the big kiss off from REIT executives, who have been
cashing out to the tune of HUNDREDS of millions of dollars since
the summer of 2005.
insiders at Toll Brothers, including Bruce and Robert Toll, have
cashed out more than $229 Million over the past year, near the
high of $100 per share (source: MSN.com). Likewise, KB Home CEO
Bruce Karatz sold $146 million over the last year, near the 52-week
high of $85. KB had fallen to $69.26 per share on Friday, February
24, 2006, while Toll Brothers was down to $33.34. Click to review
REITs Report Card, to see additional data on
insider buying, income, debt, news and more.
Johnny-come-lately buyers, who were probably also late to the
Internet party in 2000, are being seduced into buying high, with
aggressive financing, such as interest-only and no-down loans,
all on the promise of future double-digit gains. David Lereah,
the Chief Economist of the National Association of Realtors, warned
attendees at the Beverly Hills Chamber off Commerce Economic Forum
in February that, "Adjustable rate mortgages should have
15% of the market. Now they have 50%, and about 70% in California.
60% were interest only. These households are trying to stretch
their income in order to afford these lofty prices."
the host and managing Editor of CNBC and author of the book, Use
the News: Separate the Noise from the Nuggets, agreed with
Mr. Lereah, saying, "It does appear that people have become
as jubilant about real estate as they were about technology in
2000." And even the new Federal Reserve Chairman Ben Bernanke
testified to Congress on February 15, 2006 that the housing market
was showing signs of softening.
to find any analysts or economists who are bullish on real estate
these days. Five out of five panelists at the Beverly Hills Economic
Forum were predicting a softening of the real estate market, largely
as a result of rising interest rates, but also due to house affordability
issues and an over-reliance on aggressive lending and speculative
For the homeowner
who intends to live in their place for a while and reap the tax
benefits of writing off their interest payments, who would be
paying rent any way, experiencing a flattening of home prices
is nothing to panic over. However, the speculator who took on
more than he could handle in an interest-only, no-down loan, could
be strapped with a mortgage bigger than the value of his home
and no way to make the payments, especially if prices drop, the
markets get flooded with sellers and interest rates continue to
rise. And certainly anyone with a 401 (k) and stock investments
should reconsider their exposure to the former darlings of the
stock market - the Real Estate Investment Trusts (REITs). As Mr.
Lereah warned earlier this month, "If there is a sharp rise
[in interest rates] to 8%, all bets are off."
run up impressive gains over the past five years, while the rest
of the indices have still not recovered from their 2000 highs.
The NASDAQ is still off over 45%, and the Dow Jones Industrial
Average and S&P 500 are still below the historical highs set
in early 2000. Meanwhile, the Vanguard REIT Index Fund (VGSNX)
has posted 40% gains since January 2000, in addition to the lovely
dividends doled out by REITs. KB Home has knocked home 500% gains
in share price over the same period, while Toll Brothers posted
an astronomical 1100% increase by their high in the summer of
If the additional
For Sale signs you've been seeing on the street corner aren't
enough to jolt you into trimming back on your REITs, consider
these other red flags. Toll Brother's has lost 70% of its value
since July 2005 (when executives were cashing out at top dollar).
On February 23rd, the company reported that signed
contracts were down 21 percent, to $1.14 billion, over all regions.
On February 13, 2006, KB Home disclosed that sales might not meet
projections because the first two months of 2006 have been marred
by cancellations and a decline in orders for new homes. KB Home
announces earnings on March 22, 2006. Finally, the National Association
of Realtors reported in January that, in December, existing home
sales were down nationwide, and most dramatically in the West,
where sales had fallen by -12.1% over last year.
the real estate broker who is lying to you about real estate returns
"always going up." S/he has a vested interest in you
buying the property, NOT in whether or not you make money on it.
That's her paycheck. Over a 25-year period, stocks, real estate
and bonds have gone up, and the returns, historically, have been
in that order, with stocks paying off better than real estate
and real estate performing better than bonds. According to Hulbert's
Financial Digest, as of January 31, 2006, the Wilshire 5000 (considered
to be a more comprehensive indicator than the Dow Jones Industrial
Average or the S&P500) has gained an annualized 12.5% (every
year) over the last 25 years. By contrast, home prices, which
everyone thinks is the hottest investment in town, are up just
7.4% this year, as of 12.31.05 (source: National Association of
Realtors). All indicators are that the returns are flattening
or heading south in real estate, rather than higher.
In any 5-10
year period, the performance of any security can (and does) fluctuate.
If you buy high into real estate and the market drops, that 4-7
year period that it typically takes real estate to recover from
calamity, when you are LOCKED IN to living in a place you cannot
sell (because you owe more than the price of it) and you cannot
RENT (because the rent won't cover the payment), and you cannot
MOVE, feels like forever. You are virtually imprisoned, and you
are in real trouble if you lose your job or can't afford to make
payments for one reason or another. This is made more acute because
typically the reason you are locked in is because everyone else
is scared off from the region or the investment because industry
has moved out of town or there has been a local calamity, and
there you are stuck with it.
Sure-Fire Investment Strategy:
with your heart and add your brain. You will make more money
by investing things that you understand and like than you will
by chasing the herd. Are you investing in real estate right
now because you heard someone tell you how much money they made
in the last five years? Or are you investing because you have
been interested in real estate or a particular home or income
property for a while, and have been tracking the returns, fluctuations,
risks, rewards for at least six months, in the area you are
interested in buying? If you are chasing money, that is always
the easiest way to lose money. If you are sure you want to buy,
you need to start educating yourself and determining which type
of investment is best suited to your tastes, AND you need to
consider the other two points of this foolproof strategy. Keep
the Leader in the Sector. In real estate, this has a great
deal to do with location. Don't buy swampland just because it
is in an outlying area to Disney World. Don't ignore the fact
that commuters are spending 2 hours on the road. That will become
a huge factor with rising gas prices. If you set your sights
on something truly beautiful (to you), you might have to put
together a plan for the purchase and be patient about waiting
for a buying opportunity, but chances are much greater that
you will gain.
low; sell high. Do not believe any mortgage or real estate
broker who tells you that real estate always goes up. When you
buy high, you're going to have to be alive a long time to realize
any gains, and perhaps go through a spell of being underwater
on your mortgage, which is challenging to survive. Buy and hold
works if you live forever. Buy low; sell high works every time.
National Association of Realtors reported that, in December, sales
were down in the U.S. by -4.4%, and in the West by -12.1%. Inventory
shot up 26.3%, while the months of supply on the market also rose
from 3.9 to 5.1 months (up 30.8%). Prices are up slightly year
over year, however, when the supply goes up and demand goes down,
If you need
to sell, depending on the region you are located in, do your research
now and plan to act sooner rather than later to get top dollar.
Summer is, historically, a strong season for real estate, so you
might have momentum going for you. What may be working against
you is rising interest rates, and, perhaps, an increase in sellers
and/or foreclosures. If speculative buyers start panicking, the
market could be flooded with sellers in the summer. And if the
Feds feel a need to continue raising interest rates, that could
be an unpleasant surprise for the markets as well. Markets don't
react well to surprises.
No one has
a crystal ball, but the guardians of industry, the Federal Reserve
Board governors, have been throwing water on the real estate fire
for 14 consecutive sessions, and they haven't said they are finished
yet. In the minutes of the January 31, 2006 Fed meeting, the governors
concluded that, "Although the stance of policy seemed close
to where it needed to be given the current outlook, some further
policy firming might be needed to keep inflation pressures contained
and the risks to price stability and sustainable economic growth
roughly in balance." Translation: you may get another rate
hike on March 27-28, at the next meeting.
So far, there
is small indication of a panic, but sure signs of a softening
in real estate, and that the Feds are intentionally guiding the
economy toward that end. Don't be a sucker when real estate is
getting the kiss off.
1. You Don't Have To Be Donald
Trump To Become a Real Estate Millionaire! You
Just Have To Do Your Homework and Get in the Game. By Bobbi McKenna
Real Estate in Today's Market: by Steve Dietrich,
president, Financial Research Group, and a guest lecturer at the
Anderson Graduate School of Business, UCLA.
America. Americans are now spending more than they
are earning, and personal savings is a negative number. Is that
a temporary dip or are we courting disaster?
Estate Party Policy: Tempted to Crash the Real
Estate Party? 5 Tips to Make Sure You Drive Home Safely… By Natalie
Pace, founder NataliePace.com
Your Dream Home With No Money Down. Q&A with Kassie Welch,
Mortgage Financial Consultant
6. Top 10 Signs
of a Bubblicious
Housing Market. By Steve Dietrich, guest lecturer
at the Anderson Graduate School of Business, UCLA and Natalie
Pace, CEO, NataliePace.com
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 security.
DISCLAIMER: Information has been obtained from sources believed
to be reliable however NataliePace.com LLC does not warrant its completeness
or accuracy. Opinions constitute our judgment as of the date of
this publication 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.
& CEO of Odyssey
You Don't Have to Drive Ugly Little Cars to Save Money on Gas
obvious that, if there's a God, he had a sense of humor when he
handed out oil reserves. He allowed the Jews to wander the Middle
East for thousands of years, and then settle in the only place
without oil. Meanwhile, oil supplies ended up in the hands of
a group of folks that mostly despise the West, treat women like
property, are nostalgic for the 6th century, and can
be whipped into a murderous frenzy over a few cartoons.
most alternative energies will reduce the demand for fossil fuels
in general, they will do little to quench the thirst for oil.
The problem is that most of these technologies are designed to
produce electricity. For reference, here's an overview of our
sources of electricity by fuel source in 2004:
As you can
see, when it comes to producing electricity, petroleum is relatively
insignificant. Putting a solar panel on your roof or a windmill
in your backyard will reduce the demand for coal and allow some
aging nuclear plants to be retired, but will have little impact
on the demand for oil.
As long as
we're on the topic of things that won't solve the problem, ethanol
is worth mentioning. This belongs in the category of another government
bribe for the farm vote rather than a serious solution to the
problem. Leaving aside the question of whether there's enough
farmland to grow enough corn to be distilled into enough ethanol
to make a difference (probably not), this looks like another government
welfare check for farmers. According to most studies, when all
the energy inputs are counted, the process of distilling corn
into ethanol consumes more energy than it produces.
is mostly refined into gasoline and diesel fuel and is overwhelmingly
used in the transportation industry. When it comes to powering
our vehicles, alternatives are pretty limited for the time being.
Although it's expensive, volatile, and requires a huge new infrastructure,
renewable hydrogen looks like the long-term solution that will
allow us to someday give the Middle East the lack of attention
it deserves. However, we need something in the meantime.
visiting Europe last year before the major run up in oil prices.
As most Europeans believe in taxing everyone and everything to
death, gasoline there was already the equivalent of $5 per gallon.
The result was a sea of ugly little cars. With little cartilage
in one knee, riding in these as a passenger was painful and I
couldn't help hoping our future would be different. After visiting
car dealers and making a lot of new best friends in the last few
weeks, it might be.
hybrid is any vehicle that combines two or more sources of power.
In this case, hybrid cars combine a gasoline engine with a rechargeable
battery and electric motor. The gasoline engines for hybrids are
usually a bit smaller than the typical gas-guzzler to accommodate
the extra components under the hood. However, the hybrid motor
provides extra power for quick acceleration or hills. When the
hybrid is stopped, some are virtually silent as the gasoline motor
shuts off and the car runs off the electric motor. These are cars
that don't need to be plugged in as they use the gasoline engine
and also recover the energy used in braking to recharge the battery.
with any new technology, hybrid technology is in its early stages
and still very expensive. Here's a comparison of the five cars
that currently offer a standard version and a hybrid along with
the approximate MPG gas savings:
RX330 - RX400h
the Honda Civic appears to be the only one with a big increase
in gas mileage and a small increase in price. In most cases, the
hybrid has additional features that account for some of the price
difference. However, this technology still increases the price
substantially. Is it worth it?
we assume that gas costs $2.50 per gallon and someone drives 15,000
miles per year, here's the annual cost of gasoline:
standards for hybrids are reported to be just as misleading as
for other cars, and a good rule of thumb is to reduce the reported
gas mileage on the window sticker by 3-5 MPG. As a result, if
I trade in my gas-guzzler that gets about 15 MPG for one of the
roomy hybrids, actual mileage will probably improve to a bit over
25 MPG. As you can see from the above, savings would be about
$1,000 per year. With current gas prices, it could take over 8
years to make up the price difference through gas savings. From
doing this exercise, it's hard to make a case for hybrids on fuel
advantages of a hybrid, the key variables are gas mileage, miles
driven per year, and the cost of fuel. High annual fuel costs
or the expectation that gasoline prices will continue to increase
make hybrids look better.
made a point of driving the original and the hybrid version when
visiting a car dealer. Before getting into a Toyota Highlander,
the first thing that struck me was the sticker on the window that
indicated the gas mileage was higher in the city than the open
road. When I asked if this was a misprint, the explanation was
that stop and go driving actually improves fuel economy in these.
When the car is stopped or the car decelerates, the electric motor
takes over and saves gasoline.
be noted that this applies to cars based upon the Toyota hybrid
technology, as cars based upon Honda hybrid technology have the
more typical lower gas mileage in city driving. For what it's
worth, the warranty on the Toyota battery and electric motor package
is 150,000 miles versus 75,000 miles for the Honda package. As
a result, city folks that do a lot of stop and go driving would
probably prefer the Toyota technology (also used by Ford &
Mercury) while the Honda technology looks better for those that
spend a lot of time on the open road.
major surprise had to do the performance of the car. I have to
confess to having a bias that these cars were probably built for
environmentalists that would happily hold up traffic by driving
an underpowered car that took most of the day to go up a hill.
Another surprise. Hybrids combine the power of two motors and
are significantly faster and more responsive than the original.
They were a lot of fun to drive.
anyone that purchases (leases probably don't qualify) a new hybrid
after 1/1/06 with the intention of driving it and not selling
it, tax incentives vary by a formula only understood by a bureaucrat.
Here's the incentive for current and planned hybrids:
Estimated Tax Credit
Coming in 2006
This is worth
more than a deduction as your tax bill is reduced by the above
amount. However, as with any government program, there's some
fine print. The biggest caveat is that this tax credit sets a
limit of 60,000 hybrids per carmaker. It's first come, first served.
After that, the incentives phase out over a 15-month period.
California drivers, some hybrids qualify to be driven in the carpool
lane with only one occupant. The bar is set fairly high, as hybrids
have to get 45 MPG or more before the owner can apply for a sticker
that allows the use of the carpool lane at any time without another
passenger. At present, the Honda Civic, Honda Insight, and Toyota
Prius are the only hybrid vehicles that qualify.
In the last
few years, oil production hasn't kept pace with demand and it's
getting down to crunch time. A way has to be found to reduce the
demand for oil, or skyrocketing prices and a lot of unpleasant
consequences will do it for us. This is going to be a tough problem
to solve, but keep in mind that it's mostly a technological problem
and higher oil prices finally provided the incentive to solve
it. If hybrid vehicles gain significant popularity, these may
be a way to manage our dependence on oil with relatively few sacrifices
until a more permanent solution is found.
considering a hybrid, Federal tax incentives will shorten the
payback period and the combination of more horsepower AND better
gas mileage in the roomier cars and the ability to drive in the
carpool lane with smaller cars is a combination that should appeal
to many people. This is a very impressive technology, but to gain
widespread acceptance and make a dent in the demand for oil, hybrid
vehicle manufacturers will have to become more realistic when
it comes to pricing and a wider variety of vehicles will have
to be made available. Our hope is that more competition and increasing
sales will result in pricing that shortens the payback period
from gas savings dramatically.
interested in more information on these, http://www.hybridcars.com/index.html
is worth a visit. This website includes a brief description of
the publicly traded companies involved in hybrid vehicle technology.
For disclosure purposes, it should be noted that Odyssey Advisors,
LLC presently has investments in three companies with some exposure
to this industry.
is the President & CEO of Odyssey Advisors, LLC, an independent
investment advisory firm specializing in equities and fixed income.
He can be contacted a www.odysseyadvisors.com or 310.568.4700.
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.
© 2006 by Odyssey Advisors LLC
the Most Successful Blue Chip Stock Picker on the Planet, Geraldine
Weiss, the founder of Investment Quality Trends.
Natalie Pace, CEO, NataliePace.com.
Quality Trends, in 1966, she couldn't even get a job
in the industry (as a woman, she was offered secretarial positions
instead of an analyst's desk). Today, her newsletter is ranked
number one for risk-adjusted returns for the past twenty years
Financial Digest, a respected independent
stock newsletter-tracking agency. Many Wall Street VIPs who
wouldn't offer her a job are now ardent subscribers to her bi-monthly
Wilshire 5000 has posted 11.8% annualized returns for the past
twenty years, Investment Quality Trends has brought subscribers
a return of 13.2% over the same period. And the best part is
that since you're investing in dividend-paying Blue Chips, you
can rest easy at night while your money earns dividends and
will earn the I.Q. Trends designation Select Blue Chip
after it has met 5 of the 6 following qualifications.
The dividend has been raised five times in the last twelve
2. It carries a Standard & Poor's Quality ranking in
the "A" category.
3. It has at least 5,000,000 shares outstanding.
At least 80 institutional investors must hold the stock.
4. There have been at least 25 years of uninterrupted dividends.
5. The earnings have improved in at least seven of the last
kind of stability, research and strict criteria going into each
buy, sell or hold and the Investment Quality Trends track record,
IQ Trends is a reasonable alternative to a mutual fund, if you
are interested in managing your own holdings, but want the best
research available. The Investment Quality Trends buy/sell strategy
is a long-term buy and hold proposition (not the day-trading
favored by many stock newsletters), thus it can be ideal for
the retirement plan, where you want less risk, less trading
and less active management, combined with a much more favorable
return than is seen in the average mutual fund.
is no longer actively managing Investment Quality Trends. Instead
she is enjoying her golden years and her family, including twelve
grandchildren. However, Kelley Wright, the managing publisher
of Investment Quality Trends is continuing Ms. Weiss' legacy,
and adhering strictly to her formula. As Kelley says, "Geraldine
Weiss was a true pioneer but she didn't get all of the kudos
that she deserved. I'm trying to do that for her now."
Geraldine's system calculates winners based upon the 6-point
checklist, it is founded upon a simple theory that Dividends
Don't Lie (the title of her first book). "We pick only
quality stocks," Geraldine says. "Those companies
care about their stockholders and are willing to share their
profits in the form of dividends."
So, if you're
wondering what's in Investment Quality Trend's Lucky 13 list,
or on their undervalued chart and which blue chips are ripe
for harvesting profits on, read on, and mark your calendars
to come into the NataliePace.com chat room on March 15, 2006 at 8:45
a.m. PT to ask your questions of Ms. Weiss and Mr. Wright one-on-one.
"Women make better investors than men. They learn
to look for bargains and look for seasonal trends. Men like
a stock pick because they like Joe or the broker. Without any
investigation, they'll go and buy. A woman rarely will do that.
A woman will research and make sure she is getting a bargain."
you are a legend. Your stock newsletter, Investment Quality
Trends, is ranked number one in risk-adjusted returns for
the past 20 years, with 13.2% annualized gains (source: Hulbert's
Financial Digest). However, when you started out, in 1966,
there weren't many women in the financial business, were there?
I used the
initial G. Weiss because when we sent out promotional literature,
I used the same letter that my partner sent out. He got all
the replies and I got none. There was a feeling against women
in the business back then. Everyone thought I was a man when
I used G. Weiss. Lou Rukeyser invited me to be a guest on his
show, so I had to come out of the closet. By then, they didn't
care if I was a woman or a well-trained monkey.
in the U.S. today have much more opportunity in almost every
aspect of life and business. That wasn't the case thirty years
ago, was it?
It was very
different in the beginning. I tried to get a job as an analyst
and all I was offered was a secretarial position, so I started
my own business. I was the first woman to start an investment
advisory business. It isn't that way anymore.
your degree. Why were you getting offered entry-level positions?
say that they didn't have an opening, but they did have an opening
as a secretary.
the upside was that it prompted you to start your own business,
which is today, one of the most successful in the history of
only quality stocks. Those numbers hold up better with quality
companies that have been around a long time, have a reputation
and have a lot of stockholders. Those companies care about their
stockholders and are willing to share their profits in the form
criteria you use is quite strict. Did you have a Eureka moment
that led to the structure of your formula?
and mother were both investors. I heard about the stock market
over the dinner table. My father was a stickler for picking
blue chips that pay a dividend. My folks were not all that different.
There were a lot of people who were interested in the income
of stocks. The market wasn't a gambling casino. When it came
time for me to think about the stock market, I remembered what
I learned from my father. I realized that dividends and income
were important. I then began to realize that stocks fluctuate
to the extremes from high to low dividend yield. When the dividend
yield was low, massive investors were not interested any more.
I applied that to blue chips and determined that as dividends
were increased, the price would rise. You could buy at undervalued
and hold it indefinitely as long as dividends continue to rise.
It was a very good strategy, as long as you stuck to blue chips.
Just hard work…
It was amazing
to me that it worked. This is so simple! Why doesn't every one
realize this? Everyone is looking for the Holy Grail, and it
is just such a simple thing.
see anything worth buying these days?
examples are financial stocks, many of which are undervalued
because everyone is looking for interest rates to go up. When
you look at Bank of America, which is going to be around for
a long time, the yield is 5%, and it is selling at 11 times
earnings. This is a good buy, and you hold it until interest
rates start coming down again. You're buying stocks that are
not popular, that are not in favor, and you wait for them to
come back in style. If you buy good quality, they do come back.
As long as you have a relatively long-term horizon, and you're
not playing the market, it is an approach that will reward you.
anyone determine the undervalue and overvalue point of a company
by looking at its dividend yield?
at long-term data. Each company is different. There is no blanket
formula. It has to be applied to that company and that stock.
Every stock has to be evaluated independently. This is something
they should be teaching in high school and certainly in college--for
men and woman.
maybe you should write the textbook!
two books. It doesn't pay. The sad thing is that financial books
don't pay more than poetry books. For the 1st book
I received a $15,0000 advance. The 2nd book gave
me an $18,000 advance. For the time, effort and anguish of writing
a book, it doesn't pay. I see these people on T.V. with a popular
novel and Hollywood picks it up, but that's not happening with
Quality Trends covers 350 stocks. Every month. That's like writing
a book every 15 days…
determine the criteria, you put that on the computer and mark
the yield you're looking for. As far as our issues go, it's
pretty simple. UnderValued Stocks: those you look at to buy.
OverValued: you look to sell. A rising trend stock could be
attractive, if it's just started to rise. Stocks in declining
trends, if it's getting close, near 10% of UnderValue or OverValue,
I'll consider it. I don't look for the last dollar. Again, this
isn't a trading vehicle. It is a long-term investment vehicle.
for 401(k) s?
for that. You're sticking with good quality. You're looking
for dividends. That's exactly what you want in your 401k or
when you began publishing, what it was like for women?
publishing the newsletter because in 1966 — 30 years ago — it
was very difficult for a woman to break into this business,
even as a stockbroker. I wanted to analyze stocks and the stock
market, so I realized I would have to start my own business
to do so, which I did.
was there the perception that women didn't have the experience
with money? Women have always been the shoppers of the world.
women make better investors than men. They learn to look
for bargains and look for seasonal trends. Men like a stock
pick because they like Joe or the broker. Without any investigation,
they'll go and buy. A woman rarely will do that. A woman will
research and make sure she is getting a bargain.
you finally did get the invitation to the Stock and Bond Club.
When I was
invited to join, I didn't. By that time, it was a social club,
and I didn't have the time.
were you in business before Lou Rukeyser found you?
It was almost
10 years. The first time he had me on the show, I thought, "I'm
so nervous. I wonder if anyone ever died of stage fright."
His producer said they had more response than with any other
program. Actually I was on his show three times, and then he
invited me to be a speaker in his seminars. Just a few years
ago, before I retired, he invited me back again. He likes my
approach, too. He always said, "My father would have liked
your approach. He said stocks that pay dividends go up too."
concerned with some of these old-school blue chips that are
in the red on their pension plans? Standard and Poor's published
a report in July that names 39 companies that are a billion
or more underfunded on their pension obligations.
know that you can do anything about it. The funds are so large.
That's why we follow the funds. They do point the way where
you're going. It's too bad. Usually there is some calamity that
shakes it all out. In 1973, all of the mutual funds went out
of business, and then you build it up again. Maybe these hedge
funds will reduce the impact, but it is a problem -- something
that you have to watch.
do you think about hedge funds?
It is a
problem that these fine companies get jerked around by these
funds. On the other hand when they sell, hedge funds offer
opportunity because they irrationally depress a stock. It
offers good value if you're an alert investor. Look at Pfizer
right now. There's nothing wrong with Pfizer. Merck -- I'm a
little afraid of that. And yet, we had the same problem with
Philip Morris (NYSE: MO). Altria [the new name of Philip Morris]
came through all those lawsuits smelling like a rose. I have
a feeling that Merck and Pfizer will come through it, even though
there are pending lawsuits. I think that they are frivolous
lawsuits. Those are the kinds of things that the institutions
are afraid of, and individuals can take advantage of with a
few hundred shares.
the most important thing that every investor should know?
thing is diversification. Don't put all of your money in at
once. Wait until you see a good value and then buy. In the meantime,
keep your money free. When you see the Bank of America priced
right, you go in and buy 100 shares. Do it gradually.
bold or cautious right now?
bubble is definitely a bubble. I certainly wouldn't invest in
real estate right now. There is never a time when there isn't
good value in the stock market. Financials, for instance. What's
going to happen to the whole market I don't know and I don't
care. There is always something to buy. Rarely can you indiscriminately
buy anything. If you're selective, there is always something.
consider any other criteria, like whether or not the CEO is
ethical? Do you try to avoid the Enrons of Wall Street?
to know what people are doing in their personal life. Is the
quality of the company an A+ company? Does it pay its dividend?
Does it increase its ratio? Is debt 50% or less of the incoming
revenue? All of these nuts and bolts are important, and they
add up. You don't know what the CEO is doing…
all charming man. In order to be the president of a corporation,
of course you're charming, of course you know how to say the
right things. Only look at the figures. Just calculate the performance
of the numbers of the company. Don't look at what they say,
but what they do.
where you are bullish/bearish?
good quality and good value in the financials and also in the
drug stocks. Bristol-Myer Squibb is selling for yield, at almost
5%. Bob Evans Farms and also Mimi's here. Those are interesting
stocks that happen to be undervalued. There aren't a lot. Wal-Mart
and MacDonald's are undervalued. Those are good stocks.
nervous about the real estate market. It really is greatly overvalued.
That will come to an end.
have any advise for women who are hearing the Biological clock
ticking at the same time as the Tenure clock?
waited until I had my children in school to go back to work.
I felt that was important to make sure they had a home to come
back to. It depends upon the person. I think a woman's main
job is to the family. On the other hand, I didn't want to be
stuck in the house. But that was me. My daughter in law is an
attorney. She doesn't want to have kids until she's over a certain
age. Everybody has to do what's right for them. Everyone has
to wrestle with those problems for themselves, in however they
are comfortable doing it.
Weiss just had her 12th grandchild. She has the number
one stock newsletter in the U.S. I guess you could say that
she has managed to balance work and family quite well!
miss chatting one-on-one with Ms. Weiss and the current managing
editor of Investment Quality Trends, Kelley Wright, in the NataliePace.com
chat room on Wednesday, March 15, 2006 at 8:45 a.m. PST.
For more information, go to the calendar section at NataliePace.com.
If you would
like to start earning reliable gains the easy way, you can subscribe
Quality Trends online at IQTrends.com.
For more information, email info@IQTrends.com
or call 858.459.3818.
to Be Sexy and Fiscally Fit? Avoid Investment Pornography!
Kelley Wright, Managing Editor, Investment
Wright, Managing Editor, Investment Quality Trends Newsletter
Shows are an excellent forum for investor education,
the exhibit hall is an excellent forum for disinformation and
a centralized location to see all the things that should be avoided
and/or ignored if one is serious about their financial well being.
While I am an advocate of the free market and free enterprise,
I am also cognizant that fear and greed are two very powerful
emotions and that the less than scrupulous can and will take advantage
of that fact.
is our wiring or just our fallen human nature that makes immediate
gratification so attractive. Whatever the case, please understand
the following: there is no software that generates 100% fool proof,
guaranteed profit trades; that "revolutionary" new trading
system being demonstrated at the big booth at the end of the row
that was "back tested rigorously" only works under the
conditions of the test. As a friend of mine likes to say, "back
testing is simply torturing the numbers until they confess."
You will not make 10,000% in the next 46 minutes using Dr. Joe
Blow's heretofore unpublished, double-secret trading system that
will only be released to the first fifty traders lucky enough
to pay $3,000 for it. It's all RUBBISH!
The fact of
the matter is that much of what the investment advisory community
produces is nothing more than investment pornography. First you
get excited, then confused and eventually angry when you realize
that it's just marketing hype, and you got suckered.
the exception, not the rule. A case in point would be a conversation
I had with the head of a publishing company who asked if we would
ever consider joining his stable of newsletters. As I looked at
the rows of airbrushed photos of the respective editors I realized
that only one of their letters had made subscribers any money,
and then only when the market was moving in his direction. I pointed
this out to the fellow and suggested that the contrast of our
track record might cause problems for the other newsletters. "Returns?
Who knows about returns; we only care about subscriptions. They
(the public) will buy whatever we sell them." Enough said.
A couple of
months back I suggested in this space that Google (GOOG) would
one day be the mother of all shorts. I made that statement for
a number of reasons, one of which was something I witnessed at
the AAII Conference in November. Our neighbor in the next booth
was demonstrating his very well known publication's momentum trading
system. The stock he was using to make his point was Google. When
I heard this fellow say that GOOG was the only stock he owned
and he was margined to the hilt I knew the top had to be close.
day we had a chance to chat and he asked about our approach and
how it worked. He listened intently for a couple of minutes and
then began to explain the "flaws" in our system. I nodded
my head and thanked him for his insights. I saw this fellow in
Orlando last week but I didn't have a chance to ask him about
his position in Google. Hmmm, don't you just hate those margin
If I had a
dime for every person that told me IQT is "technologically
challenged," or "hey, you could use some colored ink
pal," or any of the other helpful hints we inevitably hear,
I'd probably be in the Cayman Islands contemplating the cloud
formations. If what we do is dull, boring, vanilla or any of the
other delightful adjectives that are suggested to me, then so
be it. I sleep like a baby at night and for the most part our
subscribers do as well. 1). Protect your principal. 2). Earn a
return on investment (dividends). 3). Capture capital gains for
total return. Now that's excitement!
Financial Digest ranks IQ Trends the number one investment
newsletter out of the 165 letters surveyed for risk-adjusted returns
for the previous twenty years. What is important to note is what
separates us from the other four letters in the top five; specifically
the amount of risk required to generate returns. Two of the letters
had about the same level of risk as the Wilshire 5000 index; one
was almost twice the risk of the Wilshire 5000 and the
other more than twice the risk of the Wilshire 5000. IQ
Trends achieved its returns with about 24% less risk than
the Wilshire 5000. Beyond the obvious that superior returns with
less risk is desirable, less risk equates to less volatility and
therefore generates higher compound rates of return over time.
compulsion to be viewed as insightful is nothing new; neither
is their capacity for absurdity. By example, this notion that
the new Fed chief will need to flex his inflation-fighting muscles
to demonstrate his machismo to the markets is sophomoric at best
and willfully ignorant at worst. Bernanke made it to this position
because of his mind, not because he has the biggest slide rule
at the conference table. It is simply pathetic what passes for
commentary these days.
in the News:
(T) and Bell South (BLS) are humming; Verizon (VZ)
isn't. Guess which one is the Faded Blue Chip?
the Faded Blues, I read an opinion that General Motors (GM)
was a buy now that they had taken their medicine. OK, so let me
get this straight. The company is bleeding red to the point that
they cut their dividend 50%, and this is a good thing?
Auto and home
insurer Mercury General (MCY) declared a first-quarter
dividend of 48 cents, equaling an annual rate of $1.92. The annual
payment represents an 11.6% increase over the rate paid in 2005.
It is those double-digit dividend increases every year for the
past twelve years that earns MCY a "G" designation by
Tire & Rubber Company (CTB) today announced a quarterly
dividend of 10.5 cents per share on common stock, payable March
31, 2006, to stockholders of record at the close of business March
3, 2006. This will mark the 136th consecutive quarterly dividend
paid by Cooper Tire & Rubber Company.
Gallagher (AJG) looks like a mess on the surface, but are
things really that bad underneath the hood? Earnings have certainly
taken a hit as the company settles their sins of the past but
the core businesses of brokerage and risk management are producing
revenue gains of 7% and 6% respectively. AJG also has a growing
risk-management business that's not tied to insurance brokerage.
Lastly, the company pays a good dividend and has a "G"
designation for their track record of consistent dividend hikes.
This stock might be too "iffy" for some, but for the
patient investor it should turn out to be a solid performer.
stocks coincides with historic market bottoms.
stocks coincides with historic market tops.
- UNDERVALUED buying area: Dividend yield is historically
high and price is
attractively low. Bargain buys.
- OVERVALUED selling area: Dividend yield is historically
low and price is unattractively
high. A sale should be considered in this area.
- RISING TRENDS: Stocks have moved at least 10% from Under-value
should be held until price is at or near Overvalue.
- DECLINING TRENDS: Stocks have moved down at least 10% from
and should be avoided until price is at or near Undervalue.
How Do I Know Which IQ Trends stocks to buy?
Given the fact that there are approximately 100 stocks between
the Undervalued and Rising Trend categories, how does one choose
which stocks to put into their portfolio? Do some subscribers
just buy them all?
This is a frequent question and one we address at most presentations,
most recently the paid event at the World Money Show.
run a mutual fund 100 stocks is simply too many to track and you
would probably lose most of the advantage a more concentrated
portfolio would provide. Accordingly, we generally advise that
you hold no more than 25 stocks.
A filter we
suggest at our presentations consists of the following: 1) stocks
that are Undervalued; 2) stocks that have a "G" designation
for consistent dividend increases of at least 10% per year; 3)
stocks that are ranked "A" or better by S&P; 4)
a P/E of 15 or less; 5) a dividend payout percentage of trailing
twelve months earnings of 50% or less (except for utilities at
75%); 6) debt as a total percentage of capitalization of 50% or
less (75% for utilities); and lastly, 7) a book value of two times
While we try
to make this as mechanical as possible, we realize that stock
picking is still an art to a degree. For those subscribers that
don't have the time or the inclination to learn such nuances we
offer a non-discretionary consulting program for an extremely
modest annual fee. For details contact Michael Minney at 858-427-1071.
your opportunity to tap Kelley Wright's wisdom in an exclusive
NataliePace.com online chat.
March 15th, 2006
With The Most Successful Stock Picker on Wall Street. Investment
Quality Trends has the highest risk-adjusted returns for the past
20 years. Their focus is dividend-paying Blue Chips. Meet the
Founder, Geraldine Weiss, and the Managing Editor, Kelley Wright,
and learn what companies are hot for 2006.
is rated the #1 Top Performing Newsletter for twenty years (risk-adjusted)
by Hulbert's Financial Digest. If you are interested in
accessing Mr. Wright's newsletter, to post those kinds of gains
yourself, go to www.IQTrends.com.
a Raise Now? It Could Be a Check Mark Away.
employers offer "matching funds."
you forgot to set up your 401 (k), you could be throwing free
money down the drain.
family, sitcoms and books provide infinite guidance on what to
anticipate as we enter a new phase of life. In your twenties,
wouldn't it be great to have some sort of a "Smart Girl's'
Guide" to life on your own?
I had a job
offer from a major Wall Street firm and found a studio apartment
within walking distance to the office. Simultaneously, some of
my friends were moving to NYC. So with my new home, my corporate
casual wardrobe and my social network, I thought I was set.
On the first
day of work I was given a welcome package that included a myriad
of papers. As I took a cursory flip, I saw keywords like 401 (k),
medical and dental insurance. After spending sometime with the
paperwork before running out for drinks with the other new analysts,
I filled out what I thought was relevant--the medical and dental
I did not
bother with the 401K. My basic (mis)understanding of the plans
were as follows:
1. My shoe
budget goes down. Money, that could otherwise be spent today,
would be deducted from each paycheck and saved for use after I
was too old to enjoy it (591/2).
2. I was giving
up enough to the man! I felt the burden of expenses as a newly
minted graduate living in New York City and justified just saying
no to another boring, necessary evil that sucked more money out
of my wallet and away from great shoes and clothes!
smart as I am, with an enviable new job in the Big Apple, I actually
worked for 6 months without a 401K plan, wasting over $5,000 of
my budding nest egg and throwing away $2,500 of free money from
my employer! Even more startling is that only about 36% of
single woman are planning for retirement. (Source: Oppenheimer
Survey on Women and Investing)
Due to ignorance,
fear, short-sightedness and my desire to hit happy hour right
at 7:00, I had overlooked all the benefits of participating in
a 401K, benefits that, incidentally, pay off NOW, not just when
I retire. And the best thing about it is that after you enroll
and allocate your investments, you just have to monitor the statements
to make sure that your money is working for you and that you have
not made investments in securities that are headed south. Of all
the crazy money-making schemes that we think of, from Vegas to
selling articles, letting your money do a little work for you,
and monitoring its progress has to be the easiest!
You Don't Save It, It Just Goes to Uncle Sam:
Advantages: The money you contribute to a 401K plan is a pre-tax
deduction. Therefore, you pay yourself before paying the
government. The money cannot be used for your next vacation or
to buy Manolo
Blahniks any way, so isn't it better to save it in a 401K
instead of giving it to the government? In addition, you are not
taxed on any gains, including interest, you make on 401K money
until the funds are disbursed. The money in a 401K plan grows
the Easiest Way to Become a Millionaire
you have 40 years to retirement and make $25,000 (with a fixed
5% raise a year) and contribute 10% of your salary with a 3% company
match, you could retire at 65 with $1 million in savings.
Contribution (10%): 2,500
Matching Contribution (3% of 2,500): 75.00
Rate of Return: 8%
Account Value: 2,689.36
Raise From Your Employer
Match: Many employers have a match system in place, where
they offer to match a certain percentage of the employee's contribution.
In my case, it was 50% of my contribution. That is free money!
An instant raise!
require you to stay at the firm for a certain number of years
before the matched amount is considered vested. At my firm it
was three years. I only learned about vesting upon departing the
firm, so I recommend that you ask about vesting when you enroll.
Add this to the list of the other questions you have for your
401 (k) manager.
is the fun part! 401k plans offer a range of investment options.
On average, companies now offer 13 investment options. The most
common options are listed below. If you're still confused, there
are a number of articles cited at the end of this article, which
should help you make sense of the best options for you (source:
Stock Funds: Generally have a median market capitalization
of more than $5 billion to $10 billion. These stock funds are
made up of large companies.
Stock Funds: Normally have a median market capitalization
of between $2 billion and $10 billion.
Stock Funds: Small-cap stock funds typically have a median
market capitalization of less than $2 billion.
Stock Funds: International stock funds invest in equity securities
of issuers located outside of the United States.
Stock Funds: This type of mutual fund generally includes at
least 25 percent foreign securities in its portfolio.
Bonds are usually divided between longer maturity and shorter
maturity. Short-term bonds are generally considered to be less
risky than long-term bonds. A bond fund is always replacing bonds
in its portfolio to maintain its average maturity objective. You
may also have a foreign bond option.
Value Funds: These funds can provide an attractive alternative
to bond funds or money market funds in a 401k plan. These funds
invest in stable value contracts with insurance companies or banks,
and their market risk is generally less than that of a stock or
Funds: Sometimes referred to as "cash," money market funds
are like bank savings accounts in that the value of your original
investment does not fluctuate and your investment is not "at
risk" as it is with stocks and bonds. However, they are not
guaranteed by the FDIC, like a bank savings account would be,
and the rate of return is historically lower than for stock and
bond funds. As you near retirement, you want to have less money
at risk, and you may wish to increase the amount in the Money
Market and Bonds, and reduce your exposure to stocks.
These funds are intended to replicate an existing market index
such as the S&P 500, which is an index of 500 large U.S. company
stocks. Index funds and exchange-traded funds (ETFs) generally
have lower internal fees and costs than "mutual" funds,
which means more money is returned to investors.
Stock Funds: These funds allow you to invest in the company
you work for. Company stock funds are not diversified investments,
which makes them theoretically more volatile than a mutual fund.
The NASD warns that, "If your company stock holdings exceed
20% of the value of your total investment portfolio, you may wish
to consider redistributing your assets across a broader spectrum
of investment." This was a HUGE problem just five years ago,
when 57.73% of Enron employees' 401(k) assets were invested in
Enron stock, as it lost 98.8% of its value.
Market Funds: These funds are made up of stock of companies
located in developing nations.
Funds: A life cycle fund is a mutual fund geared toward investors
in a certain age group or with a specific time horizon for investing.
This is a
great entrée to investing, because you have a manageable
list of investment options to research and allocate funds. Allocations
should be made according to your risk tolerance, age and investment
goals. To determine how much risk to incur consider your investment
horizon - how much time before you will need your money. You should
choose where you'll invest your 401(k) funds based on how many
years you have before you retire. The closer you are to retirement,
the less time you have before you'll need your money and the lower
risk you'll want to take. Stocks carry much more risk than bonds
(and historically a higher rate of return), and bonds have more
risk than money markets.
401k retirement plan can follow you throughout your career. When
You Leave Your Job, Don't
Leave Your 401K! My last article outlined options
for rolling over your retirement plan without any penalty or tax
and hardship withdrawals
I analyzed the benefits of contributing to a 401k, a tiny hesitation
remained. If I am not able to withdraw money until I am 591/2
without paying a hefty penalty, what happens if there is an emergency
in the interim?
allows plan administrators to offer 401k loans to participants.
(The government doesn't require this and therefore it is not always
available.) Proceeds of 401k loans are not subject to taxes or
the 10% penalty except in the event of default. The government
does not set guidelines or restrictions on the uses for 401k loans.
Many employers, however, do, and these can include minimum loan
balances (usually $1,000) and the number of loans outstanding
at any time in order to reduce administrative costs. This is an
option you have under the 401k plan, however there are detailed
criteria for loan and hardship withdrawals that are not listed
into my first job, I finally threw in the towel and committed
to the 401k plan. I felt foolish for not contributing sooner.
I effectively missed a raise of $2,500, since my firm was matching
.50 for every dollar I contributed.
be the Smart Girls' financial lesson number 1. Don't throw away
$2,500 on the dream of a pair of shoes.
Patel is an associate in the Debt Capital Markets Group at Harris
Nesbitt Corp. She focuses on the origination, structuring
and execution of high yield and investment grade public and private
debt financings, as well as private equity transactions. Previously,
she was an analyst in the Leverage Finance Group at Citigroup
Global Markets. Email: firstname.lastname@example.org
Articles of Interest:
Eastern European Renaissance. This Year's "It" Investment.
Article and Stock Report Card by Natalie Pace.
Your Job, Not Your 401(k) By Maya Patel. Discount Brokerages
Make Rollover IRAs Easy.
Investor Alert: Putting Too Much Stock in Your Company -
A 401(k) Problem
the Mutual Fund Salesman Forgot to Mention. by Paul
Woods, President & CEO of Odyssey Advisors, LLC. How sales
charges, high fees, and excessive diversification will have you
working way too long.
You Starting Your Day with Rocket Fuel or Breakfast Glue?
Gary Kobat, personal trainer and life coach.
thirds, or over 67% of the U.S. population are NOW overweight
or obese." Change Your Diet; Change Your Life. Start
our own Gary pacing Jim Carrey in Jim's first Half Ironman
we don't mean coffee. Our question: are you starting your day
with food or fuel?
a traditional seventy-percent-plus carb breakfast is one of the
most unhealthy dietary habits in existence in this country. Breakfast
bagels, breads, muffins, cereals, potatoes, sugars, dairies, and
even more sugars (or liquids and foods that turn into sugar)
are on every corner with commercialism at it's worst. Clearly
this type of eating "non-plan" does not contain a current understanding
of human physiology and daily human performance need at today's
levels, and is basically how everyone got onto the "over"
weight and obese track in the first place.
Something is not working here. Realize a paradigm shift
is in the works!
research confirms, and the latest studies are just in: When you
consume less FOOD, you'll live a longer, higher-quality life.
When you eat more FUEL, you'll live an even longer, healthier,
vitalic, energetic, higher-quality life.
You are what
you eat, or more importantly, what you eat that is still with
you. Your biography becomes your biology. Regarding what you consume,
you need to ask yourself another powerful question: is your meal
plan clogging you, energizing you, or cleansing you?
Foods and Fuels are the most powerful drugs you will ever consume.
Remember: you don't get overweight, you DO overweight.
Your consistent daily actions, not what you do once in a
while, are what determine your health, fitness and longevity (ie:
weight destiny). Two thirds, or over 67% of the U.S. population
are NOW overweight or obese. That's "over"
10-30 lbs. "over" weight. We refer to that as
the infamous "over" syndrome. (Over eat, over emotional,
over stressed, over tired, over, over, over …) and our kids
are getting worse everyday.
"Over", "more", "emotional only" eating and "supersize" is OUT!
Small portions, the size of your palm are IN! All you can
eat is OUT! Five-to-six small meals a day are IN!
Excess carbs? Please! Start your day with proteins to balance
your mood the rest of the day, then eat your carbs for energy
mid morning, have your biggest meal as lunch so you have plenty
of time to digest it for energy the rest of the day, and don't
eat after 9pm. The truth is unless you are training for a marathon,
an ironman, or a long bike excursion, packing seventy percent-plus
of your daily diet with carbs is absolutely heading you away from
your objective and putting you on the obesity path of the masses.
to the flour and water you used as a kid in elementary school,
turn into paste or glue. So remember the next time you think you
need a bagel, you are really ingesting glue, and for what reason,
the marathon? (Endurance athletes get a hall pass on this one.)
So that means that all pastas, breads, cakes, muffins and chips
turn into some sort of paste, and on your sides if you are not
working out or training enough.
remember the three consumable FUEL delivery systems: liquid fuel,
soft fuel, and hard fuels. Liquids are converted into energy
in minutes; soft fuels are converted into energy in less than
10 minutes, and hard fuels take forever, sometimes hours, to digest.
So when you are in need of energy, work or training, think about
how quickly you need your energy and then make your fuel decision.
Liquid protein shakes, bananas, fruit, oatmeal, egg whites, veggies,
etc. make great liquid and soft instant energy snacks, as well
as meals, anytime of day.
Experiencing a light activity day? Eat lighter. Experiencing a
heavy activity day? Eat more. Setting yourself up for energy-success
means planning your fuels and meals for the next day, the day
after that, and the day after that. Match your daily fuel
needs with your activity levels, considering yesterday, today
1.5 hours of carbohydrates in your system at any one time, or
the equivalent of running all-out for 1.5 hours at top end heart
rates, which you don't do. This fuel acts as short term energy
in your system when needed. Also realize you have 3-4 weeks of
fat on your body as long-term energy fuel, and that there is 2.5
times the energy from a fat gram than a carb gram of fuel. So
psst: you have plenty of fuel in your body, you don't have to
"over" eat, and when we create a fat burning machine by eating
less sugars, we will have more energy.
Heads-up and think about dramatically reducing or eliminating
your intake of EXCESS fats, oils, toxins, wheat, dairy, and acids:
sugar-salt-nicotine-alcohol-caffeine-and prescription drugs. Also
think about not eating when you are stressed or emotionally upset,
don't drink during meals, properly combine fuels, eat slowly,
chew your food many times, enjoy your food via a tranquil mind,
remove the dead foods, devitalized foods, and excess DRY foods.
Remember: the world is 70%+ water. Your body is 70%+ water. Your
eating program is what % water? Drink water.
And let's not forget that the purpose of the elimination cycle
in your body is to remove toxic waste from your body. Elimination
is not merely one bowel movement, but the overall elimination
of waste from all of the cells and tissues of the body. You are
a body of living cells, and a healthy cell is fully hydrated,
oxygenated, and holds little fat. The elimination cycle is without
doubt your greatest ally in the prevention of inner disease, weight
gain, and higher energy.
consideration liquids, soft fuels, and hard fuels when understanding
fuel, energy, health, and longevity. Give your insides a break
once in a while, and lighten up on the hard fatty foods and eat
fuels. Eat small, eat fuel, eat frequently, and you may just find
yourself with more energy, less weight, and a better outlook in
your day, in your career, and in your life.
Until next month: Eat smart. Live, work, train, and recover smarter.
A passionate life and fitness coach, world-class athlete, author,
and keynote speaker, Gary Kobat works one-on-one with select individuals,
customized mastermind groups, and larger goal oriented teams for
lasting personal and professional change. If you are interested
in joining a group or for a private consultation, email him directly
Potato's Guide to Investing.
Natalie Pace, CEO, NataliePace.com
Tips for Making Money the Easy Way.
and Cary Stratton Making Money The Easy Way
Photo: M-M Stratton, Megorama.com
me the Remote, Will Ya? This is easier said than done,
isn't it? You don't want to ask a TV hog to hand you the remote
because that is only going to invite an argument on why they
should give it to you and how it's their turn to decide what
to watch. At the end of the day, with investing at least, it's
your money, dang it, and you get to say what goes. But, it will
pay to have someone else digging between the couch cushions
searching for the lost remote (or digging through those thousands
of index funds finding the gold). So, find someone who is comfortable
with giving you control, understands which shows you like to
watch (or the kinds of companies you like to invest in), honors
your ethics, doesn't test your boundaries of decency, etc.,
all that, and is capable of stashing your goods in a safe place.
Make sure your financial planning partner doesn't have a record
of losing things! Finding the remote is a pain, but losing your
nest egg can be devastating.
Surf. Stop Main-lining CNBC and start using TV for
the purpose it was invented - brain dead entertainment. That's
right. Switching from Cramer to Crumbs might actually
improve the performance of your portfolio. Why? Because you
won't be running with the herd on headlines. Yes, just as you
suspected, if you buy into Google fever, chances are you are
buying high, and if you wait until Enron is on everyone's dump
now list, you might be better off using your stock certificates
as wall paper. People who bought Google at the high lost over
$100 per share in the last 60 days. If you want to get information
that is proven effective, try out some of the stock newsletters
that are tracked by Hulbert's
Financial Digest and/or
TipsTraders.com. These independent tracking
companies hold the journalists and money managers to their picks,
and give you an independent accounting of how well the companies
they report on perform. There is a big difference between the
talking heads. Learn which ones have a record of making money
for people. It's just a click away. You can do it during commercials.
is Over-Rated. Guess which kind of investor loses the
most money, the one who ignores their money or the one who mainlines
data? Just like Evel Knievil, the American stuntman who
broke 35 bones in his pursuit of fame, those risk-loving performance
freaks who expect that their calculations are going to save
them from blowing out a tire and landing in a body cast when
they leap off of tall buildings, are the ones who spend more
time on the sidelines recuperating. Sure getting a little exercise
is going to make your fiscal physique sexier, but there is a
case to be made for getting cuddly with your honey for a movie
marathon and forgetting about stocks, bonds and real estate
for the weekend. After all, most of Wall Street does this for
the entire month of August. Getting on a balanced regimen of
evaluating your portfolio and holdings once a month, once a
quarter or even twice a year should serve you better than hyperventilating
every time the Feds raise interest rates or oil nears $70 a
barrel. No one ever made any money by panicking and taking on
too much risk is a good way to lose a lot of money, even for
professionals. The more balanced your portfolio, the more you
can sleep at night, the more rational your buy and sell decisions
and Cola. It always pays to anticipate what the next
big trend is going to be, which gives you license to sample
a few snacks during Lost… The last ten years was the
decade of designer coffee (like Starbucks), but will Vitamin
Water be the ticket of tomorrow? NataliePace.com gets our best leads
from subscribers like you. Friends tipped us on MySpace in 2005,
Google in 2004, Opsware in 2003 and Taser in 2002. So be sure,
once you figure out what the next big thing is, that you email
us at info@NataliePace.com! This investing tip alone gives you
license to experiment and enjoy your life (and email us with
the location of the Garden of Eden and the great new products
and services that are there for the picking).
Housewives. Did you know that Disney downloads,
from shows like Desperate Housewives and Lost,
totaled 2.5 million episodes at $1.99 each on Apple's iTunes,
according to CEO Bob Iger (on the 2.9.06 earnings call)? Did
you know that Desperate Housewives and Lost are
owned by ABC, which is owned by Disney, which just bought Pixar,
making Steve Jobs (CEO, Apple and Pixar) the largest individual
shareholder of Disney stock? Everyone has been worried about
declining revenue for movies and television due to downloads,
and Disney/Apple found a way to earn almost $5 million in their
first at bat.
can figure out how to monetize movie downloads, it is Steve
Jobs, and now that Pixar is owned by Disney and Jobs is the
largest shareholder, you can bet that he is sharing some brainpower
and bandwidth with Disney CEO Bob Iger. In only three years
of operations, iTunes just sold their billionth legal download
on February 23, 2006. iTunes Music Store now features a selection
of over 3,500 music videos, Pixar and Disney short films, a
variety of hit TV shows, 35,000 podcasts, 16,000 audiobooks
and more than two million songs from the major music companies
and independent record labels.
Disney just become the happiest place on Wall Street?
off: Check Out. If you work too hard to worry about
mish mash, gobbledy gook like 401(k)s and Keoghs, check off
some boxes, hand them back to your human resource manager and
then check out into the blue haze of the television tube. Odds
are that doing something with your retirement plan and then
forgetting about it is better than doing nothing. The Wilshire
5000 (a broad gauge for the stock market) has posted 11.8% annualized
returns for the past twenty years (source: Hulbert's Financial
Digest). Investment Quality Trends, one of the most successful
stock newsletters, has brought subscribers a return of 13.2%
over the same period. And the best part is that if you're investing
in dividend-paying Blue Chips, you can rest easy at night while
your money earns dividends and posts gains. Of course, the more
you know, and the more interest you take in your money, the
more likely you are to really succeed, and reading just a few
articles below should go a long way toward that goal. That is,
if you're willing to get off the couch.
and Lovers: It Pays to Pick a Good One.
Brokerages Make Rollover IRAs Easy.
Steps to Protect Your Retirement NOW.
Blind Date. Get To Know Your Nest Egg and Have More Fun.
by Natalie Pace, CEO and founder, NataliePace.com.
Common Investment Mistakes; Avoid them and Profit! by Natalie
Wynne Pace, CEO and Founder of NataliePace.com.
Joy of Stocks, as told by Virgin Investor, Jodi Seidler.
Style and Parties. While You Dream of the Good Life, Your
Future Could Be Cat Food. by Natalie Pace.
Smart 401(k) Investing.
Ways to Higher Pay.
Warren Farrell, Ph.D.
tips from one of the most respected authors on career advancement
in the world.
Farrell, Ph.D. With his wife, Liz and two daughters
Photo Credit: Leslie Ellen Ray
for Why Men Earn More uncovered twenty-five differences
between what men and women do in the workplace. Here's the rub.
Everything men do leads to more money; everything women do leads
to more balanced lives—and usually, to better lives. So you don't
just want to imitate men.
The road to
high pay is a toll road. The trick is discerning which tolls are
worth it. For example, working outdoors in the rain and sleet
is a disadvantage for most people, but many park rangers choose
the profession precisely because they love the out-of-doors. Here
are ten tips for you and your daughter to consider. Most lists
are slanted toward female executives, but women—like men—come
in all education and skill levels, so this is a diverse list.
1. Be aware
of the 80 fields in which women earn more than men. Five fields
that pay women more than men and also provide excellent opportunities
language pathologists ($45,000 women; $35,000 men; women make
29% more than men)
(35% more than men)
and Promotions Managers
a technical field, and then sell a technical product. Men
love to buy from smart women. Thus female sales engineers get
paid 143% of male sales engineers. Engineers and computer
scientists constitute the majority of the highest paying fields
now, and will in the future. There are hundreds of scholarships
available only to women for female engineers and computer scientists,
and women's pay exceeds men's (until the women choose to work
fewer hours, travel less, move less, or work for a public agency
rather than a private firm).
For women with fewer skills and less education, join the
Marines, Navy or Air Force, but not the Army. Only three
women in the War in Iraq have been killed in those three services—all
the other female deaths are in the Army. The safer opportunities
are also the ones that translate best into civilian life, such
as training in administrative work, weather, computer fields and
now earn almost as much as doctors, have far more control over
their lives, and do not experience the emotional taxation of being
intimately involved with patients as they die.
banking and financial analyst are two excellent choices for
women who want to earn a lot, earn more than their male counterparts,
but do not like taking major risks with money. Female financial
analysts average $69,000 per year, 118% of their male counterparts.
CEOs are selected from among those assuming bottom line, financial
responsibilities for a company, not human resources or public
relations, so these fields also pave the way for women who want
to break alleged "glass ceilings".
Be more willing to take financial risks, whether by selling
and working on commission (commercial real estate; insurance),
or working toward being a venture capitalist. Venture capitalists
typically earn between $100,000 and $300,000 per year.
a construction company. You don't need to lift
a hammer or nail. You do need to be able to organize those who
do. All government agencies and universities and many companies
are required to hire a certain percentage of female-owned construction
In medicine, take your eyes off doctors and consider nursing,
or being a medical assistant or physician assistant. All are
projected to be among the fastest growing fields in the next decade.
Nursing can pay more than $100,000 per year as a traveling ("gypsy")
nurse or as a nurse anesthetist. Only female nurses are allowed
to see and touch the bodies of both sexes, giving hospitals an
incentive to hire women. Medical Assistant requires nothing
more than on-the-job training. Physician assistant, requiring
only a Bachelor's, pays very well.
who work 44 hours per week make almost twice what people earn
who work 34 hours per week. The extra hours, if well used,
lead to disproportionately fast promotions, and job opportunities
that would not otherwise be available. To get those ten extra
hours, hire out your repetitive chores--they cost less than what
you'll be getting paid for your extra ten hours, and you'll be
helping someone who needs the money.
The most important career decision you will ever make is the choice
of your spouse. If you want family, well-raised children and
a very successful career, there's a way to have it all. Marry
a man who is happy to raise the children while you raise the money.
Those men are available if they know you will respect them. National
polls among people in their twenties now find 70% of men (vs.
63% of women) desirous of trading pay for more time with the children.
Children raised by dads in intact families do extremely well on
all twenty-six different areas of measurement (socially, physically,
psychologically and academically).
follow your bliss, it's often money you'll miss (thus "starving
artist" and actors called "waiter"). If you want
to pursue your dream without being poor, work in computers or
engineering for a few years, then take off a year or two to pursue
what fulfills more but earns less.
Farrell has been chosen by the Financial Times as one
of the world's top 100 thought leaders. His books are published
in over 50 countries, and in 13 languages. They include two award-winning
international best-sellers, Why Men Are The Way They Are
plus The Myth of Male Power. His most recent is Why
Men Earn More: The Startling Truth Behind the Pay Gap--and
What Women Can Do About It. U.S. News and World Report
chose Why Men Earn More as "One of the 5 Great
Career Books of 2005."
appeared on more than 1,000 TV shows, from Oprah to Larry King
Live, and has been featured in Forbes, The New York Times,
and The Wall Street Journal. In 2003, his campaign
for Governor of California was a special feature of CNN. He lives
with his wife and daughters in Carlsbad, California, and virtually
Score for Companies; Need a Seat on the Board.
by Fran Lotery, Managing Director, Family Enterprise
Leadership System, LLC Senior Consultant, The Metropolitan
Group, LLC & Lois Phillips, Management Consultant, Author
Sweeney (a woman who scores AND has a seat on the board)
Co-Chairman, Disney Media Networks
President, Disney-ABC Television Group
PHOTO CREDIT: ABC/BOB D'AMICO
performing companies have a higher representation of women on
their leadership teams," according to Ilene H. Lang, President,
Catalyst, a New York based research and advisory company.
a ground breaking study in 2004 that included the 353 Fortune
500 companies that sustained their Fortune 500 standing four out
of five years (from 1996-2000). Catalyst found that companies
that had the highest representation of women in top management,
had 35.1% higher ROE (Return on Equity) and 34% higher TRS (Total
Return to Shareholders) than companies with the lowest representation.
Yet, in the 2002 Catalyst Census of Women Corporate Officers and
Top Earners, women only represented 15.7 percent of corporate
officers in the Fortune 500. This is up from 12.5 percent in 2000
and 8.7 percent in 1995, when Catalyst started tracking women
in top level positions, but the statistics tell only part of the
story because, of the 15.7% of women corporate officers, only
9.9% hold line officer positions or "clout" positions.
The remaining women are in executive "support" roles.
In general, women continue to be invisible and undervalued. 95%
of top earning positions are dominated by men and you can well
imagine the statistics for women of color—1.6%, up from 1.3% in
last census of women board directors, board seats in the Fortune
500 increased from 12.4% in 2001 to 13.6% in 2003, with women
of color comprising 3%. Change is incremental, yet by 2010, women
in the labor force will increase by almost 10 million, a growth
rate almost one-third higher than men (source: Monthly Labor Review).
Think of their purchasing power.
So what does
all this mean? Women continue to struggle to gain a seat at the
table. Sheila Wellington, past President of Catalyst, in her book,
Be Your Own Mentor, urges women to be strategic about every
career decision. In order to become visible in the workplace,
women need to make it known that they are interested in promotion
and must actively seek challenging assignments to gain the experience
that will put them in contention for line positions. The "glass
ceiling" and the "glass wall" -subtle obstacles
and invisible barriers to breaking into the boardroom that keep
women from gaining experience in profit and loss arenas -- remain
solidly in place. As a result, savvy entrepreneurial women are
simply leaving corporations in record numbers and redirecting
their talent towards starting their own businesses at twice the
rate of men upending conventional wisdom that women are uncomfortable
taking risks. The number of 50% or more women-owned firms with
employees expanded by an estimated 28% between 1997 and 2004,
three times the growth rate of all firms with employees (source:
Center for Women's Business Research). In other words, women are
outstanding business leaders, reliable and profitable.
taking control of their lives, trading corporate politics, structure,
rigidity and barriers to advancement for flexibility. Women make
80% of product purchasing decisions and represent 54% of the voters
that turned up at the polls in the last presidential election.
Women are more comfortable with using their intuition, are process
and detail oriented and bring a different voice to the table.
Judy Rosener, Professor Emeritus, The Paul Merage School of Business
at UC Irvine, says, "Women have a tradition and history of
being outsiders. So we see things differently. It's not that we're
better or more ethical than men, but I think we ask new kinds
of questions…that the good ol'boy network won't say."
century workplace requires managers to build collaborative teams,
flatten the hierarchy, and embrace a transformative leadership
style that takes advantage of not only a man's voice but also
a woman's. Women managers are seen as great implementers. Talented
and experienced women in management not only want a level playing
field but the right to compete for executive leadership roles
while maintaining flexibility, choice and control over their lives.
The corporations that are requiring managers to keep a Diversity
Scorecard, to include "Gender Initiatives" and are allowing
women to be in profit/loss C-level positions that deliver monetary
results, are more profitable, as we've seen from the Catalyst
Research, yet the Western Region lags behind the rest of the country
with only 13.4% of women holding these top positions. With the
cost of housing in California at formidable levels, retaining
and attracting women leaders is bottom-line smart.
Academy's Women's Leadership Conference: Shaping
Possibilities will be held in Thousand Oaks, California on March
23rd and 24th, and will address the topics
that more than fifty business leaders in three focus groups believe
are critical to women's advancement into executive "clout"
positions. Work/life balance, risk-taking, emotional intelligence,
presentation skills, negotiation, and career and networking strategies
will be addressed by experts and in experiential workshops. The
conference will also feature a panel with male CEO's to get the
goods on what they are looking for in candidates for C-level positions.
Leadership Conference: Shaping Possibilities provides outstanding
women executive role models such as Kris Leslie, CFO of DreamWorks
Animation SKG; Patty DeDominic, President of PDQ Personnel Services,
Inc.; and Judy Rosener, Professor Emeritus, Paul Merage School
of Business, UC Irvine, the leading world expert on gender diversity
in the workplace and author of numerous publications on women
women in the work place is not a movement of vilifying men and
encouraging women to think of themselves as helpless victims of
the corporate establishment. Instead, women are learning relevant,
concrete skills and strategies to realize the possibilities of
how women can follow their passions, chart their own course to
reach executive line positions, or if they choose, launch their
Ph.D. and Lois Phillips, Ph.D., co-chairs of Inamed Academy's
Leadership Conference: Shaping Possibilities, March
23-24 at the Westlake HYATT HOTEL, are passionate about impacting
gender practices in corporations and empowering each woman to
chart her own course to become "the CEO of her life."
Both Fran Lotery and Lois Phillips are business consultants, authors,
and speakers with a long history of championing women leaders
in politics, education, and business.
the opportunity to chat one-on-one with Patty DeDominic, CEO,
PDQ Careers, in the NataliePace.com™ chat room. For more information,
go to the calendar section of NataliePace.com. Subscribers only.
Tuesday, March 7th, 2006 8:45AM through 9:30AM PST (Online Chat
with Patty DeDominic and NAWBO Leaders and Legacy Award Recipients)
Join hostess Patty DeDominic, CEO, PDQ Careers and NAWBO Legacy
Honoree, as she and other NAWBO award recipients share their secrets
of leadership and leaving a legacy.
Gamble the Roof Over Your Family's Head in the Stock Market.
The Delano Max Wealth Institute, LLC
Best Nest Egg Is Freedom from Debt!
teach all of my students the incredible tranquility of the debt-free-state.
Freedom from debt offers you incredible respite. You can
wake up in the morning knowing that your feet don't have to hit
the floor running to scramble up some green to feed the mortgage
monster for another 30 days. When you are debt free you really
can settle down and relax and savor your options instead of desperately
seeking solutions to monthly payments. You really do need to think
right now about the life you really want. How much of your time
do you want to enjoy right now? You will enjoy yourself much more
"now" by becoming debt free while investing in the long
term where you don't have to frantically watch your stock prices
on a computer monitor all day.
Sit down and
look at the income you make. Total up all of the house payments,
car payments, and credit card payments that you make. For most
people this is over $1,500.00 per month. My wife and I, for example,
had a $750.00 house payment and two $325.00 car payments shortly
after we were married 15 years ago. Stop and think about what
I am about to show you. If you were able to erase your mortgage,
your car loans, and your credit card debt you would be giving
yourself a raise, in this scenario, of $18,000.00 per year! Putting
the maximum $4,000.00 contribution into two wife and husband Roth
IRAs means that you would still have $10,000.00 to have fun with.
You could go on a romantic trip to Las Vegas, for instance, a
favorite for my wife and I.
Now here is
the great part. You would be able to have the same lifestyle you
do now living on $1,800.00 a month less. The U.S. savings rate
in 1980 was 10%. In
the fourth quarter of 2005, as reported by the Bureau of Economic
Analysis on of January 27, 2006, personal saving as a percentage
of disposable personal income decreased to -0.4 percent of disposable
personal income. Part of this problem has been attributed by economists
to an increase in home values making people feel wealthier than
they really are.
read what I have to say very carefully. Home Equity Can Be An
are particularly prone to wake up calls if the hottest real estate
bubble in state history cools off. According to San Francisco
mortgage research firm LoanPerformance, 48% of homes in California
were purchased with interest-only loans in 2004. That is a significant
jump up from fewer than 2% in 2001. In the higher-priced Bay Area
counties of San Francisco, Marin, and San Mateo, two out of three
homebuyers chose an interest-only loan during the first two months
of 2005, compared to only 59% of homebuyers in the same period
during 2004 and 18% in 2002. If we enter into an economic environment
of rising interest rates, an avalanche of foreclosures could dampen
or depress residential property prices. The same could occur in
other parts of the country.
repeats itself! In the massive economic boom and run away bull
market of the roaring 1920s, interest only mortgages were popular
then too but tamer. They were interest only for the life of the
loan and not interest rate adjustable as I explain below. After
the banking system and stock market collapsed, ushering in the
great depression, the United States witnessed a flood of foreclosures
on interest only mortgages as property values were depressed and
people could not refinance.
have been simply ignorant to the very real risks of an interest
only mortgage. I think of these dangerous mortgages as medium
term financial guillotines. You don't want to let a mortgage broker,
realtor, or banker talk you into putting your head into one and
here is why. Interest only mortgages give you a low payment for
usually five to ten years because you are paying only the interest
on the mortgage but not the principle. However, when the clock
strikes midnight on New Years Eve of that last interest only payment
in the fifth or tenth year, the party is over. Your gilded carriage
turns into a rotten pumpkin as the mortgage payment explodes to
the fully amortized interest and principle amount!
with interest only mortgages is that they are frequently attached
to adjustable rates, making them in reality interest only adjustable
rate mortgages (OI-ARMs). People entering these loans think, "Hey,
no problem because I have five years until the interest payment
adjusts, and the interest rate has been low forever." They
think that they can pay the mortgage off, refinance, or sell the
house if they have to because they have lots of time and subconsciously
believe that yesterday and today equals tomorrow. Meanwhile, "You
can't sustain double-digit growth forever," as David Lereah,
the chief economist of the National Association of Realtors, notes.
Or as Maria Bartiromo, the CNBC host of Closing Bell, put it more
succinctly to a crowd in Beverly Hills this month, "It does
appear that people have become as jubilant about real estate as
they were about technology in 2000."
is disastrous for anyone holding such a loan. Property depreciation
can be caused by factors including but not limited to terrorist
attacks, outward migration of an industry from a state or a metropolitan
area, earthquakes, volcanoes, hurricanes, nuclear explosions,
or other human and natural disasters. But that is just ONE dimension
of risk on these nasty home loans. Interest rate increases in
the mortgage market can impede a homeowner's refinancing into
a superior 30 year fixed mortgage. This is because higher interest
rates drive the payment up out of reach of the homeowner's front
and back-end debt to income ratios, which the banks require to
approve the new mortgage. In short, your current salary ends up
coming up short on the refinance, if interest rates and principal
owed goes up.
banking industry is not clearly informing homebuyers of their
risks. Part of the reason is the shift in the banking system to
a fee based business model over the traditional deposit cost,
loan interest spread business model of the past. Mortgage originators
are more interested in the fees they clear on the new interest
only loans than the financial quality of the mortgage itself today
because they know the loan will be sold out of the portfolio promptly.
This devil may care attitude is a potential moral hazard in mortgage
loan underwriting quality today.
enter into these debt agreements because they want to live in
an area where the market has experienced extreme appreciation
relative to the national average, they want to live in a more
upscale community than they can realistically afford, or they
have a delusional belief that they temporarily need a low payment.
Clearly there are many more risks on these loans that these people
are not considering.
it blows my mind to observe so many people actually attracted
to sophisticated leverage plays (leverage is another financial
term that simply means debt), when they don't even know which
mutual funds they have in their nest egg. Aggressive mortgage
companies have been flooding the market with cheesy advertising
to dupe people into one of the dumbest financial mistakes they
can make; taking out a second mortgage on their home! This means
that instead of actually cashing out the mortgage, you are putting
the precious roof over your head at risk! The Federal
Deposit Insurance Corporation that insures
your bank deposits offers strong warnings against seeking a second
mortgage when you are cash strapped as does the Federal
I also observe
people attracted into the investment markets that emphasize "making
lots of money fast on debt." Unfortunately these same markets
can make you lose lots of money very, very fast. As a former futures
and futures options trader I am extremely sensitive to leverage
of any kind. I get really annoyed by some of the financial
"gurus" out there that are teaching people to take out second
mortgages out on their homes to invest in the stock market.
Here is a
checklist of things you can do right now to start becoming free
of debt, and start saving and investing toward a more carefree
- Look out
for wasteful expenditures in your household (make sure your
significant other is on board in this area).
- Do not
buy a new vehicle after you cash out the loan. This is a significant
and short term source of savings for most families. If you immediately
begin paying what you were paying on your monthly car payment
into an investment retirement account, such as a Roth IRA, you
will be getting richer instead of expanding your lifestyle or
wasting the extra money. Sit down and plan with your partner
now what you will do when you cash out your car loan. My wife
and I saved $600.00 of the money we were paying on car loans
or $7,200.00 annually. If you did this you would only be short
$800.00 to make the full contribution this year to both you
and your significant other's Roth IRA! If you saved or earned
an extra $3.08 per each of the 260 working days in a year you
would cover the additional $800.00 short fall.
- Use some
of the money you were paying on a car loan to accelerate your
mortgage. For instance, if you were to put $100.00 toward the
principal balance of a $100,000.00 mortgage (at 6% for thirty
years), you would reduce the payoff date by nine years and save
$39,551.45 in interest payments! This is called accelerating
Warren Buffet's investing advice for the money you save in your
Roth IRA. Look for large, well-managed companies that are undervalued
in terms of share price. Then buy and hold for long term gains
over years or even a decade or more. Novices should avoid sophisticated,
short term, highly leveraged, fast buck investment strategies
like futures, futures options, and stock options as an investment
vehicle, no matter how well known the author/ speaker/ guru
investing takes patience, resolve, discipline, forgiveness of
mistakes, and consistency. In my many years as both a finance
professor and investor my personal observation is that women have
more of these characteristics than men. Women, however, do not
always exploit these natural strengths for fear of loss, or fear
of what other people will say if people were to find out they
invest. Don't let your fear hold you back, but be methodical in
learning about the stock market before you commit your hard earned
forget that a strong man is one who fully supports the woman he
loves. Don't tolerate a man who belittles you in any way; who
makes you think that you cannot invest or manage your money just
as well or even better than he does. My wife and I do all of our
financial planning together as a team. My fearlessness can also
lead to impetuousness, which is balanced by her level head.
Brown a.k.a. "The Wallet Doctor" holds a Ph.D. in finance
from the University of South Carolina and is a professor of finance
at the University of Puerto Rico. Dr. Brown can teach you how
saving the daily price of a cup of coffee at Starbucks can make
you a millionaire in the stock market through long term stock
investing. Dr. Brown's website is: http://www.walletdoctor.com/
101: When is 3% is Better Than 6%?
Higher Interest Rates are Good for Income Investors.
might also ask why Wall Street makes such a fuss about the dismal
bond market and offers more of their patented Sell Low, Buy High
advisories, but that should be fairly obvious. An unhappy investor
is Wall Street's best customer."
is 3 percent better than 6 percent? Yeah, we all know the
answer, but only until the prices of the bond securities we already
own begin to fall. Then, logic and mathematical acumen disappear
and we become susceptible to all kinds of special cures for the
periodic onset of higher interest rates. We'll be told to sit
in cash until rates stop rising, or to sell the securities we
own now, before they lose even more of their precious Market Value.
Other gurus will suggest the purchase of shorter-term bonds or
CDs (ugh) to stem the tide of the perceived erosion in portfolio
values. There are two important things that your mother never
told you about Income Investing: (1) Higher Interest Rates are
good for investors, even better than lower rates, and (2) Selecting
the right securities to take advantage of the interest rate cycle
is not particularly difficult.
Higher Interest Rates are the result of the Government's efforts
to slow a growing economy in hopes of preventing an appearance
of the three headed inflation monster. A quick glance over your
shoulder might remind you of recent times when the government
was trying to heal the wounds of a misguided Wall Street attack
on traditional investment principles by lowering interest rates.
The strategy worked, the economy rebounded, and Wall Street is
trying to scramble back to where it was nearly six years ago.
Think about the impact of changing interest rates on your Income
Securities during the past five years. Bonds and Preferred Stocks;
Government and Municipal Securities; they all moved higher in
Market Value. Sure you felt wealthier, but the increase in your
Annual Spendable Income got smaller and smaller. Your total income
could well have decreased during the period as higher interest
rate holdings were called away (at face value), and reinvestments
were made at lower yields!
How many of you have mental bruises from the realization that
you could have taken profits during the downward trajectory of
the cycle, on the very securities that you now lament over. The
nerve; falling below the price you paid for them years ago. But
the income on these turncoats is the same as it was in 2004, when
their prices were ten or twenty percent higher. This is the
work of Mother Nature's financial twin sister. It's like acorns,
snowfalls, and crocuses. You need to dress properly for seasonal
changes and invest properly for cyclical changes. Remember the
days of Bearer Bonds? There was never a whisper about Market Value
erosion. Was it the IRS or Institutional Wall Street that took
Higher rates are good for investors, particularly when retirement
is a factor in your investment decisions. The more you receive
for your reinvestment dollars, the more likely it is that you
won't need a second job to maintain your standard of living. I
know of no retail entity, from grocery store to cruise line that
will accept the Market Value of your portfolio as payment for
goods or services. Income pays the bills, more is always better
than less, and only increased income levels can protect you from
inflation! So, you say, how does a person take advantage of the
cyclical nature of interest rates to garner the best possible
income on investment quality securities? You might also ask
why Wall Street makes such a fuss about the dismal bond market
and offers more of their patented Sell Low, Buy High advisories,
but that should be fairly obvious. An unhappy investor is Wall
Street's best customer.
Selecting the right securities to take advantage of the interest
rate cycle is not particularly difficult, but it does require
a change in focus from the statement bottom line… and the use
of a few security types that you may not be 100% comfortable with.
I'm going to assume that you are familiar with these investments,
each of which could be considered (from time to time) for a spot
in the well diversified Income Portion of your Asset Allocation:
(1) The traditional individual Municipal and Corporate Bonds,
Treasuries, Government Agency Securities, and Preferred Stocks.
(2) The eyebrow raising Unit Trust varietals, Closed End Funds,
Royalty Trusts, and REITs. [Purposely excluded: CDs and Money
Funds, which are not investments by definition; CMOs and Zeros,
mutations developed by some sicko MBAs; and Open End Mutual Funds,
which just can't work because they are really "managed by
the mob"… i.e., investors.] The market rules that apply
to all of these are fairly predictable, but the ability to create
a safer, higher yielding, and flexible portfolio varies considerably
within the security types. For example, most people who invest
in Individual bonds wind up with a laundry list of odd lot positions,
with short durations and low yields, designed for the benefit
of that smiling guy in the big corner office. There is a better
way, but you have to focus on income and be willing to trade occasionally.
The larger the portfolio, the more likely it is that you will
be able to buy round lots of a diversified group of bonds, preferred
stocks, etc. But regardless of size, individual securities of
all kinds have liquidity problems, higher risk levels than are
necessary, and lower yields spaced out over inconvenient time
periods. Of the traditional types listed above, only preferred
stock holdings are easily added to during upward interest rate
movements, and cheap to take profits on when rates fall. The downside
on all of these is their callability, in best-yield-first order.
Wall Street loves these securities because they command the highest
possible trading costs… costs that need not be disclosed to the
consumer, particularly at issue. Unit Trusts are traditional securities
set to music, a tune that generally assures the investor of a
higher yield than is possible through personal portfolio creation.
There are several additional advantages: instant diversification,
quality, and monthly cash flow that may include principal (better
in rising rate markets, ya follow?), and insulation from year-end
swap scams. Unfortunately, the Unit Trusts are not managed, so
there are few capital gains distributions to smile about, and
once all of the securities are redeemed, the party is over. Trading
opportunities, the very heart and soul of successful Portfolio
Management, are practically non-existent.
What if you could own common stock in companies that manage the
traditional Income Securities and other recognized income producers
like real estate, energy production, mortgages, etc.? Closed End
Funds (CEFs), REITs, and Royalty Trusts demand your attention…
and don't let the idea of "leverage" spook you. AAA
+ insured corporate bonds, and Utility Preferred Stocks are "leverage".
The sacred 30-year Treasury Bond is "leverage". Most
corporations, all governments (and most private citizens)
use leverage. Without leverage, most people would be commuting
to work on bicycles. Every CEF can be researched as part of your
selection process to determine how much leverage is involved,
and the benefits… you're not going to be happy when you realize
what you've been talked out of! CEFs, and the other Investment
Company securities mentioned are managed by professionals who
are not taking their direction from that mob (also mentioned earlier).
They provide you the opportunity to have a properly structured
portfolio with a significantly higher yield, even after the management
fees that are inside.
a REIT or Royalty Trust is more risky than a CEF comprised of
Preferred Stocks or Corporate Bonds, but here you have a way to
participate in the widest variety of fixed and variable income
alternatives in a much more manageable form. When prices
rise, profit taking is routine in a liquid market; when prices
fall, you can add to your position, increasing your yield and
reducing your cost basis at the same time. Now don't start to
salivate about the prospect of throwing all your money into Real
Estate and/or Gas and Oil Pipelines. Diversify properly as you
would with any other investments, and make sure that your living
expenses (actual or projected) are taken care of by the less risky
CEFs in the portfolio. In bond CEFs, you can get un-leveraged
portfolios, state specific and/or insured Municipal portfolios,
etc. Monthly income (frequently augmented by capital gains distributions)
at a level that is most often significantly better than your broker
can obtain for you. I told you you'd be angry!
Another feature of Investment Company shares (and please
stay away from gimmicky, passively managed, or indexed types)
is somewhat surprising and difficult to explain. The price you
pay for the shares frequently represents a discount from the market
value of the securities contained in the managed portfolio. So
instead of buying a diversified group of illiquid individual securities
at a premium, you are reaping the benefit of a portfolio of (quite
possibly the same) securities at a discount. Additionally, and
unlike regular Mutual Funds that can issue as many shares as they
like without your approval, CEFs will give you the first shot
at any additional shares they intend to distribute to investors.
Stop, put down the phone. Move into these securities calmly,
without taking unnecessary losses on good quality holdings, and
never buy a new issue. I meant to say: absolutely never buy a
new issue, for all of the usual reasons. As with individual securities,
there are reasons for unusually high or low yields, like too much
risk or poor management. No matter how well managed a junk bond
portfolio is, it's still just junk. So do a little research and
spread your dollars around the many management companies that
are out there. If your advisor tells you that all of this is risky,
ill-advised foolishness… well, that's Wall Street, and the baby
Portfolio Management since 1979
Brainwashing of the American Investor: The Book that Wall
Street Does Not Want YOU to Read, and A Millionaire's Secret
note: The opinions expressed in this article are solely the opinions
of the writer and do not represent the positions of NataliePace.com.
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
and/or investment vehicles 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 security.
Turning Up Green for St. Patty's Day, Err…. Except Real Estate.
Natalie Pace, CEO, NataliePace.com.
Discretionary and Blue Chips with Legacy Costs. Our Monthly Hot
News On Cool Stocks Report.
are not buy/sell recommendations. Always consult a certified financial
professional before buying or selling stock. NataliePace.com is not a
brokerage or financial service company and does not operate or
act like one.)
(and countries) in the News:
Pace, top-ranked stock picker Per TipsTraders.com
of Blue Chips with "legacy costs": 30% of
the Stocks held by the largest number of accounts at Merrill Lynch
(source: NY Times 2.9.06) are underfunded on their pension plans
by more than a billion (source: S&P 500), including Chevron,
Exxon Mobil, IBM, Johnson & Johnson, Pfizer and Procter and
Gamble. If you have a retirement plan that is loaded with mutual
funds, you should be aware that pension plans and "legacy
costs" for companies with unions and/or benefits-based retirement
plans have many money managers and market analysts concerned about
the performance of huge companies, especially those with labor
unions, and bullish on small to mid-caps (over Blue Chips and
large caps) this year. The larger/older the company, the more
likely it is to be suffering from heavy internal costs, like supporting
more retirees than workers and escalating medical costs, while
at the same time having little room to negotiate benefits that
allow them to compete on the world stage. The billion dollar losses
at General Motors, Delta, United Airlines, American Airlines,
Ford Motor Company and more are just the tip of the iceberg on
headlines that might be forthcoming in some of the former blue
chip companies this year.
reputable companies fear that the legacy companies will get into
trouble and put the burden on the taxpayer," according to
Dr. Gary Becker, Nobel-Laureate Economist. For the doctor's fix,
be sure to read the exclusive Q&A with Dr. Becker this month.
You will also find a list of the 39 companies who are "underfunded"
by more than a billion to their pension plans.
If you wish
to have more options in your retirement plan or 401
(k), you may be able to roll it over (without
penalty) into a self-directed plan. Click on 401
(k) to read an article outlining online discount
note: There will be an online chat with Blue-Chip stock picker,
Kelley Wright, of Investment Quality Trends, the #1 risk-adjusted
newsletter in the US for 10, 15 and 20 year returns, on March
15, 2006. Go to the calendar section of NataliePace.com for more details.
Motor Company has the highest amount of underfunded pension
liability, at -$12.306 billion, the corporation is still receiving
an average 7 stock ranking (out of 10) on MSN.com (source: Standard
and Poor's, July of 2005). This is why trading on analyst recommendations
is one of our Top
10 Investment Mistakes. Click to review the
Kenneth Lay and Jeffrey Skilling are on trial in Houston this
month. Skilling faces 31 counts of fraud, conspiracy, insider
trading and lying to auditors for allegedly lying about Enron's
financial state before the company crashed. Lay faces seven counts
of fraud and conspiracy for allegedly perpetuating the scheme
after Skilling resigned in August 2001. Both have pleaded not
guilty. Meanwhile, Enron: The Smartest Guys in the Room
is nominated for an Academy Award for the Best Documentary Feature.
If you are interested in hearing the story from the filmmaker's
perspective, you can buy or rent the movie online at Moviefone.com,
or NetFlix or Blockbuster.com, et al.
The following NASDAQ-listed companies participated in the inaugural
Small-Cap Investor Conference in London on 2.7.06. As you can
see, one of the companies that we are reporting on, Gevity HR,
Inc., was included in this elite group!
ArthroCare Corporation (ARTC); deCode genetics, Inc (DCGN); Encysive
Pharmaceuticals Inc. (ENCY); Momenta Pharmaceuticals, Inc. (MNTA);
Myogen, Inc. (MYOG); QLT Inc. (QLTI); and Ventiv Health, Inc.
Coherent, Inc. (COHR); Diodes Incorporated (DIOD); Gevity HR,
Inc. (GVHR); Power Integrations, Inc. (POWI); SafeNet, Inc. (SFNT);
Synaptics Incorporated (SYNA); Telvent GIT, S.A. (TLVT); and Xyratex
Estate and Retail Pull Back: At the Beverly Hills Economic
Summit earlier this month, the five panelists concurred that consumer
spending would likely abate and real estate gains would level
off or fall some, while capital spending (from corporations) should
pick up the slack in the economy. For more information, read the
Real Estate Warning article in this ezine.
Radio: XM Satellite Radio suffered a blow of confidence
from former board director Pierce Roberts Jr., who resigned on
2.15.06. "Given current course and speed there is, in my view,
a significant chance of a crisis on the horizon," Roberts wrote.
"Even absent a crisis, I believe that XM will inevitably serve
its shareholders poorly without major changes now." XM lost $675.3
million, or $3.07 per share, this year, compared with $651.2 million,
or $3.30 per share, last year. Revenue rose to $558.3 million
from $244.4 million. The company has 6 million subscribers (compared
to Sirius' 3 million) and just signed Oprah to feature her own
24/7 show on the network. CEO Hugh Panero is projecting profitability
at the end of the year, with 9 million subscribers. More information
on Sirius is listed on our Hot News list below.
(NASDAQ: OSTK). We featured Overstock in 2003 at $11.50
and then took it off of our list on 12.15.04, when the stock was
trading at $55.13. Overstock has a lot of potential, but they
also have a lesser experienced, unproven executive team. Indeed,
when the short positions moved in, the company responded with
lawsuits (swords instead of sweets for the investors). By 2.27.06,
Overstock had fallen to $22.98. In a press release on February
7, 2006, CEO Patrick Byrne reported that Overstock's "goals
in 2005 were to grow revenue 60-100% and break even +/- 1%. We
achieved the first, but I failed on the second." The company
is forced to stop the bleeding and refocus on the core business,
the online shopping experience. Byrne projects that it will take
6-9 months to "rehabilitate the patient and get him running
again." Overstock scores in CEO disclosure and honesty, which
is a positive, but fails in the business growth plan, which is
a whopper of a negative. For the year ended December 31, 2005,
Overstock.com reported net loss of $24.9 million, or $1.29 loss
per share, compared to $5.0 million, or 29 cent loss per share
last year. We'll continue to report on this, but when shopping
on Overstock, it may pay to be a customer and not an investor
at this time, at least until the Back to School Wall Street Stock
Sales in September (when the patient may be recovered). Overstock
bargains are still found online, but technology spending was too
rich and ill-conceived for our taste.
Facts, Quotes and Educational Information:
are three important online chats this month. Chat one-on-one
with the Chairman and CEO and the President of U.S. Gold on
3.1.06, with NAWBO Legacy CEO Patty DeDominic and other VIP
women in business on 3.7.06 and with the #1 Blue Chip Stock
Pickers in the U.S. on 3.15.06. For more information, visit
the NataliePace.com calendar at www.NataliePace.com.
Mania. Mergers and Acquisitions are exploding this year,
for the fastest start to a year since 2000, when the $165 billion
AOL-Time Warner merger was announced (Jan. 2000). The value
of 622 deals announced so far equal $49.9 billion, according
to Thomson Financial. 2005 saw 1,013 deals with a total value
of $37.4 billion. 2001 had 1,031 deals for a value of $31.2
billion. 2000 was a record year with 939 deals valued at $218.9
Returns Predicted in 2006. Liz Ann Sonders, the chief investment
strategist for Charles Schwab is predicting a 10% return for
the S&P500 in 2006, as is Tobias M. Levkovich of Citigroup
and Henry C. Dickson of Lehman Brothers.
in Favor, according to Smith Barney and the Federal Reserve
Board. "Technology is our favorite sector for 2006
- as we expect stocks to benefit from a pickup in enterprise
spending, and valuations to increase from current levels. We
would highlight two names in particular today: QLogic &
Cognizant Technology Solutions." Dr. Albert D. Richards,
CFA, Smith Barney, from Portfolio Strategist, 1.12.06. Every
industry in the world relies on technology and now that capital
spending is back, you can expect to see more outlays in this
area. "Rising business sales, a declining cost of capital,
and ample financial resources in the corporate sector continued
to foster a favorable environment for capital spending, a sentiment
echoed in executive surveys, which generally pointed to widespread
increases in planned capital outlays," according to the
Federal Reserve Board minutes, where the governors noted that
"real outlays for equipment and software posted a solid
gain in the third quarter."
in favor, according to Smith Barney. "Attractive valuation;
low earnings expectations; out of favor with buy-side, anticipate
more positive news flow," according to Portfolio Strategist,
Interest Rates. The Federal Open Market Committee decided
on 1.31.06 to raise its target for the federal funds rate by
25 basis points to 4-1/2 percent, for the 14th consecutive
rate hike, and believes that "further policy firming may
be needed." The next FOMC meeting will be 2 days, on 3.27
and 3.28.06. Click to review the FOMC
Minutes from the January 31, 2006 meeting.
Companies and Mutual Funds: Did you know that tobacco companies
are popular holdings of mutual funds? Altria, Philip Morris
Tobacco Company's new name (NYSE: MO), is 74.0% owned by institutional
investors (aka funds). If you don't know what you checked off
on your 401 (k), you might be manufacturing and marketing the
cigarettes that you don't want your neighbors and kids to smoke.
(If you don't care, that's one thing. If you don't know, it's
time to wake up.)
Buy High. The Dow Jones Industrial Average and the S&P
500 are trading close to their historical highs set back in
2000, while the NASDAQ is still almost 50% off from the highs
set back in March of 2000. Investment Quality Trends, which
tracks over 309 Blue Chip stocks, notes that only 26, or 8.5%
of them, are in a buying range right now. (For more Info, read
"Want to Stay Sexy and Fiscally Fit?" on this month's
ezine.) Investors are still feeling the burn from the crash,
but corporations are not. This time around, technology and the
Internet are making real money, and cash-rich/capital-rich corporations
are in need of finally updating their software and technology.
Tech is on a number of analyst's lists for being in favor, while
blue chips have a concentration of the corporations that are
suffering from "legacy costs." It may be time to lick
old wounds and rummage through the file cabinet, for out with
the old and in with the new.
estate is not showing any substantial weakening inn prices
or construction, according to the Federal Reserve Board's analysis
of the numbers, but REITs are reporting problems, including
cancellations and price softening. Additionally, the National
Association of Realtors has reported an increase in inventory
and fewer sales, particularly in the West. Demand is expected
to soften in the coming quarters. For more information on this
important shift in investor sentiment, read the Real Estate
on Past Features: Goldcorp, Pixar (now Disney) and Sony
have recently exploded, and we've included them this month,
so that you evaluate whether you wish to add to your position,
hold or take your profits!
note: There will be an online chat with the former Chairman and
CEO of Goldcorp, Rob McEwen, on March 1, 2006. Go to the calendar
section of NataliePace.com for more details.
WINNERS, which keeps us at the top in Annualized Returns on the
companies featured in NataliePace.com (according to TipsTraders.com).
This hot news article still has the proud honor of featuring twenty-one
companies that have posted positive gains, versus just five that
have gone south. Of the five that have gone south, we were most
concerned with Krispy Kreme, but there are signs that Stephen
Cooper, turnaround King/CEO, is moving that company forward. Turnarounds
are difficult to stomach, even the turnaround of the most popular
sweet on the planet. Lawsuits are many. OSI Pharmaceuticals, Sirius
Satellite Radio and Yahoo - in our view, these are all great companies
with exceptional products and/or leadership. Sometimes it takes
awhile for the rest of the investment world to realize that. Still
love Jet Blue as a consumer, but the sector is in trouble until
they figure out how to make solar-powered planes. Tried to hang
with Martha Stewart Omniliving, but, despite a recent jump in
ad revenue, the flops weighed down her attempts at a comeback.
Line: 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, and 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. Always
consult a trusted financial professional before buying or selling
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.
Consult your certified financial planner before making any changes
to your investment strategy.
since original feature
the article in the vol. 2 iss. 11 ezine, entitled, "Harvesting
Profits…" Morgan Stanley analyst David Togut lists
ADP as "overweight." 2Q results were just under
forecasts, at $2.15 billion in sales (expectations were
$2.17 sales). 17.5 percent gain in quarterly net profit.
The company's earnings rose to $259.7 million, or 45 cents
per share, from $250.1 million, or 42 cents per share, a
year earlier. On 1.24.06, ADP added an automated accounts
payable management solution, which streamlines AP, while
at the same time simplifying Sarbanes-Oxley compliance.
Sold its claims services business to Solera Inc. for $975
million in cash, on 2.9.06. There should be a one-time gain
next quarter of $450 million from the sell, but 2006 full
year earnings are expected to fall by up to 2 cents per
share, with a loss of 7 cents per share in 2007. The company
is hosting a conference for financial analysts on 3.14.06.
Stock in a great sector.
this is only traded on the Toronto Exchange)
treatment and metals recovery for acid-contaminated water
in mining ind. BioteQ's customers include Jiangxi Copper
(China), Breakwater Resources, Falconbridge, and Phelps
Dodge. This company is only trading on the Toronto Stock
Exchange's TSX. Go to Bioteq.CA for more info. If your stomach
is lined with steel, this could be a fun, rewarding, high-risk
bet. Annual Shareholder's Meeting is scheduled for May 1,
2006. More details to follow on or before 3.27.06.
Global Investors Eastern Europe
seems to be in the right countries, and, within those countries,
in the right, growing sectors. See vol. 2, issue 8. Great
way to diversify, as well as to add growth. Eastern EU economy
rocks. Western EU economy stalls.
purchased Pixar, and along with it got Steve Jobs as the
largest individual shareholder (with 7% of the company's
stock). Hmmm… The most successful animation film company
meets the most successful family media company meets the
most successful new media device, the iPod. Hmmm. Sounds
like the happiest place on Earth to us. Produces Lost
and Desperate Housewives and you don't have to be
either to know they are huge hits for the company. CFO Tom
Staggs said that syndication for the two tv shows should
net $1 billion in operating profit. In the February 6 earnings
call, Bob Iger said that content from The Walt Disney Company
had resulted in 2.5 million episodes sold on iTunes.
the article in the vol. 2 iss. 11 ezine, entitled, "Harvesting
Profits…" Roy C. King became President and COO on 12.20.05,
responsible for sales, marketing and biz development. 4Q
earnings and conference call Tuesday, February 28, 2006
at 10:30 a.m. EST. Participated in the NASDAQ inaugural
Small-Cap Investor Conference on 2.7.06 in London.
were spooked in 2005, when 17-year CEO and Chairman Rob
McEwen left the company (to become CEO & Chairman of
U.S. Gold, listed below). However, McEwen remains the biggest
shareholder and the transition to the new management seems
to be working out quite well. Share prices are high, but
gold is in favor on most analysts' lists this year. Vancouver-based
operation, with Canadian mines and the lowest production
cash cost of gold, at $25 US per ounce. With the acquisition
of Placer Dome assets in Nevada, the price of production
is expected to rise to $150 ounce. 2006 production is expected
to reach 2 million ounces, with 2.4 million ounces produced
in 2007. As of Dec. 31, 2004 (2005 have not been released),
Goldcorp had 12.49 million ounces of reserves. Just announced
terms of a new deal with Silver Wheaton whereby Wheaton
agrees to deliver 220 million ounces of silver per year,
and waiving any capital expenditure contributions previously
required to be paid by Silver Wheaton. In consideration
for these amendments, Silver Wheaton will issue to Goldcorp
18 million common shares, representing 9.8% of the outstanding
shares of Silver Wheaton, and a US$20 million promissory
note, increasing Goldcorp's ownership to 62%, or 126 million
common shares of Silver Wheaton. Must be approved by shareholders
and the TSX in addition to meeting all of the receipt and
documentation guidelines. Gold sales in 2005 totaled 1,344,600
ounces compared to 427,600 ounces in 2004. Cash costs per
ounce in 2005 were less than US$25 compared to US$115 in
2004 per earnings report of 2.15.06. Execs will discuss
results with analysts and investors on March 6, 2006 before
the markets open.
volume 2, issue 6 for a feature article
near 52 week low.
investment bank Lazard LLC to shop the company to suitors
and appointed board member Joseph L. Fischer as interim
CEO. Fischer was Former Senior Vice President, Dial Corporation
and Former Group President, Corporate Controller, Johnson
& Johnson. Reported 4Q Erbitux sales totaled $121.2
million, compared with an analyst consensus of $114 million,
and a profit of $13.1 million, or 15 cents per share, compared
to a loss a year ago. Total revenues for the full year ended
December 31, 2005 were $382.9 million compared with $388.7
million for the full year 2004. Net income for the full
year 2005 was $98.9 million with diluted income per share
of $1.14 compared with $113.7 million, or $1.33 per share,
in 2004. Filed for FDA approval to use Erbitux on head and
neck cancer on 8.30.05, and received "priority"
review status on 10.31 from FDA. Review expected 2.28.05.
Results from study are impressive and the EU commission
just received a positive opinion from their committee, on
2.23.06, to grant approval in Europe. New panitumumab drug
from Amgen is predicted to gain market share of colorectal
cancer in about three to four years, though it is not expected
to gain approval and product launch before 3Q 2006. Swissmedic,
the Swiss agency for therapeutic products, approved Erbitux
for head and neck cancer on 12.22.05. Merrill Lynch analyst
Eric Ende thinks IMCL is a TOP SELL for 2006, while research
analyst Steven Harr, Morgan Stanley, calls IMCL "overweight."
New press releases under the new CEO are looking very positive.
Perhaps ImClone will have an easier time getting the message
out about this great DNA-based cancer drug under his guidance.
Reports say that Bristol Myer Squibb may be looking to sell
their 17% stake iin IMClone.
turnaround mode. Trading at 5 year lows.
off S&P Midcap 400 effective 10.27.05.
got an extension on its 12.15 deadline to file financials
with the SEC, but faces NYSE delisting after April 30, 2006,
if they don't get the reports in on time. "While a
number of challenges remain, I am pleased to report that
we continue to make progress with the Company's turnaround,"
said Steve Cooper, CEO. Don't forget that Michael Sutton,
the former chief accountant for the SEC, is on KKD's board.
KKD has begun completing its restructuring initiatives,
with optimistic words of recovery from President and COO,
Steve Panagos. "We believe that the New England region has
significant growth potential and we look forward to continuing
to serve this important market." Turnarounds like this are
very hard on the stomach. This high-risk investment is only
for the seasoned investor with nerves of steel.
Vegas Sands Corp.
Vol. 2, Iss. 7
Venetian, Sands Macao
mover advantage in China's Vegas!!)`
Venetian, The Palazzo (2Q '07), The Sands Macao, The Venetian
Macao (1Q '07). 97% occupancy rates at the Venetian. Go
to LasVegasSands.com, click on Investor Information, and
then Investor Day, to see a Web Cast on fast growing and
vast the Macao market is. Las Vegas Sands Corp. is also
making deals with other Macao hotels to manage their casinos
and show rooms, including the Four Seasons, Intercontinental
Hotel, Holiday Inn, Far East's Cosmopolitan and Dorsett,
Shangri-La Hotel Macau and the Traders Hotel Macau, all
on the Cotai Strip in Macao. Amounts to less than 7% of
CEO trust holdings of LVS. Bidding on new Singapore casino/resort
with Singapore's leading developer and hotel group, City
Developments Limited. Morgan Stanley analyst Celeste Mellet
Brown recommended the stock for growth investors, with a
target point of $59, Assuming a bull market, while a bear
market warrants a $47 price target. Earnings on 2.14.06
were record 2005 net revenues of $1.74 billion, an increase
of 45.4% over the prior year. Net income in 2005 was $283.7
million, or $0.80 per diluted share compared to full year
net income of $495.2 million, or $1.52 per diluted share
in 2004. (2004 included $417.6 million for sale of the Grand
Canal Shopping Mall.) Looking to secure a $2.5 billion credit
facility to develop "Asia's Las Vegas" in
Macao. Yeow… Yeehaw! CEO Sheldon G. Adelson plans to sell
42.8 million shares, worth approximately $2 billion, after
selling $366 million on 9.13.05, for trust diversification
purposes. This will reduce his personal stake in the company
from 75.3 percent to 63.2 percent, which should be viewed
as a positive more than a negative, although investors typically
get spooked when the founder sells. To put this in perspective
another founder, Bill Gates, sells over a billion each year
to fund the Bill and Melinda Gates Foundation, without causing
a twitter in the financial markets.
in mid-range. Growth company. Volatile share price.
were itching to RE-ADD NTGR TO THE HOT LIST ON 1.16.06,
when NTGR announced a deal with Skype (owned by eBay) to
offer Wi-Fi Internet phones. However, as we reported on
1.15.06, Institutional investors unloaded 10% of shares,
or 3,304,900 shares, on 1.10.06, and we expected the price
to dump on this large sale. Sure enough it dropped from
$20.76 to $17.42. An October report from Jupiter Research
predicted that 20.4 million U.S. households will subscribe
to some form of Internet-based broadband phone service by
2010. More information on Netgear's Skype Wi-Fi phone, including
pricing and availability, is planned for the first quarter
of 2006. BusinessWeek named NTGR as one of its 100 Hot Growth
Companies. Judges from the IT Industry and CRN Readers Rated
NETGEAR Best in Service and Support Among Crowded Networking
Category that Included Companies Worldwide with Both Voice
and Data Legacies in Dec. 2005. 4Q earnings missed expectations
by a penny, largely due to not keeping up with supply. Net
income was $8.9 million versus $8.6 million a year ago,
with per-share earnings flat at 26 cents. Netgear is
presenting at the Goldman Sachs Global Technology Symposium
in Phoenix on 2.27.06. According to CEO Patrick Lo, they
have 58 new products.
2, iss. 10
Fox, Myspace and DirecTv.
article, "News Corp. Enters New Media," from vol.
2, iss. 10. Bought Myspace, Scout Media and IGN Entertainment,
all IT companies, for far less than competitors are paying
for their holdings. With sales of $24.4 billion and a MC
of $51.52 billion (compared to Google's $5.25 B in sales
and $127 billion MC), we think investors will start taking
notice of this undervalued juggernaut, especially once MySpace
revenues start hitting the books. Myspace has surpassed
Google in page views and user time online, which should
start translating into a major jump in ad revenue this year,
especially since MySpace's core demographic is the coveted
16-34 year olds. Media is in favor for 2006, according to
Smith Barney analysts. News Corp. earned $1.08 billion in
the quarter ending in December, up almost triple from the
$386 million it had garnered for the same period last year.
Murdoch has been quoted as saying that MySpace and IGN Entertainment
will be his leading drivers of growth in coming years. Mobizzo,
Fox's mobile network, which pioneered text voting on American
Idol, launched on 2.27.06, and will have micro-pay downloads
of films and tv (including Napoleon Dynamite, the
Fox cult film), games music and more.
issue 44. 1st featured Dec. 2002.
was announced on 2.13.06 that Cisco will distribute Opsware's
products worldwide and that the companies will collaborate
on advanced network management solutions built on Opsware's
Network Automation System, which sent a rocket through Opsware's
share price. CONSENSUS INSIDER BUYING (which we reported
on in January) turned out to be a very good sign. 3Q results
beat Wall Street revenue expectations. 3Q loss was $2.8
million, or 3 cents per share, from $6.3 million, or 8 cents
per share, a year ago. Quarterly report in Feb. '06. Annual
earnings in April '06. The Cisco deal is huge. On 2.13.06,
Opsware shares were up 10% on the news. Opsware will host
a webinar on reducing IT risk and improving security and
compliance through automation on 2.28.06 at 8:00 a.m. For
more info on other webinars and edu, go to Opsware.com.
near 52-week low.
2005 Company of the Year 2005. Read vol. 1, iss. 56.
and Year End earnings will be announced on March 7 at 5:00
p.m. EST. Annual shareholder's meeting will be on June 14,
2006. On Feb. 9th, the BOD made the bylaws more
shareholder friendly, in the hopes of attracting back investors.
FDA approved 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.
European approval granted on 9.21. Switzerland approved
Tarceva in March 2005. Partner of Genentech (DNA) and Roche.
Net U.S. sales for Tarceva increased 15 percent over the
third quarter to $83.9 million for the fourth quarter ended
December 31, 2005. Total U.S. net sales of Tarceva for 2005,
its launch year, were $274.9 million. U.S. net sales of
Tarceva as recorded by Genentech, Inc., OSI's U.S. collaborator
for Tarceva. Ended 2005 with in excess of $150 million in
cash and investments on its balance sheet.
investors increased significantly on 2.9.06. $2.35 million
in new orders in January from state government agencies,
for 1Q delivery. $9.9 million in new orders in 10.05 for
4th Q 2005 delivery. Could make sales double
over same time last year. Two-way land mobile radios (LMRs),
for govt and public safety. According to Feltl & Co.
analyst Richard Ryan, RELM has just 1% share of a domestic
market worth $1.9 billion (and the global market is eight
times larger), so there is plenty of room for growth. Coverage
on MoneyCentral.msn.com on 1.18.06 means it might come up
on more investors' radars.
demand is huge; supply is limited; stock price is high.
Analysts say pressure on price should continue on high demand
in China and Asia, as well as the high cost of mining. Due
to the commodities crunch, gear, personnel and materials
are in high demand and at a premium cost, however Rio Tinto
is a very well managed corporation. Jim Jubak reported on
12.20.05 that RTP has put plant production plans on hold
due to high construction costs in Australia (where many
of its plants and mines are located). Finds, processes and
mines minerals: copper, iron, coke (from coal), aluminum,
titanium dioxide and diamonds, and has increased investment
in the Cortez Hills of Nevada. Rio Tinto has been added
to Jim Jubak's 50 Best Stocks in the World List (eff. 9.05).
Great press usually means more buyers. Hang on, and enjoy
the dividends, but don't get sucked into buying high.
Even Citigroup has taken RTP down to Hold from Buy (even
though MSN reports that the company is undervalued based
on growth expectations). As long as Jubak keeps RTP rich
in headlines, expect investors to keep buying high. Earnings
reported on 2.2.06. Net earnings were $5.215 billion compared
with $3.297 billion in 2004. $1.5 billion special dividend
(equivalent to $1.10 per share), and a share buyback program
totaling $2.5 billion by the end of 2007 were announced.
Investments in growth totaled $2.552 billion.
a Buy rating at $5.60 from Soleil Media-Metrics. Sirius
aired the Super Bowl; XM signed Oprah. The head-to-head
competition continues. Howard Stern has paid off in subscribers,
but not new investors. Sirius announced on 12.27.05 that
it topped 3 million subscribers and was on track to finish
the year strong, yet the share price is 28% off of its 52-week
high. XM Satellite Radio has more than 5 million subscribers.
Was 2004's Santa Rally present, with gains of over 100%
in the last quarter of 2004. XM radio is installed in GM
cars; GM is losing market share and having biz cash flow
issues. Could impact XM. Mercedes just agreed to make SIRI
standard on SL and CL models for 2007. Caris & Co. analyst
Susan Kalla says Sirius "may be able to bring down subscriber
acquisition costs to $100 per sub, leading to a breakeven
in 2006." Kalla said Sirius could reach about 16 million
subscribers by 2010, and predicts a 2007 cash break-even
point for XMSR, with 18 million subscribers by 2010. The
company issued and registered 34 million shares, worth more
than $200 million, to Stern and his agent the week of Jan.
13, 2006. Short selling in Sirius Satellite Radio Inc.
jumped almost 12 percent to a volume to 113.9 million shares
earnings on February 6, 2006, and offered year-end expectations
that analysts are calling conservative. Piper Jaffray analyst
Safa Rashtchy upgraded his rating on Sohu to "Outperform"
from "Market Perform," recommending that investors buy the
stock. See NataliePace.com archived ezine, volume 2, issue 9, when
Sohu was the feature company, in the "You Can Do Better
Than Baidu" article. Financial Times ranked
Sohu in Top 10 Chinese Global Corporate Brands on 9.6.05.
(6 days after our article.) SOHU selected as the official
sponsor of Internet Content Service (ICS) for the Beijing
2008 Olympic Games. Insider buying, including CFO (usually
a good sign). According to comScore media Metrix, SOHU averages
more minutes per visitor (at 26.3) than Baidu (at 19.2)
or Alibaba (at 2.9). Sohu is just behind Alibaba in terms
of page views at 13 million and 15 million respectively,
compared to 6 million for Baidu. Alibaba stomped both sites
in terms of unique visitors in November 2005, with 2.332
billion, compared to 198 million (Sohu) and 128 million
(Baidu). 4th Q results on/about 2.8.06. Sohu
execs will ring the opening bell at NASDAQ on March 13th.
Rowe Price Em Eur & Mediterranean
Vol. 2, iss. 8
vol. 2, issue 8. Great way to diversify, as well as to add
growth. Eastern EU rocks. Western EU stalls. Go global with
the emerging countries. Avoid the countries in the EU that
are stalling in economic growth.
Plan to add.
MISS THE ONLINE CHAT with CEO and President on 3.1.06. Go
to the CALENDAR SECTION of www.NataliePace.com
for more details. (Subscribers only.) sSee the feature interview
with CEO and Chairman Rob McEwen in NataliePace.com ezine, vol.
3, iss. 2. This is a gold exploration company that is being
traded off the big boards. If the choice is between this
and the craps table, you might have better odds here (and
more fun if McEwen strikes gold.) Note: U.S. Gold is not
producing gold at this time. They are digging to find a
new reserve. U.S. Gold closed the
private placement of 16,700,000 subscription receipts at
a price of US$4.50 for aggregate gross proceeds of US$75.15
million on Feb. 22, 2006.
2, iss. 9
tones, domain names, plus, including Jamster…
net income rose to $271.4 million, or $1.06 cents per share,
from $114.8 million, or 43 cents per share, a year ago (1.26.05
release), boosted by sale of online payment system in the
amount of $252 million. Expects 1Q call to miss expectations
due to price cuts to win customers and problems in the mobile
content area. Repurchased 9 million shares for value of
$215 million in the 3rd Q. Revenue shortfall
in the mobile content area is expected to improve, according
to CEO. Michelle Guthrie, CEO of STAR Group, Ltd. (a division
of News Corp.) was named to the Board on 12.19.05. According
to Stratton Sclavos, CEO and Chairman, ""Michelle's
track record in building successful content and distribution
relationships in both Europe and Asia will be an invaluable
asset in VeriSign's long range strategy to build and operate
the world's premier digital content utility." VRSN is looking
to expand into mobile and broadband with Michelle's guidance.
Annual analyst day on 5.25.06 at corporate offices.
2, iss. 10
featured article, "News Corp. Enters New Media,"
from vol. 2, iss. 10. Yahoo is the #1 web site, with more
traffic, page views and time online than MSN or Google.
Yahoo nearly doubled its fourth-quarter profit to $683 million
and revenues were up to $1.501 billion, a 39 percent increase
compared to $1.078 billion for the same period of 2004,
but missed Wall Street expectations by a penny (thus the
investor pullback). Don't be fooled. Yahoo is still a bargain
compared to Google. So why is Google's market capitalization
over twice the size of Yahoo's? Do investors really think
Google is twice as valuable and has twice as much future
potential as Yahoo, when Yahoo is the number one online
destination? How long can that last?
in Profit-Taking Range. Note: The news is still favorable on these
companies (so far) for the long-term (as in Genentech and Google),
which means if you have them in your 401K or long-term portfolio,
you might want to keep them there. However, for the trading portion
of your portfolio, in a market of modest gains but high volatility,
many analysts recommend taking profits in shorter windows. A gain
is a gain. If you took gains from Google a month ago, your individual
shares were worth $100 each more than they are today.
look to add some of these great companies to our hot news list
again, if the price point should become attractive (as we did
NetGear this month).
Blue Chip Hold for your long-term portfolio. Biotechnology
is a volatile sector. January tends to be the highest month
for gains on Wall Street.
Blue Chip Hold for your long-term portfolio. Buy in at a
better price. If you're drinking the Kool-Aid and want an
IT play that is trading at a better value, look at Yahoo
and/or some of the other IT media companies (Disney and
News Corp.) listed above. If you've quadrupled your money,
profit taking and capital gains are attractive these days.
Announced 4Q earnings on 1.31.06. Missed expectations,
and investors panicked (as we'd warned they would). Google
shares sank 12 percent in after-hours trading to $379.00,
losing roughly $15.3 billion from their $128 billion market
capitalization. Google shares continue to sink, to
$344.20 on 2.13.06.
2, issue 4
Corp. bought Intermix for $12/common share on 9.30.05. Investors
received cash for their shares. If you want to invest in
the growth of Myspace, you need to buy NWS.A. See listing
above for more info.
1, iss. 55
FDA issued a warning on "unscreened human tissue"
on 10.26.05. LifeCell reported a recall of products, and
took a charge of $1.4 million in 3Q to reflect the recall.
NY DA investigation of a company supplier of LifeCell (not
LifeCell). LifeCell's product is in high demand and sales
are growing. However, a hit like this investigation could
be devastating, and the 4Q earnings press release didn't
even mention it (not a good sign). Preliminary product revenues
for the fourth quarter were $27.0 million, up 69% compared
to $16.0 million reported for the same period in 2004. The
increase in product revenue was primarily due to a significant
increase in demand for the Company's flagship reconstructive
surgical product, AlloDerm(R) Regenerative Tissue Matrix,
which increased 84% to $22.0 million in the current quarter
compared to $12.0 million in the fourth quarter of 2004.
The produce is in high demand, but it is also under fierce
scrutiny right now. $14 million in insider sales by CEO,
CFO and controller in last 12 months, most recent sales
occurred in Feb. '06. Fourth quarter and full year 2005
earnings results will be released in early March.
says ad revenue is back, and merchandising is heating up.
public fired Martha's Apprentice show, and Martha's
daytime show isn't becoming the next Oprah. Revenues
for the year ended December 31, 2005, were $209.5 million,
compared to $187.4 million for the year ended December 31,
2004. Operating loss was $(78.3) million for the year ended
December 31, 2005, compared to $(60.0) million for the year
ended December 31, 2004. Martha is building homes with KB
Home, and launching 24/7 show on Sirius. The company is
also launching another magazine aimed at young women called
BluePrint. It's hard to get too excited about these projects,
however, when it is clear that Martha's big shots at a comeback
turned out to be flops and when money is mirgrating from
print into new media. Sometimes you have to just stop the
loss and try something else. We love Martha's recipes and
hold no grudges.
good news that they would turn a small profit this year,
instead of posting a loss, gave investors more hope for
a turnaround than might be warranted. We originally featured
the Sony turnaround in Dec. 2003, only to watch the company
falter with its PlayStation and handheld music products.
Recent earnings gains, largely on flat screen TVs, are in
a very price competitive space. If you didn't sell when
PSX bit the dust, this is a great chance to get out with
some gains on your side. Sony reported a 17.5 percent gain
in quarterly net profit on 1.26.06.
court decision assesses after-tax damages of about $40 million
through Dec. 31, 2004, which Sunoco will record as a charge
in the third quarter. Shut down its LaPorte and Bayport,
TX polypropylene facilities and evacuated all its non-essential
personnel in TX on 9.22, due to Hurricane Rita. 4Q net income
fell $5.7 million due to unusual events, including the impact
of Hurricane Rita and a relocation, the company added. Full
Year net income totaled $63.2 million, or $2.40 per unit,
compared with $57 million, or $2.27 per unit, in 2004. Revenue
totaled $4.5 billion up 30 percent from $3.46 billion. Annual
meeting 5.4.06. "We project U.S. refining margins will remain
strong in 2006, albeit down from 2005 highs," wrote Standard
& Poor's Equity Research analyst Tina Vital in a research
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