QUOTE OF THE WEEK:
"Rising interest rates mean an improving economy, which is good for [commercial] real estate, as long as they do not rise too much."
Douglas Durst
CEO of the Durst Organization,
builder of 4 Times Square in NYC, the first "green" skyscraper

SUCCESS SECRETS OF CEOs: How do you make your dream business come true? iSophia asks Kay Koplovitz, who became the first female network president in television history, when she founded USA Networks in 1977. In an exclusive interview with iSophia, Ms. Koplovitz gets very specific about building your dream business, from teamwork and networking to raising venture capital.
WIN 10: Live like royalty on a reasonable budget, but never get caught being cheap. Tips on when to penny pinch, where to use coupons and when it pays off to pony up the dough.
Stock Report Card: Biotechs are still beating most other stock sectors out of the gate. We've found a few promising geldings (for gamblers), an undervalued champion and a Nutty Professor jockey, for your summer stock consideration.
Girl's Guide to the Market: How to Create a Portfolio With Pocket Change. In the past eighteen months, while so many investors were hiding from the bear market, the WIN, Power of Ten investment club in Santa Monica has doubled their portfolio. These bold friends meet monthly, pool $100 each, and now have over $28,000! Discover how they overcame their financial phobia.
Psyching up for Prosperity. Why Affirmations are the First step to Improving Your Fiscal HealthÉ By Chellie Campbell, author of The Wealthy Spirit.
Institutional Investments can Drive a Stock up or Drag it Down. Check out the Top 10 institutional picks and pans of the week.
WINsider CALENDAR: Wednesday morning chat with financial guru, Chellie Campbell. A Great Balls of Fire gala event to protect our nation's men from one of the most deadly killers on the planet today-prostate cancer.
Companies in the NewsÉ News highlights, as reported by the most respected sources in the world. Alphabetized for easy reference.

ÈSUCCESS SECRETS OF CEOs:

Kay Koplovitz, The founder of USA Networks and the first woman network president in television history.

How do you make your dream business come true? iSophia asks Kay Koplovitz, who became the first female network president in television history, when she founded USA Networks in 1977. In an exclusive interview with iSophia, Ms. Koplovitz gets very specific about building your dream business, from teamwork and networking to raising venture capitalÑwhen to bluff, hold Ôem, fold Ôem and when the best bet is to walk away from the deal.

"Many times the best deal you make is the one you don't make." Kay Koplovitz, 8.4.03

N. Wynne--Let’s put a few things in perspective. We live in a completely different world from our grandmothers AND our mothers. 100 years ago women couldn’t own property or vote. In the early 1970s, women still owned less than 5% of American businesses. By 1998, however, women owned 9.1 million enterprises, contributed $3.6 trillion to the GNP annually, employed over 27.5 million people, but received less than 1.7% of venture capital funding. In 2002, women owned 49% of American businesses operating in the U.S., generating +$1.15 trillion in sales annually. (source: US Census Bureau). That’s odd, isn’t it? How did the GNP levels drop so drastically in only two years?

K. Koplovitz--The U.S. Census Bureau changed the measurement statistics. When the numbers were quoted in my book, they were measuring businesses that were at least 50% owned by women. In the new census, they changed it to 51%. I question that rationale. Why would a business that is owned 50% by a woman be a male-owned business? Because they changed that measurement, it changed the number of businesses and the amount of revenue.

N. Wynne--Has the Springboard venture capital forum, that you launched in 2000, been as effective at getting venture capital to female entrepreneurs as you'd hoped it would be? What percentage of venture capital is going to women-owned businesses today?

K. Koplovitz--The percentage of venture capital currently going to women has risen to about 6%. The total amount of money has dropped, however. In 2000, $100 billion was invested in venture capital. Venture capital investment has dropped rather dramatically to only $25 billion invested last year. But it's the percentage of the amount that we are looking at. The market volume will change with economic conditions. We had a downturn in the economy. The percentage of venture capital going to female entrepreneurs has more than tripled since Springboard began, and since I've been looking at the figures.

N. WynneÑThat success must give you some satisfaction! Let's talk about how venture capital is distributed between early stage, late stage and mid-stage companies. In 2001, according to Venture Economics, the concentration of venture capital went to existing (and presumably successful) companies that were interested in expanding, with only about a quarter of the funds going to early stage companies. Is that true today?

K. Koplovitz--The numbers have shifted to later stage companies, with only a very small percentage going to early stage investment. Investors have retreated to safer ground. This last quarter, the second quarter of 2003, is the first quarter of five quarters that we've seen a very slight up-tick in the number of new company investments. Some venture capitalists believe they will make a number of investments in new companies this year. There is a cautionary sign of a pickup. Funds are sitting on a considerable amount of capital that they've not invested. They've purged their portfolio of bad investments or investments that they no longer want to support. They're not sitting with a lot of companies in their portfolio, so they'll start moving to new investments. Biotechnology has probably been the lead in that, although technology and wireless have gotten a considerable amount of attention, also.

N. WynneÑShould entrepreneurs consider moving to Silicon Valley, where most of the venture capital is located?

K. Koplovitz--No, Silicon Valley was one of the hardest hit sectors of the country in the technology downturn. Silicon Valley still has the largest pool of capital to invest. They still lead, but they no longer dominate. Boston is the number two market for venture capital. Boston has been consistently stronger throughout the downturn.

N. Wynne—At least there’s hope on the horizon for the commercial real estate developers, who have suffered through such high vacancy rates over the past few years. One of the things highlighted in your book is that the venture capital world is still largely run by white males, with the notable exception of Pat Cloherty, Ann Winblad and Susan Segal. Does this fact have any bearing on the way that female entrepreneurs should approach venture capital funding?

K. Koplovitz--I think we're still in the period of training women to present to venture capital in the terms that VCs are used to dealing with. Not only the language, but also by addressing the important business points that venture capitalists want to know. They want to know the product or service, competition, management team, exit strategy and how close you are to liquidity. In this downturn time, most firms are looking for profitability or breakeven in twelve months. If you're eighteen months from profitability, it's difficult to get financing today, except for biotechnology. It's understood in that category that it's a longer tail to get through research and development, testing and FDA approval, etc. Women should know the fund they're pitching to, which companies that fund likes to invest in, and what stage your company is in, before you spend your time and their time trying to present your business for capital investment. Human capital is still very important. Who introduces you is extremely important.

N. WynneÑOne of my advisors says it's important to get a company out of cash burn before going to venture capital these days. The idea is that if the VCs sense that they can squeeze you into a cash-crunch corner by dragging their feet, they'll do that and buy into your company at fire sale prices.

K. Koplovitz--A profitable company is always more interesting to investors. On the other hand, if you're a profitable company, why do you need the investors? Only if you're looking for capital for growth. It's definitely easier to look for investors if you're a profitable company.

N. Wynne--In your book, Bold Women, Big Ideas: Learning to Play the High Risk Entrepreneurial Game--which I believe is a must-have handbook for any entrepreneur, male or female, who is interested in navigating the world of venture capital--you say that the right venture capitalist can be enormously valuable to a company, in more ways than just ponying up the cash. How does an entrepreneur go about targeting and evaluating the right VC, when most entrepreneurs would dance on the ceiling just to get a meeting or even a telephone conversation with any one of them?

K. Koplovitz--I think the first thing that an entrepreneur should do in searching out potential venture capital investors is to really take a close look at the companies they have invested in, to see what their appetite is for the company that you have. Look at the stages that the firm invests in. See who is on the board of the companies they invest in. See what kind of people are around them. An entrepreneur needs guidance, introductions and experience in the financial market. A venture capitalist can bring business contacts, and also an expertise in your type of business. If you're in wireless, and if you go to a venture capital firm that has one or more partners in that category, they will have experience that will be useful to you. They will also have a network of people to introduce you to. Look at the firm with the question, "Can they help you out?" It's not just about the money. It's about building the business. You've got to focus on building the business. Entrepreneurs fall short on revenue and business development. The true revenue streams aren't always carefully thought out or understood. Therefore it's hard for the business to withstand the market pressures.

N. WynneÑAh! So profitability is back in favor, rather than the cash-burn strategy of capturing market share at any cost? (I can't help but thinking Amazon,com hereÉ)

K. Koplovity--There was a time, in the late 90s, when businesses were fed so much capital. There was a concentration on top line revenue, no matter the cost. A lot of capital disappeared with that economic model. It's not the case that profitability doesn't count. Revenue, relationship to cost, and profitability are extremely valuable to general investments.

(WIN note: Again, we can't help but thinking Amazon,com here. Amazon.com is the most visible brand in the world, but did you know that the company is sitting on a mountain of $2.8 billion in long-term debts and has only had two profitable quarters in over five years of doing business? The Earnings Per Share quarterly growth rate in 2Q 2003 was -267%, according to Money Central. For a debt-free competitor, check out Overstock.com, at OSTK.)

N. WynneÑIs there a time or circumstance when the best decision an entrepreneur can make is to walk away from the offer? What is the value of focusing on friendly funds?

K. Koplovitz--Oh yes. Many times the best deal you make is the one you don't make. That's true of mature and new businesses. You've really got to understand the economic model of your business and what that deal will bring to you in value. If it's not a good value or at least an acceptable value, if the deal does not bring an added value to you, it's not a good deal to make.

I frequently see entrepreneurs make deals because they think that making deals shows progress for the company. Making a bad deal may bring down your company. You may set a bad precedence by making a bad deal. You have to weigh the value to make sure that it fits in the economic model that works. Rarely do models work out exactly as they're planned. There are always modifications. You might give up something for something extraordinary and helpful, but don't sell yourself out for something that might ultimately hurt your business.

N. WynneÑAssuming one of our readers draws the interest and an offer from a venture capital firm, what other offers/deals can she ethically court during due diligence? I'm thinking of the way that you negotiated Warburg and Travelers during the term-sheet negotiations for Broadway Television Network.

K. Koplovitz--I think there's nothing wrong with negotiating with different sources of revenue. You get to a certain point where in order to finish due diligence you have to make a commitment. One thing about the market is to engage in multiple business deals. Business deals don't always get concluded, even when both parties want to do it. I think that's true in investments, as well. You need to talk to different firms, to get a sense of what their assessment of your business is, so that you have an idea of the market for your business from an outside funding source. At some time, you'll sign an exclusivity clause in order to close the deal.

N. Wynne-- What key data and/or statistics do you think are imperative for a great business plan, and how do you write up the revenue and costs of a new business that has yet to prove itself?

K. Koplovitz--There are many places you can go. You can go to business schools to get a business plan template, or to the Ewing Marion Kauffman Foundation, out of Kansas City. The Kauffman Foundation is solely focused on entrepreneurs. There is much value on their web site, as well. (WIN note: Click here or go to: http://www.emkf.org.) Most any major university has business plans available. There are also a variety of different associations, like the National Venture Capital Association and SpringboardEnterprises.Org, that have business plans, as well. There are numerous places you can go.

N. Wynne--Will you talk a little about how entrepreneurs can get their elevator pitch down to a delicious sound byte?

K. Koplovitz--I think trying it out, getting your pitch corrected to the ear, is very important. It's easy to record it, and listen to it yourself. You'll see holes in your own pitch by doing that. There are a number of associations--venture capital associations, and groups in and around universities--where people congregate to listen to their pitches. If you go to a VC forum and hear other pitches, you'll get a pretty good idea of who does it correctly. Springboard Enterprises.Org has a list of various elements of things that should be included, and examples of people who have done it well. IF you want to see some examples, you can see that on Springboard Enterprises.Org. It will give you several examples of people who did sections of the pitch very well. A lot of people get presentation training. A good presentation trainer will help you get the flaws out of your pitch, not only in the material itself, but also in the presentation of the material.

N. Wynne--Let's talk about starting outÑgetting the first loan or seed money. The SBA may be perceived as being friendly to female-owned businesses, but loans aren't given out to any business with less than two years of income returns. Unfortunately, according to research by the Milken Institute in 2000, women are getting only 12% of the debt financing through traditional banks, even though female-owned businesses accounted for 1/3 of GDP. Where does the startup capital come from and what changes are occurring to make the debt financing world more female-friendly?

K. KoplovitzÑThose numbers may have gone up a bit, like 15% today. Female-owned businesses are still woefully undercapitalized, whether it's debt or equity. I think that a lot of women who were rejected in the past from banks, should, however, try again. Twenty-five years ago, unless your husband or your father was signing for you, banks wouldn't talk to you. I think that there are banks that have concentrated units that are looking to fund women and minority-led businesses. Some have made more progress in providing assistance to people who are looking for debt financing. Times are changing. One should inquire at their bank of choice, to see if there is a unit that is dealing with women-owned businesses. At least go there and get their input. Some will give guidance on accountants and lawyers, if your financials aren't in the shape that they need to have. That would be another source of information that would be helpful.

N. WynneÑWhat about credit cards? We hear success stories about entrepreneurs who started their businesses on credit cards, and, of course, we never hear the horror stories.

K. Koplovitz--People are paying very high interest rates on credit cards. Today, you have a bank account yielding less than 1%, and you're paying 16% on credit card money. That doesn't add up. You're not going to be able to borrow money at prime or even prime plus two. Refinancing mortgages has been attractive in more recent months because of the low interest. If you're willing to do that and can do that, maybe you're taking a variable at 4%. That is quality money at a better price than paying on your credit cards at 16-18%, although mortgage refinancing requires you to have something with a mortgage.

N. WynneÑThat's quite a decision, deciding whether or not to put up your home to fund your dream business. Successful entrepreneurs tend to be "whatever it takes" kind of people. Perhaps that's the challenge of entrepreneurialism, to make sure that tenacity and bravery do not spill over into recklessness.

K. KoplovitzÑYes.

N. Wynne--Why does the word networking appear so many times in your book?

K. Koplovitz--You just don't build businesses alone. You really need, not only to attract good people to work for you, even if it's three or thirty or three hundred, but you need also to have a customer base. You need to market yourself. Most of that is done through networking, to get new customers, to get new opportunities to market. It's not all buying ad time. Not all products warrant that. Some are business services. You have to get customers who are satisfied with your service and are willing to speak about that to others. In television and in the movie business, we call it buzz. There is a lot of word of mouth, regardless of the tons of advertising. Word of mouth makes and breaks movies. It's still an example of meeting to spread the word. Networking spreads the word. You have an important product or service, or a customer who is satisfied, or an investor who thinks you're going in the right direction. You have to have the clarion call. You have to be an evangelist for your business. You need to tell everybody you know.

N. Wynne--You say that it's better to own 10% of a $100 million company than 100% of a $1,000,000 company, and a whole lot better than owning a company that has to close up shop for lack of capital. On the other hand, however, when USA Networks sold in 1997 for $4.5 billion, you had zero equity. How did you learn this lesson the hard way? Most people whom I relate that statistic to think that you must have had a bad attorney or executive recruiter. In today's world, stock is handed out so liberally to executives.

K. Koplovitz--People don't understand what 1977 was like. You couldn't finance television properly, much less a cable television network. Venture capital and equity ownership simply didn't exist at the time in cable television. Bob Pittman tried to take MTV public, but no one thought the cable business would amount to anything. That's a short course in history. Executives in the emerging market of cable television got big pay-outs, but equity ownership was a different issue. USA Networks was a privately-held company in a joint venture. You can't even compare the two worlds. That doesn't mean that I didn't earn a lot of money. It just means that I didn't have equity.

N. Wynne--You've launched two companies that have changed the world. USA Networks introduced satellite sports and launched cable into television network programming. Springboard is bringing women into the venture capital arena. What do you see as the future of Broadway Television Network? Will this venture be as big and bold? Will viewers eventually see Chicago, the Broadway production at an IMAX theatre?

K. Koplovitz-- IMAX is a different technology. Broadway TV is bringing Broadway musicals or event TV to the big screen. The multiplex theatres have started to project things other than movies on their screens. They're looking for other ways to utilize their real estate. They're looking at sporting events, Broadway shows, etc. If theatres put more people in the seats, they benefit from the bottom line. If you don't live close to New York City, and if you want to see the real Broadway cast in front of an audience, Broadway Television brings you that experience. It's really spectacular in high definition, Dolby sound and on the big screen, but Broadway Television Networks is only one of my investments.

N. WynneÑTrue. Homeowners, gardeners and investors might be interested in learning more about AgraQuest, a company that makes natural pesticides. This company was one of the first investments made by BoldCap Ventures, Kay Koplovitz's angel capital organization. For more information on AgraQuest, go to www.AgraQuest.com.

Kay Koplovitz is a principal of Koplovitz & Company, a media and investment firm. She is also the Chairman of Broadway Television Networks, and serves on the boards of Instinet and Liz Claiborne. From January 2000 to August 2001, Kay was the CEO for Working Woman Network. As the Chairman of the National Women's Business Council (under President Bill Clinton), Ms. Koplovitz co-founded Springboard.Enterprises.org, a nationwide venture capital forum for female entrepreneurs. Kay Koplovitz became the first female network president in television history, when she founded USA Networks in 1977. Ms. Koplovitz is the author of the entrepreneur's must-have handbook, Bold Women, Big Ideas: Learning to Play the High Risk Entrepreneurial Game.

È WIN 10:

Live like royalty on a reasonable budget, but never get caught being cheap. Tips on when to penny pinch, where to use coupons and when it pays off to pony up the dough.

The Royal Bargains

El Cheapo No No's. DON'T embarrass yourself by penny pinching in public. It doesn't pay to be cheap on:

È Stock Report Card:

Biotechs are still beating most other stock sectors out of the gate. We've found a few promising geldings (for gamblers), an undervalued champion and a Nutty Professor jockey, for your summer stock consideration.

You know the biotechnology race is on when two out of the eight stocks listed in this week's report card have done 3:2 stock splits recently.  You can still get in on the American Pharmaceuticals 3:2 stock split for shareholders, if you're interested in this company, by acting quickly, and buying in by 8.18.03. (This bit of information should not to be confused as a BUY recommendation. Read on!)

Promising, but no guarantees

Many of the companies featured in this week's report card are positioning themselves as the future of genetic based therapies and drugs, namely implanting drugs to the exact right target in the body and then releasing the treatment in recommended dosages over time. APPX, ANPI & ANSI all show great promise, providing their pipeline drugs receive FDA approval and their marketing and distribution agreements are with experienced partners. Durect Corporation and Guilford Pharmaceuticals, both of which are operating under negative earnings, have had debt and operating pressures on the plate, but, with new capital in place, have management promising to refocus on product development and FDA filings. Guilford appears to have a winner in DOPASCAN, a Parkinson's Disease drug that is poised be approved in Europe and Japan soon. Additionally, Guilford's most recent earnings report was better than expected. Still Guilford has the highest debt/equity ratio on the stock report card.

The SEC has been very aggressive lately, reviewing pricing practices of major players, like Johnson and Johnson and King Pharmaceuticals. Additionally, governmental agencies are monitoring Medicare reimbursements with an eagle's eye. Institutional holdings decreased last week in Advanced Neuromodulation Systems, Inc, even though the company had just adjusted their earnings guidance upward, based upon worries that reimbursement rate cuts will stunt future earnings growth.  The heat on targeted biotechnology and pharmaceutical companies may present a buying opportunity, if you believe in the products and the management and time your entry just right. Management counts! Otherwise, you could end up with a HealthSouth fiasco.

Perrigo beats the numbers game over all of these young stallions, as being best value, with established outperform potential. This isn't a sure shot, however. Earlier this year, Perrigo warned that the competition in the generic marketplace is so fierce their earnings in 2003 may be flat. If Perrigo proceeds with their plans to sell an over-the-counter generic of Claritin in 3Q, however, better news for earnings and share price could be in the cards. Remember, however, that stocks are often more of a popularity contest than a strict numbers game. If any one of the more high-risk stallions (listed above) scores with an FDA approval, the long shot odds stand to bring much higher, swifter gains for investors, than the more generic companies, like Perrigo, which have less WOW factor.

While scanning the net for unique biotechs, I found a rather oddball, nutty professor-type company--Spherix.  Spherix is strictly biotechnology for commercial applications. Instead of cancer cures, these scientists have found (and patented) Naturlose, a low-fat sweetener that doesn’t cause tooth decay.  Pepsico is testing Spherix’ new low-cal sweetener, according to a recent Spherix press release. The FDA approved the sweetener years ago, but Spherix has just now worked out its manufacturing, distribution and royalty snags, and, thus, may be on target to bring in some seriously sweet revenue. Last week, another Spherix product, a longer-lasting fragrance compound won a patent. Fragrance companies have, reportedly, expressed interest. The founder of Spherix and his wife recently canceled their plans to sell shares, according to a company-issued press release. This company may, at long last, be on a roll, or at least a doughnut. Imagine Krispy Kreme doughnuts that don’t rot your teeth!

Since FDA approval is merely the first hurdle in a series of manufacturing and marketing challenges for any new drug (a process which can take a number of years), companies that are hoping for their billion-dollar bonanza can be highly volatile investments. (Think of ImClone, which has yoyoed in share price from five bucks to forty bucks in just a year.) For the savvy investor, volatile stocks are profit-taking opportunities, as easy as buying in at the low, and waiting for favorable headlines to inflate the price. Trading around the core has been a profitable strategy for many biotech stocks over the last few years, including the reputable, well-established Genentech (DNA). If you're looking for long-term investments, remember that the cutting-edge companies are long shots with as much high risk of loss, as there is potential for high gains. Click here for this week's Pharmaceuticals Stock Report Card.

As a bonus this week, to help investors decide which biotechs to add to their portfolio, iSophia is including an updated Biotechnology Report Card from issue #34. Established giants, like Johnson and Johnson and Bristol-Myer Squibb, are still navigating through public problems that have adversely affected their share price. Johnson and Johnson is currently embroiled in a controversy over stent-related fatalities and an SEC investigation, while Bristol-Myer Squibb went through a year and a half of restated earnings, SEC scandals and the FDA rejection of ImClone's Erbitux application. Bristol-Myer Squibb may be making more positive headlines in the near future, however. With the ImClone executive suite in disarray (chairman and CMO positions were recently vacated and Harlan Waksal is no longer on the team), analysts have speculated whether BMY will take over ImClone completely. Erbitux continues to dominate headlines, and is expected to get European approval this year, as well as a new FDA filing. Johnson and Johnson rates highly among money managers for strong management and stability. Click here for this week's Biotechnology Stock Report Card.

WINsider TradingÉ

A key factor that should be considered before any investment is "word on the street." If you, or someone you know personally and trust their opinion, swears by the product, odds are there are others out there who will benefit and buy. Do you have personal experience with any products of the biotechnology and pharmaceutical companies? iSophia wants to hear from you!! Join us for a biotechnology chat session next Wednesday morning, August 20th, at 9:15 a.m. PST.

How does personal experience pay off? You're more likely to watch a stock with a product that you swear by, which means you'll stay abreast of the news, the share price and your returns. In stocks, the watched pot does boil, and you want to be there in time to take in all the bubbles before they pop! If you're off doing other things, all of the returns might disappear into thin air before you get a chance to cash them out.

Other questions to think about before the biotechnology chat next Wednesday morning? Are doctors aware of the benefits of the implanted pain medications? Have the companies been successful in getting the word out on the efficacy of their products?

For even more information on the biotechnology sector, check out WIN e-zine #34, an issue entirely devoted to biotechnology, with particular focus on the companies with gene-based cancer therapies, many of which have recently won fast-track FDA approval.

http://www.NataliePace.com/newsletters/members/34/34.html

Please note: the 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. ALWAYS do your research and/or consult an experienced, reputable financial professional before buying or selling any stock. Full disclosure: N. W. Pace does not currently own stock in any of the companies listed in this article.

È Girl’s Guide to the Market: How to Create a Portfolio With Pocket Change.

In the past eighteen months, while so many investors were hiding from the bear market, the WIN, Power of Ten investment club in Santa Monica has doubled their portfolio. These bold friends meet monthly, pool $100 each, and now have over $28,000! Discover how they overcame their financial phobia.

1: I don't have enough money to invest! Doesn't it take a certain amount of money to open a brokerage account?

Most brokers do require a minimum to open the account. (T.D. Waterhouse's minimum is less than Goldman Sachs'.) If you don't have a thousand dollars (or don't want to start by investing a thousand dollars) consider joining (or starting) an investment club. By pooling your money with your friends, the minimum requirement shouldn't be a problem. $100 each from ten friends equals $1,000 to invest each month. Learn on the job, while your money does all of the work for you! (Hey, if $100 is too much per month. It's your investment club. You set the monthly dues.)

2: I would start an investment club IF I had the extra time and money.

Who really has extra time and money? How about having a great excuse to get together with your friends once a month? Why not set your club dues at the amount of money you would BLOW on a night. Then you really don't need extra time or money. Ten members pitching in $100/each would have $1000 to invest each month, and $12,000 invested by the end of the year! Ten members pitching in $25/each would have $1000 to invest in only four months, and $3,000 to invest each year! A little $$ here, a little $$ thereÉ pretty soon your club has a real portfolio! The WIN, Power of Ten investment club started in January of 2002, and has DOUBLED the value of their investment in less than two years. Not a bad summer's resolutionÑto start building a portfolio, worth almost $30,000, from scratch.

3: Am I the only guy reading the iSophia online magazine?

Nope. From our statistics, at least a third of our readers are male. Who wouldn't want to read iSophia's exclusive interviews with Steve Forbes and Kay Koplovitz, or with rising star executives, like Rick and Phil Smith, of Taser International? Our reputation for finding the young mavericks of an industry is becoming very established as well. (Did you know that if you'd bought stock in the featured CEO's publicly traded company when we featured them, your portfolio would be up 67% today?) iSophia: Smart enough for a woman, but guys can get some action, too.

4: Aren't there some legal forms to file? Is it going to cost me an arm and a leg just to get started?

Opening a brokerage account is FREE, and is as easy as writing a check and signing documents. Starting an investment club is almost just as easy, when you purchase the iSophia Investment Club Start-up Kit. iSophia's investment club startup kit gives you everything from a sample member contract, to all the facts and instructions you'll need to get going. Start-up kits are just five bucks per person (if your club has ten members), at $49.99.

5: I don't have time to research all this stuff.

Who does? That is why the iSophia network does the Stock Report Card for you twice each month. Don't do the research, just read the research. The rest of the time, kick back, relax and apply your profit-maximizing strategies. If you have a company that you're interested in, you can email us with as much information as you know about the company, including any personal experience that you've had. We'll stick the company in an upcoming Stock Report Card with its competition. Yes, we'll do the work for you! It's called multi-tasking and networking, and it really works! If you haven't already signed up for iSophia, the monthly subscription rate is just $4.50. Get two months free, if you sign up for a year. Call 310.399.0497 or email info@NataliePace.com NOW!

6: What if I lose all my money?

All investments, outside of cash, are risky, but the educated individual is more likely to achieve greater gains than the novice. The odds of greater returns improve statistically for investment clubs over individual investors (probably as a result of people actively working their investments and sharing their knowledge). Analyst recommendations are, statistically, a losing strategy. According to a study conducted by Stanford and UCLA in 2000, investors lost –30% by trading on analyst recommendation. That’s why iSophia was founded—to provide an enjoyable, easy forum for investors to network and educate themselves about making wise investment choices. If you really want to make more educated investment choices, be sure to sign up for Investor’s Boot Camp, a two and a half hour hands-on training that will change the way you invest for life. See this week’s CALENDAR OF EVENTS for the next seminar, to be held in Los Angeles on September 18, 2003.

THREE BASIC TIPS

1.Diversify your portfolio into a number of stocks in different sectors, but don't try to hold more stocks than you can manage.

2. Keep cash on hand to get you through the low periods, so when stocks (or other investments) dip you don't have to liquidate at a loss. (Trimming losses is a strategy, but you don't want to be forced to do it.)

3. Diversify your investments into real estate, stocks, bonds and liquid-friendly money market accounts. Holding all your money in one sector leaves you very vulnerable. Natural disasters can wipe out real estate gains in a heartbeat. Recessions can sink stock market gains in a season. Savings accounts offer less risk, but almost no return today. Don't underestimate the value of liquidity! Cash can save the day!

7. My broker's last hot tip was HealthSouth! Aren't all brokers morons?

Relying on any ONE piece of information to evaluate investments is not a smart, or successful strategy. Trading solely on HOT TIPS from brokers or investor bulletin boards can often simply be chasing after profits that prescient investors are ready to cash in. Think of investments as a Mosaic. The more tiles of information that you have about any investment, the more complete picture you'll see. Don't trust brokers blindly. Brokers are salespeople, who work on commission. It's the entry-level position in the field. Most of a broker's time is spent selling products to clients like you, and taking deposits and orders, not in researching the companies. Most are told what to recommend by their company.

8: I just don't know enough about investing!

Learn! Start educating yourself. What are you waiting for? Come to an Investor's Boot Camp seminar. Sign up for iSophia's investment network. Start receiving our bimonthly e-zine. Join us for our Wednesday Morning online Chats with Industry Professionals. At least you'll discover that adult P/E isn't a place with smelly socks and communal showers.

9. Taxes have got to be a nightmare! More forms to fill out and numbers to crunch! ACCCKKK!!

Who wouldn't want the headache of keeping track of PROFITS!! Relax. iSophia software does the math for you (for just $19.99). Keeping track of FREE MONEY is much easier than working!! FYI: If you do not sell any stocks in a given calendar year, there will not be any capital gains or losses to declare, and no taxes to pay. To avoid penalty, however, always file your annual tax return on time, even when you are not reporting capital gains.

IMPORTANT TAX INFORMATION:

A. Your investment club will be required to file a tax return annually, which is due on the April 15 deadline. THERE IS A STIFF PENALTY FOR FILING LATE! The IRS charges $50 per partner per month for not filing a corporate tax return by the April 15 deadline. OUCH!

B. The partnership tax return is filed on Form 1065. Typically, the profits or losses will be distributed proportionately among each individual partner, with the appropriate percentage of taxes to be paid by each partner. Remember to declare any expenses associated with the investment, including the cost of hiring an accountant to file the return, broker fees, etc.

10. What if I don't like my partners? Can we kick someone out of the club without a lawsuit?

The Sample Membership Agreement provided in the iSophia investment club start-up kit covers what to do when a member wants to (or has to) leave. Our best advice is that you start or join a group with people whom you like and respect, and that everyone is clear on the club rules. Believe it or not, making money with partners can be a lot of FUN, and you can use the lessons and information to enhance your own portfolio!!

È Psyching up for Prosperity.

Why Affirmations are the First step to Improving Your Fiscal HealthÉ By Chellie Campbell, author of The Wealthy Spirit

"Chellie, an editor is interested in your book!" my agent, Lisa, exclaimed happily. "I sent her a bunch of proposals, and she returned all of them to me except for yours! Now she wants to talk to you."

My heart was thumping and my breath came fast. This could be the break we'd been waiting for. Lisa and I had been working together to find a publisher for my book, The Wealthy Spirit, for over a year, through endless rounds of interest, rejections, almost-deals, and deals that fell through.

"Deb likes your book, but has some changes to suggest," Lisa went on. "Here's her number. Good luck!"

I tried to calm down, and dialed Deb's number. We introduced ourselves and chatted pleasantly for a few minutes. Then I asked the fateful question, "What about the book do you feel needs to be changed?"

"Well, first of all," Deb replied, "We've got to take all the affirmations out of this book."

My heart sank like a stone. There was no way I could take the affirmations out of my bookÑthey are critical in helping people think more positively about money. I believe that what we focus on expands, and most people focus on money in a negative way. The average person has 60,000 thoughts every day, and most of what they're thinking about money is depressing: "The rich get richer and the poor get poorer." "Money is the root of all evil." "There's never enough money." Daily doses of "I can't afford it." You have to actively change the way you think about money in order to have more abundance flow into your life, and that means repeating positive statements about money every day in order to replace those old, negative thoughts.

So, thinking this deal was never going to happen, I quietly asked Deb, "Why do you think the affirmations should be taken out?"

"Chellie, affirmations are old news," she stated flatly. "There are 97 books on affirmations out there. I can't go to my forty salespeople and say we're doing another affirmation book. This has already been done."

"So you think everyone already knows about affirmations?" I asked.

"Yes!" she replied.

"Then let me ask you a question," I said, "Are you doing them?"

There was silence on the phone for a minute. I elaborated, "Positive statements, out loud to yourself every morning, about money specificallyÑare you doing them?"

"Well, no, I'm not," she admitted.

"That's my point," I said, "People know about affirmations, but they're not doing them. Just knowing about them doesn't do any good. Listen, why don't you test them? I'll give you my list of favorite affirmations. Say them out loud while looking at yourself in the mirror every day for the next 21 days. Then we'll talk again in three weeks."

Deb agreed. Three weeks later, she was on the phone saying excitedly, "Chellie, this is amazing! I'm getting unexpected money in the mail. People are paying me back loans I had forgotten they owed me, and I'm getting bigger and better book deals!"

I asked, "So, can the affirmations stay in the book now?"

She answered, "Absolutely yes!"

And that's why the book was published with the subtitle, "Daily Affirmations for Financial Stress Reduction".

Here is the list I gave Deb that day. Why don't you give it the 21-day test yourself and see what happens?

Affirmations About Wealth & Financial Freedom

Wishing you peace, prosperity, happiness, and abundance in all things. You deserve it!

   Chellie Campbell is the author of The Wealthy Spirit: Daily Affirmations for Financial Stress Reduction, selected as one of Dr. Laura's book recommendations in March, 2003.  She created and teaches the Financial Stress Reduction® Workshops, on which her book is based, in the Los Angeles area, and gives programs throughout the country. Her free e-newsletter is available at www.thewealthyspirit.com.

È Institutional Investments can Drive a Stock up or Drag it Down.

Check out the Top 10 institutional picks and pans of the week. (source: www.MoneyCentral.msn.com)