Nothing but Blue Skies!

Jet Blue and Southwest Airlines are expanding into new markets and eating up market share, while the major American carriers are drowning in red ink. This week's Stock Report Card features: Airlines. By iSophia founder & CEO, N.W. Pace

FLYING BELLY UP

US Airways emerged from bankruptcy, but is still losing money. United Airlines is in bankruptcy, has postponed filing its reorganization plan twice and is still losing money. American Airlines is desperately trying to AVOID bankruptcy, and is still losing money. According to a report released by the Bureau of Transportation Statistics (BTS), all but five of the large, major and selected low-cost U.S. passenger airlines' operating ratios were STILL below the break-even point in the first quarter of 2003. (Go to www.dot.gov/affairs/bts1203.htm to view the report directly). Which five are flying in blue skies, above the breakeven radar? American Eagle, Air Tran, Southwest and Spirit, led by the people's favoriteÑJet Blue, which posted $1.19 domestic operating revenue per available seat mile and $34.5 million profit, compared to United's $.77 domestic operating revenue per available seat mile, and $-608.1 million loss. (CLICK HERE to go directly to the Airlines Stock Report Card, and view the numbers directly.)

Why are the low-cost carriers gaining market share, while the giants of the industry teeter on the edge of bankruptcy? Even before the tragic events of September 11, 2001, the big carriers were in trouble, as the economy weakened and business travelers (the former mainstay of most of the big airlines) were squeezed out of those comfy seats and gourmet meals into flying coach and eating peanuts (and now blue chips). That's the past, but what's the future? As companies increase their capital spending, will business travelers return to their bigger seats in the blue skies? Eventually, yes, but probably not immediately. Businesses are starting to see improved earnings reports because they have trimmed back to the bone. Airlines are starting to report more bookings in business travel, but it is unlikely that boards will get spend-crazy, while the American economy is still posting low single digits GDP growth. Peter Greenberg, a respected travel contributor on CNBC, reports that business travelers are acting like flea market buyers, and going online for the cheapest fares. There may be suits in the business class section of the plane, but they are paying coach fares, which doesn't help the bottom line.

Even with improved revenue and more business travel, the larger airlines have cost burdens that continue to prevent profitability. The annual earnings report that American Airlines filed with the SEC on April 15, 2003 articulates the continuing problems facing the large carriers. Most airlines were already losing millions each month by the time 9.11.01 hit. The airlines woes began in 2001 when business travel slumped after the Internet bubble burst and the stock markets went into freefall. A slump in demand prompted price wars. In addition to the tragic emotional losses suffered by Americans on 9.11.01, the airlines were forced to implement more rigorous security procedures, an added cost to balance sheets that were already filled to the brim with red ink. The situation is only more dire today, despite efforts by the big carriers to reduce their costs, with rising fuel costs, decreased insurance coverage for terrorist attacks at significantly increased prices, and significantly higher security costs. According to United Air Lines, fuel is the 2^nd largest cost behind labor, and the biggest problem with rising fuel prices is that the cost cannot be passed onto the consumer, while the markets remain so competitive. Recent analyst upgrades for the airline industry have sparked a rally in the sector, but investor beware: business travel will have to exceed what it was in the boom days to offset the increased costs that are associated with airline travel today (fuel, insurance and security).

American Airlines admits that despite their efforts to cut costs and become competitive, "a large shortfall of approximately $2 billion remains between identified annual cost reductions and needed cost reductions." How is it that investors still hold almost $2 billion in market capitalization in American Airlines, when it is teetering on the brink of bankruptcy? Why has the share price rallied over ten-fold since April? With 87.1% of the shares being held by institutional investors, is this a case of unopened mutual fund and 401k mail? (WAKE UP NOW while the shares are still trading near their 52-week high!!) Is it a case of trading on analyst recommendations without reading the fine print? Gary Chase of Lehman Brothers upgraded American Airlines from "underweight" to "equalweight," prompting a 6% increase in the share price last week, but in the fine print, Mr. Chase went on to advise investors to focus on the low-fare carriers, due to cheap business travel, crushing debt loads and low-fare carrier growth. One can only wonder how American Airlines, which admits that it is dangerously close to bankruptcy, still losing money and in need of eliminating $2 billion in costs immediately in order to stay afloat can be considered an "equalweight," when there are airlines, like Jet Blue and Southwest, which are posting profits NOW and predicting 28% plus annual growth through 2008.

CAN THE GIANTS ACT SMALL?

The low-cost airlines are characterized by simple business models, great customer service, easy-to-use frequent flyer plans, on-time performance and low operational costs, while the big airlines have multiple planes, multiple markets (including cargo) and work out of many worldwide markets. "Starfish," United's attempt to compete with Southwest and Jet Blue on their own low-cost turf, is expected to launch early next year, but with "Song," Delta's low-cost carrier, already in the race for the peanuts, and Jet Blue and Southwest advancing on all available domestic territory, will United's recovery plan be too little, too late? United is dependent upon North America for 65.1% of revenues, so any sustainable recovery will rest upon their ability to remain competitive in the domestic markets, markets that the low-cost carriers have dominated during the recession. United, Northwest, Delta and US Airways have tried to help their bottom line by sharing codes, frequent flyer plans and customers, none of which has translated, so far, into profit. In fact, after almost a year of restructuring, United's management admits that they still need to cut costs further, resolve contributions to pension plans, finalize the new business plan and secure exit financing. What does that mean for the investor? BIG RISK.

Blue Skies

While the major airlines flounder under multiple jets in their fleet, high labor costs and reduced business travel, low-cost airlines are gobbling up market share. Jet Blue and Southwest, to name two of the five carriers that are operating with positive earnings, are adding planes, expanding gates, filling their planes with business travelers and predicting sustained growth through 2008. Morgan Stanley has upgraded Southwest to Outperform, believing that Southwest Airlines will have annual growth of 28% through 2008 because it is the fastest growing airline, its growth may be understated, and that LUV continues to have the highest quality name. Southwest is adding 76 jets in 2004-2005, more than the rest of the industry combined. Meanwhile, Jet Blue continues to rate high with customers who love the new planes, the free DirecTV and the new food terminals that offer even sushi to take on the plane. Both airlines have good reputations for on-time performance, another consideration for even the most discriminating business passenger. Finally, many Americans are beginning to PREFER the out of the way terminals, where the security lines can be half the wait.

Business travelers, including me, are chomping at the bit for more legroom, but are still forced to keep costs down. No one likes to see corporations, like American and United Airlines, that employ so many people, in hard times. Despite our desires, however, at least for now, it's nothing but blue skies for the penny pinchers who are willing to pack their own lunch. Those airlines that are laden with debt, and floundering for business models that work, will continue to experience major turbulence. Investors who get on board with the big, unprofitable air lines are advised to buckle up and hang on for a lengthy, wild ride.

FULL DISCLOSURE: N. Wynne Pace owns shares of Jet Blue.

You Can "Do Good" AND Get Rich. Learn how Socially and Environmentally Responsible Investing Can Help You and the World by Gregory Wendt, CFP^®

Terrie, an anti-tobacco educator for colleges across California, is devoted to her job and has a talent for helping young people recognize the perils of smoking. That's why she was appalled when she learned that every one of her mutual funds held large investments in tobacco stocks. For Terrie, the revelation that her investment portfolio conflicted with her personal values is what sent her to my office and marked the beginning of her interest and inquiry in socially and environmentally responsible investing.

Terrie isn't alone. The trend toward socially responsible investing (SRI) began in the 1960s, as people began to shun companies like Dow Chemical that profited from the manufacture of napalm for the Vietnam War. The movement to sell off "sin stocks" gained momentum in the 1980s. A growing number of investors found it unconscionable to hold stocks in companies that did business in apartheid South Africa. The end of apartheid inspired socially responsible investors to turn their power and attention to other issues, such as protecting the environment and promoting fair labor practices. One faith-based institutional investor on the East coast, alone, leverages its $90 billion in assets to make better corporate citizens out of companies as large and powerful as Exxon Mobil, Ford and General Electric. Today, one out of every eight dollars under professional management in the U.S. is part of a values based portfolio. In 2001, the Social Investment Forum reported that socially responsible investments in the U.S. totaled more than $2.3 trillion.

Can My Money "Have a Heart" AND Make a Competitive Return?

Studies now demonstrate that socially responsible investing does not mean a loss on competitive returns. Several recent studies make it clear that SRI funds do not underperform conventional mutual funds. In short, investors have discovered that one can Ôdo good and do well' at the same time.

A recent Social Investment Forum study found that 16 of 21 screened funds with $100 million or more in assets achieved the highest rankings for performance from Morningstar or Lipper for the single and three-year periods ending June 30, 2003. The Domini Social Equity Index also shows that what is good for the planet can also be good for the pocketbook. The Domini Index outperformed the S&P 500 in 2002 and for past 10 years on a total returns basis.

In 2002, our country faced pending war, countless corporate scandals and a slumping stock market.  Nonetheless, leading tracking agencies gave socially and environmentally responsible funds high ratings. Investing in companies with good social and environmental track records is not at odds with seeking solid financial performance.   Socially responsible funds are definitely competitive with the broad universe of mutual funds and, in many instances, do better than other types of funds.

Why Should I Become A Socially Responsible Investor?

Responsible minded investors align their portfolios with their values by selecting or excluding companies based on their values. For my client Terrie, her strong commitment to public health made her choice clear: dump all of her tobacco holdings. This is known as screening.

Investors consider a host of values when determining what companies to invest in - and what companies to avoid. Avoidance Screening is an option when a company or industry falls short of an investor's values. Socially responsible investors consider a wide range of factors. For example, many responsible investors shun companies that manufacture or sell tobacco, alcohol, firearms, weapons or energy from nuclear power plants. Responsible investors might also exclude companies for any number of other reasons, such as companies with poor records of diversity in the workplace, shoddy environmental records or firms who do business with oppressive regimes, such as Burma.

Affirmative Screening is the opposite approach. Responsible investors might seek out innovative companies that support their values and principles. Sometimes this takes the form of investing in companies in cutting-edge industries such as alternative energy or companies that market organic foods. It might also take the form of investing in companies or agencies that demonstrate a high level of commitment to the environment, workers rights or minority communities.

Money Talks!

Whether you know it or not, your money is talking. The question is: Do you agree with what it is saying? Through the proxy voting process, the shares you own in a company, either directly or through a mutual fund, have a say on a wide range of issues as to how a company is managed.

A third, and critical component of socially responsible investing, is shareholder activism. This is very important because it has a direct impact on how companies are managed. I always remind my clients that this is where the "rubber meets the road." Shareholder activism is promoting powerful changes in corporate America. This is accomplished via proxy voting, shareholder resolutions and dialogue with management. Every year there are hundreds of shareholder resolutions on issues as diverse as: animal testing, drilling in the arctic, non-discrimination policies, sweatshop labor, genetic engineering and human rights.

Through these varied approaches, values based investors are changing the way many firms do business. This is promoting progressive changes here in the U.S. and around the world. Success with one corporation can often spur change across an entire industry. For instance, in 1999 shareholder activists were a critical part in pressuring Home Depot to stop purchasing wood harvested in endangered old-growth forests. Just prior to the company's annual meeting where this decision would be decided, 12 percent of Home Depot shareholders stated loud and clear they wanted the selling of such wood stopped. Not only did Home Depot amend its policies to phase out the sale of such wood but within a year so did Menards, Home Base, Wickes Lumber, Lowe's and Lanoga.

Caring for the community

Many investors want the savings they hold outside the stock market to work for their values as well. Community development investing is when investors make loans to communities in need to help create low-income housing, shelters for battered women, and childcare centers. By opening a checking account at a community bank or by investing in a mutual fund that places assets in hard-hit inner city communities, your wealth can support the nearly $7.6 billion of assets in the U.S. that are directly involved in community investing.

Now her money "talks" as loudly as she does

Another client of mine, Mary, has found the whole process of SRI and shareholder activism to be very attractive. She is a successful television actress who is very active in supporting environmental groups and progressive causes. For years her advisor was a family stockbroker at a major brokerage firm. On a number of occasions, she raised her concerns about companies in her portfolio that depleted natural resources and befouled the earth.

Mary encouraged her advisor to find investments and mutual funds that were socially and environmentally responsible. Throughout the relationship, the broker derided her concerns. He always dismissed such requests and advised her that socially responsible investment strategies were inferior. Eventually Mary was fed up and finally embarked upon finding a new advisor. Mary came to me seeking someone who would not only listen to her concerns, but who could also help her to earn competitive returns on her portfolio. Now that her money is Ôspeaking as loudly' to promote her values as she is, Mary is very happy with the changes that she has made.

Mary says she is pleased that her wealth is not only growing, but it is also helping to fuel positive change in the in corporate America. Her investments, she says, are now safeguarding her family's welfare - and the planet's.

To learn more about Greg and his services or for more information about Socially Responsible Investing go to the website WWW.GREGWENDT.COM

Greg Wendt is a Certified Financial Planner^® who offers comprehensive financial advice to individuals, families, privately held corporations and non-profit organizations. People come to him for a full range of financial services including comprehensive financial planning, investment management, estate planning and life insurance - as well as his expertise in socially and environmentally responsible investing.

With over 12 years of experience in the financial services industry, Greg has earned a reputation for listening to his client's needs and providing them with customized solutions and unbiased advice.

You can reach Greg via email at gwendt@premierinsight.com or by phone at (310)227-8050 x122.

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Success Secrets of CEOs:

Want a Raise AND a new TITLE? Interested in Climbing the Ladder of Success as Quickly as Possible? iSophia interviews Executive Chef John Doherty of the Waldorf=Astoria, who, at the age of 27, became the youngest executive in the history of the century-old hotel. To get to the executive suite, he not only had to speed past the sous chefs who taught him all his tricks. He also had to get them on his team. Learn the master's tricks, in this exclusive iSophia interview. By N. W. Pace

In the kitchen of Executive Chef John Doherty of the Waldorf=Astoria in New York City, there is a saying: "The difficult immediately. The impossible a little longer." The Waldorf is known for pulling off some of the most extraordinary last minute food feats of all time and for preparing everythingÑsoups and stocks to pastries and dessertsÑfrom scratch. How does Mr. Doherty manage to please royalty and presidents while handling a $9 million grocery bill and 125 cooks? ! (And does your routine seem just a little easier in comparison?) You'll be surprised to learn that the Waldorf kitchen's motto applies very aptly to Mr. Doherty's own life. He surmounted the impossible almost immediatelyÑby becoming the youngest executive chef ever employed at the WaldorfÑat the age of 27.

N. WynneÑOkay, you were the youngest executive chef in the history of the Waldorf=Astoria, and probably one of the youngest in the world. How does a 27-year-old sous chef convince one of the world's most established organizations that he can manage 3,000 daily meals, 150 cooks and a budget of nearly $15 million?

John D.-- Today is your day! I'm giving the commencement speech at the Culinary Institute of America. So, last night I had to put all of my wisdom into notes. When I first got here there was some, shall we say, bad behavior going on in the kitchen. There was peer pressure to join in on the "fun," but I knew then not to participate. I knew that someday I was going to be their boss, and I never wanted them to say, "Who are you kidding?" I knew that it is important to walk a straight line and not give people a reason to cut you down. They're looking to cut you down.

N. WynneÑHas your executive style changed much over the years, as you matured?

John D.-- I put together something called "A Simple Recipe for Success" when I was 27, and I have a booklet on quality that I give all my new-hire employees. It covers everything from safety, to cooking procedures, to philosophies on quality. All this helps them get a sense of where I'm looking to go, so that they get on board quickly. I haven't changed the Recipe for Success since that time because it still works for me. [iSophia note: See the end of the interview, for Mr. Doherty's recipe.] That's the key about getting a large operation going--getting in touch with the line level employee, the person who is actually getting the job done. If you can't get them focused and motivated, you're not going to get where you want to go.

N. Wynne--How did you come to understand that at the age of 27? Was it through management training classes?

John D.-- I started working very early, at the age of fifteen. I was able to get along with people and make the bosses happy. I learned that getting along with people was a better way of getting things done than not getting along with them.

N. WynneÑSo good guys do finish first! I'm assuming that most of your colleagues were much older and more experienced than you, at the time that you became their boss. Were they resentful? How did you negotiate human nature in that difficult situation?

John D.--When I became, at 25, a sous chef, all of the sudden I was the supervisor for the old-timers, who'd taught me everything I knew. It was, at times, a little uncomfortable. The best way to deal with the tension was to treat them as my mentors, with great respect. I'd say, "Here's the problem. What do you think of this as a solution?" Typically, they'd respond, "No, no, no." So, I'd say, "What if we tried it this way?" Then, they'd get on board and say, "Well, let's give it a shot." I made them part of the solution. When it worked out better, everybody felt good about it. Years later, I took management courses that laid all of this stuff out, but a lot of what I learned was trial and error. Certainly there were management courses that helped fine tune and refine me.

N. WynneÑSo, a great leader gets his team involved in the decision-making. What other qualities helped you succeed in the position of executive chef for one of the premier hotels in the worldÑthe Waldorf=Astoria?

John D.--There's one basic fact of life--change. The world changes. The business changes. Our lives change. There are two kinds of people. Those who keep up to fit into the future, and those who create change to mold the future. We all have to decide where we're comfortable being--where we want to be. Leaders all have one common goal--they have a vision. Everybody should create a vision for his/her future--a dream. Think about the most comfortable and satisfied that you could possibly be in a certain job and family situation. Envision your future to the point where you can see it and you want it. I was able to do this very young, and other young people can do it.

N. WynneÑMost of us have big dreams, but how do you translate your hopes from Fantasyland into real life?

John D.--You then have to have a plan. You have to know the necessary steps that you need to take to achieve your vision. You have to think about education, the quality of education, the duration of education, and the enrichment. You can go to the greatest school in the world, but if you don't apply yourself and get something out of it, it's just a diploma. With the job you choose, you need to understand what the qualities of that job are, and the fulfillment that you get from it.

N. WynneÑSo, when you recruit your employees and team members, are you looking for good leaders or good followers?

John D.--I ask people when I interview them, "In your last job, what impact did you have on that business, that you can say is yours." Many people can go with the flow. I want people who make an impact. I think the most important step is decision making. People have to understand the potential, the risk and the consequences of every decision they make. The decision you make can be as simple as how you walk , talk and interact with people. You can be early or late to an appointment. It's a decision to do it right or to let it slide, to do something with pride, or hope that no one notices mediocrity, to take a job, or enrich your life or choose to make more money. These are the decisions that you make, that will clearly have an impact on your ability to reach your vision. Your career is like a skyscraper. The deeper and stronger your foundation, the higher you can build it. There are no short cuts. There's no easy way.

N. WynneÑSome people excel in school and still find themselves stuck in a mid-level position. What's your advice for those people? There was obviously something about you that clearly distinguished you from your colleagues, and at a very young age.

John D.--The last step or element to achieving your vision is effort. Effort is what makes everything different. It shows in everything you do. We are judged by the results of our efforts--grades, raises, promotions and recognition. Work hard at everything you do. Work harder than the next guy, harder on the next day, and you will live to see your vision.

N. WynneÑSo, as Edison says, invention is 10% inspiration and 90% perspiration. Who inspired you to succeed? I'm assuming that if, by age 27, you were already executive chef at the Waldorf=Astoria, you must have had started out on the right trackÉ

John D.--I always found that I was able to take something from everyone. To this day, I respect my elders immensely for their knowledge and experience. Where I can take a lifetime to learn, with a simple question I can learn something. Everybody had a different element that I loved and respected and made it part of my personal repertoire. It's not about giving up yourself. It's about making yourself better.

N. WynneÑAre you one of those people who believes they learn from hardship, from those who may have mistreated you?

John D.--You can learn from people who make mistakes. I've certainly been treated in ways that I know I never want to treat anybody.

N. Wynne--15 seems so young to start working! Is that legal?

John D.--It wasn't my first job! My son's 15. He has a part-time job. I had a newspaper route. Caddy at the golf course. Pumping gas. That was very cold in the winter. My friend got me a job washing dishes, which was great because that was warm. My parents provided food, clothes and shelter, but not extras, like concert tickets and play money. Concert tickets were a big thing. My mother said, "You want money, go get a job!" So I got on my bike, and hit 15 gas stations. One of them took me. I missed the concert, but I got my job.

N. WynneÑI have a friend, another very young executive, who used to dye his hair grey for board meetings. Do you have any of those kinds of tricks up your sleeve, advice to other young executives on how to maneuver in an older, more experienced crowd?

John D.--If you treat people with respect as ladies and gentlemen, that's really the big key. Never offend anybody. Never give anybody a chance to let his/her ego get in the way of making the right decision for the business. The worst thing I can do is embarrass someone.

N. WynneÑSo, let's verify the numbers. Is your budget truly $15 M budget, with 150 culinarians, seven chefs and two restaurants? How many hours a week are you working?

John D.ÑOur food budget is about $9 million, with an annual payroll budget of about $15 million. We've got 125 cooks. I'm putting in about É 60 hours per week.

N. WynneÑThe Waldorf=Astoria is my favorite hotel in NYC, but it's famous for hosting VERY high profile statesmen and women. What's the favorite event you've ever hosted at Waldorf.

John D.--Well. It's one of those two. (He points to two photos on the wall.) I just took a bunch of other pictures of Presidents off the wall for the Culinary Institute of America to display. The one on the left is the 40^th anniversary of the UN. I'm shaking hands with Ronald Reagan. In the room behind him, there were five heads of state. Reagan, Thatcher (UK) , Mulroney (Canada), Nakasone (Japan), Kohl (Germany) and Italy (Berlusconi). Those people were all at that dinner, and it hasn't happened since. The presidential staff said, "Oftentimes the President likes to thank the chef for such a great meal. This is a big night, so we'll thank you for him." When I got down the hall with the Secret Service, however, the elevator didn't go anywhere. One guy turns to me and says, "The President would like to see you." I was only executive chef for four months at that time. I was just a kid. That was fabulous.

The second big deal for me was in 1988, when President Gorbachev was the 1^st Russian leader to come to this country for I don't know how long. The meal was on Governor's Island. The White House asked if I would prepare the meal. So I did.

N. Wynne--Wow! You were a part of that incredible moment, when the Cold War and communism in the USSR ended?!!

John D.--At that table, we've got Colin Powell, George Schultz, Reagan, George Bush, and Gorbachev. Casper Weinberger. The Russian entourage. There were twelve people, and I was clearly at the center of the world at that moment, while history was changing. That to me was amazing! We were the only people on this little island, except for more Secret Service and KGB than anyone could ever shake a stick at. The world was changing that day.

N. WynneÑIt's pretty hard to top that experience!! Do you have a favorite song, quote or story? What inspires you?

John D.--I am inspired by artists who reinvent themselves and their art form-- guys like Sting. I listen to a lot of music. I write my menus and my thoughts, while I listen to music, and I get inspiration from music. Every time an artist comes up with something new, that reminds me that, although everything around me is so familiar, there is another way of doing it. When it comes to food, what inspires me is when the chef does something that I didn't think of. I say, "Damn, why didn't I think of that!"

N. Wynne--Has that happened recently?

John D.--I can usually pick out something from almost every meal that I find to be creative.

N. WynneÑWell, as I've said in the past, the Bull and Bear restaurant is something you've got to do if you're in New York City. Experience the best of everything from Mr. Doherty's staffÑdelicious, freshly prepared food served by experienced, attentive (but not giddy) wait staff. Trust Ubie, the captain at the Bull and Bear, when he recommends the cheesecake. It's to die for.

A Simple Recipe for Success

Work hard by combining speed and accuracy.

Help others and they will help you.

Think about what you are doing:

Do you understand it?

Is there a better way?

Challenge yourself to do better.

Every time you do a routine item,

Do it faster, more accurately.

Make it taste better, look better.

CommunicateÑexpress your feelings

Respectfully to those around you.

Listen and be compassionate to them as well.

Take pride in everything you do, and

The quality of your work will be recognized.

Choose your words and actions carefully,

As you can never take them back.

It's ok to say, "I don't know, but let's find out."

Seek advice of others who know

And have succeeded.

Learn from the mistakes of others,

as well as your own.

Executive Chef John Doherty

Waldorf=Astoria

WIN 10: CALIFORNIA RECALL.

In their own words, the top Candidates speak up about their concerns and how they'll fix the $38 billion budget shortfall. Be sure to tune in October 1, when iSophia features an exclusive interview with Steve Forbes on how he'd fix California's Chao$.

In the CA Gubernatorial Debate of September 3, 2003, each of five candidates was given two minutes on a soapbox, to preach their priorities. ISophia has captured the candidates in their own words.

1. Gray Davis: Gray Davis believes that the recall is a right-wing effort to win a game (election) that they lost last year. "It's like the Oakland Raiders saying to Tampa Bay, ÔWe know you beat us, but we want to play the Super Bowl again.'"
2. Arnold Schwarzenegger: "California spends $29 million more each day than it takes in. We need to audit everything. Open the booksÉ Children come first. They always have, and always will."
3. Peter Ueberroth. Though he's bowed out of the campaign, he is waiting to endorse the candidate that best promotes his pro-business agenda. "We need a big sign that says, "We welcome employers here, then we can fund the arts and on down."
4. CA Senator Tom McClintock (Rep): "We need to roll back the taxes that are destroying our economy. We've got to have a governor who knows every inch of the state bureaucracy. The spending lobby now controls our government."
5. Arianna Huffington: "I would balance the budget by making corporations pay their fair share of taxes. The next American Revolution is taking place right here and right now, and it's about freeing ourselves from oppressive special interests."
6. Cruz Bustamante: "The oil companies are doing the exact thing that the energy companies were doing. Six companies have 90% of the market share. The fact is that Californians are being gouged."
7. Larry Flynt: "California is the most progressive state in the union. I don't think anyone here will have a problem with a smut peddler as governor."
8. Angelyne: "People think I look like Barbie."
9. Toni Casey, Republican candidate for the 2004 U.S. state Senate: "[Arnold] is supported by former Secretary of State George Schultz, financial guru Warren Buffett, and former Governor Pete Wilson (and the list will exponentially expand as the "Arnold Train" continues to pick up speed and momentum), but equally important, Schwarzenegger is creating a buzz, an excitement, an electricity among the voters that has never been seen in California. He is energizing voters that generally don't vote and historically don't pay attention."
10. Overheard repeatedly at the Republican Party of Los Angeles County party on 9.9.03: "If you don't vote for the Republican in the lead, you're voting for Bustamante."
11. Peter Camejo (Green Party): ÒClose the tax loopholes for corporations. We are 36th in the nation in property taxes. We need to create a balanced budget and a fair tax. I want to see California become the world leader in renewable energy. That is the future.Ó

Forget About Diamonds: Exercise is a Girl's Best Friend.

Jewelry is only skin deep and money can't buy health, but a healthy heart radiates from the inside out. For lasting results (and head turns from the opposite sex), try investing in your fitness. By Mark Eckhardt

Mark Eckhardt has been an instructor in the fitness industry specializing in group indoor cycling classes since 1995.  He served as the Director of the stationary cycling program at the renowned Voight Fitness Studios, and continues to work as an international fitness consultant.  

After sending out the announcement about my schedule change at Revolution (in Santa Monica, California), I received many responses from our group of riders.  Among these were several descriptions of people struggling to return to or maintain an ongoing commitment to exercise in general. Since this is a big topic within the fitness industry, I thought I'd share my perspective about why it is so hard to keep a routine going.

After seven years of teaching I've noticed a trend amongst exercisers.  It seems that after a certain point a class, or a routine, begins to lose its appeal and interest drops off drastically.  When this happens a person typically falls into one of four categories.  

1. Drop exercise entirely, or workout at intervals that do nothing but reinforce that you're are not in the same kind of shape that you used to be.  

2.  Run all over town seeking the latest craze in the industry at great expense and cost to you.  

3. Become a member of the living dead. In this category you attend classes and hit the gym regularly, but don't really do anything other than just get through it.  Let's face it-- a monkey could do the same.  At this level, there is absolutely no enthusiasm or aliveness present.  You drag yourself into the gym, and your fitness level goes nowhere; you're stuck.

4. Recreate yourself as an exerciser.  These folks identify an unexplored area within their regiment and explore it fully. Perhaps it is purchasing a heart monitor, sampling various fitness philosophies, or choosing to use their class as the training ground for an outdoor activity that ultimately propels them on to the next level.  

Recreating yourself is the key to maintaining enthusiasm and interest in your routine.  It's not about working harder, finding a new class or instructor.  Recreating yourself is about expanding yourself in a way that gives rise to a new level of enthusiasm and joy.  To do this you have to let go of your attachment to the past and look into the future for inspiration.  By the way, a harder ass ain't enough to keep you in the game in a healthy way. Two great examples of what I'm talking about are Claudia Ribet & Vivian Wong.

Since attending my classes at Quest, Claudia has gone on to train with Gary Kobak at Revolution.  Not only is she spinning like mad, but has recreated her "self" as a cyclist.  She's stronger than ever and is currently training for a major outdoor cycling event in the near future.

Vivian Wong recently came to me and announced that she wanted to improve her overall fitness level and body composition.  I encouraged her to purchase a heart monitor, which she did, and the rest is history.  After approximately one month of training with a monitor Vivian has discovered strength and spirit she never knew she had.  She recently committed to doing a 5k in 2004. It will be her first ever.            

Claudia and Vivian are incredible examples of people who recreated themselves.  In other words, they created a new context, or relationship, for exercise in their life.  It's not only about looking good. That's a route that leads to never ending dissatisfaction.  It's about creating something that allows you to track your progress and to acknowledge the successes along the way.  From this place, even the failures show up as a contribution to training.  Each failure/breakdown is confirmation that you are committed to something that is important to you, and presents an opportunity to get back on track.  

If you are lacking enthusiasm around exercise, you are most likely referencing your memories of the past and projecting them onto your current regiment or future exercising opportunities.  To conclude, life presents a constant supply of opportunities to explore. Take a moment to find inspiration and use that to unleash the human spirit within you!  

I hope this helps. Take care & I'll see you around the bend.

WINsider CALENDAR:

Golf tournament to benefit terminally ill children. Last chance for Investor's Boot Camp. Wednesday morning chat with iSophia founder, N.W. Pace. California's Governor Recall Election.

CALENDAR RECAP: (See below for more details on each event.)

1. 9.15.03 at 12:30 p.m. The Chase Foundation's 6^th Annual Golf Tournament, benefiting kids at the Children's Hospital in Los Angeles, California. 818.845.5521. El Caballero Country Club, Tarzana, CA.
2. Investor's Boot Camp with iSophia founder, N.Wynne Pace, on Thursday, September 18, 2003 in Los Angeles, California. Register at www.learningannex.com or call 310.478.6677. Receive $5.00 off for registering online. For more information on N.W. Pace, call 310.399.0497 or email info@NataliePace.com.
3. Wednesday October 1, 2003 at 8:45 AM PT. Wednesday's Worldwide Online Chat with iSophia founder, Natalie Pace, discussing investment clubs, investment strategies and easy to follow recipes for investment success.
4. October 7^th. California Gubernatorial Recall Election. VOTE!!

See below for details on how to participate in these exclusive iSophia events!

1. 9.15.03 at 12:30 p.m. The Chase Foundation's 6^th Annual Golf Tournament, benefiting kids at the Children's Hospital in Los Angeles, California. El Caballero Country Club, Tarzana, CA. Prizes, dinner, Silent Auction, and the opportunity to win a 2-year lease of a new 2004 BMW if you get a hole in one on hole #10. Call 818.845.5521 to sign up or give a tax-deductible donation.

2. Last Chance to Attend the Millionaire Training Camp with iSophia founder, N.Wynne Pace on Thursday, September 18, 2003 from 6:45 - 9:30 p.m. PST in Hollywood, California.

Peter Lynch and Warren Buffett. Yes, they have investing secrets. You should know them. In two and a half intense, hands-on hours at Investors Boot Camp, you will learn and practice:

• The wisdom and success strategies of the most successful stock pickers ever
• Why Headlines and Hot Tips suck
• Avoiding scam artists and salespersons.
• How to Buy Low and Sell High.
• Grading Companies in a Report Card!

"Her investment style and the Member Mosaic are exciting concepts that, if used properly, help individual investors better discern the health of large corporations." Gary Kennedy, entrepreneur, former president of Oracle USA.

"She makes it hands-on and fun. This is totally do-able." Linda, seminar attendee

"Working with money can actually be fun!" Kiki, seminar attendee

"I learned what information to look for when evaluating a stock, and what not to listen to." Bobbi, seminar attendee

N. Wynne Pace is a successful investor with a trademarked market philosophy. She beat the market three years running, and has been interviewed by Diane Sawyer on Good Morning America, in Time magazine, More magazine and USA Today. To book N.W. Pace for a speaking engagement or seminar, contact info@NataliePace.com or 310.399.0497.

To enroll in the September 18th seminar NOW, call 310.478.6677 or register online and receive $5.00 off. Click here to register NOW or go to www.learningannex.com. Click on Los Angeles. Scroll down to August 13th. Click on "Financial Planning for Women," with N. Wynne Pace and register! (Men are welcome, too!) If you have any problem registering, please call 310.399.0497 or email info@NataliePace.com.

3. Wednesday October 1, 2003 at 8:45 AM PT. Wednesday's Worldwide Online Chat with iSophia founder, Natalie Pace, discussing investment clubs, investment strategies and easy to follow recipes for investment success. This chat is available exclusively to iSophia members. (If you're not a member, click here to sign up. At $4.50/month, financial freedom costs less than lunch!!) You will need your password to enter the chat room. Please test your passwords NOW to make sure that you can get in and out of the chat room easily. Call us early, if you have any questions on how to enter the chat!

Directions:

• Go to: NataliePace.com.
• Click on: Chat Room
• Click on: Already a Member (if you're not already a member, it's only $4.50 a month to join!! Click JOIN NOW to become a member)
• Enter in your user name and password
• Enter in your nickname and press return
• If you have a question, type it in and then press return

4. October 7^th. California Gubernatorial Recall Election. MARK YOUR CALENDARS. BE SURE TO VOTE!!

Companies in the NewsÉ

News highlights, as reported by the most respected sources in the world. Alphabetized for easy reference.

Airline Sector: The New York Times reported on 9.11.03 that, last month, Northwest filled 82.6% of its seats. That's #2 for the industry, behind leader, JET BLUE, which had 91.6% of its seats filled for the month. Regular iSophia contributor, Paul Woods, CEO of Odyssey Advisors, 310 568.4710, has some comments and observations on the airline sector that are worthy of your attention. See below!

Paul Woods--I don't short stocks, but if I did, I would start with American Airlines.  JetBlue is cleaning everyone's clock for a couple of reasons....

(1) They've turned the whole airplane into the equivalent of business class.  Comfy leather seats that are wider than most, plenty of legroom, and everyone has their own DirecTV in front of them.

(2) Lower cost structure.  They are non-union.  What kills the old airlines is not just higher union wages, but restrictive work rules that amount to featherbedding.  JBLU also has the most fuel-efficient airplanes in the industry.
 
(3) Great service.  Most older airlines go out of their way to annoy the crap out of you. JBLU takes off on time, arrives on time, and doesn't lose your bags.  If they're early or late, you get a courtesy coupon worth $25 off your next flight.  They fly out of terminals where security checkpoints are less of a hassle.

(4) Ticketing.   It's cheap and easy to buy (online or by phone) and cheap and easy to change the departure or arrival date. If you find that you can't use your ticket, it's fully transferable and can even be sold on eBay.

(5) Cheapest ticket around.  Enough said.

When you add all these together, even Southwest can't compete with these guys.  The biggest risk is if employees decide to become unionized.  I think most of them have stock, so this probably isn't a great risk.

As far as the stock's concerned, it's on our list of egregious sandbaggers.  Estimates still look too low. [iSophia note: That means that Jet Blue will likely outperform the earnings expectations in the next quarter, something that usually prompts a rally in the share price, as shareholders buy in on great news.] For more translation on sandbagging, earnings and how you can profit by identifying those companies that will turn in earnings statements that are significantly higher than Wall Street expects, CLICK HERE to go to Paul Wood's article in issue #37.

Full Disclosure: Paul Woods, N.W. Pace and Odyssey Advisors' clients own shares in Jet Blue.

Fannie Mae and Freddie Mac: The Treasury Department will be creating a new agency to supervise these two government-sponsored, leading mortgage lending institutions. The New York Times is touting this as the most significant regulatory overhaul since the Savings and Loans crisis of a decade ago. If you haven't already checked your mutual funds to dump the ones that include these companies, now's a very good time to open those statements, look into what companies are behind those generic fund names and consider making a few changes! (9.10.03 NYT)

WIRELESS WOO-HOO!! Why is wireless the wave of the future and one of the hottest tickets on Wall Street? Which companies should you look into?

1. China, Africa and India are too expansive and do not have the resources or money to lay telephone lines.
2. The Chinese may be riding bikes, but they have the first generation of Silicon Valley's latest technology, ahead of American consumers!! Chinese Gross Domestic Product growth leads the world, and is expected to come in at 9% for the year.
3. Households and small businesses are upgrading to broadband in droves, and adding wireless capacity for the convenience of hooking up anywhere in the house, and almost anywhere on the road! Fortune 500 executives won't be caught dead (and some will be buried with) without their Blackberry.
4. Brightpoint (CELL) has moved from a 4:1 reverse split last year, to a 3:2 split and +13X growth in share price. Pat O'Neil, president of Loring Investments believes that CELL is now at risk of being sold off, and perhaps a 10-20% drop in share price, because of the rapid uptick, but likes the stock as a long-term investment. (Look for any drop-off as a potential buying in opportunity!)
5. Wireless is cheap and easy to use! Word is spreading! Look at the spread of Hot Spots into McDonalds and Starbucks!
6. Linksys has been ranked as an Inc. 500 Fastest Growing Private Company in the United States for 5 consecutive years.

iSophia will be doing a Wi-Fi report card in an upcoming e-zine. For now, here are some publicly-traded wireless companies that Wall Street professionals recommend checking out: NetGear (NTGR), Cisco (CSCO), Intel (INTC), Digital River (DRIV), Trimble Navigation Limited (TRMB), Brightpoint (CELL), American Tower Corp. (AMT), Nokia (NOK) and QualComm Inc. (QCOM). Of these companies, the following are operating in positive earnings: NTGR, CSCO, INTC, DRIV, TRMB, NOK & QCOM. Sorry. LinkSys is privately held.

VISION: To build a global community of investors through seminars, a world-wide web-site and, ultimately, television.
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