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Vol.4 Issue 1 January 1st, 2007
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Quote of the Month:
underscores how much we value eBay as a partner. Our technologies
will allow us to connect users to relevant advertising across
eBay's international properties. By working together to promote
click-to-call functionality through Google Talk and Skype, we
are offering advertisers another innovative way to connect with
Dr. Eric Schmidt,
CEO, Director and Chairman of the Executive Committee, Google.
- 2007 Company of the Year.
By Natalie Pace, CEO and founder, NataliePace.com.
Includes our Company of the Year Stock Report Card.
- CEOs of the YEAR. Extraordinary executives doing amazing things
that are transforming the way we live, interact and communicate
worldwide, and making their companies rich in the bargain.
By Natalie Pace.
- China's Evolution Toward Freedom. A candid interview with one of the
most respected CEOs in mainland China, Dr. Charles Zhang,
Chairman and CEO, Sohu.com. By Natalie Pace.
- Comfort Zones: Stop Playing Safe. Stop Playing
By Gary Kobat, life and fitness guru to the stars.
- Medicine and Vitamins:
How A Dollar A Day Keeps Children Alive in Impoverished
India. By Marilyn Tam, Co-founder, Us Foundation.
- Overcoming the Last Hurdle. Is
the electric car ready to shock a few people? By Paul
Woods, President & CEO of Odyssey Advisors, LLC.
- Bonds: Your Nest for the Golden
(Not Goose) Egg. By Bond
Specialist Meri Ann Beck-Woods, the Chairman and COO of
- Blue Chip King Kelley Wright on How to Earn Steady,
Low-Risk Returns You Can Sleep and Retire On!
- The Perfect (Cyber) Broker:
Missing the Greed Chip. Learn
how to tell if your broker is a shyster or a saint with
one easy question, and a 5-minute online alternative to
being shark bait.
- Baby-U-Deserve-Getting-Every-Thing (Budget).
By Chellie Campbell, author of Zero to Zillionaire.
- Women on Wall Street: Balancing
High Stress Careers and Family By Networking. by Janet
Hanson, founder of 85 Broads, a global women's network.
- Zen and the Art of Bungee
Jumping: Why Checking Your
Ropes is the Key to Successful Investing. By Natalie Pace.
- Wonder How Our Past Companies
of the Year have Performed?
- Still Leading Wall Street,
Earnings Almost 42 Cents on the Dollar Every Year. By
Natalie Pace. Includes our Hot News on Cool Stocks List.
2007 Company of the Year.
Natalie Pace, CEO and founder, NataliePace.com.
of the Year Stock Report Card.
past four years, we have become known as the premiere newsletter
for picking breakout companies. Wonder how we identify so many
great companies/performers in our annual Company of the Year designation?
Below I give up a few of my secrets.
I targeted the most dynamic and effective CEOs in the world. I
then screened for only those companies that had doubled revenue
over the last two years. That criteria eliminated some of the
companies of our top CEOs, including Sohu.com, News Corp. and
Disney, and left just five companies - Google, eBay, Suntech Power
Holdings, Las Vegas Sands and Apple.
Las Vegas Sands
was tossed out for having the highest price to earnings ratio, the
highest debt and the loosest insider selling - almost double what
the combined sales of the other companies were. Too bad the slot
machines at the Sands and Venetian aren't cashing out $223 million
over the last two months for Las Vegas and Macao casino visitors,
instead of lining the pockets of Las Vegas Sands executive insiders.
Insider selling of this magnitude, right at the time when the company
is under pressure to finalize the terms of their proposed building
of "Asia's Las Vegas" in Macao smells fishier than the
Hong Kong harbor. This is further exacerbated by the many reports
I've received from Chinese economists and investors who confirm
that the government officials have intentionally slowed the pace
of foreign companies building in China and Chinese provinces, like
Hong Kong and Macao.
A key disclosure
in Las Vegas Sands' November 9, 2006 earnings report convinced us
to take Las Vegas Sands off of the Hot News list this month as well.
According to the quarterly earnings report, "The Company does
not have all the necessary Macao government approvals that are needed
in order to develop the Cotai Strip developments." 139% gains
since we first featured the company in July of 2005 works great
for us. (For more details on Las Vegas Sands, Apple, Google, eBay
and Suntech, click on the Company
of the Year Stock Report Card, and read up on the Las Vegas
Las Vegas Sands sidelined, Apple Computer, eBay, Google and Suntech
Power, all worthy candidates for Company of the Year, were left
on the table. As you look for the new Blue Chips of your 21st
century portfolio, Apple, eBay and Google are some of the most
stable holdings in Silicon Valley. If you haven't already bought
these companies, flag them for your long-term freedom fund and
buy them at the best possible price. (Few of these companies are
bargains this month.) Suntech Power is a great growth stock for
your trading portfolio and/or your "green" socially
Why are we
picking technology companies as the new blue chips? Google and
Apple continue to dominate, innovate and monetize new cyber-space
applications of the old industries of entertainment, information
(news) and advertising. Over the last two years, Apple successfully
redefined the way we listen to music and watch television, while
Google has made online advertising more effective and less intrusive
for millions of information-seeking web surfers worldwide. Google's
new click-to-call and click-to-add to your blog options are the
next wave of Internet advertising, and prove that the company
is the leader in capturing eyes and wallets online, in ways that
don't annoy their audience.
Not only does
Google own the most popular search engine and video site (YouTube),
but Google is also monetizing these new products more quickly
than its peers. Google's sales have more than doubled since 2004,
while Yahoo sales are up just 74% over the same period. Apple
is doing the same thing for the music business. Apple stores are
the most exciting retail centers of recent memory, while Tower
Records, Wherehouse Records and more have all closed up shop.
And the halo effect of newbies buying Apple computers because
they love their iPod has become real revenue. Apple's annual sales
in 2006 were over double the sales in 2004.
as if these two companies don't have a lot of cross-pollination
-- yet. But, the recent addition of Dr. Eric Schmidt to Apple's
board should bring possibilities of future alliances to these
two giants of industry. (Pixar's former CFO, Ann Mather, is on
The strong interpersonal
relations between Google and Apple also extend to eBay. There is
a saying, "Show me your friends, and I'll tell you who you
are." Meg Whitman's alliances with Google (and Tom Online in
China) indicate that she is powerful and poised for even greater
success than she has achieved to date. eBay is leading the next
wave of online advertising revenue worldwide, as Google's partner
in the Click-to-Call innovation, which, like text-based search advertising
before it, brings retailers and service providers to the online
Google will become the exclusive text-based advertising provider
for eBay outside the United States. In addition, eBay and Google
plan to integrate and launch "click-to-call" advertising functionality
that leverage both Skype (which is owned by eBay) and Google Talk
globally in each company's respective shopping and search platforms.
The companies said the financial terms for certain components
of the deal involve revenue sharing, but did not disclose specific
to expand our long-standing relationship with Google to explore
new market opportunities, like click-to-call advertising, that
benefit both our communities of users," said Meg Whitman, President
and CEO, eBay Inc. "People continue to evolve how they shop, communicate
and advertise online. By combining the power of eBay in ecommerce
and Skype in communications with Google's leadership in search
and advertising, we can increase the usefulness of the Internet
for shoppers, merchants and advertisers around the world."
underscores how much we value eBay as a partner," said Eric Schmidt,
CEO of Google. "Our technologies will allow us to connect users
to relevant advertising across eBay's international properties.
By working together to promote click-to-call functionality through
Google Talk and Skype, we are offering advertisers another innovative
way to connect with customers."
It's a good
idea for eBay and Google to value one another. Both are consistently
in the top 10 websites for unique visitors and page views. By
linking arms and sharing revenue and technological innovation,
they ensure the continued success and dominance of one another,
likely at the expense of their peers.
10 Web Properties as Measured in Unique Visitors
2005 vs. November 2006
Unique Visitors (000)
Internet : Total Audience (U.S.)
Interactive Media *
York Times Digital
ComScore Media Metrix
10 Properties: Page Views
Internet : Total Audience
Comscore Media Metrix
took the helm at eBay, Meg Whitman has perplexed the business
world with her unexpected acquisitions. First there was PayPal,
which has become a great revenue source for eBay, in addition
to being a natural new division for the mega site. In 2005, there
was the Skype acquisition.
the world's largest online auction website want with an emerging
telecommunications company based out of Eastern Europe? It turns
out that "click-to-call" is at least a partial answer
to that question, but not the only answer. Ms. Whitman also leveraged
existing Skype relationships in China to a full-fledged partnership
with Tom Online (partially owned by China's wealthiest entrepreneur,
123 million Internet users and 400 million mobile phone users,
according to the eBay press release. (These figures are considered
conservative, as there is difficulty gathering reliable data in
China.) Chinese consumers are expected to spend about $5.88 billion
online next year, nearly 9 times what they spent in 2005, according
to iResearch. eBay will own 49% of the new Chinese web site, with
Tom Online owning 51%.
of the Year
growth and maturation of the partnerships between eBay and Google,
and potentially Google and Apple are some of the most exciting
on the planet. And yet, it is the outsider Suntech Power Holdings
(NYSE: STP) that gets the designation as NataliePace.com's 2007
Company of the Year.
to find even a diehard capitalist who isn't green these days.
(Even Rupert Murdoch has been quoted as saying, "Everybody's
green.") Business leaders, politicians and everyday folk
alike are united in one common cause: Screw high gas prices. Let's
tap renewable energy. As we indicated in the October 2006 article,
Powers Whole foods," Suntech is the clear worldwide
leader in photovoltaic solar panels. And China's commitment to
subsidizing solar energy, which is key to an emerging (and expensive)
marketplace, is much more high profile than anything President
Bush is doing.
In March of
2004, Premier Jiabao Wen, the 3rd most powerful man in the Chinese
government, visited Suntech, addressed Suntech staff and praised
the company, ensuring government support at the policy level for
what Wen called the "future of China's renewable energy industry."
Additionally, Suntech's Board of Directors seats such heavyweight
business leaders as Mr. Chengyu Fu, Chairman and CEO of CNOOC
Limited, and president of China National Offshore Oil Corporation,
a PRC state-owned enterprise. Since Premier Jiabao Wen's visit,
Suntech has more than tripled revenue and cornered the market
on the scarce silicon wafers that are needed to keep production
up to the high levels of demand in 2007.
With the largest
market capitalization, the highest sales (double that of SunPower's),
the lowest price to earnings ratio (most of the solar energy companies
in the U.S. are still cash negative), a corner on the silicon market
and a Chinese labor force, it's difficult to imagine that any American-based
solar energy company will catch up to Suntech's colossal lead. Sales
are increasing between 27-42% each quarter. During this decade,
solar energy may at long last become a viable renewable energy alternative,
and if it does, you'll be glad you purchased your SunTech shares
Natalie Pace plans to purchase shares in SunTech Power Holdings
three days after the publication of this article, on January 8,
Articles of Interest:
Powers Whole Foods, But Not the Whole World.
The People's IPO.
Skype Outpaces News Corp's MySpace, with 113 million registered
Chief Executive Officers of the YEAR.
executives doing amazing things that are transforming the way
we live, interact and communicate worldwide, and making their
companies rich in the bargain.
- Dr. Eric
Schmidt, CEO, Director and Chairman of the Executive Committee,
first thing you notice about Dr. Schmidt's photo is that he isn't
wearing a tie or a button-down. He's got on a polo shirt. The
CEO of the most successful IPO in history is laid back, a team
player, and that may well be the key to the phenomenal market
lead in search and advertising revenues that Google has maintained
over mega-giants, like Yahoo and Microsoft.
think "competitor," Dr. Schmidt thinks "partner."
Over the last few months, he has inked deals with MySpace and
eBay, which look like master strokes in the race to provide ever
more innovative ways to link users, businesses and advertisers
in the most subtle, effective and desirable way. Google mastered
search-based links, and is now moving into "click-to-call"
and click to add options. Overnight, since the recent acquisition
of YouTube, Google has already begun collecting revenue from the
previously cash bleed start-up. All that without annoying the
It's as simple
as this. You add the trailer for Casino Royale to your
MySpace page, and Sony Pictures pays Google and MySpace for the
grass roots advertising. If you decide to "click-to-call,"
an option that Google and eBay are developing together, then eBay
will get in on the revenue action. If you view a 30-second video,
chances are there will be a very effective, but brief, advertisement
at the end. And YouTube now offers streaming video of new films
and television shows.
launched its IPO in summer of 2004, experts argued whether the
company could take a valuation equal to Yahoo or eBay. At today's
market value of $140 billion, Google is as valuable as Yahoo ($34.74
billion), eBay ($41.92 billion) and News Corp. ($67.94 billion)
combined. Revenue has tripled in two years, to an expected high
this year of over $10 billion.
to Larry Page's original IPO letter, "Google is a triumvirate,"
between Page, Sergey Brin and Dr. Schmidt. Whether Dr. Schmidt
is the spokesperson of the three-headed decision-making team,
or the humble team-playing mastermind, Dr. Eric Schmidt has ensured
himself the distinction of being the only CEO in existence who
has managed and grown a company from zero to over one hundred
billion in under two years.
has a Bachelor of Science degree in electrical engineering from
Princeton University, and a master's and Ph.D. in computer science
from the University of California-Berkeley. In 2006, Dr. Schmidt
was elected to the National Academy of Engineering, which recognized
his work on "the development of strategies for the world's most
successful Internet search engine company."
- Dr. Charles
Zhang, Chairman and CEO, Sohu.com:
was one of the 1st Beijing-based companies to be listed
on the NASDAQ, in 2000. Most technology companies didn't survive
the fall of NASDAQ, but Sohu did, and is now one of the most popular
online destinations in the world and the official sponsor of the
2008 Beijing Olympics. The pathway from fledgling, battered
visionary entrepreneur during the Internet cleansing of 2000-2002
to one of the most respected and powerful CEOs in the world today,
reveals exactly why Dr. Zhang is the Chinese CEO of the Year.
Dr. Zhang was born in the East and educated in the West, and he
embodies an understanding of Western individualism and innovation,
alongside the tradition, responsibility and work ethic of the
East. He has proven himself to be more than capable of maneuvering
and excelling in both worlds, and of promoting a bridge of commerce
between two distinctly different world powers.
has a Ph.D. in experimental physics from the Massachusetts Institute
of Technology. Before founding Sohu.com, he was MIT's liaison
officer with China. As one of the first Chinese entrepreneurs
to list on the NASDAQ, Dr. Zhang also pioneered the adoption of
Western accounting standards for Chinese business.
reports that his team of programmers has found a way to stream
media that will sideline the need for uploading video programming,
which would eliminate millions of dollars in costs for sites like
YouTube.com. He has also turned his focus away from the "grey-haired"
mentality of short-term earnings, toward making Sohu.com the best
user experience possible. Being the best technology-driven company
in the world worked for Google, YouTube and MySpace, and Dr. Zhang
anticipates the same success for Sohu. According to Dr. Zhang,
"When you have a product that is 10% better than the competition,
that will affect the user base and you will become 10 times more
popular than the other one."
In 2007, the
world's population of Chinese-speakers will begin experiencing
Sohu as a major broadcaster of the Olympics and more. As the popularity
with users increases, it is likely that Sohu's desirability with
investors will also.
Sohu is not
cheap, at a P/E of 31.60. There may be opportunities to buy in
at a lower price, if you're willing to be patient. However, look
to get in well before the summer of 2008! Also, read my candid
interview with Dr. Zhang this month for more insight on the amazing
transformation of the Chinese economy and what inspired the evolution
of freedom in the minds of former Communist government officials.
Jobs, CEO, Apple:
Jobs made it cool to buy music again, and even found a way to
charge us for downloads of our favorite television shows. Along
the way, he managed to open up the hottest new retail shops and
sell millions of Apple computers to former PC diehards. Revenue
has more than doubled in the last two years at Apple, and the
stock is up 160%. Over 65 million iPods have been sold and over
1.5 billion songs legally downloaded from its iTunes online store,
according to the Apple website.
Apple and Jobs successfully survived a SEC inquiry into the timing
(and backdating) of options, and won a lawsuit from Apple Records
demanding that Apple cease its iTunes product line and/or turn
over a portion of the profits. "The special committee, its
independent counsel and forensic accountants have performed an
exhaustive investigation of Apple's stock option granting practices,"
according to Al Gore Jr. (the former Vice President of the United
States), chair of Apple's Special Committee, and Jerome York,
chair of Apple's Audit and Finance Committee. "The board
of directors is confident that the Company has corrected the problems
that led to the restatement, and it has complete confidence in
Steve Jobs and the senior management team."
And now, as
the ad on the Apple home page indicates, "The first 30 years
were just the beginning. Welcome to 2007." Apple is all the
rage with customers and traders alike. The stock, with a price
to earnings ratio of 37.40 and a price of $84.84 is no bargain.
Still it's hard to imagine that Apple will get less popular next
year, or that you'll find it trading at a better price (unless
there is a serious shock to the economy or world, at which point,
you'll want to bite the bullet and buy a few more shares at the
- Bob Iger,
bought Pixar, the most successful animation film company of all
time for Disney, and took a chance on the new media possibilities
of the iPod at a time when his existing partners (television stations)
were threatening to sue - all within the first few months of taking
the top job. (Pixar created seven of the most successful and beloved
animated films of all time: Toy Story, A Bug's Life, Toy Story
2, Monsters, Inc., Finding Nemo, The Incredibles and Cars.
Pixar also won 20 Academy Awards and its films have grossed more
than $3.2 billion at the worldwide box office to date.)
appear to be paying off. The television audience didn't fall off,
even though more than 12 million downloads of ABC television programs
and over half a million movies have been sold through Apple's
i-platform. The hit dramas Lost, Grey's Anatomy, and Desperate
Housewives continue to post high ratings and demand high rates
for advertising on television, which should keep their television
partners from blowing a gasket over the availability of the programming
on Apple. These programs were three of the top five shows on network
programming, and won ABC TV (a Disney company) the top primetime
ranking for adults ages 18-49. As a result, Disney shares are
up almost 45% since Mr. Iger took office from Michael Eisner,
and the stock is trading higher than it has in six years.
- Meg Whitman,
President and CEO, eBay:
has perplexed analysts and investors during her tenure with
her unexpected acquisitions. The purchase of PayPal was a brilliant
move that few understood at the time. In 2005, she purchased
Skype, a Voice Over Internet Protocol based out of Eastern Europe.
What appeal does telecommunications have to the world's largest
auction site? It turns out that the Skype acquisition helped
with two key partnerships that eBay announced over the last
few months - a strategic alliance with Google worldwide, and
one with Tom Online in China.
to expand our long-standing relationship with Google to explore
new market opportunities, like click-to-call advertising, that
benefit both our communities of users," said Meg Whitman, President
and CEO, eBay Inc. "People continue to evolve how they shop,
communicate and advertise online. By combining the power of
eBay in ecommerce and Skype in communications with Google's
leadership in search and advertising, we can increase the usefulness
of the Internet for shoppers, merchants and advertisers around
underscores how much we value eBay as a partner," said Eric
Schmidt, CEO of Google. "Our technologies will allow us to connect
users to relevant advertising across eBay's international properties.
By working together to promote click-to-call functionality through
Google Talk and Skype, we are offering advertisers another innovative
way to connect with customers."
and investors still haven't figured out exactly how Skype and
click-to-call works and how much money can be pulled in as a
result. But Skype is the fastest growing website in the world,
ahead of Myspace and YouTube, and the ability to monetize the
free long distance with products and now advertising, should
start adding up in the coming quarters. Meanwhile, look for
Ms. Whitman to continue to innovate and perplex her pals on
Wall Street and in Silicon Valley. It's a strategy that alienates
some investors in the short term, but stands to delight them
at the end of the day.
- Dr. Zhengrong
Shi, Suntech Power Holding's Chairman and CEO:
the lowest price to earnings ratio, double the market capitalization
of the competition, is experiencing 200%+ growth, racks up more
sales than the combined strength of its competitors, boasts one
of the lowest debt/equity ratios and has strong government and
business support globally - from China, to Australia, to Japan
and the U.S.
and CEO, Dr. Zhengrong Shi, was asked to join the International
Advisory Committee of the New York Stock Exchange on August 10,
2006. In March of 2004, Premier Jiabao Wen, the 3rd most powerful
man in the Chinese government, visited Suntech, addressed Suntech
staff and praised the company, ensuring government support at
the policy level for what Wen called the "future of China's renewable
energy industry." Additionally, Suntech's Board of Directors seats
such heavyweight business leaders as Mr. Chengyu Fu, Chairman
and CEO of CNOOC Limited, and president of China National Offshore
Oil Corporation, a PRC state-owned enterprise.
Dr. Shi recently
cornered the market on silicon wafers, and gave a blow to Evergreen
Solar's ability to meet demand, when Suntech won the silicon supply
contracts from MEMC Electronics.
media is starting to take note of Dr. Shi and Suntech. The New
York Times recently named Dr. Shi as a "green" entrepreneur
and New York Times Columnist Thomas L. Friedman warned
that: "China's emerging green power entrepreneurs could clean
our clock in the clean power business." As we note in our Company
of the Year article (read it to find out which of these CEOs has
the distinction of running the company of the year), we predict:
"With the largest market capitalization, the highest sales
(double that of SunPower's), the lowest price to earnings ratio
(most of the solar energy companies in the U.S. are still cash
negative), a corner on the silicon market and a Chinese labor
force, it's difficult to imagine that any American-based solar
energy company will catch up to Suntech's colossal lead."
Mention: Ross Levinsohn: former President, Fox Interactive Media.
Levinsohn discovered lightning in a bottle (MySpace.com), and
then rescued it from a drowning mother ship (Intermix) at a
time when Wall Street pros were warning his boss (Rupert Murdoch)
that he was overpaying by about $400 million.
September 30, 2005, News Corp. completed their purchase of Intermix
(MySpace's parent company) for $629 million. Insiders accused
the Intermix management of selling out for a song, saying that
the deal was a fire sale that was never shopped around town.
Investment bankers joked that Rupert Murdoch was taking a bath.
a year, MySpace became one of the hottest properties on the
web, and is currently number one in page views, above Yahoo,
MSN and Google. (Fox Interactive Media is the umbrella division
of News Corp., containing all of the Fox websites, including
MySpace, although Myspace is largely responsible for the number
one page view ranking.) MySpace just signed a deal with Google
that is valued at over $900 million. Hitting $500 million in
revenue for the Fox Interactive Media division should be easy,
according to Peter Chernin, especially since the MySpace/Google
deal was signed.
10 Properties: Page Views
Internet : Total Audience
Comscore Media Metrix
the chief architect of the best acquisition in recent memory,
Ross Levinsohn "resigned" from News Corp., effective
November 27, 2006. Peter Levinsohn became President of Fox Interactive
Media because, according to Peter Chernin, "At this point
in FIM's evolution, Peter's adept leadership, keen knowledge of
the complexities of the digital space and ability to work skillfully
across multiple business lines makes him the ideal person to lead
this important asset into the future." Mr. Chernin wishes
Ross success "in whatever he chooses to do next and we hope
there is an opportunity for us to participate."
is looking to do, if you're looking for a chief acquisitions officer,
this executive has a good nose for the next big thing, and the
instinct and killer negotiating skills to get in and buy while
everyone else is still rubbing their chin.
Articles of Interest:
The People's IPO.
Surpasses U.S. Internet Usage. Sohu.com Weaves the Most Promising
Asian Worldwide Web. By Natalie Pace, NataliePace.com CEO and
You can Do Better Than Baidu With Other Google Acquisition Targets.
Article and Stock Report Card by Natalie Pace.
Media Networks Co-Chairman Ann M. Sweeney on Apple: Disney's
"E" Ticket To The Future.
Skype Outpaces News Corp's MySpace, with 113 million registered
Powers Whole Foods, But Not the Whole World.
The Next Google
Corp. Takes on Cyber Space With Acquisition of Myspace.com.
Conquers Google; Takes on World. Exclusive Q&A with MySpace
co-founders Chris DeWolfe and Tom Anderson.
Evolution Toward Freedom.
candid interview with one of the most respected CEOs in mainland
China, Dr. Charles Zhang, Chairman and CEO, Sohu.com.
Charles Zhang Ringing the Opening Bell at NASDAQ © Copyright
2006, The Nasdaq Stock Market, Inc. Reprinted with permission
one of the most trafficked sites in the world, and Dr. Charles Zhang,
as the Chairman and CEO of the publicly traded company, is as respected
and influential in Asia as Dr. Eric Schmidt (Google's CEO) is here
in the U.S. As with many Internet CEOs, Dr. Zhang has lofty ideas
about how his company will innovate and leave the competition in
the dust, attract more visitors, and perhaps license the patented
technology, as a result. Unlike most other Internet entrepreneurs,
Dr. Zhang consistently delivers up results. So, what innovation
is going to blow the world out of the water in June 2007? Read on
to find out.
aegis of Dr. Zhang, Sohu.com was listed on the NASDAQ in the U.S.
back in 2000, became the official website of the 2008 Beijing
Olympics, and is now preparing to become a major Internet-based
broadcasting company, with streaming video, ala YouTube. As China
ramps up to show its best face to the world in 2008, Sohu.com
will surely play a big role in Chinese speaking communities around
the globe. The company continues to post steady growth, and is
on track to ring up 30% higher full-year revenues over last year.
By as early as June 2007, the site is poised to become a major
broadcaster in China, according to Dr. Zhang.
5, 2006, I spoke with Dr. Zhang, discussing streaming media video,
why grey hairs don't belong in the Internet company's boardroom,
the new "Confucius" economy in China and more. Dr. Zhang's
candid insights on the amazing transformation of the Chinese economy
and what inspired the shift toward a more open market in the minds
of former Communist officials, allays fears of a "conspiracy"
and reveals instead the honest birthing of a nation evolving toward
greater freedom. Discover what Dr. Zhang believes to be the most
important contributions to the evolving mindset of government
Pace: Please describe the main areas that your company makes money
these days for our readers?
Zhang: Sohu.com is a portal. The portal provides news -- political,
real estate, entertainment, sports - with a wide range of content
every day. We have become the main source of news in China. We
are also like Yahoo and Google, with search, email, participating
in message boards and clubs and communities. Recently blogs have
become very popular, and with broadband, there is video content.
Sohu.com has become a multi-media platform and an interactive
looking to be the Chinese portal for social networking and video
content - ala YouTube and MySpace - in addition to being a news
provider and the official website of the 2008 Beijing Olympics?
It's the future of News Corp, Time Warner, YouTube, Yahoo and
the technology is very expensive. Myspace and YouTube are two
of the fastest growing businesses in the United States. Getting
them to turn a profit, when there is so much cost associated with
the technology of running these media-rich sites, is the trick…
in China, there is streaming media technology, which is leading
the world. We haven't allowed individuals to upload in China yet,
so there was more incentive to develop the streaming technology.
concerned that another Chinese website or a startup might beat
Sohu to the punch, like YouTube jumped into the market and beat
all of the major US portals in under 18 months of doing business?
the startups have all kinds of challenges because of language
problems. In the U.S., with YouTube and MySpace, there is no language
problem. With experienced persons on the board and management
of these startups in the US, you can quickly rise up to dominance,
and it is very hard for the traditional company, like Yahoo, to
catch up. In China, the new startups have a high fatality rate
because of the language issue, access to capital, investor relations
and board management.
the new "policy changes" with the mobile providers and
how will that affect Sohu revenue going forward?
The most important
application of the mobile phone is really point-to-point -- sending
messages. We have nothing to do with that. That is provided by
the operators. We make money on the value added services - like
ring tones and jokes. I think until there is more wealth, a bargain-basement
mobile network is widely established, and advertising or other
value-added services emerge, the wireless revenue will stay flat,
or decline for a while. It is a less important part of our business,
and only a quarter of our revenue now. Our business continues
to be centered around the personal computer, with wireless and
brand advertising. There are so many people here, so we are able
to sell advertising. The mobile screen is too small for advertising.
with phones becoming handheld computers, advertising and other
revenue has got to be just around the corner…
size of the mobile usage is enormous. The number of mobile handsets
is at half a billion. Most of the exposure to the mobile phone
is 12 hours a day. You're probably by your PC only two hours a
day. The PC has a more rich application, but we are experimenting
with how to integrate it seamlessly to your phone. Reading, writing
your blogs… The PC is like the aircraft carrier in the war, and
then you have the F-16. The mobile phone is like the F-16. When
you leave the ship, you are still communicating with the ship,
and all of the activity that you set up there.
your traffic like?
We have 250
million page downloads per day. It includes Sohu.com, and six
products are you launching?
We are launching
a new version of the search engine, Sogou, version 3.0, which
is more powerful than the existing one. We'll retrieve 10 billion
pages, and also a much more relevant and intelligent search than
the existing one by the Google search engine. This is not just
stand-alone search. It will also power Sohu, so that the text
communities and the search engine will help to create multi level
text and improve the reading experience.
new search engine sounds interesting, but slightly 2004. What
about social networking and video?
our MySpace strategy. Young people will use their blog as their
own space. They will do their search and see their music, everything,
on their blogs. We have this seamlessly integrated platform on
a person's blog.
you plan to launch videos?
By June next
year, we will create a good YouTube experience. For the last three
years, we have become a technology driven company. Our focus on
technology will demonstrate its strength and power. It's almost
like a submarine that will emerge from the ocean in June of next
a very strong statement. So you've been navigating under the radar,
so to speak, but may actually blow the competitors out of the
water in June?
In the early
years, we were good at marketing and brand building. We introduced
China to the US, but we were weak on the Internet technology.
Over the past few years, we've hired the best minds in China.
This program will show our strength in June.
U.S. companies be impressed enough with your streaming video technology
to license it?
We are leading
in China in video streaming. This technology is leading the world,
and could be used by U.S. companies. YouTube costs so much because
of bandwidth, storage and capacity. This would be eliminated by
is free and doesn't have any advertising on the site. How will
video streaming generate revenue for Sohu?
technology gives us the opportunity to be the PC driven, telecom
and broadcasting platform that will replace the television. Because
of the relatively less competitive nature of Chinese TV, which
is state-owed, that gives us the opportunity to become a major
streaming and Sohu as the "major broadcasting company"
be up and running for the 2008 Beijing Olympics? (Editor's note:
Sohu.com is the official website for the Beijing Olympics.)
we will broadcast web casts of the Beijing Olympics on the website.
Besides that, we'll have the function to generate maps, and offer
hotel reservations and registrations around the world. 2007 will
be a year with many Olympic related events, and the whole of China
is really excited. Our cameras will be broadcasting many important
events. One of the events is the passing of the torch. We'll report
this all of the way, including many exciting, important places,
and the selection of the runners. We'll report the sports events
through three means: one is text-based media -- articles; secondly
through interactivity, with blogs and communities; and third is
the broadcasting. Our camera will film and capture all of these
athletes talking and everything behind the scenes.
been your greatest challenge or disappointment and/or what would
you have done differently?
We went public
in the US in 2000. I think the biggest problem for an Internet
company from China listed on the NASDAQ is that the traditional
school of thought management to an Internet company doesn't apply,
in terms of management, what kind of management is important,
and what kind of background and training management should have.
The costs, quarterly earnings, business model -- all of these
traditional management styles apply to the Internet. But I don't
think it should be like that. I think, especially across cultures,
the NASDAQ and public companies' requirements and the investors'
opinions, here in China are regarded as holy and serious. The
people don't ask why, they just do it. People just do those things
in hiring, in corporate environment. Everyone is trying to learn
from U.S. companies, and hire people with grey hair and people
who talk business and time span, but these go against the Internet
company. This is missing the point. You are spending time on things
that are secondary. What are most important are product and the
user experience. When you have a product that is 10% better than
the competition, that will affect the user base and you will become
10 times more popular than the other one.
right. You've just described the success of MySpace.com and their
hip, young executive team.
If you care
for this quarter and the next, and the other company creates just
a better product, they will become ten times bigger! This is the
biggest challenge for an Internet company in China, and in the
US. I don't know much of what is going on with Yahoo, but I think
Yahoo has a problem with its technology. If you look at China
and the most competitive companies now and what they were doing
five years ago, you have all these mistakes that were made and
corrected. We are still in existence. Many companies make short-term
mistakes and are just all gone. The Internet company is a different
animal simply because of this exponential networking fact, and
it should be managed differently.
do you possess that has most lead to your success?
I'm a good
person. I treat people fair. I have a team who really work hard
for me and are very loyal. Second of all, I think through things
very deeply. I try to understand things in a very broad framework
-- from social phenomena, society, people behavior -- and I also
try to understand myself. That enables me to identify and to understand
why we were successful in becoming very famous and such a powerful
brand. It gives me the ability to meditate and to change. It's
why I want to change the company into a Technology-driven company.
I have to make sure the [other] influence gets gradually erased
-- the influence of the short-term talkers -- including restructuring
the board and hiring the right people who understand this philosophy.
Am I spending time meeting reporters and clients, or our engineers
and our users to understand the product better?
one of the first mainland Chinese companies to become listed on
the NASDAQ. Clearly, you are on the leading edge of the political
and social change occurring in China. What prompted China to open
up to a market economy?
demands China's freedom so much beyond people's imagination. This
advancement basically means that everyone has access to information.
This gradual education and change of habits happened everywhere,
not only in the private sector, but with government officials,
too. The government has a rule that if you are 60 years old, you
have to retire, so the government leaders are very young. The
officials are the same age as we are. They are very open-minded
and they are trying to learn.
called the new focus of the Chinese government "Confucius."
How does a Confucius government differ from Communism and Capitalism?
In China, everything
works in harmony. We have moral obligations to the country, and
it's like a big family. The market economy and Capitalism are really
the common assets of humankind. Confucius is more of a philosophical
approach -- how this person benefits versus society versus the collective
group -- whereas the West is based on individualism. Even Communism
was imported from the West. In the 1920s, when the Communist party
was established in China, it was Mao and a group of Chinese intellectuals
trying to save China. They just jumped onto the Communist Theory.
Even then, it was still a Confucius government, where the individual
is still considered as part of a collective nation.
this cultural ethos affect your management style and the productivity
of the average worker?
In terms of
commitment, first of all, the people are so diligent and are working
so hard. The Confucius culture is one that you have to work hard
to be recognized by your parents, ancestors, country and the Emperor.
Confucius people are very driven. You don't persuade them to work
hard; they automatically work hard. There is less individualism,
and more self-sacrificing. But you have to understand that you
don't solve things in a black and white way. You have to be delicate
and subtle and care for people's feelings and try to solve things
given a very important time frame. Deng Xiaoping did not argue
that this government was Communism or Capitalism. He just did
it and let time tell. It's like Eastern medicine: you look at
the whole body. You try to see the whole system and let time work
markets are opening up, there is still criticism about human rights
and the freedom of the press in China. You are providing so much
news. Do you worry about censorship and/or being arrested for
publishing the wrong thing?
I'm not concerned
about so-called freedom of the press. The freedom we enjoy is
so much more than it was ten years ago. Now it is too much. We
should ask the Internet companies to have a social responsibility.
There is too much violence.
articles of interest:
Surpasses U.S. Internet Usage.
Sohu.com Weaves the Most Promising Asian Worldwide Web. By Natalie
Pace, NataliePace.com CEO and founder.
can Do Better Than Baidu With Other Google Acquisition Targets.
Article and Stock Report Card by Natalie Pace.
Zones: Stop Playing Safe. Stop Playing Small.
Gary Kobat, life and fitness guru to the stars
...just because something feels familiar does not
mean it's the most powerful use of your energy.
| Gary Kobat
with Jim Carrey and Will Ferrell
are life blueprints that we follow unconsciously. Without realizing
it, we make choices that keep us in the familiar, even when the
familiar may not be the healthiest place to be.
Comfort zones at some point stop serving us and become obstacles
to our fulfillment and happiness; in fact they may lead to longer
and longer plateaus or periods in the black hole.
Comfort zones are a state of mind, like:
conflict or discomfort,
2. blaming, drama,
anger or victim thinking...
Nine times out
of ten, we go on autopilot and gravitate to what we know, even if
it makes us unhappy.
Have you ever sincerely wanted to change something in your life,
but no matter what you did, you kept running into the same self-defeating
patterns? Comfort zones live powerfully in our subconscious, with
surface change not effective until we bring them out into the light.
When we go into a comfort zone we feel some immediate relief. We've
learned the landscape well. We know how to navigate, sneak around,
and take the short cuts.... Though we think we are moving forward
because we are no longer uneasy, we're really not moving
at all or sliding back. Comfort zones: if you're in one, get out,
because you're slowly dying.
Many of us love working under pressure. We feel it keeps us focused.
But have we ever finished a project of lower quality than we wanted
because we ran out of time?
If you feel
stuck, have lost your passion, don't have a fire in your belly,
chances are you are in a comfort zone. If you feel dull, uninspired,
and are going through the motions, chances are you are in a
You don't always know you're in a comfort zone until things
start unraveling. They start unraveling because the way we have
been operating isn't serving our higher purpose. When we break
free, we create opportunities for huge movement in our life.
Passion returns. We reinvent ourselves. We redefine who we are.
Comfort zones are like blind spots; until we recognize them,
we won't begin to move out of them. When you're in one, know
that a friend, mentor, coach, teacher, or therapist can help
point them out. But also know: you can't receive from someone
until you're ready to give to yourself.
Once you detach from a comfort zone, get ready to change: to
blast off... to make higher energy choices... You'll feel friction
as you let go, so don't be surprised... It won't feel familiar,
nor will it feel familiar to the other people in our lives.
Actually, it will challenge them too, to let go of their own
comfort zones either because we are inspiring in how we are
approaching our change or because it has disrupted our interactions
with them. Don't let other's discomfort hold you back.
Zero in on your comfort zones. Identify the ones that are not
serving you anymore. Take the next step. Let go. Hang in the
uncomfortableness for a while, and notice the amazing amount
of new opportunities you have created.
Thank you for allowing me to do what I love...
Live, race, and recover smarter.
Medicine and Vitamins:
Tam, co-founder, Us Foundation.
A Dollar A Day Keeps Children Alive in Impoverished India.
Tam at lunch with students in the Nandi Hills Village, India
came in groups of tens, twenties, thirties, forties and fifties.
They came on foot on the hard packed potholed dirt roads, the older
ones, ages eight or nine, holding the hands of the younger ones.
Many of them walked barefoot the several kilometers from the eleven
villages around Nandi Hills, Bangalore rural district, India to
the HH Sai Maa Health Centre, as they owned no shoes. There are
no buses nor could they have afforded to take one. They came with
their teachers, smiling and eager to get some needed medicine and
vitamins, and to learn about health and hygiene.
streamed in until the brick and cement hall was packed with over
a thousand thin small bodies, all sitting quietly on the cool
cement floor, wide eyed in anticipation of what we may share with
them. Tears welled up in my eyes as I looked at the sea of expectant,
upturned little faces. I could feel their hope and trust along
with their unquestioning acceptance of what is. Turning to my
colleagues, I can see that they too are overwhelmed. We are awed
by the magnitude of the challenge and encouraged by the potential
we have to make a difference in so many young lives.
We have come,
a collaboration of four organizations, Us Foundation www.usfoundation.org
, Airline Ambassadors International www.airlineamb.org
, Humanity in Unity www.humanityinunity.org
and Vitamin Angels Alliance www.vitaminangels.org
to provide anti-parasitic medicine and vitamins for 25,000 children.
I, as the representative of Us Foundation, the lead organization
in this project, am responsible for organizing the program. Quickly
I composed myself to share with them the parasite related health
issues and the hygiene steps necessary to prevent re-infection.
Working with the local team from Sai Maa Health Centre, we handed
out the local language hygiene and nutrition picture flyers so
that the children and teachers can take the information to their
This is why
we are here, to avert the loss of the next generation; for a mere
US$1 we can ward off the major childhood diseases and blindness
for one child. With little access to clean water and no organized
sewage system in the Nandi Hills rural area; the probability of
the children being infected with parasites is almost 100%. We
brought anti-parasitic medicine to eliminate the parasites and
multi-vitamins to support their health. The vitamins can prevent
the children from illnesses that we usually only read about in
the western world, rickets, scurvy, and most debilitating of all,
blindness from a lack of vitamin A and other nutrients. With the
medicine and vitamins the children have an opportunity to grow
into a healthy functioning youths.
a translator to the children and teachers, I am amazed by their
attention and focus. With a thousand children jammed crossed legged
on the hall floor, bony knees pushed up into the back of the child
in front for over an hour, there was not a single disagreement.
And they were attentive and interested. What they lacked in material
wealth they had in a maturity and awareness that I have rarely
seen in people of any age much less young children.
of the anti-parasitic medicine began. The volunteers sat in a row
to dispense to the children who filed by. We made sure that they
chewed and swallowed the citrus flavored tablet before we thanked
them and sent them on. Two doctors worked with their teachers to
get the children's health history to track their health progress.
The line moved quickly. Heartwarming and heartbreaking memories
burned into my heart as I handed out the medicine. The children
wore their threadbare school uniforms or their best clothes if they
couldn't afford one for the occasion. Their hair, neatly combed
for the boys, and braided with ribbons or flowers for the girls.
Big brown eyes took up most of the thin sweet faces, watchful and
shyly smiling or sober past their age.
Then the big
event: lunch! We dished out the food to the children in long rows
in the hall; again the calmness and congeniality impressed all
of us volunteers. Serenely waiting for their food the children
sat still, no fidgeting or rambunctious activities and they ate
quietly and in such good behavior that it would impress Ms. Manners.
the event with songs and chants, we laughed till we cried and
then too soon it was time for the children to walk back to their
villages. We gave the multi-vitamins supplies to the teachers
to dispense with the children's school lunches along with extra
anti-parasitic medicine for their village.
The next few
days were spent introducing the anti-parasitic medicine, vitamin
and health education program to parents and other villagers in
the rural community. We handed out hygiene kits, health and nutrition
flyers and lots of goodwill, which we got back manifold. The human
connections dissolved verbal languages and customs; we were bonded
with smiles and spirit.
From now on,
November 14th, International Children's Day, will have
even more meaning as that was the day we launched our program.
Starting January 2007 we have monthly missions scheduled to deliver
more aid and to continue the health and nutrition education to
improve and maintain the children's health. We have started with
25,000 children in this area and there are so many more we can
help. At US$1 per child, less than the cost of a Starbucks coffee
drink, can save four or five children. What a wonderful opportunity
we have to make a dramatic change in so many people's lives for
If you are
interested in participating in a future mission, please log in
For tax deductible donations to this program, please send your
donation to the India children's project at:
Barbara, CA 93150
is the founder of Us
Foundation, the author of "How
to Use What You've Got to Get What You Want,"
and former President of Reebok Apparel Products & Retail Group.
Marilyn's vision is to add 25,000- 50,000 children to a children's
health & education program in Kashi, India to launch in late
March… Us Foundation will be collaborating with the same organizations,
adding Save the Children, and eventually will be doing this program
in 41 countries!
the Last Hurdle.
Woods, President & CEO of Odyssey Advisors, LLC
the electric car ready to shock a few people?
Motors CEO Martin Eberhard discusses the Tesla Roadster
With Gov. Schwarzenegger
At the turn
of the last century, cars came in steam, electric, and gasoline
versions. When Thomas Edison was asked which he favored, without
hesitating, his reply was electric cars. They didn't have the vibration,
noise, and smell associated with gasoline cars or the long start
up times and limited range of steam cars. Had someone listened to
him at the time, we might not now be stuck with a classic 19th
century technology and sending huge amounts of money to countries
whose chief exports are petroleum and terrorists. For all its advancements,
the internal combustion engine is still a noisy, heat-blasting,
poison-spewing monster with too many moving parts.
spite of what the proponents of Proposition 87 promised in the last
California election, putting a solar panel on your roof right now
will have virtually no impact on the demand for foreign oil. Alternative
energy technologies like solar and wind produce electricity only.
The problem is that oil is overwhelmingly used to fuel our vehicles,
with only about 3% being used to produce electricity. However, some
amazing strides have been made recently in a technology developed
in the 1830s, and there's now a light at the end of this tunnel.
Power Generation by Fuel Type (2005)
obvious solution to clean technologies that produce electricity
and the need to fuel our vehicles is the electric car. Although
these have been around since the 1830s, electric cars haven't exactly
caught on so far. Some automakers had a brief fling with electrics
in the 1990s in response to a program from the California Air Resources
Board to produce a zero emissions vehicle. This program was subsequently
modified after complaints by automakers that it made no sense to
produce these cars because of the lack of consumer demand, and most
of the electric cars produced at the time ended up in museums. This
of course touched off conspiracy theories and charges of automaker
incompetence. However, the real problem was probably that battery
technology was in its infancy and electric cars were unable to provide
the performance and range that would satisfy anyone but the most
a result, Tesla
Motors stunned a lot of people at a recent auto show. One
observer summed it up by saying, "Until today, all electric
cars have sucked." Martin Eberhard, the CEO of Tesla Motors,
says traditional carmakers have failed with electrics for two reasons.
According to him, these were marketed as "penalty boxes"
for environmental do-gooders and gas-mileage-obsessed penny-pinchers.
Second, they just didn't understand batteries. The Tesla's lithium
ion battery pack gives it the power to hit 60 mph in four seconds,
a top speed of 130 mph, and the ability to run 250 miles without
a recharge. A one-hour charge is good for 80 miles, while it takes
a 3.5-hour charge to go 250 miles. It even plugs into a wall socket
at a roadside stop in a pinch.
roadster is a big ticket item at $90,000-$100,000 depending upon
options. Their strategy is to initially enter the high end of
the market, where buyers are willing to pay a premium, in order
to accumulate the funds necessary to broaden the product line.
In 2008, Tesla expects to introduce a car designed to compete
with BMW's 5 Series for about half the price of the roadster.
Following that will come the development of a low cost family
car. By the way, Tesla doubled their production target and is
already sold out for 2007, which is bound to raise a few eyebrows
in the auto industry.
Tesla is claiming driving costs of around a penny per mile, that's
the direct cost of electricity to charge the batteries. Tesla
is also claiming a useful battery life of 100,000 miles. We're
taking this with a few grains of salt, because with current lithium
ion battery technology, that's pushing it.
The best thing
about lithium ion batteries is their light weight and their ability
to be formed into a variety of shapes and sizes. However, there
are still some serious drawbacks. Even if never used, these batteries
begin aging from the time of manufacture, so an older battery will
not last as long as a new one. People living in Phoenix should note
that these batteries also have the annoying habit of rupturing,
igniting or exploding if subjected to high temperatures or direct
From the standpoint
of someone considering an electric car, another problem is that
lithium ion batteries lose storage capacity over time. The capacity
loss is directly related to temperature and the amount of the
charge when stored. If your garage is a carport in the desert,
don't even think about buying a Tesla Roadster as your range could
be less than 30 miles after 5 years. Higher temperatures reduce
storage capacity more quickly, but keeping the charge low when
the car isn't being used will prolong life. However, the risk
here is driving too far with too low a charge, which may result
in batteries that are irrecoverably dead and have to be replaced.
that most people keep their electric cars fully charged and the
batteries lose capacity at the rate of 20% per year. That means
the range of a Tesla Roadster is 250 miles the first year, 200
miles in the second year, 160 miles in the third year, etc. Even
if these batteries can be charged the usual 750 times, the constant
erosion in the car's range may make it necessary to replace the
batteries even if there are some charges left. The cost of replacement
is still the wild card, but using conservative assumptions and
assuming a big markup on Tesla's custom battery pack of 6,831
rechargeable batteries, this car is probably still more expensive
to drive than a gasoline car once the cost of batteries is amortized.
Over the Last Hurdle
possible that a small company in Reno, Nevada may have radically
changed the economics in this equation. In February 2005, Altair
NanoTechnologies announced a prototype battery that has
three times the power of existing batteries and can be fully charged
in six minutes. In a recent test, the company claims their batteries
went through 15,000 charge/discharge cycles while still retaining
85% of battery capacity. To accomplish this, the company removed
the graphite from conventional lithium-ion batteries and replaced
it with nanotitanate, a substance they developed. The batteries
can operate from -50ľC to over 75ľC and appear to be safe even
at extreme temperatures. They are currently being used in a new
production electric truck made by Phoenix
Motorcars in Ontario, California.
is planning to introduce a sport utility truck in early 2007,
using the Altair battery. Its target market is fleet sales in
California, 2% of which are required to be zero emission vehicles
(ZEVs) by the California Air Resources Board. This truck carries
a price tag of $45,000 and has a relatively small battery in order
to allow the truck to carry 5 passengers and a full payload. It
has a range of around 130 miles, goes from zero to 60 mph in about
10 seconds, has a top speed of 95 mph, and recharges in less than
Later in 2007,
Phoenix plans to introduce a SUV with a similar price tag. It
will be offered in two configurations, one with a range of 130
miles and the other with a range of 250 miles. It's a safe bet
the one with the longer range will have less room for passengers
and storage, but will also be faster with a higher top speed.
should be noted that the estimate for the number of charge cycles
comes from Altair and has yet to be verified with independent
tests. In addition, since the cars using these batteries are new,
there's no history to compare against. Phoenix Motorcars is conservatively
estimating a 12-year life on the Altair battery pack, so the batteries
may outlive the rest of the vehicle. Not having to replace the
batteries and pay only for the cost of recharging is the type
of seismic shift that may finally tilt the economics away from
and Japanese automakers are quietly laying the potential foundation
for electric cars with hybrid vehicles. We're huge fans of gasoline/electric
hybrids as they proved it was possible to save money on gasoline
without sacrificing comfort or performance. Hybrids also give
automakers experience with the necessary batteries and regenerative
braking technology that captures the energy used in braking to
recharge the batteries while driving. All that remains is to remove
the antiquated combustion engine.
has recently reversed their reversal of the 1990s and again announced
plans for an electric car. Several other U.S. and Japanese automakers
are also jumping on this bandwagon. An all electric Prius may
be possible within 18 months, although Toyota has made no announcements.
Beyond that, a small selection of electric cars from major automakers
is expected around 2010.
previously mentioned, the Altair battery technology is unproven,
and it will take some time to see if it really works. To remove
the last roadblock for electric cars, Altair's batteries will
have to perform as promised and become more widely used. Range
is also still an issue for electric cars. They now can probably
cover most driving done by most people on most days. Folks may
still need another car for longer trips, although Altair's batteries
recharge in about the same amount of time that it takes to fill
a gas tank, so the wider availability of the appropriate electrical
outlets would mitigate this problem. It's also hard to be thrilled
with the places chosen so far for assembly. The Tesla is being
assembled in England while the basic truck from Phoenix Motorcars
comes from Korea. Unfortunately, automakers in both countries
are notorious for poor quality. Finally, the selection of electric
cars needs to improve dramatically for these to become more widely
electric car that costs significantly less to drive than a gasoline
powered car, that recharges in the time it takes to fill a gas
tank, and has the comfort and performance to satisfy American
drivers is one of the most potentially important and disruptive
technologies of the decade. Imagine a one-time purchase of solar
panels (subsidized by taxpayers) that not only eliminates your
electricity bills but also provides a lifetime supply of fuel
for your car. Imagine telling the lunatics that control world
oil supplies to put their oil where the sun doesn't shine and
finally giving the Middle East the lack of attention it deserves.
Imagine having to figure out what to do with all the money you
aren't spending on electricity and gasoline. Like Martin Luther
King said, I have a dream.
purposes, it should be noted that Odyssey Advisors LLC has an
investment in Altair NanoTechnologies (ALTI) for a small number
of clients willing to tolerate very high risk.
is President and CEO of Odyssey Advisors LLC, an independent investment
advisory firm specializing in equity and fixed income management
for individuals, entrepreneurs, families, endowments, and non-profit
institutions. He can be contacted at email@example.com
has been obtained from sources believed to be reliable however
Odyssey Advisors LLC does not warrant its completeness or accuracy.
Opinions constitute our judgment as of the date of this material
and are subject to change without notice. This material is not
intended as an offer or solicitation for the purchase or sale
of any financial instrument. Securities, financial instruments
or strategies mentioned herein may not be suitable for all investors.
© 2006 by Odyssey Advisors LLC
Bonds: Your Nest for
the Golden (Not Goose) Egg.
Bond Specialist Meri Ann Beck-Woods, the Chairman and COO of Odyssey
Anne Beck-Woods, Chairman & COO, Odyssey Advisors LLC
December 15th, subscribers chatted with bond specialist
Meri Ann Beck-Woods, the Chairman and COO of Odyssey Advisors, about
the myths and must-knows of how bonds can help to stabilize your
I understand that bonds may be a good, relatively low risk method
of balancing my portfolio.
Meri Anne Beck-Woods:
Bonds can act as a risk minimizer, with stocks as a return maximizer.
But bonds can be risky as well, and, at times, more risky than stocks.
to find the right style of investing in stocks. I'm very analytical,
but I've also got an artsy "intuitive" side to me. I've
been reading and researching the Investor's Business Daily
style of investing. Do either of you recommend the CANSLIM method,
or have you found something better for smart people with limited
a very good reputation when used with common sense and sound judgment.
The devil's in the details.
note: Paul Woods, a 30-year money manager veteran with superior
skills in stocks, will be in the NataliePace.com chat room on
January 10, 2006. That would be a good question to ask him.)
saying there are different types of bonds with different risks?
maturity risks and coupon and leverage risks depending upon the
type of bond you buy.
I do not
own any bonds. I'm a principal in a couple of small companies
and very prone to taking risky maneuvers. I'm looking for bonds
to balance my risk-taking behavior.
A bond ETF
can give you diversification in bonds with less risk than an individual
portfolio and a reasonable expense ratio of 15 to 20 basis points.
Although, you do need to pay commissions.
bonds are not a "buy and forget" type of investment?
ETFs! Wow, that is nice. And it will have liquidity. I didn't
know that they had bond ETFs, but it makes sense now that you've
you are an entrepreneur and take a lot of risk, you can get a
lot of diversification with a bond ETF fund and not pay a lot
and reduce your risk. Also, how soon you need your money back
will determine the type of risk you want to take in a bond portfolio.
The longer the maturity, the greater difference in price volatility.
you go into a bond ETF instead of an equity ETF, if there is volatility
in bonds and less return?
are not a substitute for equity ETFs. They have a different purpose
for fixed income investors who either don't have enough money
for a full-sized bond portfolio and want diversification, or are
aggressive and want to short bonds in a cost effective way.
I am 40
and have been an aggressive investor so far. I have zero percent
bonds in my portfolio and plan to retire in 5 years. How much
would you recommend as a percentage for bond ETF funds?
to 20%. It would depend upon your circumstances. If you have 100%
equities at 40, you are still very young. A small position in
one or two bond ETF funds would not be a bad idea, however.
be more specific about bonds to go into? The U.S. dollar is predicted
to be bearish. Have we outlived the European market? Do you recommend
buying a bond ETF that has a smattering of all currencies? Is
there such a beast?
has been strong for a long time and predictions about the euro
surpassing the dollar have not come to pass. The Chinese yuan
and other Asian currencies other than the yen will be stronger
than the dollar.
you capitalize on this?
The AGG ETF
has a small amount of Canadian, Mexican, Luxembourg and Italian
bonds. But it has a longer maturity and risk factor. There are
foreign bond mutual funds but the expense ratio is usually high
as well as the management fee, when compared to bond ETFs at 15
to 20 basis points.
shorting bonds. Where do you get the education on this and isn't
it quite risky - something you are trying to avoid by buying bonds
in the first place?
would be risky, and would be for an aggressive investor doing
market timing, which I personally don't recommend.
have a maturity date, then why does the longer ETF have a greater
risk factor associated with it?
maturity of each of the bond ETF funds is different and can range
from just over 2 years to 23 years. Remember ETF funds sell every
day and never mature like a regular bond. You always have the
market risk of not getting all of your money back .
bond ETFs similar to the Barclay's iShares? Is there an iShare
bond I can purchase?
6 Barclays bond ETF funds covering all segments of the bond market.
in particular that you recommend?
ratio is either 15 or 20 basis points for each fund. The one with
the highest Sharpe ratio or risk-adjusted return right now for
one year is the iShares Lehman AGG bond fund, symbol AGG, with
a .28 risk-adjusted return and one-year total return of 5.919.
The Lehman 20-year treasury has a high one-year total return of
6.44 and a risk-adjusted ratio of 0.23. The lowest return among
the bond ETFs has been the TIPS, the Treasury Inflation bonds.
Usually, you want a higher risk-adjusted return, which is the
return of the fund, less the 3-month Treasury bill return, divided
by the standard deviation of the return of the fund.
just buy T-bills with almost the same return and 0% risk?
had negative returns over time due to inflation. In recent years,
they have had returns lower than the Fed funds rate. Right now,
they have a higher return for 6-month T-bills, due to the yield
curve being higher in the short end.
a relationship between returns in real estate and T-Bills?
There is more
of a relationship between the 10-year treasury note and real estate
due to the setting and spread of mortgage loans.
recommending only buying bonds for a one-year term versus long
term bonds, and why?
has unique needs for income or capital preservation. I am not
a market timer and would recommend different maturities for different
people. 5-year bonds usually have a high percentage of return
and a lower percentage of risk than the longer bond.
are returning close to 5%. How do you balance the need for bond
ETFs in your portfolio, compared to the favorable marketplace
of money markets these days?
pros are diversification in the bond market for less money. One
bond costs a $1000 or more, whereas the most expensive ETF is
only $108. This will give you diversification of from 24-124 bonds,
depending on the bond ETF you choose.
great and I can trade them through my broker, right?
on bond ETFs average 4.2 to 4.6%, although they are taxed as ordinary
income, unlike stock dividends.
fund - a fund compared to a bond index. There are also many equity
exchange traded funds with the same advantages of diversification,
although higher risk. Say you want a foreign fund with a lower
expense ratio than a mutual fund. An ETF would work.
Paul Woods does a great job of explaining ETFs in the article,
the Mutual Fund Salesman Forgot to Mention." You can
find it in the archived NataliePace.com ezine, vol. 2, iss. 10.
Also, you can find a good variety of ETFs at AMEX.com (the American
Stock Exchange site) and at iShares.com, the Barclay's site.)
how do you feel about market timing with ETFs, as in moving to
bonds or cash when the market is strange, and moving to hot sectors,
-- I think the whole purpose of bonds is to balance risk and to
have a long-term view, so that you are not juggling your entire
nest egg. As Meri Anne aptly points out, stocks are really the
return maximizer. You can take on higher risk with a portion of
your portfolio with stocks, and still sleep at night, if you are
certain that you've got your assets covered with safer investments,
like bonds and money markets.
And by the
way, I don't recommend "market timing" with stocks either.
I've been publishing a magazine for four years, every single month,
through some of the toughest years in the stock market. We've
always found one great company to feature, and the returns on
those features have produced 45% annualized gains. That's the
best on Wall Street without trying to get too fancy. My "stocks
on steroids" trading strategy is simple: 1) Invest in what
you know and love, 2) Pick the leader in the sector; 3) Buy low;
sell high. A market downturn becomes a buying opportunity. A bull
market becomes a selling opportunity. (As you know, I also believe
you should be taking a long-term view for the 401 (k) of your
Choose a good company and forget the timing, and use bonds to
secure your nest egg?
Meri Ann Beck-Woods:
Good work, Natalie. The bond market produces average returns more
in the 5-10% range, except in a bull market. The cons of bond
ETFs are the risk of not getting your principal back in total,
and a brokerage fee for buying and selling. In addition, there
is the expense ratio and not enough information about each individual
bond available to the public, and no control over how and when
you want your interest income.
Anne! As you can see, Ms. Beck-Woods is a very experienced bond
trader. She has over 35 years experience in the money management
industry as a fixed income and balanced fund manager. She is the
Chairman and COO of Odyssey Advisors, a money management firm for
institutions and high net-worth individuals. Meri Anne is the former
president of the Los Angeles Association of Investment women and
a member of the CFA Institute. She is also a co-author of the book
Inspiration To Realization and a lifetime member of the Network
for Empowering Women entrepreneurs. She can be reached at 310 568-4700
or at her website at www.odysseyadvisors.com.
has been obtained from sources believed to be reliable however Odyssey
Advisors LLC does not warrant its completeness or accuracy. Opinions
constitute our judgment as of the date of this material and are
subject to change without notice. This material is not intended
as an offer or solicitation for the purchase or sale of any financial
instrument. Securities, financial instruments or strategies mentioned
herein may not be suitable for all investors. Copyright © 2006 by
Odyssey Advisors LLC
Blue Chip King Kelley Wright on How to
Earn Steady, Low-Risk Returns You Can Sleep and Retire On!
December 6, 2006, NataliePace.com subscribers plumbed the wisdom
of Mr. Kelley Wright, managing publisher, Investment
Quality Trends stock newsletter. Kelley is currently outperforming
all of his peers, by bringing in the top risk-adjusted returns on
Wall Street at 13.1% annualized (every year) since inception, according
to Hulbert's Financial Digest. (The stock market has returned 11.8%
annualized over the same period, with more risk than the Investment
Quality Trends stock newsletter.)
Reserve Board is meeting next week, on December 12, 2006? What do
you think will happen?
The Fed is in a tough spot because of the dollar, so they can't
go any lower. The bond market is screaming for them to do just that,
So you think
in the squeeze, that they will just do nothing, with the one director
the new provision that companies must list their pension plan
and other post-employment benefit obligations on the earnings
reports effective December 15, 2006. How do you think that might
affect Blue Chips like General Motors, Boeing, AT&T, etc.?
a problem that has to be dealt with. The big, successful companies
will find a way to make it work though.
portfolio is all lumbering Blue Chips with a disappointing run
in past few years. I am considering moving into faster growth
stocks. Any advice?
Big Blue chips
are great investments; you do need a strategy though, to pick
the right ones.
Note: Kelley's stock newsletter, Investment Quality Trends at IQTrends.com,
categorizes the Blue Chips, so that you can see which ones are ripe
to buy, hold or sell. That might be a great way to compare your
current holdings with those that Investment Quality Trends believes
to be best poised for future returns. Their criteria are very stringent
and they stick to it like glue.)
Investor's Business Daily type of investor, usually holding
for many months. Do you have any feelings regarding the market
continuing strong, versus a major correction in 2007?
I think there
will be strength in the market until March, then we could see
a slow grinding down turn.
Blue Chips, many of the speculators I know feel uncomfortable
about the direction of the market, so they're in cash.
If you focus
on the market of stocks, as opposed to the stock market, and buy
high-quality issues when they reflect historical value, you will
you feel about the markets in general? Do you buy into the Santa
Rally and the pre-election year rally buzz?
Rally is a seasonal phenomenon that is consistent. Whether we
had our rally in September through November remains to be seen.
are nice, but they tend to be high-priced. Because I don't have
a lot of cash to work with, I like to find lower-priced companies
where I can buy more shares and benefit better from price moves.
What is your experience with this strategy?
about price; focus on value. This is to say when you buy a stock
that represents historical value, you will be better off than
trying to find something that is low-priced. You are betting on
capital appreciation that may not materialize. Everybody loves
capital gains, but capital gains are never assured. A long-term
consistent dividend trend is the best evidence you are invested
in a profitable concern.
Note: Tom, in order to have "more cash" to work with,
you should also be diligent about tithing to your freedom fund.
Make sure that you are depositing 10% of your gross earnings into
your freedom fund each paycheck. For more "Freedom Fund"
tips, read, "Call
it Your Buy My Own Island Plan," from vol. 3, issue 11
of the NataliePace.com ezines.)
course, historical trading range is a good indicator of value
and I use buy/sell limits. When it comes to Natalie's stock picks,
it is the ones with lower price that get my attention the most.
Blockbuster, for example.
issues with a consistent dividend record have repetitive patterns
of low price/high yield and high price/low yield. If you buy in
the former instance and hold until the latter, you will compound
at a high rate of return with low risk and volatility.
reading about inflation, the housing market, trade deficit, etc.
How will these factors show up in the stock market?
always rewards a company for managing so well that they constantly
increase the dividend. Growth comes with a rising dividend trend.
Growth of income is also important because you can leverage that
income growth into additional issues.
the IQTrends.com criteria for evaluating companies?
We have a
fundamental approach to technical analysis. First we use a very
Graham and Dodd like quality screen that eliminates about 96%
of the market. Then we define their dividend trends using charts
to identify their high and low dividend bands over 25 years. Our
Criteria for Select Blue Chips consists of: dividend increases
five times in the last twelve years; an S&P Earnings and Dividend
Quality Ranking of A or better; 5,000,000 shares outstanding;
at least 80 institutional investors; 25 years of uninterrupted
dividends; and earnings improved in at least seven of the last
you feel about the tech sector? Do you think that Akamai is overvalued?
We don't screen
for sectors; we screen for quality and value. That said, Teleflex
is the only stock in our Undervalued category that has a tech
companies do you follow?
We have about
300 issues in our universe currently.
your thoughts on natural foods sector and specifically companies
like Whole Foods, Wild Oats and United Foods.
When you search
for value as we do, what is currently Undervalued is generally
out of favor, so "hot" companies or sectors don't usually
hit our radar screen. The natural foods sector doesn't have any
companies that meet our Criteria.
Note: Remember that Blue Chips offer steady returns, dividends
and they also stabilize your portfolio. Even if you're an options
junkie, if you don't cover your assets with Blue chips and diversify,
allocate, etc., you're likely putting too much at stake.)
of Kelley's IQTrends. Com newsletter is that it offers very nice
returns. What are you at right now, Kelley? 13.5% EVERY YEAR for
the past 25 years?
about 25% less risk than the Wilshire 5000. Using the Rule of
72, 13.50% means your portfolio doubles every 5.33 years.
Note: If you subscribe to Kelley's newsletter, only made $14/hour,
but put aside 10% and saw those kind of returns, you'd be a millionaire
within 31 years. That's the magic of compounding and stability.)
familiar with the term "risk-adjusted." Does this mean
you have more liquidity, less volatility or what?
means taking less investment risk to make a similar return. By
example, if my portfolio returns 10%, it is equivalent to another
portfolio earning 12.5% but with 25% more risk.
an ideal return?
An ideal return
is one that beats inflation and taxes with some left over to reinvest
Note: The stock market has been returning about 12.5% every year
over the past 25 years, so, for professionals, 10% return is underperforming.
For novices, it's not so bad.)
since more Blue Chips are concentrated in the Dow, how do you
feel with the Dow at an all-time high? How many of your 300+ companies
are ripe to buy? How many are in selling range? Is the Dow overvalued
The Dow has
a dividend profile of Undervalued when the yield is 3.0% and Overvalued
when the yield declines to 1.50%. At about 2.16%, the Dow is in
the middle of its value range. There are currently 32 stocks in
our Undervalued category.
means, there are 32 stocks worth looking at to buy?
Not the whole
Dow, but select issues like Citigroup and McDonald's.
yield rule of > 3% apply to individual stocks or the Dow in
Just the Dow.
Each stock in our universe has its own unique profile of Undervalue
limits, volatility has worked in my favor with some stocks, especially
those in my Roth. I am hearing you say how volatility is a bad
thing to be avoided.
is a trader's game, not an investor's.
think there will be legislative relief to companies overburdened
by pension obligations?
Tom, how did
the companies get overburdened? If a company mismanaged their
pension plan, who is ultimately to blame?
Note: There is already a fund in the United States called the
Pension Benefit Guaranty Corporation. When United Airlines eliminated
their benefits-based pension plan, the PBGC picked up the slack.
The problem is that PBGC is overburdened and underfunded currently,
with no relief in sight. Additionally, someone who might have
expected a certain amount in retirement based upon their pension
plan promise, would be looking at a cap rate that could be significantly
lower than what they expected. That certainly was the case with
the United Airlines pilots, who are receiving only about half
of what they were promised.)
any last words of wisdom for our chatters?
your needs and the what, when and why you are investing. Then
plot a strategy to realize the rate of return you need to generate
to meet those needs.
Do I include
my primary residence as part of my portfolio, or do I leave that
out when I consider how to diversify my investments?
is an asset, but not a tradable one.
individual investor, do you see any problem with having a portfolio
consisting of only 3-4 carefully picked stocks at any one time?
10 are better.
you determine when to sell?
Wright, Managing Editor, Investment Quality Trends Newsletter
Note: The Investment Quality Trends newsletter does extensive analysis
to determine when a stock is overvalued and ripe to sell. Check
out IQTrends.Com, where
you can go for a free tour of their newsletter and check out their
criteria for evaluating stocks. I've been featuring Kelley Wright
in my ezine for the past few years, and for Blue Chips, you really
cannot get any better than the criteria/formula/screening of IQTrends.com.
Blue Chips generate, for the most part, easy, stable money returns,
and the IQTrends.com
stock newsletter is well worth the small investment that you pay
to receive Kelley's newsletter and research twice a month.)
The Perfect (Cyber)
Broker: Missing the Greed Chip.
how to tell if your broker is a shyster or a saint with one easy
question, and a 5-minute online alternative to being shark bait.
Enron employees saw their golden eggs become goose eggs, as a result
of one simple mistake - investing too much in the stock of their
own company.* This year, the new wave of lawsuits aren't directed
at shady CEOs, but at brokers promising riches beyond your wildest
dreams. As corporations move from benefits-defined pension programs
into 401 (k)s, which are handled by the employee, NOT the corporation,
individuals are finding themselves plunked on Wall Street without
the first clue as to where to turn and what to do. And, as happens
to strangers all over the world, the first "native" offering
to drive them around, may in fact be driving them down a dark alley
where they'll end up stripped naked of all of their belongings.
Note: The NASD
recommends that you "should have no more than 10 to 20% of
total investment assets in company stock." For more information
go to the NASD.com Investor Alerts.
the Los Angeles Times has recently identified three such
victims -- former Exxon Mobil workers who took an early retirement
and placed their nest eggs in the hands of an aggressive, but
slick and likable, broker. Rather than the promised rich life,
these men, all over 60, are looking at lawn mowers, as in ones
they'll be pushing to earn enough to eat. As Bradley Simon, one
of the bilked retirees says, "There are a lot of sharks out
there. These boys in these suits and those nice ties - they aren't
looking out for you."
So, how can
you determine whether the person who is pitching to handle your
nest egg (or perhaps already handling it) is a shyster or a saint?
There is one easy way to tell. It is a red flag that any one of
the three Exxon Mobil retirees could have seen. It is as simple
as following the money.
Yes. All you
have to do is to ask one easy question. "How much of my nest
egg should I invest in the stock market?" The three Exxon
Mobil retirees had portfolios that were between 84% and 91% invested
in stocks, which is a BIG RED FLAG. At retirement, their broker
had put these men ALL IN on the stock market. The rule of thumb
is to have a percentage EQUAL TO YOUR AGE that is risk-free, so
only 40% of the portfolios of these 60-year-old men should have
been invested in the stock market, if the broker were truly looking
out for them. (60% should have been in lower-risk investments,
like money markets, T-bills and bonds.)
If you are
60 or older, and the salesperson in front of you promises you
riches beyond your wildest imagination, and is planning on putting
90% of your nest egg in the stock market, you are dealing with
a crook, a novice, or a self-interested salesperson. In this scenario,
your broker is not advising you well, even if you are fully aware
of the risks, and agree to this extremely aggressive portfolio.
S/he is more interested in the fees and commissions that s/he
is earning. An experienced professional would never place your
future all in on the stock market if you were at or close to retirement.
Even a modest drop in the stock market could crack your nest egg,
give you a heart attack and/or reduce your living expenses! Last
time I checked, great certified financial planners were in the
business of keeping their customers healthy, wealthy and alive!
If you want
to check up on your broker or certified financial planner, simply
look at your brokerage statement. If you are all in on stocks
and/or stock mutual funds, no matter what your age is, that is
a big red flag. If you have a percentage of your portfolio equal
to your age that is NOT invested in stocks or mutual funds, your
financial planner is likely experienced, wise and looking out
for your best interest. Note that bond funds and money markets
are considered to be "safer" than stocks. Do not include
the bond or bond funds in your stock calculations when you are
evaluating your broker.
If your broker
fails this asset allocation test, the next step is to contact
the NASD and see if the broker has any complaints on file. If
s/he has been this aggressive with your portfolio, s/he may already
have a few complaints on file from other disgruntled clients.
You can contact the NASD
BrokerCheck team at NASD.com or by calling (800) 289-9999.
is no substitute for a great certified financial planner. S/he
can truly be a wonderful asset, can help you navigate tax considerations,
can present retirement plan options, can help you outline and
achieve your financial goals, and perhaps even play a role in
educating you to be more market savvy. However, if you are new
to the investing game, it will pay to be ultra-safe while you
learn enough to interview and identify a reputable certified financial
planner. It is very difficult for brokerage houses to monitor
self-interested brokers (until after they are sued by a slew of
unhappy clients), so even the most reputable brokerage firms in
the U.S. are vulnerable to the unethical actions of any one associate.
On the other hand, a cyber-managed portfolio is not subject to
the whims and greed of humans, so this is a viable, and desirable
option, especially for newbie investors who are comfortable with
making transactions online!
note: For tips on finding a great broker, read, "Brokers
and Lovers: It Pays to Pick a Good One," in the Investing
Edu section of the NataliePace.com home page.)
discount brokers offer various types of cyber-managed 401 (k)s.
With as little as a few minutes of research, you can set up your
portfolio, and, in some cases, have the plan rebalance according
to a pre-set, personalized formula! See below for details. Note
that in many cases you are able to rollover your existing retirement
plan into a new brokerage with no penalty. A sales associate can
easily identify if you qualify, and assist you with the details
of the rollover.
To access, TD AMERITRADE's Amerivest online retirement plan, go
to TDAMERITRADE.com. Click on "Plan with Amerivest." Try
a guided tour before you commit, by clicking on "Try Amerivest
Now," located on the right navigation bar. Within just five
minutes, you can set up a fictitious portfolio that considers your
retirement goals, your annual contributions and your risk tolerance.
The plan is both balanced and personalized. The Amerivest plan also
readjusts itself regularly to make sure that you are always in line
with your goals and objectives. It also allows you to customize
your investments. This blueprint can be a great gauge to see how
a broker who is "missing the greed chip" might design
your portfolio. You can try out Amerivest without giving any of
your personal information, and the company makes it easy to set
up the account if you determine that Amerivest is right for you.
Schwab offers a low-cost retirement plan, but one of the
options is an "All Equity Portfolio," which is exactly
the type of portfolio that novice investors should avoid. The
Schwab portfolio options are based upon the type of investor that
you are, and rely upon you to properly categorize yourself. The
plans are not personalized and don't rebalance regularly, but
assume that you understand these basics and are capable of selecting
the best portfolio for yourself and managing/rebalancing the plan
yourself, or with the guidance of a Schwab associate. Self-directed,
motivated and savvy investors can easily compare Schwab's portfolios,
from the "Conservative" portfolio (which is 55% bonds,
20% large-cap stocks, 10% small-cap stocks, 10% international
stocks and 5% cash) to the "Growth" portfolio (which
is 40% large caps, 20% small caps, 20% international, 15% bonds
and 5% cash), and more. Savvy investors and existing Schwab clients
are likely to be more attracted to this product.
Intelligent Investing Optimizer is designed to allocate your assets
based on your investment goals, time horizon, and risk tolerance,
according to the website. e*Trade also offers recommended ETF
and mutual fund portfolios to customers with $50,000 of investable
cash, according to the web site. (The links weren't functioning
when we tried to design our portfolio online, so we can't report
on the ease of use of this product.) e*Trade has offices, and
associates to assist you with the process. E*TRADE does not offer
401K services, only IRAs, which can be opened with no minimums
and no fee, according to a company spokesperson.
has an easy to use calculator to determine how much your IRA and
Roth IRA contributions can/should be, based upon your age. The
Retirement Center also sells "Educated Investor"
products, ranging in price from $24.95 to $89.95. According to
a ScotTrade spokesperson, you can create a fictitious portfolio
and navigate around the ScotTrade web site before you open an
account. Good luck. We aborted our attempts after the site kept
asking for personal information, which we weren't willing to provide
on a test run. (The Amerivest trial run works without any personal
contact information.) ScotTrade's spokesperson assures us that
they do not sell the information they gather. However, we did
receive a call from a Scottrade sales associate almost immediately
after we aborted our attempts to access the site. The difficult
time I had trying to access the retirement products online appears
to be intentional, so that the company can get your contact information
and assign you to a sales associate.
Scottrade and TD AMERITRADE all offer a lot of information and
education for self-directed retirement planning, and branch offices
where you can get assistance, but, so far, only TD AMERITRADE
actually makes it easy to set up a cyber-balanced portfolio that
holds your hand and walks you through the process of balancing
risk tolerance with your financial goals. With TD AMERITRADE's
Amerivest product, you can have your money earning for you, while
you become a more informed, sophisticated investor. There is no
chance that your broker is a shark if s/he is a robot. The cyber-broker
is actually considering your needs without any regard for her
Hmmm… I never
thought I'd think a computer was the best partner, but in this
case, TD AMERITRADE may have found the first solution for America's
newest challenge - protecting the individual investor, who must
now navigate Wall Street on her own! Think of Amerivest as the
perfect date, while you get educated enough to interview and hire
the right certified financial partner for a long-term, rewarding
As of the writing of this article, NataliePace.com has NO advertising
or consulting agreements with TD AMERITRADE, e*Trade, Scottrade
or Charles Schwab. Natalie Pace DOES NOT own stock in any of the
companies mentioned in this article.
Articles of Interest:
and Lovers: It Pays to Pick a Good One," located in the
Investing Edu section of the NataliePace.com home page.
Football Coach to CEO: Exclusive Q&A with Joe Moglia, CEO,
TD AMERITRADE. From NataliePace.com ezine, vol. 3, issue 10.
too Much Stock in Your Company - A 401(k) Problem. An Investor
Alert on the NASD.com website.
the Mutual Fund Salesman Forgot to Mention. By Paul Woods,
President & CEO of Odyssey Advisors, LLC. From NataliePace.com
ezine, vol. 2, issue 10.
Campbell, author of Zero
keep track of the score of the money game on the money scorecard—the
Campbell, author of Zero to Zillionaire.
response to the word "budget"? Do you have a sinking,
shrinking, depressed feeling? Are you afraid if you count the money
you're going to find that you can't afford the lifestyle you've
become accustomed to? Or want to become accustomed to? Do you think
your money will somehow work out alright if you just don't look
at it too closely? Are you Cleopatra, the Queen of Denial?
Let me give
you a tip: If you don't count your money, you are always going
to be stressed about money. You won't ever be relaxed, or feel
secure, or rich. You will always have a gnawing sensation that
maybe some bill is coming due that you've forgotten. You won't
know if you can afford to take that great vacation trip to Italy,
or buy that gold watch, or how much of a mortgage you can handle.
You'll drug yourself with the credit card crack so often the thought
of sobriety will scare you silly. Visit a Debtor's Anonymous meeting
if you don't believe me.
we have to make friends with the word "budget."
isn't advanced calculus, algebra, geometry or trig. This is one-plus-one
stuff, and if you can't count that, how do you expect to count
your millions? I heard recently that a woman reading a newspaper
with the headline "Twelve Brazilian Soldiers Wounded"
turned to her companion and asked, "How many is in a Brazilian?"
you grounding in reality, like a scale does for a dieter. Only
the dieter wants to see a lower number and we want to see a bigger
one. If you don't count, you won't know where you are in your
program. You won't know if it's working or not, or if it is producing
the results you want.
in my workshop came to class after doing her budgets and said,
"The good news is I doubled my income last year."
the room cheered.
the bad news?" I asked.
bad news is I only increased my profit two percent."
happens that when we start making more money, we get uncomfortable.
We don't know what to do with the extra money, so we get rid of
it in order to return to our comfort zone. Yes, for some people,
being broke and anxious can be the comfort zone. If she had been
budgeting every month, she would have seen the path she was headed
down sooner, and been able to take steps to reduce her spending
before all that extra money was gone.
can be fun when you discover that you are making more money and
enjoying more riches. But you won't have any extra money unless
you budget. It will disappear into the black holes of the Universe
that suck up all the excess cash that people haven't budgeted.
If you don't have a plan for it, it will disappear.
so many lotto winners end up broke within five years. We shake
our heads over these stories, but these poor folks have no idea
how to be rich. They have no consciousness about how to manage
large sums of money, so they spend it foolishly, give large sums
away to family and friends, go on spending binges, and forget
that they are going to owe taxes, or that they've incurred debts
that are going to catch up with them next year. If you've always
lived paycheck to paycheck, what's natural for you is to be scrambling
to pay your bills. So that is the situation that they unconsciously
set up for themselves to be in again. They're still broke—they're
just broke at a higher level. If your unconscious habit pattern
is to spend more than you make, it won't matter how much you make.
You'll always find a way to spend more.
planners try to avoid using the word budget and disguise it in
more user-friendly verbiage like "spending plan" or
"savings plan." It doesn't work. You know they're talking
about a budget. So I have reframed the meaning of the word: I
say it stands for "Baby-U-Deserve-Getting-Every-Thing."
Now saying "budget" is like saying a positive affirmation.
A budget is your declaration of your priorities for spending your
money. Get happy with budgets, because they are your navigational
chart to riches.
You are going
to need three different budgets. I have complicated names for
them: Low, Medium, and High. Each of these budgets is just your
budget for one month. You design all three and then at the beginning
of each month, you choose which budget you are on for the coming
month. Anyone can be on Low Budget for a month! That's as long
a commitment as you have to make. Be committed for one month,
be disciplined for one month. Then perhaps, next month you can
move up to Medium Budget. Maybe you'll get a raise or a promotion.
Maybe you'll get a diamond. Maybe you'll get a $7 million contract.
Lastly, you need to look ahead to what's in your High Budget.
What are you going to buy when your big ship comes in? High Budget
is a positive affirmation in action. Because if you don't have
a reason to spend the money, you won't have a reason to make the
Money And Enjoy Life, Too
these financial professionals whose books, magazines, newsletters,
CDs, etc. exhort you to stop spending money on lattes and save
your pennies seem to have missed the news that pennies aren't
worth squat anymore. It's understandable because they make their
living from getting you to save and invest your money with them
rather than spend it on yourself now. That is fine to a point.
We have to make sure that we have some money tucked away for the
future when we might like to retire or not work as many hours
empire-building as we did when we were young. But we've got to
have some balance in the program and enjoy our spending, too.
Twenty-nine people out of one hundred die before they reach retirement
age. We need to spend some of our money enjoying life now.
worked and saved all his life, building equity in his home, a
pension when he retired from his company, and carefully increasing
his savings and assets. When he was 84, he sold the family home
he had lived in for 46 years. My sisters and I discussed different
housing options with him, and looked at retirement communities,
condos, and assisted living facilities. He was very concerned
about his budget, preserving his savings, and not spending too
much money. I nudged him and said, "Dad, all your life you
have done a great job at saving for your retirement. Well, this
is it! This is the retirement you've been saving for. You get
to change your habit now and spend the money." We laughed
about it, but old habits die hard. And it feels so good and safe
to have money saved, it's difficult to let go of it.
Be wise with
your money. Save some, but not too much. Spend some, but not too
much. Sometimes getting control over your money means pulling
back. Sometimes it means loosening up. You need to be able to
do both, and adjust what you do depending on your current circumstances.
The fringe positions—all savings or all spending, all black or
all white—are never the positions that work well in life or money.
A balanced life and a balanced checkbook mean negotiating the
gray areas in the middle. Look at your budgets over the next few
months and see what adjustments are best for you right now.
looking. And keep adjusting. It's a process. The more you do it,
the easier it gets, and the more money flows more easily to you.
And the more money you get, the more fun it is to play with your
is the author of Zero to Zillionaire and The Wealthy Spirit.
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. You can sign up for Chellie's Ezine at www.chellie.com.
Women on Wall Street:
Hanson, founder of 85
Broads, a global women's network.
Balancing High Stress Careers and Family
from the book More
Than 85 Broads, from the chapter "A View From a
Broad" continued from last month.
of the first things I asked our team to do was to run a network
search of all members who listed the World Trade Center as a work
address. Seven of our members listed either Tower One or Tower
Two in their profiles. We reached out to all of them immediately.
A few hours later, we received an email from Christie Millard.
The subject line in her email read "blessed to be alive."
to God, survivor instinct and luck, I am alive and safe. It was
an absolutely horrifying experience, beyond anyone's worst imagination,
beyond what any special effects movie could ever re-create, but
I made it down from the 78th floor of 2 WTC. Not everyone in my
office did though, so this nightmare continues.
It's been a really tough few days. I've met with Maggie Craddock
before, might have to call her up again. I know I need to see
someone, but I'm finding it hard to accept help from anyone when
I am so much better off than so many.
Please let me know the status on other 85 Broads members—I can
only assume there were a number of them in the WTC complex. It
is just sickening to think what the families of missing people
are going through.
By the end
of the week, we had heard from six of our seven members who had
worked in one of the two towers. Then on Sunday I received this
email from Rachel Simon, followed by other emails over the next
days and weeks.
September 16, 2001
I wanted to let
you know that I learned this evening that Cathy Chirls, a member
of 85 Broads, was lost in the attack. Cathy contacted me over the
summer and we met for lunch. We talked about what life was like
after Goldman, discussing work, commuting, choosing our kids' schools,
family, etc. Cathy was a lovely woman—we connected at lunch and
I remember thinking that perhaps I had found a new friend.
Cathy was eager to help others. I shared my story with her about
being laid off at Goldman a few months ago. After describing my
work experience at Goldman, she immediately had two people she
wanted me to meet. At the time, I told her that I was taking the
summer off and she could give me their names in Sept/Oct when
I started my job search.
I knew that Cathy worked at the WTC and emailed her this week
asking if she was OK. Friday evening, her husband responded that
she was missing. I forwarded your email to him.
Just wanted to let you know....
Wednesday, September 19, 2001
It breaks my
heart about Cathy Chirls. I was supposed to have lunch with her
on Monday (because of our 85 Broads connection). We had to move
it to Wednesday, never knowing that Tuesday would bring this horror.
Thank you for getting the sad message out that she is among the
missing. Please if you hear any more, let us know. I truly appreciate
the extension of all the prayers and comfort.
September 28, 2001
Thank you for
the focus that you have given to Cathy Chirls. I knew Cathy when
I worked at Goldman Sachs. After I was let go from the firm last
March, she contacted me and we got to know each other better. She
was incredibly resourceful in tracking me down and we started a
friendship based on a common bond. We shared our thoughts about
life on Wall Street for women, the challenges, the inequities, and
how we could try to change certain things.
Although I only knew her for a short time, it was long enough
to realize what a warm and understanding person she was. She was
a woman just like all of us, who was juggling work and family.
She was an experienced and bright Wall Street professional. She
was a mother and wife. She was a friend.
Cathy knew the value of a network of professional women. She contacted
me. She opened her heart to me and shared her candid and sincere
I found myself drawn to Cathy very quickly. I know that we would
have continued to grow close in a relationship based on honesty,
respect, and support.
I was terrified for Cathy when the tragedy happened and when I
saw the email from 85 Broads, my worst fears were confirmed. Cathy
understood that women need to help each other. We were trying
to help each other. Let's all keep helping each other.
9/11, wanting to be part of a "community" seemed to
grow exponentially. Wall Street was undergoing a furious "headcount
reduction" and many b-school grads weren't able to land a
single job offer. The need to connect seemed more critical than
ever. By 2002, our network had grown to over 5,000 members who
lived in 150 different cities around the world.
milestones were reached that year. Alison Levine, 85 Broads member
extraordinaire, was the captain of the first ever all-U.S. women's
team to attempt to summit Mt. Everest. Although her team came
within 280 vertical feet of the summit before being forced to
turn back, it was an incredible accomplishment. Equally exciting
was Alison's dedication of two new children's school sites in
Nepal on behalf of 85 Broads and Room to Read, a wonderful nonprofit
organization in San Francisco. The pictures of Alison in her orange
85 Broads cap with hundreds of school children was an absolute
thrill. Not long after, 85 Broads member Kate Reid left her job
at Goldman Sachs to teach at one of our two schools.
September of 2002, it was I who needed to reach out to the community
of women in our network. I had just been diagnosed with breast
cancer and was scheduled for surgery on October 21. I sent a letter
to everyone in the network imploring them to get a mammogram and
a sonogram if they were "at risk." It was the sonogram
done by Dr. Susan Drossman that saved my life, as my mammogram
hadn't detected a thing.
astounded me was the number of emails I received from other members
of the network who told me that they had had cancer too, not just
breast cancer, but ovarian cancer, uterine cancer, and leukemia.
Almost every one of them had been diagnosed in their late 20s
or early 30s. Each and every one of them faced life-threatening
challenges and every one of them shared their courageous stories
as astoundingly, the day after I got home from the hospital the
phone rang. It was Joe Gregory, who at the time was the co-chief
operating officer of Lehman Brothers. Joe and I had had lunch
in July, and he was calling to see how I was doing. I had only
met him once. He wanted to give me some information that
he thought would be helpful and just to say, "Hang in there."
I remember staring at the phone after I hung up and thinking to
myself, now there's a guy who understands the power of networking.
In a word, I was completely blown away by his thoughtfulness.
the next six months, I struggled with the fallout of my diagnosis.
Only weeks after I was out of the hospital, I was back in again
to have my ovaries removed as the type of breast cancer I'd had
made me a likely candidate for ovarian cancer. A month after that,
I had two skin cancer operations— one on my lip and one on my
chest. The one on my face left a deep, one-inch scar from my nose
to my lip. I had a three-inch vertical scar on my chest, which
only added insult to injury. By the spring of 2003, my memory
seemed to be leaking brake fluid due to the fact that I was now
experiencing "traumatic menopause," a condition that
occurs when your ovaries are removed and your body stops producing
estrogen. I seemed to have virtually no short-term memory at all
which made remembering who was in the network an almost unbearable
challenge. And of course my own family got the brunt of my anger,
depression, and frustration.
2003, I met several times with Joe Gregory at Lehman Brothers
because he wanted me to come work there. I told him I couldn't
do that because I already had a "day job," which was
to run Milestone Capital in addition to my growing network "empire."
But by the end of 2003, he had talked me into coming back to the
Street at the age of 51. In May of 2004, I left my home in Bedford
for 745 Seventh Avenue. It had been a decade since I'd worked
in NYC and over 15 years since I'd been in a large office building.
I had a new focus and a new mission. I was going to help Lehman
Brothers become the preeminent "brand" with women on
college and university campuses.
experience of meeting new people and trying to remember their
names, titles, and locations was utterly terrifying. When I ran
into people on the elevator or in the building, I would act very
friendly while at the same time try to rummage through my mental
"attic" for a name or any reference as to how I might
know the person I found myself talking to. It was not unusual
for me to meet someone at a meeting and a week later run into
them again and have no memory of the meeting or the person. It
is a surreal moment, which I have learned to move through as best
I can. People will often look at me with astonishment as they
think I'm either kidding or rude or both.
the same time that I reported to work at Lehman Brothers, we launched
Broad2Be, an exact replica of our Broad2Broad co-mentoring initiative,
for women at some of the leading undergraduate schools. We piloted
Broad2Be at Dartmouth and in May of 2004 we held a wonderful event
there for women undergrads and our Broad2Broad members at Tuck.
It was a huge success and for the first time brought together
undergraduate women with women in business school, as well as
current and former women from Goldman Sachs.
long, we had over 50 Broad2Be schools in our network and in one
year over 1,500 women joined the network, regardless of career
focus. What I found to be absolutely stunning was the amazing
cultural diversity on the campuses, and for the first time, I
felt truly blessed to have launched the 85 Broads network. I was
meeting women from all over the world and even though I couldn't
remember their names or faces, I had an inner joy that lifted
my spirits and helped me forget my own personal issues.
Lehman Brothers, I had the opportunity to spend my summers meeting
all of the female interns, both from undergraduate and graduate
business school. I hosted two or three roundtable discussions
a day, which I found to be both exhausting and exhilarating. We
spent the hour and a half that we were together talking about
what these amazing young women were passionate about. And we laughed
about being a woman in a male-dominated business. In some of my
2005 summer roundtables I had women in the group who had been
at Lehman Brothers the prior summer who hoped that I would immediately
remember and recognize them. They would say, "It's great
to see you again Janet," and I would thank them and say,
"It's great to meet you!" Good thing these fabulous
young women had a sense of humor.
days I would be almost manic and bursting with energy and sparkle.
Some days no amount of coffee could keep me from feeling and sounding
narcoleptic. Often I would receive an email or two following a
roundtable discussion from the women who had attended.
Thursday, August 04, 2005 10:20 AM
To: Hanson, Janet
Subject: My deepest gratitude
Morning Ms. Hanson,
was one of the young women at the roundtable yesterday and would
like to express my deepest thanks. I went into the roundtable ready
to meet a managing director with an amazing background from whom
I could learn many things. But little did I know I would meet an
extraordinary woman whose words would stay with me for the rest
of my life. Yesterday you told the group that we inspired you. Well
I believe you inspired us much more than you could imagine. I walked
out of that room stronger and more courageous than ever. I have
not felt that secure in a long time. I would simply like to thank
you for taking the time to reach out to us. I hope to stay in touch
with you and share my career advancements with you for I am sure
you can give me some amazing advice, although you have already given
the group and me more advice than we could ever dream of. So once
again, thank you for being an inspiration.
the past few years, people have often commented that I am a courageous
soul. That is because I have the love and support of my wonderful
family and the extraordinary friendship of a guy by the name of
Rodney Eyles. I was first introduced to Rod in 1999, when he was
in New York to play in a professional squash tournament. Rod was
one of the greatest squash players to ever pick up a racquet.
I loved his fierce determination, even though he was on the "back
nine" of his career. He was 32 years old, which in squash
is "geriatric" due to the pounding a player's body,
takes on the court. Rod was interested in teaching young up and
comers in the United States how to play the game and so in 2000,
he began coaching our son Christopher, who was 9 at the time.
I had never known a professional athlete before, much less one
from Australia! Rod's view of the sport and the world were unique
and when he came to New York to teach Christopher, he always seemed
to bring the brilliant Australian sunshine with him.
long, I became obsessed with getting myself into the best shape
of my life. I started running and swimming and watching my diet.
My weight dropped from 150 pounds to 110 pounds. I was in "the
zone" and loving it. I found that my outlook on life was
changing, that I was seeing everything from a more positive point
of view and even though I was almost 50 years old, for the first
time in my life I felt the incredible "high" of being
BE CONTINUED NEXT MONTH…
In her new
than 85 Broads, trailblazing superstar Janet Hanson
introduces us to some of the most remarkable, courageous, and
successful members of 85
Broads, a global women's network she founded in 1999. Women--and
men--will want to discover "the power of the network" at every
stage of their careers and lives.
Zen and the Art of
Checking Your Ropes is the Key to Successful Investing.
jumping. Exhilarating and exciting, providing that you have the
safety lines attached properly. It is the last moment of your life,
if you don't. What does this have to do with investing? Are you
leaping off the edge of the canyon with a safety line or on blind
faith? Even veteran jumpers take a moment each time they jump to
check the fundamentals of their machinery. It is impossible to survive
if there is a malfunction with the safety gear. It's hard to be
Zen about falling if you know you're in for a crash landing.
your safety gear first:
yourself the following questions.
Ropes: In your freedom plan (formerly known as retirement
plan), is a percentage equal to your age safe from risk? For more
information on asset allocation strategies, read "Call
It Your Buy My Own Island Plan," from NataliePace.com
ezine vol. 3, iss. 11. Also read the articles in the Investor
Edu section of the NataliePace.com home page.
Before Leaping: Before trading stocks, bonds or options,
have you educated yourself enough with information from a reputable
source? (For options, use the Chicago
Board Options Exchange at CBOE.com.
for stock and bond investing, check out the free investor information
from the National
Association of Securities Dealers at
a Professional Holding the Lines: Is the person advising
you on your portfolio a trusted professional who has proven herself
over a long period of time? Does s/he have any complaints with
(Check it out easily on NASD.com.) For more information, read
to Find a Broker" on NataliePace.com, under the Investor
Common Mistakes: I'm sure any reputable bungee pro will
tell you not to eat right before jumping. There are a few basics
to investing, too. Do you have at least 7 great reasons to invest
in the company, or are you relying solely on hot tips, headlines,
analyst recommendations and/or technical analysis? (If you had
done that in 2000, you would probably have lost a lot of money
in Enron.) For more information, read "Lessons
from Enron," and "Top
9 Investing Mistakes." Both articles are located
in the Investor Edu section of NataliePace.com.
the Pro: You wouldn't want to jump off of the Golden
Gate Bridge from lines tied to Uncle Joe's pickup truck. Have
you lined up the competition of the company you are interested
in investing in? Try filling out a Stock Report Card on the
company you are interested in investing in. Line up the numbers,
alongside the competition. You'll find sample stock report cards
under the Investor Edu link. This simple discipline can help
you to identify the leader in the sector. For instance, you're
better off investing in Southwest (a company with oil hedges
in place) than in Delta (a company in bankruptcy). (For my money,
I wouldn't invest in any airline right now - at least
not until they invent solar-planes. Additionally, investing
in companies that are in bankruptcy means that your stock becomes
worthless when they emerge from bankruptcy and issue new common
stock.) However, given those two caveats, it's easy to see that
Southwest is doing pretty well, while Delta is losing billions,
when you simply fill in the blanks of the Stock Report Card.
Oftentimes, there is a clear leader when you take the time to
look at some basic numbers, and this 20-minute process has been
the key to my enormous success as a stock picker!
May all of
your leaps off the cliffs be exhilarating, Zen-like bungee jumping,
and may you land in a pile of dough!
Wonder How Our Past
Companies of the Year have Performed?
International: 2003 Company of the Year. Peaked at 9000%
gains. We took it off our Hot News list with 3000% gains. The
company is still up 600% over the share price at the time of
2004 Company of the Year. +34%. Marc Andreessen's 2nd
Billion-Dollar Idea (after Netscape).
2005 Company of the Year. -51%. Invented the miracle "cancer
pill," Tarceva. Explosive sales didn't impress investors
like we hoped they would.
2006 Company of the Year. Parent Company: News Corp. is up +35%.
(Myspace made 60% additional gains from the time of our first
feature in April 2005, before being purchased by News Corp.)
Power Holdings: 2007 Company of the Year. Solar energy
company, based in China.
Click on the
company name to go to the feature article. Sorry! Our ezines from
2003 (including the Taser article) have been removed from the website.
Still Leading Wall
Street, Earning Almost 42 Cents on the Dollar Every Year.
our Hot News on Cool Stocks List.
|Natalie Pace, NataliePace.com CEO and founder
of the companies featured in NataliePace.com are pulling down 42%
gains on average every year, according to TipsTraders.com.
The list below features 29 companies earning great gains, versus
just five that are headed slightly south.
oh! Man! Does it pay to put hot models in lingerie during the
busiest gift-buying season of the year. According to comScore
Networks, the Victoria's Secret's web site sold enough goods to
be ranked in the Top 10 retail websites between November 1 and
December 26, 2006. Amazon still pulled in at number one - no surprise
Retail WebSites: Ranked by Dollars Spent
Auctions and Large Corporate Purchases
2006 Holiday Season to Date (Nov. 1 - Dec. 26)
were anticipating that more people would catch the (Product)
Red bug this holiday season, but the red states opted for
electronics, cheap duds (JC Penney and Walmart) and those beautiful,
anorexic waifs in Victoria's Secret's skimpy clothing. Official
sales reports will be released this week, so don't be surprised
if Limited Brands Inc. (NYSE: LTD), the parent company of Victoria's
Secret, sees a nice little bump in share price. The Gap experienced
a 4% decline in sales (from last December), and reduced expectations
for their full year as a result.
campaign, which includes products from Gap, Apple, Motorola, Emporio
Armani, American Express, Converse, and more, is a five-year campaign.
Lingerie may have won in 2006, but there are many stars who support
the vision of founders Bono and Bobby Shriver in eliminating AIDS
in Africa. Don't give up on the project before we see what these
visionaries have in store for 2007. In
an odd twist of sentiment, shares for Gap were up on January 4,
2007, after the bad news on Gap Sales was released, and analysts
were still giving the stock an 8 out of 10 positive rating, while
Limited Brands, which reported an increase of 6% in net sales, saw
their share price decline. "We are clearly disappointed with Gap
and Old Navy's holiday sales and overall performance for the year,"
said Paul Pressler, president and CEO, Gap Inc. "Given that we did
not gain the traction we had expected, the management team, with
the active involvement of our board of directors, is currently reviewing
Gap and Old Navy's brand strategies. We are committed to making
the necessary changes to improve performance."
is a sampling of features and highlighted stocks, along with their
performance and the date of the feature article or the time when
we highlighted them as a buying opportunity on the hot news list.
As you can see, there are plenty of opportunities throughout the
year to buy and sell and make great gains. Sometimes it takes
a few months for the company to pop (as happened over the last
year and a half with Las Vegas Sands), and sometimes, as in the
case of MEMC Electronics and Suntech, it happens right away (though
the upside in these companies may just be beginning).
as of 12.15.2006
3, iss. 11
3, iss. 10
3, iss. 5
3, iss. 5
3, iss. 3
3, iss. 3
3, iss. 2
3, iss. 2
3, iss. 2
2, iss. 4
2, iss. 7
2, iss. 9
2, iss. 8
1, iss. 48
how do you become a member of the 42 cents on the dollar club?
Read the feature article (the headline article) and the Hot News
on Cool Stocks article in every ezine. (The Hot News list is usually
the last article each month.) Check out the highlighted companies,
and see if you want to buy or short them. Check out the new "deletions"
to see if you're interested in taking your profits. Hold the companies
that remain on the list but are not highlighted. (There are often
buying opportunities throughout the year. Just be patient.)
check out the mid-month update, which is always posted as a home
page article on the Monday on or about the 15th of
the month. (You can also access the most recent mid-month update
on the home page at NataliePace.com, in the Online Magazines,
Mid-month Update links.) Finally, read the Investing articles
in the ezine to learn some of the strategies that I use to identify
great breakout companies. Eventually, you want to become your
own stock picker, so, check out the Stock Report Cards, which
are located in the headline article each month and in the Investor
Edu section of the home page, and start putting in your favorite
company, along with its competitors, and lining up the numbers.
There is almost always a clear winner when you consider
sales, income, price to earnings ratio and recent news.
that your trading portfolio is SEPARATE from your 401 (k) financial
freedom plan. You don't want to be putting your nest egg all in
on Wall Street. There are many articles written that address how
to best allocate your assets to reduce risk and maximize gains.
remember that I am a journalist, not a broker. These are not buy/sell
recommendations. You should always consult a certified financial
planner before making any changes to your portfolio, to determine
the best strategy for your individual needs.
OPPORTUNITES AND INFORMATION:
Rates: Pause, Cut or Raise? The Federal Open Market
Committee paused in August, September, October and December,
after raising interest rates 17 consecutive times prior.
The federal funds rate remains at 5-Ň%. The next meeting
is scheduled over the course of two days at the end of this
month, on January 30-31.
in reading the minutes of the December meeting for yourself?
You can. It is available online. Click on FOMC,
or go to FederalReserve.gov, to read! "Economic growth
has slowed over the course of the year, partly reflecting
a substantial cooling of the housing market," according
to the Feds. While readings on core inflation has been "high,"
the Committee determined that "inflation pressures seem
likely to moderate over time." There was only one governor
who voted for a rate hike of 25 basis points. The other 10
were in favor of the pause.
tentative meeting schedule for the 2007 calendar is: January
30-31, 2007, March 20-21 (Tuesday-Wednesday), May 9
(Wednesday), June 27-28 (Wednesday-Thursday), August 7 (Tuesday),
September 18 (Tuesday), October 30-31 (Tuesday-Wednesday),
December 11 (Tuesday), January 29-30, 2008 (Tuesday-Wednesday).
The fact that the Federal Open Market Committee has decided
to increase the number of 2-day sessions from two to four
is an indicator that there is double the concern over managing
the economy in the coming months and years.
Chats: Check out the Calendar section of NataliePace.com
regularly. There are two wonderful opportunities to chat
one-on-one with millionaire money managers this month! Don't
miss out. Enter the chat room now to make sure that you
know how to do it and that you don't have any firewall issues
preventing you from accessing the room. (You'll need your
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 goals, 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 any security.
disclosure: I have listed the companies that I own or intend to
buy under the column "NP OWNS?"
News on Cool Stocks List
Companies (Hot List):
Satellite Radio (SIRI)
Gold (USGL, just added to the AMEX & TSX.
Environmental. (Microcaps are extremely vulnerable to changes
in the weather. With builders and real estate falling off, so could
demand for commodities, which could mean less money spent on environmental
clean-up.) 144% gains are good enough for us.
With disappointing December sales and lowered expectations for the
year end, GAP shares may go down in value. While we still believe
in the PRODUCT RED, there is a good chance that there will be a
better buying opportunity after the annual results are released
and the company gets back on track with a new improved brand/marketing
Rio Tinto. With copper supplies increasing, building
in the U.S. tapering off and building in China curtailed by the
government, the copper futures have taken a beating this month.
On November 10, 2006, copper futures plunged to a 4-ż month low.
(See below for additional information on Rio Tinto.)
145% gains are good enough for us.
Vegas Sands: Removed on 1.1.07. 139% gains are good
enough for us. $223 million in insider selling, just at the
time that the company is under pressure to finalize the terms
of their building of "Asia's Las Vegas" in Macao smells
fishier than the Hong Kong harbor to us.
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. This 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 appear to be 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
3, issue 10, and vol. 2, iss. 12 for articles on renewable
Antioco purchased $1 million (value) shares on 11.21.06 at
$4.66 each. According to Antioco, Blockbuster is in talks
to sell off parts of its international operations, including
Blockbuster Taiwan. Investors liked the news, bought in and
pushed the stock price up. Launched TotalAccess, a NetFlix
like mail-in movie service for $5.99 -- $17.99 month on 11.2.06.
BBI had approximately 1.5 million online subscribers as of
September 30, 2006, including approximately 100,000 trial
subscribers at quarter-end who subsequently converted to paying
members. The 2006 year-end goal is 2 million online subscribers.
Revenues for the third quarter of 2006 declined 2.9% to $1.33
billion compared with $1.37 billion for the third quarter
of last year. See vol. 3, issue 4, "Blockbuster Sale."
Very high risk. Distressed acquisition play in a heated up
M&A environment? Jules Haimovitz was added to its board
on 5.26.06. Haimovitz is currently vice chairman and managing
partner of TV production company Dick Clark Productions Inc.
He was formerly president of MGM Networks Inc., a unit of
Metro Goldwyn Mayer Inc., and served as president and chief
operating officer of TV programming syndicator King World
Productions Inc. Currently in a legal battle with NetFlix
over the right to rent movies through the mail, which NetFlix
claims to own the patent on. According to the AP, BBI is still
considering the sale of some assets, and will, in the meantime,
invest in a significant number of new GameStation stores during
to the M&A Mania article in volume 3, issue 6 for details
on Citigroup's appeal. According to an Associated Press report
on 11.29.06, Citigroup will be one of the first banks operating
in China. China is due to open its banking sector fully to
foreign competition by Dec. 11 under conditions set when it
joined the World Trade Organization in 2001. Rising interest
rates and the current M&A mania are positive for Citigroup.
At long last, things are starting to look favorable for the
1Q earnings on 2.7.07. Diluted earnings per share (EPS) for
the fourth quarter increased 89% to $0.36, compared to $0.19
in the prior-year period, reflecting growth at Studio Entertainment,
Parks and Resorts, and Media Networks. The Company generated
$4.8 billion in free cash flow during fiscal 2006 compared
to $2.4 billion in the prior year, reflecting an increase
of $1.8 billion in cash provided by operations and a decrease
of $0.5 billion in capital expenditures. Disney/Pixar/ABC,
distributed by Apple iTunes. Hmmm… The most successful animation
film company meets the most successful family media company
meets the most successful new media device, the iPod. Sounds
like the happiest place on Earth to us. As the largest individual
stockholder, Steve Jobs may be the prime candidate for the
new Chairman of the Board. During the year ended September
30, 2006, the Company repurchased 243 million shares for $6.9
billion, of which 96 million shares were purchased for $2.8
billion in the fourth quarter. As of September 30, 2006, the
Company had authorization in place to repurchase approximately
206 million additional shares. Pirates of the Caribbean
blockbusters equal film profits, DVD profits and renewed interest
in the theme parks!
the articles, "Wow Dow," in vol. 3, iss. 11 and,
"eBay's Skype Outpaces News Corp's MySpace," in
volume 3, issue 9. Half of American consumers plan to shop
online this holiday season, up from 36 percent three years
ago, according to the National Retail Federation. Internet
retailers saw a big boost on Black Friday, with online sales
rising 42 percent to $434 million, according to a ComScore
Networks survey, as visits to leading sites jumped 21 percent
versus an average day. eBay has been beaten up and has HUGE
growth potential. Additionally, Skype's new products (Wi-Fi
VOIP phones in particular and associated hardware) are hitting
the shelves in time for Christmas and will likely start adding
a significant chunk to the eBay bottom line by the first quarter
of 2007. Analysts continue to batter eBay prospects, but many
fail to include the potential upside of Skype. According to
Google CEO Eric Schmidt, "We continue to forge significant
partnerships with companies such as eBay, Fox Interactive
Media, and Intuit that will be of great value to all involved."
eBay reported record consolidated Q3-06 net revenues of $1.449
billion, representing a growth rate of 31% year over year.
GAAP operating income was $339 million, a decrease of 5% year
over year, and represented 23% of net revenues. Excluding
stock-based compensation of $74 million, operating income
would have increased 16% year over year to $413 million, or
28% of net revenues.
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. Your international fund
should reflect the difference.
FDA approved the use of Herceptin for treatment in early-stage
breast cancer on 11.17.06. DNA is a Great Blue Chip Hold for
your long-term portfolio. Genentech specializes in DNA-based
cancer treatments that might ultimately eliminate the need
for chemotherapy! (Avastin chokes off the blood supply to
the tumor.) Biotechnology is a volatile sector, but this popular
#2 biotechnology company has a big pipeline of drugs. Cancer
drugs are a $20+ billion annual market, and DNA has appx.
$8-9 billion of the market cornered. Avastin alone is expected
to bring in $2 billion in annual sales by 2007. Genentech
reported a quarterly profit of $568 million, or 53 cents a
share, on Oct. 11, 2006, compared to $359 million, or 33 cents
a share, for the same period last year. DNA expects earnings
per share to grow by 65 percent to 70 percent for the full
year. The sales of non-Hodgkin's lymphoma treatment Rituxan
rose 12 percent to $509 million for the quarter while sales
for its colon cancer staple Avastin shot up 34 percent to
$435 million. P/E: 47.20. 3Q Total product sales = $1,941
million, a 34 percent increase over $1,451 million last year.
The company currently expects approximately 65 to 70 percent
growth in non-GAAP earnings per share for the full year 2006,
relative to 2005.
YouTube.com, one of the most popular sites on the web. Google
joined the S&P 500 on 3.31.06. Great Blue Chip Hold for
your long-term portfolio. Buy in at a better price. Soleil
Media Research Analysts put Google's value, based upon forward-looking
revenue metrics, at $362/share. If you've quadrupled your
money, profit taking and capital gains are attractive these
days, although Santa Rally & YouTube Buzz factor could
mean that price remains lofty at least through the end of
the year. Announced 3Q 2006 earnings on Thursday, October
19, 2006 at 1:30 p.m. PT. Google reported revenues of $2.69
billion for the quarter ended September 30, 2006, an increase
of 70% compared to the third quarter of 2005 and an increase
of 10% compared to the second quarter of 2006. According to
Google CEO Eric Schmidt, "We continue to forge significant
partnerships with companies such as eBay, Fox Interactive
Media, and Intuit that will be of great value to all involved."
to Google CEO Eric Schmidt, "We continue to forge significant
partnerships with companies such as eBay, Fox Interactive
Media, and Intuit that will be of great value to all involved."
Announces 1Q on 11.16.06 after the closing bell. Intuit Inc.
reported on 10.30.06 that the Securities and Exchange Commission
has closed its investigation into the software maker's stock
option accounting practices without taking any punitive action.
11.17.06 earnings report: 1Q 2007 revenue increased 19% over
the year-ago quarter to $362.1 million. Growth was primarily
driven by strong sales of its QuickBooks software and add-on
solutions, payroll and payments. Intuit posted a GAAP (Generally
Accepted Accounting Principles) net loss of $58.9 million
versus a net loss of $45.8 million in the first quarter of
2006. According to the company press release, "Intuit
typically posts a seasonal loss in its first quarter when
it has little revenue from its tax businesses." 2Q revenue
last year was 144% higher than 1Q in 2005 and 2004.
Kreme Doughnuts Inc. said it would team up with NBC's "Today"
show for its 13th annual toy drive. Customers can drop off
new toys at KKD stores! (This kind of cause marketing can
be VERY effective over the holidays.)
you visited the Coffee Bean and Tea Leaf shops lately? Seen
Krispy Kreme doughnuts in the pastry case? A survey of just
a few shops revealed that the goods are selling great, and
reflects well on the new management team's commitment to bringing
in the dough to satisfy the sweet tooth of investors. KKD
is expanding into Asia - namely Macao, the Phillipines, Hong
Kong, Indonesia and Japan. In turnaround mode, and trading
at 5 year lows, though things have sweetened up since KKD
hired Kraft Foods veteran Daryl Brewster as president and
chief executive in March 2006. Taken off S&P Midcap 400
effective 10.27.05. The Company expects to report a net loss
for the first two quarters of fiscal 2007. Hired the former
general counsel from Winston-Salem-based Reynolds American
Inc. (NYSE: RAI), Charles A. "Chuck" Blixt, 55, to serve as
its top lawyer. Average weekly sales increased 8 percent in
company-owned stores and 5 percent system wide, according
to Krispy Kreme's sales report on 9.12.06. Having former tobacco
company counsel and director on team should help get rid of
some of the lawsuits. Now, if consumers are still sweet on
the doughnut, they may actually have a business on their hands.
Received an Overweight rating, with a $15 target rate, from
Prudential Equity Group LLC analyst Howard W. Penney on 10.27.2006.
Annual earnings report was filed on 10.31.06. Revenues for
the year ended Janury 29, 2006 were $543.361 million down
from $707.766 mm and $649.345 mm in 2005 and 2004 respectively.
The loss was $135.760 million, trimmed from $157.054 in 2005
and a profit of $49.845 million in 2004. Long term debt stands
at $118.241 million. 61 stores have been closed over the past
two years. As of 1.31.06, there were 323 KKD factory stores,
and 68 KKD international stores.
"Sun Powers Whole Foods," article in vol. 3, iss.
10. Silicon is in high demand, and MEMC has been able to price
its product higher as a result. On 10.26.06, the Company reported
net sales of $407.9 million, which represents an increase
of over 10% from the second quarter level of $370.5 million.
Net income was $91 million. During the 3rd quarter,
MEMC Electronics finalized its $5-$6 billion solar wafer agreement
with Suntech. As part of the agreement, the company received
a warrant to purchase up to a 4.9% equity stake in Suntech,
for which the company will be required to mark the warrants
to market each quarter until they are exercised. Nabeel Gareeb,
MEMC's CEO, reports cash and short-term investments of over
$450 million. MEMC will receive $2.5 billion to $3 billion
in revenue from sales of the wafers over the 10-year period
from Taiwan's Gintech Energy (solar). MEMC also will be eligible
to purchase a 10 percent interest in Gintech, as well as acquire
the rights to a parcel of land of about 1.7 hectares, or about
4.2 acres, located within the Hsinchu Science Park. Buy rating
and $54.00 price target at Jefferies.
Pace's Exclusive Forbes.com Video
Network Q&A with Patrick Lo (from August 2006). Award
Heaven! Patrick Lo, CEO, won the Ernst & Young's Entrepreneur
of the Year Award (on 6.16.06), NetGear is on Business Week's
Hot 100 list (for the 2nd year), NetGear was awarded
Best Buy's Bravo Award for Business Excellence and POPULAR
MECHANICS just gave NetGear's Skype phone its Breakthrough
Award. The NETGEAR Skype WiFi phone is available for pre-order
online for a price of $249.99. Skype currently has 133 million
registered users, and the NetGear phone is one of the first
Skype Wifi phones. 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. 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. 3Q earnings on 10.26.06: Net revenue
for the third quarter ended October 1, 2006 was $151.6 million,
a 36% increase as compared to $111.3 million for the third
quarter ended October 2, 2005, and an increase of 16% as compared
to $130.7 million in the second quarter of 2006. Net income,
computed in accordance with GAAP, for the third quarter of
2006 was $8.0 million or $0.23 per diluted share. This net
income was a 7% decrease compared to net income of $8.6 million
for the third quarter of 2005. According to CEO Patrick Lo,
NetGear has 58 new products. CFO Jonathan Mather is out. Christine
M. Gorjanc has been awarded the position of Chief Accounting
Officer. We'll keep you posted on any replacements for Mather.
$151.1 million in cash and short-term investments as of 10.26.06.
2, iss. 10
Fox, MySpace and DirecTv.
my vol. 3, iss. 9 article, "eBay's
Skype Outpaces News Corp's MySpace, with 113 million registered
users." As Rupert Murdoch noted in the last News
Corp. 1Q earnings press release on 11.8.06, "News Corporation
websites now rank second in the U.S. in total page views and
fifth in unique visitors. Our recently announced landmark
deal with Google for textual search is expected to generate
$900 million over three and a half years." MySpace is
now a Top 10 Global Internet Brand with over 134 million registered
users, making it the 2nd fastest growing Internet site in
the world. (eBay's Skype is #1!) Media is in favor for 2006,
according to Smith Barney and Soleil Media research analysts.
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. Rupert
Murdoch has some talented, innovative leaders under his aegis,
and they are hitting home profits. News Corp. has completed
$2.5 billion of a $3.0 billion buyback program initiated last
June, and increased the stock buyback program to $6.0 billion.
"This $3.0 billion step up clearly reinforces our view
that repurchases of News Corporation shares are among the
best uses of our cash in today's environment," according
to Rupert. According to Google CEO Eric Schmidt, "We
continue to forge significant partnerships with companies
such as eBay, Fox Interactive Media, and Intuit that will
be of great value to all involved." Holiday DVDs include:
Ice Age: The Meltdown and X-Men. Theatrical hits include:
Borat, The Devil Wears Prada, Little Miss Sunshine and
44. 1st featured Dec. 2002.
earnings: Net revenue for the third quarter ended October
31, 2006 totaled $25.0 million, up 59% from the same quarter
last year. GAAP net loss in the third quarter was $(4.8) million
or $(0.05) per share. Has $91 million in cash on hand. Named
to Deloitte and Touche's prestigious Technology Fast 50 Program
for Silicon Valley on 10.26.06. It 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. The company raised
its full year revenue expectation to $102 million. "We
reached the key milestone of non-GAAP profitability," said
Ben Horowitz, president and CEO of Opsware Inc. "During Q2
we also shipped the Opsware System 6 suite, the most important
release in our company's history." CFO Sharlene Abrams resigned
on 7.12.06. She will continue through Oct. 31 to aid a smooth
transition to new CFO David F. Conte. Ms. Abrams is under
SEC investigation for handling of options at her prior company,
Mercury Interactive. Opsware automates the complete IT lifecycle
and enables IT to automatically discover, provision, patch,
configure, secure, change, scale, audit, recover, consolidate,
migrate, and reallocate servers, network devices and applications.
Over 350 of the world's largest companies, outsourcers and
government agencies use Opsware to deliver this new, automated
model of IT. Announces 3Q on November 29, 2006 before the
near 52-week low.
2005 Company of the Year. Read vol. 1, iss. 56.
earnings on Nov. 6th: reported total revenues of
$74 million for the three months ended September 30, 2006,
an increase of $40 million (or 118%) compared to revenues
of $34 million for the same period last year. Net loss was
$21.3 million. Genetic based "cancer pill." FDA-Approved
Tarceva for lung cancer November 2004. Canadian regulators
approved Tarceva on 7.13.05. European approval granted on
9.21.04. Switzerland approved Tarceva in March 2005. FDA approved
Tarceva for use with pancreatic patients on 9.13.05. Submitted
new drug application to Japanese FDA on 4.17.06. Partner of
Genentech (DNA) and Roche. OSIP is now testing Tarceva as
an application for other cancers, including lung cancer. Industry
sales data has placed the cancer drug market's value at more
than $20 billion annually and it is growing fast.
to the Russell Microcap Index on 6.30.06. 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.
In addition to providing communications for national security
needs, RELM can actively address communications needs at hazardous
substance facilities such as oil refineries, mines and chemical
plants. The United States Postal Service Extended its Exclusive
Contract with RELM Wireless on 7.13.2006. RELM announced 3Q
earnings on 11.2.06. Sales increased approximately 20.7% to
$9.2 million from $7.6 million for the same quarter last year.
Net income for the third quarter was $1.1 million, or $0.08
per diluted share, compared to net income of $1.2 million,
or $0.09 per diluted share, for the same quarter last year.
Bil Market Cap
3Q on Nov. 8, 2006. Total revenue increased 150% year- over-year
to $167.1 million for third quarter 2006, reflecting nearly
three million new subscribers added in the last twelve months.
SIRIUS ended the third quarter with 5,119,308 subscribers.
For the fourth consecutive quarter, SIRIUS led the satellite
radio industry in net subscriber additions, capturing a record
61% of total satellite radio net additions in the third quarter.
SIRIUS reported a net loss of ($162.9) million, or ($0.12)
per share, for the third quarter of 2006 compared with a net
loss of ($180.4) million last year. Karmazin says the Stiletto
handheld (iPod-like SR device) is here, and almost all of
the record companies are happy with it. Sirius is on track
to finish the year strong with over 6.2 million subscribers.
Originally XM projected 9 million by year's end, but the company
has cut its subscriber year-end forecast. 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 2/3rds of 2007 cars. SIRI has deals with
Ford, MBZ, Jeep, Dodge, BMW, VW, Audi and Rolls-Royce. Nielsen//NetRatings
report said the online traffic to Sirius' grew 188%, to 1.9
million in March 2006 from 666,000 unique visitors in the
year-ago period. That beats XMSR traffic, which turned in
1.69 million in unique visitors in March.
(Chinese Co. ADR)
Mil Market Cap
ezines, vol. 3, issue 4 and volume 2, issue 9 for feature
articles on Sohu. Financial Times ranked Sohu in the
Top 10 Chinese Global Corporate Brands on 9.6.05 (6 days after
our first feature article). Sohu was selected as the official
sponsor of Internet Content Service (ICS) for the Beijing
2008 Olympic Games, so this story is still nascent. See
Charles Zhang in an exclusive interview on the Forbes.com
Video Network. Could be some bumps in the road between
now and Beijing Olympics 2008, which should ultimately be
worth it, with China still growing at over 9% in real GDP
Holdings Co. Ltd (Green & Chinese Co. ADR)
3, issue 10, and vol. 2, iss. 12 for articles on solar energy.
Suntech is inspiring a slew of Chinese solar company IPOs,
with LDK Solar, Yingli Solar, Trin Solar and Linyang solar
planning to launch a US IPO in the near future, according
to Reuters (10.02.06). Beat analysts' expectations of $151.61
million in revenues. 3Q earnings (11.20.06): Third quarter
total net revenue was up 27.2% sequentially and 187.8% year-over-year
to $163.0 million. Net income for the same quarter of $28.7
million, or $0.19 per diluted American Depository Share (ADS).
STP and the University of New South Wales signed a new $1.2
million collaborative research agreement through 2007 with
a $3 million extension through 2010. Suntech will supply solar
modules with an aggregate output of 23.2MW to Atersa for installation
in the Photovoltaic Grid Connection Park in the Extremadura
region of Spain, the world's largest solar power plant.
Price Em Eur & Mediterranean
2, iss. 8
3, issue 4 and vol. 2, issue 8 for articles on why Eastern
EU rocks, while Western EU stalls. Great way to diversify,
as well as to add growth. Go global with the emerging countries.
Avoid the countries in the EU that are stalling in economic
growth. International investing in the right sectors and countries
3, issue 9, "eBay's Skype Outpaces News Corp.'s MySpace"
for a report card that features Time-Warner. AOL and Time-Warner
have finally figured out how to work together, and Chairman
& CEO Richard D. Parsons, successfully fought off Carl
Icahn. After a series of blunders, could it be TWX's time
to shine? AOL is now an advertising-supported business. Reported
3Q results on 11.1.06: Revenues rose 7% over the same period
in 2005 to $10.9 billion, led by growth at the Cable and Networks
segments. As of September 30, 2006, Net Debt totaled $32.2
billion, up $16.1 billion from $16.1 billion at the end of
2005, reflecting, among other items, the closing of the Adelphia
and Comcast transactions as well as the Company's share repurchase
program. $4 billion in free cash flow. From the inception
of its stock repurchase program through October 31, 2006,
the Company has repurchased approximately 770 million shares
of common stock for approximately $13.4 billion. At existing
price levels, the Company expects that it will purchase at
least $15 billion of its common stock by the end of 2006 and
the remainder of its $20 billion program in 2007. At AOL,
Revenues declined 3% ($58 million) to $2.0 billion, due to
a 13% decrease ($210 million) in Subscription revenues, offset
in part by a 46% increase ($151 million) in Advertising revenues.
Ron Grant was appointed President and COO of AOL LLC on November
21, 2006, by AOL's new Chairman and CEO Randy Falco. Grant
has held senior positions on both sides of the aisle - at
AOL and at Time-Warner, making him ideal for the job. Prior
to being appointed Chairman and CEO of AOl, Mr. Falco was
President and COO of the NBC Universal Television Group. Jonathan
Miller's departure was unexpected, but the transition seems
to be a smooth one. All internal communiqué awards
Miller kudos for setting AOL on the right track prior to his
departure, which is a huge leap forward compared to the internal
squabbling that characterized TWX/AOL at the time of the merger.
Wall Street approves and the stock prices have been up.
trading on the AMEX stock exchange on 12.11.06. (Also trades
on the Toronto Stock Exchange.) See the feature interview
with CEO and Chairman Rob McEwen in i-Sophia ezine, vol. 3,
iss. 2, and click to hear Natalie
Pace's Q&A with Rob McEwen on the Forbes.com Video Network.
Note: U.S. Gold is not producing gold at this time. Rob McEwen,
Chairman and CEO, was awarded the "Most Innovative CEO" award
in 2006 by Canadian Business magazine in its fifth annual
"All-Star Execs roundup." On Nov. 3, 2006, Rob McEwen, Chairman
and CEO, and his wife Cheryl McEwen were honored by Tiffany
& Co. with the 2006 Tiffany Mark Award. The Tiffany Mark
Award honors men and women who are making their "mark" professionally
and in their community through tireless efforts on behalf
of charities and organizations they care about deeply. The
McEwens are avid philanthropists, particularly in the field
Clean Energy Portfolio (Green ETF)
3, issue 10, and vol. 2, iss. 12 for articles on solar energy.
This is a well-managed "smart" ETF, which updates
its holdings regularly, but falls and rises on the good or
bad news of alternative energy companies which it may not
even hold in the portfolio. Fell earlier this year on bad
news at Evergreen Solar, with regard to silicon supply, even
though Evergreen Solar was not a major holding.
(NYSE: SNE) and Sunoco (NYSE: SUN) both had great runs for the
list! LifeCell (NASDAQ: LIFC) posted over 180% gains before being
added to the Watch list. Bioteq Environmental (TSE: BQE) had 144%
gains. Rio Tinto was removed on 11.15.2006 with 145% gains.
removed from the Hot Stocks List:
Vegas Sands Corp.
Vol. 2, Iss. 7
"Company of the Year" in vol. 4, iss 1 for the reasons
why LVS has been taken off of the Hot News list, effective
permits are down worldwide, and there are reports that China
is pulling back on its rapid urban expansion. Additionally,
there are currency considerations in Australia, where Rio
Tinto does a great deal of its business. Rio Tinto has definitely
been the star of the metals sector since we first featured
the company, back in August of 2004, but the insatiable demand
for copper and metals was tied to the low interest rates in
the US (fueling construction) and the pro-expansion policies
in China. With both of those reversing, it seems like the
high and the thrill may be nearing their peaks. Even with
the year-end Santa Rally going and the Dow at an all-time
high, on November 10, 2006, copper futures plunged to a 4
ż month low. "It's not unusual to see copper supplies increase
on a seasonal basis, but the steady nature of the increases
of 2,000 to 3,000 tons over the last few weeks has eroded
support in the market," said Dan Vaught, a futures analyst
at AG Edwards. Rio Tinto PLC, the world's second-largest miner,
said on 10.18.06 that third-quarter refined copper production
fell 15 percent after the company shut down a smelter at a
mine in Utah.
Companies. The companies that are listed are worthy of watching
and might be worth buying in on opportunity (i.e. at a better
price), if you believe the news on future potential. 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
CEO Eric Schmidt joined the Apple board of directors in Oct.
2006. Very positive for the long term. Former CFO Fred Anderson
resigned from the Apple Board on 10.4.06, due to the options
backdating scandal. On November 12th, Apple hired Donald J.
Rosenberg, former SVP and general counsel of IBM, to join
the company as its SVP and general counsel, reporting to Apple
CEO Steve Jobs. (Hmmm… extra firepower in the legal department.
CFO resigned… Are you connecting the dots?) The internal investigation
revealed that Steve Jobs did NOT directly benefit from any
back-dated options, but that he "was aware that favorable
grant dates had been selected" according to a company
press release. The board at Apple is standing behind Jobs,
but the Los Angeles Times put a scathing article on the scandal
on the cover of its paper January 3, 2007. More ink could
follow. The stock could be negatively affected in the short
term. The popularity of the iPod and the dominance that Jobs
is gaining with his alliances with Disney and Google should
keep Apple at the top of the technology performers over the
next few years at minimum. We're just waiting until January
15, 2006, to see if any more headlines on the options backdating
scandals spook investors into selling.
the article, "Gap's Inc(RED)ible Campaign," from vol.
1, iss. 12.
dropped to $573/$580 range on 9.15.06 causing losses for most
gold mining stocks. Any troubles in the already tight metals
market, or investor panic over inflation and terrorism could
send gold prices even higher than they currently are (which
has been happening all year). This has traditionally been
one of the best performing gold companies. The Glamis M&A
went through on 11.13.06. ]Gold was back up to $635 on 11.29.06
and traded for $617 on 12.17.06.
largest software company. $31 billion in cash. Launched Zune
on Nov. 14, 2006 to compete with iPod, but iPod sales are
at No. 1 & 2 slots on Amazon's bestsellers list with a
4 star rating (out of 5 possible), whereas Zune weighs in
at 55, with an average customer review of 3 stars. Great blue
chip for your long term portfolio. Trading at a 52-week high,
so waiting for a better buy-in opportunity.
Off Stocks List:
Companies (Cooling Off List):
Verisign and Yahoo.
Off Stocks (that may be in Profit-Taking Range). Note: We
may look to add some of these companies to our Hot News list again,
if the price point should become attractive and if the outlook
for the company improves. The companies listed in bold have recently
been added to this cooling off list and/or may be currently poised
for a continued decline in value. Investors who have them in their
portfolio should read the recent news and consider whether it
is time to sell and take profits, dump losses, short the position
and/or simply weather the storms, while keeping the company in
their long-term portfolio. At any rate, always consult your certified
financial partner before making adjustments to your portfolio.
(The stocks on this chart are expected to go down in price.)
when added to Cooling Off List
buy into the hype that airlines are "doing better."
Read the article, "$72 Oil Will Sink Airlines,"
in vol. 3, issue 7. American Airlines' financial obligations
surpass $17 billion, including $5.4 billion owed to pension
plans and other post retirement benefits (which is close to
AMR's $6.80 billion dollar market value). American Airlines
has such a strong brand, and so few investors are aware of
the depth of their debt, that AMR tends to run up on any good
news in the sector. It's not a slam-dunk short or put. Competition
from low-cost carriers and competitors that have gained cost
advantages through the bankruptcy reorganization process remains
a significant challenge. Southwest became the largest domestic
carrier for the second month in a row, in September 2006,
carrying 7.5 million passengers that month, ahead of American
Airlines Inc.'s 7.3 million, according to the US Department
$1 billion on accounting fees related to the accounting scandal.
Fannie Mae also said it would miss a regulatory deadline Wednesday
for filing its financial report for the third quarter of 2006.
The company hasn't filed an earnings statement since late
2004, and the NYSE has given FNM a deadline of 3.15.07 to
file the 2005 annual report. If it fails to file the report,
the company could be delisted. And yet investors are still
in to the tune of $58.44 billion…. Are you? According to the
AP, "Maintaining strong asset quality position will be
a challenge for Fannie Mae, given the recent weakening of
housing values from the very strong levels seen over the last
few years." Standard and Poor's has a negative outlook
on Fannie Mae.
the article "Faded
Blue Chips" in vol. 3, issue 8. According to
Standard and Poor's Report on Pension Plans (6.06), GM owes
-$50 billion in pensions and other post employment benefits
(OPEB). General Motors' market capitalization is $19.85
billion, and last year the company lost over $10.95 billion.
With a debt equity ratio of 3.85, most investors are probably
unaware of the fact that GM has financial obligations that
exceed the value of the corporation by over 4 times. For
more information, please read the "Wow Dow! Or NASDAQ
Now?" article, in vol. 3, iss. 11.
and CEO Bruce Karatz resigned under pressure Oct. 2006, after
SEC investigation of backdating options. He'll repay $13 million
to the company, however, his retirement package has not been
negotiated, meaning that his golden parachute could far exceed
the $13 million. Additionally, Karatz cashed out over $100
million in stock over the last two years. KBH missed filing
3Q report on time, due to SEC investigation into stock options.
KBH will have to restate results for fiscal 2005, as well
as the first two quarters of 2006, as a result of the incorrectly
reported stock option grants. Moody's Investor Service has
placed KBH on review status for a possible downgrade. The
concerns are: getting the 3Q earnings filed before 12.31.06
and maintaining liquidity in the face of a weak housing market
and being forced to repay debt obligations. KBH's debt/equity
ratio is 1.20. Read the article, "Rupert Murdoch, Nobel
Laureates and Top Real Estate CEOs. Find Out Where They Are
Investing," from volume 2, issue 5. In May 2005, we called
REITs a burnout sector, and the fallout should continue, with
high home prices, rising interest rates, people backing out
of contracts and rising inventory.
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 ‘05 to reflect the recall.
LifeCell's product is in high demand and sales are growing,
however the story on some of the unscreened and untested
tissue it received from Biomedical Tissue Services is not
over. Lawsuits have been filed by some plaintiffs who
unknowingly received products from Biomedical Tissue services
and the impact of those lawsuits is still largely unknown.
According to the Associated Press, the FDA shut down BMT
for not screening the tissue for communicable diseases,
among other violations. LifeCell has set up a testing
program for anyone who received the BTS donor tissue. LifeCell
has been named in "several" lawsuits related to
this matter, according to the earnings report filed on 10.26.2006.
"There can be no assurance that the level of insurance
maintained will be sufficient to cover the claims or that
the all of the claims will be covered by the terms of any
insurance." There has been at least $15.5 million in
insider sales by CEO, CFO and controller in last 12 months.
AlloDerm(R) Regenerative Tissue Matrix, increased 73% to
$30.3 million from $17.6 million a year ago. LifeCell has
a great product in high demand, but the potential fallout
of the unscreened human tissue could be more than most small
capitalization companies can take. Operating income for
the third quarter of 2006 increased 144% to $8.7 million
compared to operating income of $3.6 million in the third
quarter of 2005.
earnings on 12.5.06: Net income was $173.8 million, or $1.07
per share, compared with $310.3 million, or $1.84 per share,
last year. According to the earnings press release, "A
higher-than-expected number of buyers canceled their orders
in the latest quarter, and the company incurred costs from
walking away from some land it had optioned, or acquired
a right to buy." According to analysts, builders are
slashing prices to attract buyers. That is different than
"stabilization" of the real estate market, as
it weighs on profit margins. According to the National Association
of Realtors, the median price for a home sold dropped by
3.5 percent from a year ago, the largest year-over-year
drop on record. The number of contracts signed in Florida
and the Carolinas fell by 78%. Full year earnings are projected
to be in a range of $260 million to $340 million, or
$1.58 to $2.08 per share. In May 2005, we called REITs
a burnout sector, and the fallout should continue, with
high home prices, rising interest rates, people backing
out of contracts and rising inventory. Read the article,
"Rupert Murdoch, Nobel Laureates and Top Real Estate
CEOs. Find Out Where They Are Investing," from volume
2, issue 5.
following companies were taken off of the Cooling Off list effective
10.16.06. Verisign (+15%). IMClone (-11%). Yahoo (-28%). (The
cooling off list anticipates that a company will lose share price
note: NataliePace.com does not act or operate like a broker. We
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