- Wind Power: Not Just Hot Air.
By Natalie Pace. Includes a Wind Power Stock Report Card.
- Green Skyscrapers and Solar
Louvers. By Natalie Pace.
Featuring the winner of the 2007 Solar Decathlon, platinum
and gold LEED Manhattan skyscrapers and paraffin microcapsules.
- 12 Green Tips For Your Home.
. Easy. Easy. Easy. Beautifies your electric bill (and
- Envision Solar CEO Robert L. Noble on Solar Carports, the Silicon Shortage and
the Hottest Solar Companies on Wall Street.
- The Feds' Big, Fat Rate Cut. By Kassie Welch. Why lower discount
rates don't mean lower mortgage rates.
- Foreclosures are Lower Than You Might Think, Despite
the Histrionic Headlines.
Q&A with mortgage loan specialist Kassie Welch.
- A Shattered Peace.
By David A. Andelman. After World War I, the world's representatives
met in Paris, where they engaged in tough debates and
hard partying. Their many errors, according to Mr. Andelman,
ultimately led to crises from Iraq to Kosovo and wars
from the Middle East to Vietnam.
- Top 10 Reasons to Renew Your Subscription to NataliePace.com
(Clean energy is the top performer on Wall Street!)
- Are You a Zillionaire or a Cranky, Rushed, Overworked
Chellie Campbell, author of Zero to Zillionaire.
- Ninjas Take a Toll. By
Paul Woods, president & CEO of Odyssey Advisors, LLC.
The stock market goes bungee jumping in the third quarter.
- Prevent the Pack Rat Syndrome.
By Michael Iachini, director, mutual fund research, Schwab
Center for Financial Research.
- Ask Natalie:
Premium Subscribers Parade Their Favorite Companies for
a Royal Review. With questions on Hoku and Primus Telecommunications.
- Subprime Squeezes Speculators (not Homeowners)
By Natalie Pace. Includes my Hot News on Cool Stocks list.
- NataliePace.com Calendar:
Don't Miss President Bill Clinton when he keynotes the
GreenBuild Conference in Chicago, or Natalie in person
at T. Harv Eker's Extreme Wealth Conferences in Las Vegas
and Atlantic City!
Wind Power: Not Just Hot Air.
Power Stock Report Card.
The craze for
renewable energy worldwide continues, as everyone scrambles to save
the world from pollution and global warming. It's on the top of
country agendas worldwide. As former British Prime Minister Tony
Blair said last week, at the California Governor and First Lady's
Conference for Women, the 13 biggest polluting countries create
more than 70% of the emissions, and those countries -- - four countries
in Europe, plus South Africa, Russia, Japan, China, India, Mexico,
Brazil and the United States -- are finally ready to sign an agreement
to reduce carbon-based emissions. Tony Blair said, "Last year
[at the G8 conference], we finally agreed that we should have a
new global deal and that everyone should be partnered. That can
be done this time around."
usage and harnessing the power of natural energy sources is so important
in California that former Governor Gray Davis decoupled utility
revenues from the meter. California now rewards companies like PG&E
when they save energy, instead of raking in the dough when
customers are energy hogs. By attending to the utility company's
bottom line needs, California legislators have ensured that the
power industry is now part of the solution. Investments in renewable
energy sources - particularly solar and wind - are flourishing in
the state, as a result, and current California Governor Arnold Schwarzenegger
has become the American spokesperson for Green on the world's stage.
solar incentives have made it the leading country worldwide in solar
energy (source: Milken Institute). Can you believe it? A dark, cold
country like Germany outranks California in solar energy! Imagine
how green North America could be if southwestern states and Mexico
were as forward thinking in their solar policymaking, and beyond
that, India and Africa.
Canada has locked
arms with California, embarking on a well-publicized partnership
to reduce carbon footprints. And in the global march toward sustainable
living, no renewable power source will be left behind. Each region
has a different renewable resource to exploit for the benefit of
everyone - from photovoltaic solar, to solar thermal, to wind, to
geothermal, to hydroelectric and beyond. (The Durst Organization
is seeking a platinum LEED rating on their new Manhattan skyscraper
without using one solar panel. See the article Green
Skyscrapers in this month's ezine for more information.)
continues to top the industries performing on Wall Street, beating
out energy in the 1st and 3rd quarters of
2007, with 10.07% clean energy growth in the 3rd quarter
of 2007 (when oil prices were hitting $80/barrel), compared to 9.39%
in energy. Our Hot News on Cool Stocks list has featured a number
of companies focused on renewable energy over the past few months,
including such top performers as Echelon (+39% since our August
2007 feature), World Water & Power (+203% since our April 2007
feature), Suntech (our 2007 Company of the Year) and more.
energy with smart meters, Suntech makes solar panels (in China),
while World Water creates solar solutions for agricultural and clean
water needs - from the crop fields of California to the deserts
of Darfur. But a recent visit to a community that is living off
the grid - Angel's
Nest in Taos, New Mexico -- was living evidence that
the power of wind can be just as important as these solutions. Wind
can be most effective at night, when solar energy flat-lines.
so much about solar, but what opportunities lie in the wind power
business in the United States and the world? The American Wind Energy
Association (AWEA) reports that The U.S. federal government approved
a further extension of the Production Tax Credit (PTC) through to
December 2008, giving significant incentives for the wind farm business.
So, if the federal incentives are in play, why aren't we hearing
more about wind? The answer may be - just as it was for solar for
decades - that what used to be just hot and cold air is on the brink
of becoming a major and explosive headline.
Texas and California
have taken the lead in wind power, followed by Iowa, Minnesota and
Washington state, according to AWEA
(American Wind Energy Association). The growth of popularity of
wind power, from a capacity of 9121 megawatts in 2005 to 12,634
megawatts by the end of the 2nd quarter of 2007, is quite
simply staggering. And there are literally thousands of current
and planned projects all across the United States, spread out across
37 of 50 states. One of the added side benefits is that our rural
farmers can sell power from a single, utility-scale wind turbine
at an average income of $3,000/year per megawatt or more, without
giving up an inch of cropland. (If you are a rural homeowner involved
in the subprime crunch, think about installing a wind turbine to
see you through?)
Now, some investors
might be tempted to invest directly in the utilities that are building
solar and wind power plants. However, that's a riskier play than
you might think. Green utilities will have to figure out a way to
earn revenue by saving energy, instead of reaping profits on energy
guzzlers. It could take awhile to develop new ways to bring money
in when there is no power going out. A handful of states to date
have offered strong rewards to the utilities for doing just that.
But until utilities are given some help across the nation with this
(with the states taking leadership roles in their own communities),
it is more likely that renewable energy will hurt the utility's
bottom line and cripple investor confidence.
Some of the
major utilities are already unprofitable. AES Corporation, which
operates one of the largest wind power farms in Texas, lost -$40
million last year. FPL Energy, which owns four out of the ten largest
wind farms in the U.S., is profitable, with increasing revenues
and an 8.8% profit margin, but who likes to purchase the slow growth/low
margin utilities industry at a 19.70 price to earnings ratio, especially
when the pressure on earnings will continue to fall as more demand
for renewables heats up?
Energy (PSD), Washington state's largest private utility and an
active purchaser of wind farms, agreed to be acquired and taken
private by a consortium of investors for $30 per share in cash.
Too late to capitalize on that opportunity.
For a pure wind
power play, then, consider manufacturers of the wind turbines, those
companies that install them, set up the invertors and work with
the governments and utilities to put wind on the grid. Europe has
a corner on this market, and a clear advantage, as wind power, nuclear
power and solar power have been part of the European renewable agenda
since the Kyoto Protocol was introduced, back in 1992. (Many countries
in Europe actually signed it in 1997.)
In this month's
Power Stock Report, I feature four international wind
power companies, based out of Germany, Spain and Denmark. Each has
an English version of their website available to investors, who
can buy their shares off the boards (OTCBB). One company in particular
stood out, as often happens, as a clear leader.
aligned with other alternative energy giants, including Suntech
Power, Kyocera and Sunpower, to form the Solar Alliance, an industry
group dedicated to keeping renewable energy at the top of the political
agendas and to keep subsidies flowing into the company coffers.
Conergy were up 71% in 2007 over last year, according to the 2nd
quarter earnings report. The PhotoVoltaic market, which Conergy
has a piece of in addition to the wind applications, is expected
to grow by 25-40% in 2008. Conergy's orders on hand equal more than
$1.2 billion EUR. According to Chairman and CEO Hans-Martin Ruter,
"These are not ten-year delivery contracts but rather hard
orders for systems and components, the great majority of which will
be delivered within the next 18 months."
What is as impressive
(and important) is that Conergy's working cash flow (as of the 2nd
quarter) was 70% of revenues, whereas competitor Vespas is limping
along with a cash flow equal to only 15% of revenues. While it appears
that Vespas has prevailed in the patent dispute with German based
Enercon, law suits are costly - both in executive time and money.
Conergy's cash flow could prove key in an explosive environment
where innovation and market position are essential to future success.
Conergy also has a syndicated credit line of $600 million EUR, which
"places Conergy on a solid financial footing," according
also partial to any German-based company, since Germany is leading
the world in solar, and additionally for the impressive showing
that the German solar team had at the U.S. Solar Decathlon in October
2007, winning first place, and being one of just seven teams to
generate more power than it used. But another promising development
in the Conergy strategy is the recent announcement of Conergy's
plan to build the largest windmill farm in Australia (New South
Wales). Even though this development is early stage and is awaiting
Australian Parliamentary approval, according to Forbes.com, it is
more proof that the wind is at Conergy's back (so to speak) in renewables
Note that Conergy
came into buying range this month when Forbes.com said it was in
"serious trouble" for forecasting that the income in 2007
would be a slight loss, instead of an expected 60 million euro ($85.9
million) profit. (Gamesa, Nordex and Vestas are trading at a 52-week
high.) The company will make its annual earnings announcement on
Nov. 12, but it looks as though investors have already sold off
in anticipation of bad news, putting Conergy into buying range.
in many areas, including revenue growth, value, location in Germany,
worldwide presence, the alliance with its peers (in the Solar Alliance)
and CEO respectability. That's not to say that Gamesa, Nordex and
(to a lesser extent) Vespas won't gain in popularity and enjoy increased
share price. Merely that wind power is still a whisper on the renewable
energy front, behind solar, and Conergy looks best positioned to
whip up the winds into a roar.
As of the printing of this ezine, Natalie Pace does not own shares
in Conergy. (She always purchases her personal shares in any company
at least three days AFTER articles are published. Check the Hot
News list for future updates on her holdings.)
Skyscrapers and Solar Louvers.
the winner of the 2007 Solar Decathlon, platinum and gold LEED Manhattan
skyscrapers and paraffin microcapsules.
outfitted with mini-solar cells and micro-capsules of paraffin in
the ceiling and walls that help to insulate your beautiful and fully-sustainable
home (that even powers your electric car). If Wow comes to mind,
you're not alone. On October 19th, 2007, there were twenty
teams from universities around the world competing for the best
and brightest sustainable home, but one team's innovative designs
were jaw-dropping -- in sleek beauty, simplicity of application
and energy efficiency.
competing universities relied upon more traditional sustainable
designs - green roofs and walls, brown-water irrigation systems
and discarded shipping containers -- the 1st place Solar
Decathlon home that was built by the German team from Technische
Universitat Darmstadt was an innovative collaboration
of architecture and engineering unlike anything the world has ever
the Architecture, Lighting, and Engineering contests. The Architecture
Jury said the house pushed the envelope on all levels and is the
type of house they came to the Decathlon hoping to see. The Lighting
Jury loved the way this house glows at night. The Engineering Jury
gave this team an innovation score that was as high as you could
go, and said nobody did the integration of the PhotoVoltaic system
any better. Darmstadt was one of seven teams to score a perfect
100 points in the Energy Balance contest (meaning the team created
more power than it used).
of Maryland took 2nd place and top honors in the communications
category (website, tours and brochures), while the University of
Santa Clara took 3rd place with high marks in all of
the comforts of life - including power, appliances and hot water.
The team from University of Illinois at Urbana-Champaign won the
contest for Market Viability and will be featured at the 2007
Greenbuild Conference in Chicago from November 7-9, 2007.
(Former President Bill Clinton is the keynote speaker at the Greenbuild
Conference this year, with General Motors as a platinum corporate
What the Solar
Decathlon highlights is that, clearly, sustainable living is a collaborative
effort between engineering and architecture. The teams that scored
the highest were equally weighted in talent in both arenas, and
that is exactly what is happening in green building all over the
world - not just at university competitions. Green is no longer
just about throwing a half dozen solar panels on the roof. Green
means inviting scientists, architects, visionary kooks, engineers
and discarded candles into a think tank to watch chaos light up
and take on new (and more sustainable) forms.
Anyone who is
knee-deep in green is rapidly discovering that sustainability applications
are site specific, and, in the words of PG&E SVP Nancy McFadden,
conservation is more important and valuable than solar, wind, hydro
or geothermal. Solar panels aren't as efficient in Manhattan as
they are in Los Angeles. In the Big Apple, PV (photovoltaic) panels
take a beating from the elements and the sun's pathway is narrowed
by the skyscraper landscape. Thus, "blue roofs," with
rain water cisterns, ice farms, and, potentially, water turbines,
help to power and conserve energy in mid-town skyscrapers that are
located along the wet, Eastern seaboard. The Southern California
builders are getting creative with solar as roof tops, awnings,
parking structures and now, thanks to Technische Universitat Darmstadt,
even louvers, but have little use for collecting rain water in the
dry Southern California landscape.
Stars of Green Building:
are just a few examples (and links) to some of the world's most
creative and interesting cutting-edge Green design, architecture
and engineering, from all across the nation.
Taos, New Mexico
Nest, a fully sustainable home in Taos, New Mexico,
insulates the 2-story structure with a rain forest, which also serves
as the black-water filtering system of the estate. Air-to-water
machines convert the indoor humidity into drinking water. The institute-like
estate runs off the power grid with solar, wind and hydrogen power,
recycles water, and houses an eclectic group of scientists, contractors
and engineers who claim that they can reduce the cost of photovoltaics
by a factor of eight, turn dirt roads into concrete with enzymes
that are safe enough to drink and power skyscrapers on water turbines.
None of these
prospective products are fully operational yet, but one of the most
promising of the WorldsNest innovations currently seems to be the
enzyme roads, which do indeed bind soil into a concrete-like hardness,
using only soil stabilizing enzymes. The road, which had recently
been bladed before my visit in October, was so compact that stones
were sheered cleanly, without getting pulled up from the soil. Since
most of the cost of roads comes from prepping the soil and rehabilitating
warps and sinkholes caused by water damage, having a foundation
that gets harder with rain could be an enormously efficient, cost
effective, green solution.
A second great
achievement at Angel's Nest is the integration of insulation, energy
conservation and natural lighting. The front side of the building
is floor to ceiling windows, while the backside has no windows and
is a shield against the wind and elements, trapping in hot air in
winter and circulating air flow in the summer.
does not yet feature all of the cutting edge green technology
applications that their scientists boast of owning the patents on,
the founders of Worldsnest.com,
Robert Plarr and Victoria Peters, are living examples of green visionaries
who are walking the walk. Their home/living institute is a beautiful
haven with delightfully bright and warm yoga studios, and even a
floating bed, which proves that reducing your carbon footprint doesn't
mean you have to give up the designer shoes! Buy Robert and Victoria's
book to learn more about their Secret
Universitat Darmstadt's solar-paneled louvers were an
amazing feature of the home, but the team didn't stop there. The
louvers were capable of being pulled back, like French doors, or
shuttered for privacy and energy conservation. The slats themselves,
which were imbedded with sleek, small solar panels, are automated
to track the sun for maximum efficiency. Paraffin microcapsules
offered an efficient and lightweight means of storing energy within
the walls of the home. The innovations of this home could (and should)
start turning up in the Home Depots and Lowes of the world soon.
of America Tower at One Bryant Park: the
world's most environmentally responsible high-rise office building.
Dursts, the skyscraper visionary greenies who are holding the high
ground in Manhattan, have almost completed their second monumental
achievement in sustainable urban office buildings, after having
built the world's first green skyscraper, at 4 Times Square (the
Nasdaq building) back in 2002. The Tower at Bryant Park sports all
the latest in innovative sustainable design, including the world's
first "blue" roof, complete with cisterns that capture
rain water for irrigation of the plants and use in the toilets.
When the Bank of America team moves into the first 34 floors next
May (2008), each person will have personal climate control settings
and will breathe filtered indoor air that is cleaner (by far) than
the air outside.
Bank of America Tower at One Bryant Park: the world's
most environmentally responsible high-rise office building.
(© Durst.org 2006)
Durst Organization and Bank of America are going for a platinum
LEED rating on their skyscraper - all without one solar panel.
Note: LEED, or Leadership in Energy and Environmental Design,
is the industry standard for green building, and was developed
by the U.S. Green Building Council. The top rating is platinum,
then gold, silver and bronze.
systems incorporated into the design include:
Blue Roof - Cisterns collect 33,000,000 gallons of
rain water annually, which is treated and then used to irrigate,
flush toilets and cool towers. Savings: 10,300,000 gallons
saved per year, with a 45% reduction in water costs.
Ice Farm (48 tanks): 8.5 megawatt co-generation plant,
which allows the tower to stay off grid utilizing compressed
Local Building Materials. 40% of the building materials
are purchased from within a 500-mile radius. This supports
local entrepreneurs and saves on gas and CO2 emissions.
Blast furnace slag (a byproduct of steel) is re-used
in concrete for cement.
Floor to ceiling glass saturates the building with
natural sunlight, cutting down on the use of artificial lighting.
Natural shading at the top and bottom of the glass panels
reduce glare for computer operators.
Continuous commissioning: annual maintenance checks
ensure that operations are running properly and at optimal
One Bryant Park sport even one solar panel? According to Helena
Durst, solar has a 25-year payback in Manhattan, with a 20-year
life expectancy. (Perhaps someone should be lobbying the New
York governor for stronger solar incentives?)
at One Rockefeller Park:
Park City waterfront condominium high-rise received a Gold LEED
rating. The urban flats are currently on sale starting at just under
a million for a one bedroom, to almost $3 million for a 4-bedroom/3
bath with views of the Hudson River and the Statue of Liberty. Green
features of the building include:
2. Wood from forests that are certified renewable or responsibly
3. Special paints, adhesives and sealants
4. Glass curtain wall: views and daylight without electricity
5. Geothermal wells heat/cool the lobby spaces
6. Water-saving faucets and dual-flush toilets
7. Natural gas for electricity
8. Triple-glazed "blue technology" curtain wall
9. Storm water run-off irrigates green roof - reducing "heat
10. Storm water is also used in mechanical system cooling tower
11. Programmable thermostats and carbon monoxide censors
in the parking garage
and the first Wired LivingHome
getting a prefab, architecturally significant, green home that is
completely wired and goes up onsite in one day. Hard to believe,
but true. The LivingHomes
team builds the home in a factory, and then ships it to the site
in under a dozen modules.
living room of the first prefab green LivingHome --
platinum LEEDS home.
LivingHome, which is available for tours in Santa Monica,
California, was the first platinum LEED rated home ever.
Whole Foods junkies, Patagonia-wearing yoga lovers, hybrid
owners and Wi-Fi Skypies should be on cloud nine with this
beautiful home. First movers pay a premium, but could end
up with a home that will be beloved and renowned throughout
time, much as the Case Study homes from the 1950s are today.
Be the first in your neighborhood to own one, or better yet,
contact the team and build your own LivingHomes community.
information, read "Green
and Fab," from volume 4, issue 10.
Rendering Courtesy: BP.com
House is a "living laboratory" that uses green, eco-friendly
innovations to give consumers a little better station experience.
Located at the corner of Olympic and Robertson in Los Angeles,
this station requires less water, wastes less water and pollutes
less than a typical gas station. Other features include:
glass in the glass tiles
2. Solar panels
3. Green roof (living plants insulate and take CO2
out of the air)
sinks and toilet seats
(made with 60% post-industrial aluminum scrap)
5. Cell phone drop off (recycle your old cell phone
at the station)
6. Low VOC "volatile organic compounds" paint
is better for breathing
more, including how to take your class on a field trip to
Helios House, at TheGreenCurve.com.
Nevada Solar One. Photo courtesy of Solargenix Energy.
Solar One, the
world's 3rd largest solar power plant, is located in
Boulder City, just outside of Las Vegas. Nevada Solar One utilizes
concentrated solar collectors - parabolic mirrors - with receivers,
heating oil and steam turbines to generate enough power to light
up over 15,000 households. Generating 130 MW hours/year, Solar
One Nevada is a full-scale
power plant. The carbon footprint reduction is, reportedly, equivalent
to removing 17,000 cars off the nation's roads.
12 Green Tips For Your Home.
Easy. Easy. Beautifies your electric bill (and our world).
your cell phone charger from the socket. This alone could
save the planet - or at least Delaware (the nation's friendliest
state for business). The charger keeps charging and charging --
even while the phone is chasing all over town with you, buzzing
away with text messages. If you knew how much of your electricity
bill was this one silly waste, you'd unplug immediately - as soon
as it was charged!
Naked! In the winter, turn the thermostat down a few degrees
and wear a sweater inside. Throw an extra blanket on the bed. In
the summer, go naked (just kidding, wear a bikini at least). Be
sensitive that a few extra degrees saved in every household amount
to a massive reduction in energy statewide. In fact, according to
Cynthia Bryant, California Governor Arnold Schwarzenegger's Deputy
Chief of Staff and Director, in 2004 alone, California saved over
1.3 trillion kilowatt hours, for a cost reduction of $98.7 billion,
after a statewide campaign to conserve energy.
Water: Turn the faucet off when you brush. Take shorter
showers (or partner up). Be conscious that water is a precious resource
and piping it in uses up valuable energy. Proactive homeowners could
look into brown water systems to reuse their shower and sink water
for watering plants.
Compact Fluorescent Lamps: Replace your old light bulb with
this energy-efficient, long-lasting bulb. More energy, with less
waste and less cost because you replace them once in a blue moon.
Windows. Darken and lighten electronically. In summer, darker
windows reduce solar heat gain and still allow visible light to
pass through. In wintertime, the windows can be left clear to brighten
and warm the house.
Keeping out unwanted heat and cold means that you don't have to
be an energy hog to be comfortable. A rudimentary way of doing this
is with curtains and shading in the summer and keeping windows and
doors closed in the winter.
Windows. (low-e) coatings are thin, transparent coatings
of silver or tin oxide that permit visible light to pass through
but also reflect infrared heat radiation back into the room.
solar energy and day lighting. Considerable amounts of solar
energy can be captured for desired heating (while avoiding unwanted
heating) without active mechanical systems, simply by properly designing
a home, with respect to the sun. South-facing windows can let in
a lot of heat from winter sun, while large overhangs keep out that
solar heat in summer.
materials. If you are remodeling, consider that it takes
energy to change a solid to a liquid or a liquid to a gas (for example,
melting ice or boiling water), which can be yet another way to heat
and cool without juice from the grid. Conversely, there is energy
embodied in the liquid or gas that can be released as heat energy
when it liquefies or solidifies. Excess hot water or exhaust air
is routed through the phase-change material, cooling the water or
air and melting the material. When heat is needed, cool water or
intake air is run through the phase-change material, absorbing heat
from the solidifying material. (This application is being used in
One Bryant Park's ice farms as well as the Universitat Darmstadt's
2007 Solar Decathlon winning home, with its microcapsules of paraffin.)
or solar electricity. Traditional building components can
now be replaced with PV materials. BIPV materials are used for vertical
facades, roofing systems, and awnings for parking and shading structures.
Cost is thereby offset by not having to purchase the overhang materials.
thermal collectors. Solar energy is used to heat water.
Apricus was the solar water heater of choice at the Solar Decathlon.
Structural Insulated Panels. Pre-fab foam insulated panels
make superior insulation easier to install.
For more information
and links to green products, be sure to read the article, "Reduce
Your Carbon Footprint!" from volume 4, issue 10.
Solar CEO Robert L. Noble,
Solar Carports, the Silicon Shortage and the Hottest Solar Companies
on Wall Street.
products, applications and companies are sprouting up as prolifically
as Internet stocks pre-Y2K. At the 2007 Solar Conference in Long
Beach, California, over 200 speakers and 10,000 visitors gathered
to showcase all things solar. One of the newer companies in this
space is Envision Solar, a privately held company that wants to
lead the world in installing solar carports. I spoke with CEO Robert
Noble by email in October 2007, discussing the solar marketplace
and his market edge.
company currently has the best product? (Does SunPower have
the best solar panel? Or Trina? Or Suntech?)
Robert L. Noble, Founder/CEO, Envision Solar: Like so many
things in business, the short answer is, "It depends."
Most of the polycrystalline module manufacturers are producing very
high quality products, but are using the same raw material providers
and same manufacturing equipment - without brand recognition and
very high level quality control, many manufacturers may be forced
to compete on price, leading to a so-called "race-to-the-bottom."
As a side note, you may want to see past issues of Photon International,
if you'd like a review of global module producers / products today.
Which company is establishing a niche in an area with great potential?
(Carmanah's solar LED lighting for signs, airports, etc?)
Maybe we're biased, but we think we're approaching the niche of
parking lot solar arrays with a unique view of the world - there's
a staggering amount of unshaded parking in the U.S., not to mention
an enormous potential for charging stations for plug-in hybrid electric
vehicles, which many of the major auto manufacturers are working
Where are these companies going to get the silicon? And
is this one way where a company can edge out another — by securing
a steady supply without disruption? (I'm thinking of the problems
Evergreen had with MEMC Electronics last year.)
Right now, all the major silicon producers are scaling up, and really
started doing so around 18 months ago. Since we're working
exclusively with Kyocera for our projects today, we're pretty well
insulated from some of the shortages, but in listening to the manufacturers
last week at Solar Power 2007, and trying to "read the tea
leaves," I would speculate that there should be some alleviation
in the short term supply issues in the next 9-12 months. In the
short term, it will be important to have an uninterrupted supply,
but in the long-term, innovation will be key.
Which company do you think is best poised with cutting edge and/or
disruptive technology or break through in the industry? (With
rapid innovation, the company that comes up with something 10% better
could secure an increase in business that is 10X that of the competition.)
Disruptive innovation is a difficult thing to predict accurately,
but the venture capital industry has placed hundreds of millions
of dollars on a wide variety of solar technology companies in recent
years. Again, from what we've heard at Solar Power 2007, even some
of the traditional polycrystalline manufacturers believe they can
produce grid-parity electricity by 2012, which is awfully exciting.
There are vast tracts of land available for solar deployment - we
need look no further than our parking lots, building facades, and
rooftops in the search for clean energy.
To learn more about Envision Solar's, Envision Solar Trees and LifePorts,
go to EnvisionSolar.com.
The Feds' Big, Fat
lower discount rates don't mean lower mortgage rates.
many calls and emails regarding the Fed lowering rates. One
person called today asking for a mortgage at 4.50% and said, "The
news says the Fed cut the rate to 4.50%. That's what I want.
If you won't give it to me, that's fine. I can find
a lender who will!" Some people do not believe it when I try
to explain reality.
What's worse: You can bet you will hear mortgage radio ads within
the next week saying: "The Federal Reserve has cut rates! Call now
and get the new lower mortgage rate!" There is no shortage
of mortgage companies out there who exploit the confusion of the
general population when it comes to marketing efforts. Now
more than ever, it's critical to work with a qualified Mortgage
Consultant, like myself, with over 20 years experience. I'm
here to help during this crucial financial time in history, where
there is no certainty how severe the current credit crisis may be
or how long it will last.
how much confusion there is about what the Fed is and what they
actually do. Below are an explanation and a clarification
of the impact of Wednesday's announcement. It's a bit long,
but worth reading if you'd like to understand more about how mortgage
interest rates are priced.
the Federal Reserve's monetary policy committee decided to cut the
overnight borrowing rate between banks (fed funds rate) by 0.50%,
from 5.25% to 4.75%. This was the first rate cut since June of 2003
and the largest since November of 2002. The policy committee
also cut the discount rate (rate for bank loans directly from the
Fed) by 0.50% from 5.75% to 5.25%. This follows an intermeeting,
discount rate cut of 0.50% on the 17th of September.
The meat of the statement is contained in the following excerpt:
"Economic growth was moderate during the first half of the year,
but the tightening of credit conditions has the potential to intensify
the housing correction and to restrain economic growth more generally.
Today's action is intended to help forestall some of the adverse
effects on the broader economy that might otherwise arise from the
disruptions in financial markets and to promote moderate growth
This cut by the Fed has zero direct impact on mortgage rates.
As noted above, the rates controlled by the Federal Reserve
impact the cost of funds to banks. This affects rates on such
things as equity lines of credit, credit cards and other Prime Rate
indexed short term lending programs.
rates are determined by the bond market. Mortgage
lenders do not obtain the funds they lend out on mortgages from
the Federal Reserve. They obtain the funds through selling
bonds. These "Mortgage Backed Securities" can be purchased
by any investor through most any investment banker or broker.
A bond is a fixed income security. This means you pay a certain
price for the bond when you purchase it and at this price you are
guaranteed a set rate of return. So if you pay $95 for a 10
year bond that is yielding 4.5% you are guaranteed to receive a
4.5% return on your $95 every year for 10 years and at the end of
this time period you will receive your $95 back. Thus the
rate of return you will receive is fixed: a fixed income security.
The price on bonds changes constantly, just like individual stock
prices. Bonds are traded on the open market continuously just
like stocks. The price on a bond and the yield move inversely.
So as the price on a bond goes up... the guaranteed rate of
return or yield goes down. As demand for a bond decreases,
there are less buyers the bond issuer must pay a higher rate of
return to attract buyers and thus the yield increases.
The key factor that drives prices on bonds is INFLATION, or in general,
the increase in the costs of goods and services. Inflation
means it costs you more to live.
Since the rate
of return on your bond is fixed, how much your return actually helps
your buying power in the real world is impacted by inflation. Let's
say you have a bond that is paying you 5%. If the inflation
rate is running at 2% per year then your bond is giving you a return
in real buying power of 3%. But if the inflation rate jumps
to 4%, suddenly your rate of return in real buying power is reduced
to only 1%. So your bond is not worth as much when inflation
This is why
bond prices and yields are primarily impacted by economic data related
to inflation. Bond investors only care about a Fed rate cut
in the context of how they view it impacting inflation moving forward.
This is the key point! Again, the Federal Reserve
has zero direct control over mortgage rates. Bond yields
and thus mortgage rates are determined by bond prices which are
driven by inflationary perceptions on the part of major bond traders!
Not only does the Federal Reserve have no direct impact on mortgage
rates, but often a Fed move on the Fed Funds rate or the
Discount Rate can have the exact opposite effect on mortgage rates.
This in fact is exactly what happened with the bond markets
reaction to the Fed rate cut on September 18th.
The bond market (I am using the benchmark 10 year US Treasury bond
for example as most mortgage backed securities track in line with
Treasuries) actually sold off slightly in reaction to the news of
the first Fed cut. 10 Year Treasury bonds closed down 2/32
with yields up slightly. As I type this (3:06 pm on the 19th)
10 Year Treasury bonds are down a whopping 18/32 and yields are
Last month, this yield hit a low of 4.32%. So as you can see, bond
yields actually increased by .23 despite the Fed cutting by .5%
in September. Why? Because the bond market is
looking forward and is focusing on inflation. Oil prices are currently
at all time highs and commodities prices are also trending higher.
Both are inflationary.
If bond traders
think inflation going forward could be a concern then bond prices
will drop, yields will rise and thus mortgage rates will rise. Even
though consumer price data released today indicated good news on
the inflation front, bond traders are being extremely cautious and
exhibiting some fear that reduced economic growth may not forestall
increasing longer term prices.
I hope this has given a general explanation of why the Fed does
not control mortgage rates and how they actually work. This
does not mean that the Fed action will have zero impact on mortgage
rates. Hopefully, it will. If the Fed move can stimulate
the economy and prevent a recession and at the same time reduced
growth results in slackening price pressures and lower inflation
then the bond market may be content and we could see mortgage rates
hold fast or decline.
But keep in mind that mortgage rates right now are extremely
low. There is not much if any room for rates to really
decline. Long term fixed rates are currently within .75 of
all time lows seen in 2003 (shorter term rates thus adjustable rate
mortgage rates are well off all time lows and thus are not as attractive
currently). I think it is very unlikely that we will see inflationary
pressures slacken to the point where bond yields will decrease significantly
from where we are.
If oil drops to $40 a barrel and both consumer and producer prices
decline substantially then we could see bond yields come down. But
that's certainly not something I would gamble on!
real factor with regard to refinancing is the loan program.
If you're currently in an ARM (Adjustable Rate Mortgage),
now is the time to refinance into a longer term ARM (10 years is
what I would recommend) or a 15 or 30 year fixed, if you can afford
it. This is especially the case for self-employed
individuals who utilize stated income loans since many
of these programs are disappearing. Just because you were
able to buy your home or refinance in the past does not mean the
loan program is or will be available in the future.
of buying homes, interest rates are still very low. Even
if the real estate market continues to soften, more than likely
interest rates will rise resulting in the same or higher monthly
mortgage payments. Meanwhile, renters lose the tax benefit
of home ownership, which is writing off the interest portion of
their mortgage payment as well as the property taxes. This can really
add up! So, be sure to factor in low interest rates and tax savings,
in addition to the home price, when you are deciding your best buy-in
information, you may reach Kassie at KassieWelch@aol.com
or visit her website at www.DreamHomeOwnership.com.
Foreclosures are Lower
Than You Might Think, Despite the Histrionic Headlines.
with mortgage loan specialist Kassie Welch.
35% of people
who own a home, don't have a mortgage and 93.48% of all people who
do have mortgages are paying on time, according to Douglas G. Duncan,
Ph.D., Chief Economist, Mortgage Banking Association. Wonder what
other important details are being twisted into the hysterical headlines
you've been so worried about? Read on as NataliePace.com subscribers
chat with mortgage loan specialist Kassie Welch, and reflect on
recent data provided by the Mortgage Banking Association.
loved your 5 Tips For Borrowers who are in danger of losing their
Thank you. It's
important that people know what their options are so they can either
keep their home or save their equity if they can't find a loan that
works for them.
Note: If you missed that article, you can read Kassie's article
Loans in the vol. 4, issue 10 ezine.
Has the Fed's
rate cut helped out?
Fed lowering the discount rate didn't help first trust deeds since
the cut stimulated the stock market, detracting from bond investment,
so mortgage rates actually jumped up. First Trust Deeds' pricing
is based off of the 10-year bond, and seconds are tied to prime.
I have an article I wrote detailing this, in this month's ezine,
that you might want to read.
What do you
anticipate going forward, based upon your knowledge of seasonal
trends, as well as the current pace of home buying?
First, I need
to qualify that I only track the Los Angeles market, which is where
I'm based, so my comments on the current market are area specific.
As trends go, this time of year things tend to slow down. Most people
don't want to move/relocate during the holiday season. Generally,
those with their homes on the market really need to sell. Could
be because they've already purchased a new home, are relocating,
or an illness/death, etc.
So, in general,
would you say that the annual trend in real estate is that winter
is more of a buyer's market?
In fact, deals can be available if you're willing to buy/move when
horror stories of price drops throughout the U.S. For instance,
the National Association of Realtors reported that the median price
for existing single-family homes dropped again in the 2nd
quarter of 2007 for areas like Las Vegas (-3.6%), Cleveland (-7.1%),
Daytona Beach, FL (-8.3%) and Sacramento (-6.3%), while other cities
saw sharp rises in prices, including Salt Lake City (+21.9%), Salem,
OR (+16.7%) and Glen Falls, NY (+10.7%). In general, nationwide,
prices were off -1.5%, with only the NorthEast showing overall,
but modest, regional gains (.7%). What are you seeing in Southern
As for the real
estate market in Los Angeles, it's holding. Major lenders come out
with distressed and declining areas and LA County is not on the
list. What we're seeing here in LA is the market stabilizing, which
is a relief to many buyers who got out of the game because the bidding
wars were pushing up prices.
I know this
isn't the case in other areas of California, like San Diego, Bakersfield
and the inland empire. I also wonder how the fires will affect that
declining market since natural disasters tend to drag down values.
Note: in Los Angeles, prices were up 2.9% in the 2nd
quarter of 2007, while San Diego posted flat performance of .2%,
according to National Association of Realtors.
And the cover
of the LA Times had a lot of flattened homes in the San Diego
I heard yesterday
that 950,000 people were evacuated, but I don't know how many will
actually end up displaced.
discussing seasonal trends, but we do have to consider the larger
annual trends, however, before going so far as to say that this
year's prices will hold strong in the next 3-5 years. According
to the National Association of Realtors,
real estate returns are 6.6% annualized (on average) for the past
38 years (since 1969, when the organization began tracking returns).
This includes some dismal years, and some years of rocket ship returns,
as we saw prior to 2006.
Being in the
business for over twenty years, I've seen lots of market fluctuation.
I've watched values go up as well as down. The irony is that when
values are down, interest rates are usually up, making the payments
often times higher when buyers wait for the "deal."
estate is more than an investment for most people. It's not only
the roof over your head, but it's your HOME. Regardless of
market conditions, there are always people who need/want to own
their own home, whether it's for the tax benefit, housing needs,
or just that next step in life. I've weathered changing markets
because I always put my client's needs first and take their entire
financial goals into consideration.
I was wondering
about people trying to fix their subprime mortgages. It seems to
me that they go into these products because they couldn't afford
the fixed rate payments at the time. But now that the interest rates
for the adjustable rates have gone past the fixed rate, it would
be almost impossible to refinance. Also, given that qualifying is
now so hard, is there any hope for all of these people?
It really depends
upon the situation. If "hope" equals low payments like
they're used to, possibly, if they're willing to go into another
negative loan. If not, rates and qualifying are high and more stringent.
Do you see
the mortgage companies renegotiating on the notes now in order to
avoid more foreclosures?
are going to establish units that work on renegotiating loans. The
modifications that I've been hearing about, however, are also at
market rates. The only difference is that the fees are lower for
the modification versus a refinance. The problem with renegotiation
is that most of the companies servicing the loan don't actually
own the loan. That makes them the middle-man who has to go back
to the "investor" for any modification, which is challenging.
I suspect that until a particular investor takes a big hit in foreclosures,
that they'll be less likely to renegotiate.
rates are very high in comparison to where they've been. (We've
been in a boom and who would foreclose when they could sell their
home at a profit?) Overall, however, foreclosure rates are moderate
Note: Historically, about 1 percent of all first and second mortgages
have gone into foreclosure, according to RealtyTrac.com. In a national
delinquency survey conducted by the Mortgage Bankers Association,
in the 2nd quarter of 2007, foreclosures were at 1.40%,
while delinquencies were 5.12%.
be a typical offer by a loan company to renegotiate? Because it
seems to me that these new homeowners were barely able to afford
the original payment. But what I see as the salvation here is that
real estate, given 5-10 years, does recover nicely. If only the
loan companies have the ability to see this and work to keep people
in their homes rather than do the 1930's thing and take back all
these homes. Actually, we're talking about Wall Street trying to
come to a solution since they would be the major investors. Correct
As for typical
offers, I haven't heard about one. I do know from past experience,
when I was an Auditor at a direct lender, that renegotiations are
generally done for a short period of time. The assumption is that
someone is experiencing hardship, which is affecting her/his ability
to pay, but that the hardship should pass. I also agree that it
will probably take 5-10 years for the market to recover and appreciate
of mortgage companies refused to negotiate on some former clients'
homes and they also refused to accept a lower price on new buyers'
(short) and now they are holding the homes and trying to sell them
a good $50,000 below what offers were brought to them months ago.
I don't know what they are thinking…
that the government will jump in with some "savior loans"
via FHA, but these loans all require full documentation. This doesn't
really help the typical homeowner who's in trouble now, who more
than likely bought with a stated income product. Short sales are
tough, too. Again, until the lenders feel the losses via foreclosure,
they'll probably hold off taking any unnecessary losses. Renegotiating
temporary buydowns is what I'm hearing about now.
Note: Savior loans, which, if offered, will most likely be held
through Fannie Mae and Freddie Mac, are capped at $400,000, which
doesn't do a lot of good in the Southern California marketplace.
What we need
is a solution that encompasses the 5-10 year time period, such as
an equity share.
Kassie: I think
direct lenders that are holding the actual paper they're servicing
are going to be more apt for creative solutions, mostly because
they'll be in the position to do so. If you give me more specifics,
I'm better able to comment. I also have a few examples myself.
One recent call
was from a family (6 adults) that lives together in a 6/4 house
with a negative amortization loan. Payments are incredibly low at
$1900, but the negative amortization loan is getting ready to recast
(usually at year three when the homeowner hits 115% of the original
loan amount, if they made only the minimum payment). The lender
offered them a jumbo 30-year fixed at 6.5% and no fees, which is
excellent, but this would basically double their payments. They
can't afford this, but where are six adults going to pay less to
Note: In terms of solutions for anyone really trapped in the subprime
squeeze, etc., you might check out the FederalReserve.gov
website. The Federal Reserve has an entire section devoted to helping
any real estate homeowner who is in trouble, and they are actively
working to make sure that the overall economy keeps working.
in the very big picture, there really aren't that many homeowners
who are currently in trouble, despite what the headlines are screaming.
35% of people who own a home, don't have a mortgage, and 93.48%
of all people who have mortgages are paying on time (source: Mortgage
would you ask if you wanted to renegotiate a loan? Are there things
to know so that you have the best chance?
I'd ask a lender
what their policy is for hardship cases, since those guidelines
are already in place. If your situation isn't hard case, like job
loss, illness, etc., ask about refinancing without fees.
a specific person in a bank that would be good to ask for when renegotiating?
What kind of questions or approach should you ask/take?
the collection department that's the first contact because hardship
usually implies you're already behind in paying. They'll let you
know who to speak with, if someone internally is available. Again,
the best chance will be with direct lenders.
you have additional questions for Kassie, you can contact her at
Also, be sure to check out her article on "Subprime
Loans," in vol. 4, issue 10.
A Shattered Peace.
was 1919, the First World War was over, and the world's representatives
gathered in Paris for the Treaty of Versailles, where they engaged
in tough debates and hard partying, and changed the course of history
to the present day. These events were fueled not only by world leaders
but by compelling players who later became the bold-faced names
of the twentieth century -- Ho Chi Minh, Allen Dulles, Lawrence
of Arabia, John Maynard Keynes, Chaim Weizmann, and even Elsa Maxwell.
The many errors committed by World War I peacemakers ultimately
led to crises from Iraq to Kosovo and wars from the Middle East
With a cautionary
message for readers today, Andelman shows how world leaders dismissed
repeated warnings from their experts and laid the groundwork for
a host of catastrophic events. Beyond the hard bargaining at the
negotiation table, there was as well a glittering, often chaotic
social whirl that accompanied and complemented the talks themselves.
Below is the story of the arrival on the international scene of
one of these players -- the so-called "hostess with the mostest,"
America's top partygiver of the 20th century, Elsa herself.
This is an excerpt
from the book, A
Shattered Peace: Versailles 1919 and the
Price We Pay Today. By David A. Andelman (Wiley: $25.95).
While the diplomats
were establishing their positions and studying the political landscape,
others were bringing their own unique and individual sensibilities
to the new Europe that was already beginning to emerge after the
First World War. A young Elsa Maxwell traveled to Paris as companion
of a twenty-nine year old Philadelphia mainline society divorcée,
Henrietta Louise Cromwell Brooks, fresh from an affair with General
John J. Pershing. Mrs. Brooks's goal was to land an eligible second
husband. She came home with a dashing brigadier general, at thirty-nine
the American army's youngest. His name was Douglas MacArthur. But
Miss Maxwell's goal was an even broader one -- to bring a new America
to Europe. As she wrote later:
exhilarating atmosphere of Paris during the peace talks. Every
day was like a sparkling holiday. There was an aroma in the
air as though a thousand girls wearing a wonderful perfume had
just passed. The city echoed to the music of bands welcoming
returning soldiers. Shops, theatres & cafés were
jammed with people who'd lived under the drab shadows of war
for four years. Everywhere, every hour of the day & night,
there were parties."
Many of the
most glittering soirées took place at the home of Mrs. Brooks's
mother where the gay young flapper and Miss Maxwell installed themselves.
They quickly turned this elegant townhouse into a headquarters for
the American military delegation and other young foreign army officers
attached to the various embassies. They came for the Saturday night
dances, but they took away the music performed on the piano by the
I say so myself I was a damned good pianist. Europe was swept
by a dance craze after World War I and in those days it wasn't
possible to hear the latest recordings by flicking a radio or
a phonograph switch. People went wild over the new school of
jazz that had been developed in America during the war and I
was among the first to import it to Paris and London. I was
in constant demand to play for dancing and to sing numbers from
new Broadway shows."
And so she did
-- enrapturing hosts of invited and uninvited guests from Bernard
Baruch, advisor to seven presidents and a young aide on the American
mission, to Arthur Balfour, the British foreign secretary who, one
evening, she captivated with Cole Porter's latest hits. "Balfour's
eyebrows became an extension of his hairline when he first heard
the irreverent lyrics, but his reserve soon cracked and he laughed
uproariously as I dipped deeper into Cole's private stock,"
the dinner party at the Ritz that followed, Elsa mixed Balfour with
former financial advisor to the Egyptian government and shortly
to become the first post-war British ambassador to Berlin; Mrs.
Keppel, the avowed mistress of King Edward VII, and whose daughter
Violet was just winding up a notorious love-affair with Harold Nicolson's
Vita Sackville-West; the celebrated Edwardian beauty Lady Ripon;
her great friend the Grand Duke Alexander of Russia who'd been hoping
(in vain, of course) that the Peace Conference might help restore
Russian throne his just-deposed and executed family; and thirty-eight
year old Sir Ronald Storrs who ran Britain's disastrous Middle East
policy. Harold Nicolson was not among the invited.
It was an extraordinary
evening which wound up very late at night in the newly-opened nightclub
of Paul Poiret where Elsa's guests gazed on "undressed French
chorus girls" and were privy to "ribald jokes which probably
never before had assaulted the ears of one of His Majesty's elder
statesmen, but (who) chortled like a schoolboy." When Balfour
fond farewell to Miss Maxwell before dawn the next morning, he enthused
that this was "the most delightful and degrading evening I
have ever spent." The
guest list was most opportune. The author of the famed Balfour Declaration,
which set the Jews on a path to a homeland in the Middle East,
was dining cheek by jowl Ų quite literally, it would appear Ų with
a young Sir Ronald Storrs, military governor of Jerusalem, who had
his own issues with how the Middle East should be divided, the role
of the Jews and of Britain. They were thrown together for that one
evening, but they were ultimately to provide some of the most explosive
moments of the Peace Conference itself and many decades that followed.
And into this heady mix, were to arrive the ultimate catalysts Ų
Sheikh Feisal ibn Hussein and Lawrence of Arabia -- self-styled
power brokers who brokered little, in the very long run, but their
own interests. Sad that few were perceptive enough to see this at
David A. Andelman,
author of A
Shattered Peace, is executive editor of Forbes.com,
and a veteran foreign correspondent for The New York Times
and CBS News.
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Are You a Zillionaire
or a Cranky, Rushed, Overworked Mouse?
Campbell, author of Zero
was a Winnie-the-Pooh kind of blustery day, after a rainstorm. The
wind darted fitfully through the puddles in the parking lot; sunlight
silvered the edges of few remaining clouds. Gusts blew strands of
hair into a nimbus around me as I strolled to my car, the box boy
following me with my cart full of groceries.
that joy of living that sometimes sails on the breeze of such a
day, I threw my arms wide and said, "Isn't this a glorious
morning?" as I opened the trunk of my car.
The young man
smiled as he started loading my trunk with my newly purchased goodies.
"I was just thinking of that song," he said, and started
singing, "Oh, what a beautiful morning…"
a beautiful day…" I joined in.
He turned to
me and we sang the rest of the chorus together in full voice: "I've
got a beautiful feeling, everything's going my way!"
walking by looked at us curiously, but we didn't care. We laughed
together and I clapped my hands, delighted with this moment of shared
connection. "What's your name?" I asked, smiling happily.
he replied. "What's yours?"
I said, and extended my hand. He took it and we shook hands. "Pleased
to meet you," we said in chorus, and laughed again. We wished
each other a beautiful rest-of-the-day, and waved goodbye.
No, we're not
quitting our day jobs, or trying out for American Idol. Not
every moment has to lead to some big thrilling conclusion or life
change. It's just a moment out of time, when the cares and the goals
and the worries and the to-do lists fade into inconsequence, and
we live truly in the moment of now. Eckhart Tolle wrote an entire
book called The
Power of Now but all you really need to know is what
Baba Ram Dass said in the sixties: "Be Here Now." Pay
attention to this precious second of your life. And this one. And
When you have
"too much on your plate" and you are rushed to get everything
done, you are missing your life. Life isn't in the to-do list or
the fear of "what will happen if" or the longing of "I'll
be happy as soon as." It isn't in your dreams or plans or goals.
Life is in the spaces between those things.
When was the
last time you sang with the box boy at the market?
isn't about getting more done, but getting less done. I remember
years ago, watching Michael in the television series Thirtysomething,
say words to the effect that "all of life boils down to six
activities: 1) Eating; 2) Sleeping; 3) Goofing Off; 4) Work—if you're
lucky; 5) Sex—if you're really lucky; and 6) Looking for a place
I don't think
we do enough goofing off.
In the spring
of 2005, the non-profit organization Families and Work Institute
released a study entitled Overwork in America. They found
that one-third of the respondents felt chronically overworked, and
more than half reported feeling overwhelmed at least once in the
past month by the amount of work they had to accomplish. More than
half complained that they were often asked to work on too many tasks,
were interrupted too many times, and that resulted in difficulty
in completing projects. Nine out of ten said that although they
worked hard, they didn't have enough time to get everything done.
79% of those surveyed said they had paid vacation
time in 2004, but 36% weren't planning to use it.
And those that
do take vacations often take their cell phones, pagers, laptops,
Blackberrys, etc. and keep right on working while the Seine and
the Danube and the Mississippi rivers roll on by, ignored and unappreciated.
People laugh and say to me, "What's a vacation?" They
are so afraid they'll miss a phone call, or that they won't get
all of their work done, that they don't even go out of town. A poll
by the National Federation of Independent Business showed that most
small businesses are open for 11 hours a day, usually beginning
at 8:00 a.m. and more than 25% of them are open seven days a week.
Does this sound
like you? I told a fellow business owner that I was excited about
my upcoming vacation, and she rolled her eyes and said, "What's
a vacation? I haven't had a vacation in six years." I was horrified.
"You don't get them back, you know," I said. She stared
at me. "It's isn't like you save them up and some year you
get six vacations. Those six vacations are lost forever. If I were
you, I'd schedule one helluva grand vacation for myself right away!"
Do you work
even when you're sick? Comedienne Rita Rudner says, "I work
for myself which is great. Except when I call in sick—I know I'm
lying." The common wisdom about owning your own business is
that you can work half-days. And you can choose which half you want
to work—the first twelve hours or the second twelve hours.
Are you bragging
about how you suffer for your business? Or your art? Or your job?
Or your children? You build the mouse trap, you put the cheese in
it, you snap it shut on yourself, you whirl on the treadmill, and
then you complain about your mousey life. Besides that, you're a
cranky little mouse. Do you think you're not wearing that "I'm-so-busy-please-don't-interrupt-me"
face? You think I can't hear the annoyance in your voice when I
call and I've disturbed you? Who do you think wants to hire cranky,
rushed people? And who wants to marry them?
Are you a Zillionaire
or a mouse?
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.
If you are
stuck in a rut in your business or life and/or having too much "month
at the end of your money," Chellie's workshop might be just what
you need to get things on the right track. You can sign up for Chellie's
Ezine and workshop at www.chellie.com.
Take a Toll.
Woods, president & CEO of Odyssey Advisors, LLC.
stock market goes bungee jumping in the third quarter.
the third quarter of 2007, the meltdown in the mortgage market continued
to affect housing, and ninja loans became a new buzzword. These
aren't loans made to Japanese dressed in black, but are made to
borrowers with no income and no job or assets. While the bulk of
these are concentrated in real estate, many credit card lenders
have additional exposure as they chose not to let a little thing
like a lack of a Social Security number get in the way of giving
credit cards to our burgeoning immigrant population.
While most financial
companies had their public relations departments working overtime
to assure us these loans weren't that big a problem and they didn't
have much exposure anyway, investors weren't buying it. Everyone,
including the Federal Reserve, knows that most of these loans will
reset at higher rates in the next 12 months, which could make the
current problems look like the tip of the iceberg. To cushion the
pain of this on borrowers and financial institutions, the Fed reduced
the Federal Funds rate by 50 basis points toward the end of the
third quarter, and more reductions are now expected.
This is the
same Fed that caused most of this problem in the first place by
keeping interest rates too low for too long and flooding the economy
with liquidity, so depending upon them to fix it seems roughly equivalent
to asking an arsonist to put out a fire. Although we were happy
to see the resulting rally in the stock market, throwing a life
preserver to lenders foolish enough to make these loans in the first
place probably insures this problem will happen again.
Looking at overall
returns for the quarter might give the impression the stock market
was fairly dull. It was anything but, as the returns shown mask
a bungee jump in stock prices during the third quarter. The stock
market has an evil twin that's irrational, high strung, and volatile,
and that twin was in charge through August 16th. By the
middle of the quarter, the stock market had given up its gain for
the year and was in negative territory. The good twin finally subdued
his evil brother in the last 6 weeks and the result was a modest
return that probably wasn't worth the aggravation.
In the third
quarter in stocks, big was good, growth was better, and small companies
and value stocks mostly stunk up the place. For reference, here's
the stock market segment scorecard for the second quarter.
Thomson One Financial, Thomson Baseline
the story was rising energy prices. Anything that had energy or
tech in the name did well, while industries likely to be hurt by
higher energy prices lagged the rest. Investors generally preferred
resource/raw materials companies, technology, and industrials while
financials, transportation, and consumer spending stocks lagged
the rest. For reference, here's the stock market index and industry
group scorecard for the third quarter of 2007:
Thomson One Financial, Thomson Baseline
As you can see,
2007 is shaping up to be a coming out party for alternative energy
in general and clean energy in particular. Investors are beginning
to recognize that higher oil prices are a blessing in disguise as
they make the economics of alternatives look better. Whether your
hot button is reducing hydrocarbon emissions or telling the folks
that control world petroleum supplies to put their oil where the
sun doesn't shine, that day gets closer with every increase in energy
day Treasury Bills
Year Treasury Notes
As you can see
from the above, lower interest rates produced a rally in the bond
market. The Federal Reserve finally got around to its usual pattern
of cutting interest rates before a Presidential election year, though
it took them longer than usual in 2007. They appear to be doing
their best to make up for lost time, and cut the Federal Funds rate
by ż% in September. The Fed has indicated that further interest
rate reductions are likely, and we have no reason to doubt them.
of current yields still shows yields on one year bonds higher than
the two year maturities. As a result, there's room to correct this
inversion, and another Federal Reserve rate reduction of at least
ż% by the end of the year appears to be likely. Our reaction has
been to lengthen the maturities of bonds in our fixed income portfolios
while continuing to emphasize credit quality and liquidity. Government
agency bonds still offer attractive yield spreads over Treasuries,
particularly in five year maturities.
continues to be positive, but unexciting. Real growth is chugging
along at a bit less than 2% per year, but corporate profits remain
stubbornly strong and continue to exceed expectations each quarter.
In addition, money supply growth has begun to accelerate and this,
combined with the likelihood of lower interest rates, reduces the
chances of a recession and makes it more likely that economic growth
will again begin to accelerate sometime before the next election.
stock market's evil twin occasionally makes an appearance in October,
the fourth quarter is when investors usually pick up a bounce in
their step and it isn't because of the holidays. In the last ten
years including three years of the worst bear market in a generation,
the fourth quarter has produced a positive return in nine of those
years. With the stock market still undervalued relative to interest
rates, corporate profits still growing, and real estate and bonds
offering little competition, we'll be very surprised if the stock
market doesn't add to its gains by the end of the year.
Woods 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.
2007 by Odyssey Advisors LLC.
Prevent the Portfolio
Pack Rat Syndrome.
Iachini, director, mutual fund research, Schwab Center for Financial
your mutual fund portfolio look like a pack rat's closet, bursting
with yesterday's hot styles and top sellers? If so, you're not alone.
Mutual fund investors tend to pour money into hot asset classes just
as they're beginning to flame out, and bail out of poor-performing
classes just before they hit bottom.
The problem is that a collection of historically high-performing funds
does not necessarily make a well-diversified portfolio and can greatly
increase risk. Avoid the "pack rat syndrome." Think of a
well-diversified portfolio as a puzzle where each fund fits neatly
with the others to complete a well-balanced picture.
by establishing a long-term asset allocation plan — your combination
of large-cap and small/mid-cap U.S. stocks, international stocks,
bonds and cash. That plan determines the broad risk level of your
portfolio. But don't stop there. Consider these five additional risk
1. Invest in
both value and growth stocks. We suggest an equal allocation to
each over the long run.
your international holdings. Consider funds that invest in developed-market
large- and small-cap stocks, as well as in emerging markets.
Although emerging-market and international small-cap stocks are
risky on a stand-alone basis, they generally have lower correlations
with developed-market stocks and, as such, offer attractive diversification benefits.
3. Don't concentrate
in one investment strategy. Specific strategies perform better or
worse in certain market environments. For example, growth funds
that focus heavily on price or earnings momentum often outperform
their peers in overheated markets, while funds that look for growth
at a reasonable price (GARP) often outperform their peers in sideways
or falling markets. So, in picking funds, remember to diversify across
4. Avoid overlap
across funds. Consider the top holdings of each fund in your portfolio,
making sure you're not inadvertently concentrated in a single sector
5. Look for
disciplined risk management. Sophisticated quantitative techniques
are helping fund managers control risks better than ever.
Subscribers Parade Their Favorite Companies for a Royal Review.
With questions on Hoku and Primus Telecommunications.
part of our ongoing education for our premium subscribers, each
month we host a premium chat. Last month's chat was an opportunity
for subscribers to grill Natalie on some of the featured companies,
like Hoku, as well as a few of their own.
Do you think the guys at Hoku can execute?
Natalie: I think
this is going to be a very volatile stock. But HOKU has such big
partners that I believe there must be some pedigree to the guys.
I mean the governor of the state of Idaho is behind the new plant,
and Hoku's partner is Suntech - the largest solar manufacturer in
the world. Hoku is proceeding the right way. Volatility will center
on any snags/holdups with the construction of the manufacturing
facility, etc. that might arise, since this plant is still in the
construction phase. Investors these days are trigger-happy for headlines.
On the other hand, if the world catches wind that HOKU might be
the next MEMC Electronics, investors will pile in. Then at the least
sign of trouble, they'll jump back out again. This is a fairly new
story, and hasn't captured a lot of Wall Street headlines yet.
Is Hoku going
to focus on solar?
recent press releases and earnings reports have indicated that they
are maintaining the obligations of the Navy fuel cell contracts,
but that none of their prior customers are interested in moving
forward with more fuel cell orders. Thus they've redesigned their
entire game plan to focus on solar. I didn't want to like this company
so much. But they do have the wind at their back in the solar sector.
It's not easy to attract such big partners, as Suntech, Sanyo, the
U.S. Navy and Nissan.
to hear a general market update.
In terms of
the markets themselves, back in mid-October, it seemed as though
everyone had forgotten about subprime problems. The Dow leapt over
the 14,100 trading wall on October 9, 2007, for a close of 14,164.53.
A few months earlier, in July and August, I had people calling my
office, screaming about an economic meltdown and wondering if they
should sell everything they own. This month, oil and fires have
brought back the investor jitters, and the markets retreated back
down to 13,671 on October 25, 2007. However, I think the overall
lesson is that anytime you start panicking about your investments,
it's time to take a vacation or go see a movie, not sell everything.
And, if you check out my Hot News list, we still have over 40 companies
that are top earners, compared to just three that are down a bit,
so there is always money to be made in any marketplace.
that you are aware of the Santa Rally; in the last quarter of each
year, 50% of the market gains are rung up, typically. This is a
historical average that is very reliable, but there is always the
chance of some disaster (man-made or natural) that can shake things
up. The pre-election year rally is another reliable historical trend,
and yes, this is a pre-election year. In the year before the election
(2007) and the year of the election (2008), historically
the markets perform at almost double of the years after the election
(2009-2010). This pattern holds up in data studied for over a century.
Paul Woods says it best. The Feds fix whatever problems happened
in the run-up of the election, after they get a new President
that, I'll have a mid-month market update that includes a report
from the Milken Institute's State of the State Conference. There
are some concerns going forward, especially with oil at $90/barrel.
It's imperative in a volatile, slow-growth environment to keep up
with current trends, especially with inflation flags, like escalating
oil prices. It's not about knee-jerk reactions. It's about profit-taking
and the "weighting" or percentages you have allocated
here or there in your long-term portfolio. In your trading portfolio,
it's about knowing when to take your profits, and ongoing information
from a reliable, reputable source is your best friend when evaluating
those things. We work hard to be just that for you.
me. I hope he doesn't move on Iran. Could have a deleterious effect
on the market. Of course, we can't control that.
war, especially when our armed forces would be stretched across
three countries in the Middle East. And frankly, I'm so weary of
seeing our young boys in peril and risking their lives. I encourage
you to become an active reader and participant in our Peace=Prosperity
articles and events, most of which are listed on the calendar section
The best way
to protect yourself fiscally-speaking is to have your portfolio
properly allocated. That way if Bush does move into Iran, you don't
have to panic. Btw: I just finished my book, which has a number
of other tips on protecting your portfolio from war and other challenges.
(It will be released in 2008, so look for it!)
other allocations besides stocks?
Yes. If you've
got a percent equal to your age that is not in the stock market
then you are never over-exposed to the actions of an aggressive
President. The ratios change with age because your horizon for making
back returns is shorter when you are near retirement. Considering
the pre-election year and the Santa Rally, there is a good case
for being slightly over-weighted right now, meaning if you're 50,
you might have 55-60% in stocks, knowing that you'll look to weight
back to normal (or less) in January - after the Santa Rally. Remember,
trading in your tax-protected retirement account means that you
avoid capital gains (and earn that additional amount in returns).
A book would
be great. I appreciate your attention and concern for our financial
I think that
cushion of "safety," of having an appropriate amount in
risk-reduced places like the money markets, CDs and Treasury Bills
allows people to trade with their brain, instead of their stomach.
When there is too much of the nest egg in the stock market and the
markets don't cooperate, I've seen people dump for losses (unnecessarily)
simply to stop the stomach acid burn, so they could sleep again
at night. There are bond-like returns in the money markets these
days (which is a fancy word for the savings portion of your brokerage
account). This is the easiest way to protect your portfolio until
you get savvy enough to start adding a few bonds to your holdings.
Do you still
think Satcon is a good purchase?
I really like
the story at SATC. They just won an Air Force contract valued at
$2 million and have a $50 million backorder on their converters.
This is the company that did the invertors on the Google solar conversion.
Solar is likely going to continue to be the top performer for some
time. There is an explosion of interest. I can't give you a buy/sell
order because I'm not an analyst or a broker. Hopefully this information
is helpful to you for determining your own decision, and certainly
you can use the information on the Hot News list - including the
price SATC was trading at when we first listed the company - to
inform your decision-making.
company called Primus, symbol PRTL. What do you think?
I get a little
nervous when I see the words telecommunications and OTCBB in the
same vicinity. You must do 1000 times the homework, and have 1000
times the reasons to buy before jumping in on any company that is
trading off the boards, especially if it is competing in a legacy
industry, like telecommunications, with giant Blue Chip corporations.
Remember the general rule that Jabba the Hutt rules the universe
and the hare wins the dash. In this case, the colossal lead that
Skype (the hare) has in VOIP worldwide (Skype grew faster than MySpace),
combined with the might and weight of the giant telecom AT&T
(Jabba the Hutt) makes me nervous.
I did a spot
check on the financial results for Primus (which you can do on your
favorite financial website), and the trend in earnings is opposite
from what I like to see. Both 1st and 2nd
quarter 2007 results were lower than the year prior, and 2005 was
a better year than 2006 and 2007. In general, I want to see increased
earnings or have a compelling reason why I think earnings are going
to pop - not a declining trend. For instance, World Water &
Power had $30 million in back orders, so you don't have to be a
genius to know what the earnings are going to look good going forward
(barring any unforeseen problems).
trend isn't unexpected in telecom, where you have VOIP long distance
worldwide being given away for free. But after three years, this
company should be figuring out other streams of income. PRIMUS Telecommunications
Group announced in May 2007 that it expects overall revenue to decline
in fiscal 2007 as compared to 2006, as it continues to prune or
to divest low-margin, or non-core revenue streams.
looked like a big red flag until I jumped over to the recent news
section and saw that Primus Canada is partnering with Motorola on
something called WiMAX IEEE 802.16e-2005, which could be positive.
The fine print also says that Primus is the largest alternative
communications carrier, with over 1,000,000 customers, in Canada
- another plus if they can figure out how to make money off of that.
If you know what WiMAX IEEE is and think it's going to be a huge
profit generator, you've got a leg up on the rest of us (so please
do share). I'd try to figure out what this technology does,
if the competition is testing something similar and if this is going
to be a new, hip, cool thing that we all have to have.
to consider: This is a company with over a billion in sales, that
manages to earn just $1 million in income, for a .13% profit margin.
I'm assuming the answer is simply research and development and the
enormous overhead burden of providing customer service and support
for a free service - VOIP. Also, why is the company trading off
the boards? How long has it been trading off the boards? What are
the plans to get re-listed? Who is running the company and how respected
is the C-level team (CEO, CFO and COO)?
If you answer
all of these questions and think the picture adds up to something
exciting, email me with your findings!
Yours in peace,
health, wisdom and prosperity,
Squeezes Speculators (not Homeowners).
my Hot News on Cool Stocks list.
Hot News lists below feature 43 companies earning great gains, versus
just six that are headed in the opposite direction. 48% of the companies
featured in my stock newsletter between 2002 and 2005 -- 25 out
of 52 companies -- DOUBLED from the time we listed them in our feature
article to the time when I took the company off of the Hot News
on Cool Stocks list (and the majority of the remaining 52% well
outperformed the marketplace. (See the chart in the article, "25
of our Companies Have Doubled," from volume 4, issue 4,
the April 2007 ezine, for a listing of companies.)
the market performance of the companies that are featured in my
Hot News on Cool Stocks list are still keeping me at the top of
over 830 A-list pundits on TipsTraders.com
in annualized gains. Over the last few years, I've been in and out
of the #1 position, according to that independent tracking firm.
TipsTraders has me listed as Highly Recommended, again, in 2007.
Federal Open Market Committee decided on September 18, 2007 to lower
its target for the federal funds rate 50 basis points to 4-3/4 percent.
The big, fat rate cut thrilled investors. The stock market immediately
rallied on the news. For Halloween, the Feds decided to give investors
some more candy, with another 25 basis point reduction in the Fed
Fund Rate. Investors fell in love with stocks and the markets soared
on the news.
Stock Market Performance
Gains 22 & 10 months
+28% & +12%
+27% & +18%
+22% & + 9%
Squeezes Speculators, Not Homeowners.
profits are strong. Earnings are strong. Cash is strong. So what
is spooking investors? The idea (fueled by headlines) that every
homeowner in America is going to be at risk of losing his/her home.
(That old Depression era gene is a tough one to defuse.)
Truth be told,
there really aren't that many homeowners who are in trouble, despite
what the headlines are screaming, and there really aren't
that many people foreclosing -- yet. Think about it: how many people
do you know who have lost their home, and what were the circumstances?
No one I know, and the two couples who are at risk of being in
trouble have one thing in common - they were gambling. One uses
the home equity as an ATM machine. This is the 3rd real
estate bust cycle for that family, and they are trying to avoid
their 2nd bankruptcy, as a result of that behavior. The
other was a speculator who recently bought a handful of houses in
Nevada as an investment, despite warnings from her friends that
the markets were about to turn.
35% of people
who own a home, don't even have a mortgage. (They own it free and
clear.) And 93.48% of all people who do have mortgages are paying
on time (source: Mortgage Banking Association). Even though foreclosures
have increased from ZERO, which is where they have been for the
last five years, the national foreclosure rate is only slightly
above the 40-year annual average.
about 1 percent of all first and second mortgages have gone into
foreclosure, according to RealtyTrac.com. In a national delinquency
survey conducted by the Mortgage Bankers Association, in the 2nd
quarter of 2007, for 1-4 unit residential properties, foreclosures
nationwide are only at 1.40%. "Those are not record numbers,"
Douglas G. Duncan, Ph.D., the Chief Economist at the Mortgage Banking
Association said, in the understatement of the year.
So, how can
the Los Angeles Times report that foreclosure numbers have
blown up and are leaking into affluent communities? When the beginning
point is zero, an increase to 1.4% can be a large percentage. Remember
nobody was foreclosing two years ago. Anyone with a heartbeat could
have sold a home in 24 hours if they needed to, so who is going
And who are
these distressed homeowners who are foreclosing? According to Dr.
Duncan, for the most part, they are speculators with real estate
fever - investors who were overextending themselves to cash in their
real estate lottery tickets. There are really only three states
that are suffering from regional economic difficulties -- Ohio,
Indiana and Michigan. (And for those homeowners who are affected
by the challenges in auto manufacturing and other legacy corporations,
our wishes are with you that you will get a better job, a great
401 (k) and are able to stay in your home or find a better one in
a more robust community…)
foreclosure problem is really "a continuing story of seven
states," according to Dr. Duncan. Between 2001 and 2007, Michigan
lost 300,000 payroll jobs on net, which takes a toll on the demand
side of housing. (Home prices are highly correlated with the conditions
of the local economy. When the economy booms, prices rise. When
it wanes, prices fall.) But the states that are really driving up
the national foreclosure numbers are California, Nevada, Florida
and Arizona, and most of the foreclosures in those four states involve
investor loans by non-occupant investors or the second home
of the homeowner - in other words people who attended those real
estate workshops where they were taught they couldn't lose in real
estate because, they thought, it never goes down. (This is
a brazen, bold lie, and it sounds exactly the same as the one circulated
during the "new economy" before the Internet bust of 2000.)
During the real
estate gold rush, prices in those four states were sky-high, and
virtually non-affordable to the locals. However, easy access to
credit and no down, fully financed adjustable rate, interest only
loans at 40-year low interest rates meant the speculative investor
could get in above her means and pray to God that s/he could get
out with a profit before the loan reset (and the monthly payments
doubled). As Angelo Mozilo, the Chairman and CEO of Countrywide
Financial Corp, told the audience at the Milken Institute State
of the State Conference on October 29, 2007, "We had a lot
of speculators lying to us. They've run, and are gone from the scene."
Subprime loans account for 42% of loans in Nevada and 40% in California
(which has 17% of all subprime loans in the U.S. and over 19% of
when we discuss solutions, and when we take away lessons learned,
to acknowledge that, outside of a handful of economically depressed
states, people are not losing the roof over their head. The majority
are 49ers who sifted for gold, turned up empty-handed and now want
to blame the guy who sold them the map, when it was their decision,
their risk and now, sadly, their loss.
If you were
tempted to jump into real estate, or even if were one of the few
who had to give your home back, it is time now to replace blind
faith, a whistle and a prayer, with wisdom. I'd highly recommend
investing in education - and attending my Living the Rich Life Retreat
in January. You will learn how to thrive, break the binds of basic
needs and invest with greater ease and confidence.Click on FOMC,
or go to FederalReserve.gov, to read!
about the average returns of real estate, stocks, bonds and classic
cars means that you'll be the master of your universe, in charge
of creating the rich life of your dreams. The more you know, the
less you have to run and hyperventilate or rely upon the advice
of people who make their living by selling you something. And, even
now, there may be more options - creative options - to consider
before you give up and let the bank take back the home. You'll delight
in designing a new Double Your Fun Budget blueprint that creates
gainful investing (through Stocks on Steroids and more) while you
sip on those café lattes!
Yes, even if
you are stung, bruised and disenchanted, now is the time to buck
up, wise up and stop whining. The rich life is a life plan, not
a lottery ticket, which is why the setting of our retreat is in
the most beautiful hotel in the world - the Loews Santa Monica Beach
Hotel. Join us. You know you want to. Take some from your education
budget, some from your long term and short term fun budgets
and register now. We'll show you how to invest for profits once
you arrive. Our premium subscriber Sam Sanders is up 87% this year.
What are you waiting for?
View of the
famous Santa Monica Pier from the Loews Santa Monica Beach Hotel.
the Pacific Ocean, at the Loews Santa Monica Beach Hotel.
Guild Strike Update
Writer's Guild represents over 12,000 current members. The most
recent report is that the two sides are coming closer, but haven't
reached an agreement. The WGA is hosting a membership meeting on
November 1, 2007 at the Los Angeles Convention Center, and the leadership
issued the following statement on October 26, 2007.
Contract 2007 Negotiations Statement
morning, we responded to the package presented yesterday by the
AMPTP (Alliance of Motion Picture and Television Producers). We
agreed to several of their proposals and withdrew or modified a
number of our own proposals in order to narrow the areas in dispute.
We also proposed a smaller working group to address several enforcement
proposals made by both sides. The AMPTP caucused for more than four
hours and returned with a package that included new rollbacks related
to our pension and health funds. They rejected our modified proposals
and ignored our working group offer. They then informed us that
they are not comfortable meeting at the WGA and insisted that negotiations
return to the AMPTP. They declined to meet again until Tuesday.
This means only two days remain to resolve the substantive issues
of this negotiation before Wednesday night's contract deadline."
the WGA likes to strengthen its position by acting in conjunction
with the Screen Actors Guild and Director's Guild. The SAG and DGA
contracts aren't up until June of 2008, so the writers may continue
working without a contract for the next few months, as they've done
in the past.
No one has a
crystal ball. If the writers do strike, day-traders could panic
and bail on Disney, News Corp. (owners of Fox), Time-Warner, Viacom
and other media companies. (Over the long-term, it's doubtful that
these companies are going to be in jeopardy - there are too many
unscripted reality shows that don't even need writers these days…)
It's time to carefully weigh your positions in media, offset against
the returns you might expect to enjoy during the Santa Rally. I'd
consider profit-taking in media in the long term portfolio beginning
in early 2008, as the industry has enjoyed a nice run-up for the
past few years, and we are entering a stormier climate for the sector
You'll see that
I've made my choice to keep media on the Hot News List for now,
though I continue to monitor the situation carefully (but not obsessively).
Peace and Prosperity,
OPPORTUNITES AND INFORMATION:
Rates: The Big, Fat Rate Cut! The Federal Open Market
Committee cut the Fed Funds rate by 50 basis points on September
18, 2007, to 4 Ż%, after pausing nine times in a row (in August,
June, May, March and January 2007, and December, October, September
and August 2006). The federal funds rate remains at 4-3/4%.
Information: Interested in reading the minutes
of the September FOMC meeting for yourself? You can.
The official Federal Reserve document is available online. Click
or go to FederalReserve.gov, to read!
Section: Conferences, Online Chats and more: Check
out the Calendar section of NataliePace.com regularly. There
are many wonderful opportunities to chat one-on-one with millionaire
money managers, economists, respected money gurus, real estate
veterans and CEOs! Be sure to join my investor teleconference
on November 14th, 2007 at 5:00 p.m. PT. (Note: This
is changed from November 7th because that is the
opening day of the GreenBuild Conference and President Clinton's
keynote!) Your chance to get your questions answered one on
one, and learn how to become a top stock picker yourself. Email
for the call-in instructions, if you don't receive them by November
5, 2007 (when we'll be sending them out.)
we have the all-important "All I want for Christmas"
and Turkey surveys. Don't forget to cast your vote! If you don't,
you might end up with ties, or Jenny Craig certificates, or
coal or power tools in your stocking…
are the results from last month's surveys…
Rally: 62% of our survey respondents believe that the
markets will close up on the year, while 24% thought that 2007
will be flat and 13% that the year will end down. Who will prove
to be right?
Estate Forecast: When we first posted this survey in
May 2007, at the first signs of a subprime crunch, more than
half of the respondents thought that real estate would continue
to increase in value, and that the subprime problems were a
mere hiccup. Now, 45% of respondents believe that we're headed
for a hard-core 5-7 year correction in real estate, 30% believe
we'll experience a 3-5 year softening of the real estate market,
while only 25% believe that the problems are noisier than need
be and there will be gains going forward as soon as next year.
Feds Big, Fat Rate Cut: Was it the right thing to do?
77% of our respondents thought so, while 22% don't think the
Feds "should be bailing out greedy people and companies
who make poor financial decisions."
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. Your investments and portfolio
should take into account 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.
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.
Hot News on Cool Stocks List
I have listed the companies that I currently own under the column
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 (if you have already purchased them). 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
Companies (Hot List):
and National Health Investors are not considered to be in
1. Conergy was
added on November 2, 2007.
Optronics was added on October 3, 2007.
on Cool Stocks List
since original feature
Read the Article, "Golf
Carts and Sports Cars," in vol. 4, iss. 6. The
price was up sharply on unusually high volume on 10.23.07.
The U.S. Senate approved a military funding budget that included
funding for two cutting-edge nanotechnology research and development
projects that Altairnano is conducting, providing funding
for a staff of 90 highly qualified individuals in Reno, according
to Altairnano President and Chief Executive Officer, Alan
J. Gotcher, PhD.
($83.93 on 2.27.07)
See archived ezine Vol. 4, issue
2, for the feature article, "Apple
Apple sold its one millionth iPhone on 9.10.07. "One
million iPhones in 74 days—it took almost two years to achieve
this milestone with iPod," said Steve Jobs, Apple's CEO.
"We can't wait to get this revolutionary product into
the hands of even more customers this holiday season."
iPhone combines three devices into one—a mobile phone, a widescreen
iPod®, and the best mobile Internet device ever—all based
on Apple's revolutionary multi-touch interface and pioneering
software that allows users to control iPhone with just a tap,
flick or pinch of their fingers.
Google CEO Dr. Eric Schmidt joined
the Apple board of directors in Oct. 2006. Somehow Jobs skated
through the options backdating scandal. The craze over the
iPhone, iPod and all things Apple, and the clout 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. Apple is a company you're going
to want to own - and everyone wishes they'd had the prescience
to buy in at a better price. On 10.22.07, Apple announced
revenue of $6.22 billion and net quarterly profit of $904
million, or $1.01 per diluted share. These results compare
to revenue of $4.84 billion and net quarterly profit of $542
million, or $.62 per diluted share, in the year-ago quarter.
Gross margin was 33.6 percent, up from 29.2 percent in the
year-ago quarter. International sales accounted for 40 percent
of the quarter's revenue.
Apple shipped 2,164,000 Macintosh(R)
computers, representing 34 percent growth over the year-ago
quarter and exceeding the previous quarterly record for Mac(R)
shipments by 400,000. The Company sold 10,200,000 iPods during
the quarter, representing 17 percent growth over the year-ago
quarter. Quarterly iPhone(TM) sales were 1,119,000, bringing
cumulative fiscal 2007 sales to 1,389,000.
"We are very pleased to have generated
over $24 billion in revenue and $3.5 billion in net income
in fiscal 2007," said Steve Jobs, Apple's CEO. "We're looking
forward to a strong December quarter as we enter the holiday
season with Apple's best products ever."
"Apple ended the fiscal year with
$15.4 billion in cash and no debt," said Peter Oppenheimer,
Apple's CFO. "Looking ahead to the first quarter of fiscal
2008, we expect revenue of about $9.2 billion and earnings
per diluted share of about $1.42."
On Sept. 6, 2007, AUO announced
another record high, with revenue up 9.9% from the previous
month. On a year-over-year comparison, August 2007 revenues
increased significantly by 89%. Shipments of large-sized panels(a)
used in desktop monitor, notebook PC, LCD TV and other applications
for August also set a new record of 7.23 million units, a
5.7% increase from July 2007. Shipments of small-and-medium-sized
panels broke the record as well and presented a 22.1% increase
from the previous month, to 14.59 million units. On 7.26.07,
the company reported 2Q results of revenues up 31.3% (Quarter
over Quarter) to $3.2 billion. Net income after tax of $182
million. Operating margin: 6.5%. AUO's Xiamen manufacturing
facility began volume production in April 2007. Production
capacity will increase by 50% for both China's monthly TV
module capacity and small-and-medium sized LCD module capacity.
Refer to the M&A
in volume 3, issue 6 for details on Citigroup's appeal. Citigroup
announced on May 10, 2007, that Citigroup China would roll-out
two new investment products -- Structured Investment Accounts
-- for the Chinese consumer that would allow him/her to invest
in equities or currencies, with a principal protection feature.
Just a few years ago, all banks in China were state-owned
enterprises. Citigroup was first mover in the Chinese consumer
equity marketplace. Purchased AkBank (in Turkey) on 1.09.07.
Akbank currently has 675 branches and 1,617 ATMs and is a
premier, full-service retail, commercial, corporate and private
bank in Turkey, with assets of $39.6 billion, loans of $19.6
billion and a deposit base of $25.0 billion. It is the world's
third largest bank by assets and the nation's largest financial
institution. Citigroup acquired servicing rights for $45 billion
worth of loans formerly held in ACC's Ameriquest company.
Terms of the deal, expected to close Sept. 1, were not disclosed.
On 10.15.07, Citigroup reported a massive decline in profits
- down 57% over last year. For that reason, we'll wait
for the news to circulate before highlighting the company
as within "buying range" again. According to
CEO Charles Prince, "A significant amount of our income
decline was in our fixed income business, where we have a
long track record of strong earnings, and this quarter's performance
was well below our expectations." Sallie Krawcheck is
back at the helm of Smith Barney, and she is a very capable
manager. Executive shuffling is not something you want to
see in a stable company. And the way the company threw Todd
Thomson, the former head of wealth management at Citi, off
the company plane for allegedly flying Maria Bartiromo around
the world leaves one wondering if more bickering than deal-making
is going on in the corporate suite. Many pundits have taken
the stance that Citi would be royal without Prince, still,
given that Thomson's division was the underperformer in the
3rd quarter, Prince might just be giving out fair
shakes. While the share price is down, you can still enjoy
the dividends. More share price stallout/fallout could take
place as the subprime histrionic headlines continue.
Power article in
vol. 4, issue 11.
Announces earnings on 11.8.07.
Earnings of 8.1.07: $9 billion in revenue, over $8.5 a year
ago. Net income was $1.178 billion over $1,125 a year ago.
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. The
largest individual stockholder is Steve Jobs. During the first
six months of fiscal 2007, the Company repurchased 96 million
shares for approximately $3.3 billion, of which 67 million
shares for $2.3 billion were purchased in the second quarter.
On May 1, 2007, the Board of Directors of the Company increased
the share repurchase authorization to a total of 400 million
shares. Pirates of the Caribbean blockbusters
equal film profits, DVD profits and renewed interest in the
theme parks! According to the annual report, CEO Bob Iger
received $22 million in compensation last year (not including
stock options). His pay included $2 million salary and a $15
million cash bonus. CEO Bob Iger was one of our Executives
of the Year in 2007. Read the article in vol. 4, iss.
1. We'll be monitoring the possibility of strikes by the Screen
Actor's Guild, Director's Guild and Writer's Guild in the
October mid-month update. The WGA contract is up on October
31, while the SAG and DGA contracts expire in June 2008. Although
the studios have all ramped up production to stave off the
effects of a strike by the unions, a strike could certainly
parch the investor appetite in film companies, even if it
doesn't cripple profits. So, far, the word is that the writers
have needs that they want addressed. Typically, the writers
work without a contract, and strengthen their position with
the alliance of SAG and DGA in June, rather than force the
issue alone, however, there is no foolproof crystal ball in
the world of organized labor versus corporations. No news
yet. Check the mid-month update on November 13th, and we'll
ping you if we hear anything before then.
Announced earnings on 10.17.07.
See the articles, "eBay's
Skype Outpaces News Corp's MySpace," in volume
3, issue 9, "Executives
of the Year in January 2007", which featured
CEO Meg Whitman (vol. 4, iss. 1). eBay reported record consolidated
Q3-07 net revenues of $1.89 billion, representing a year-over-year
growth rate of 30%. GAAP operating loss was $938 million in
Q3-07, representing (50%) of net revenues, compared to GAAP
operating income of $339 million in Q3-06. GAAP net loss in
Q3-07 was $936 million, or $0.69 loss per diluted share. Both
the GAAP operating loss and GAAP net loss were the result
of the previously announced goodwill impairment charge related
to eBay's acquisition of Skype. (This can be a tax benefit,
and Skype delivered record net revenues, excluding the impairment
charge, and a record increase of registered users - to 246
million - which can then be sent over to the eBay marketplace.
Don't be fooled by headlines and young writers making silly
assumptions.) The company purchased approximately 14.8 million
shares of its common stock at a total cost of approximately
$500 million during the quarter out of its authorized stock
repurchase program of up to $2 billion by January 2009. According
to eBay President and CEO, Meg Whitman, "eBay International,
PayPal Merchant Services, StubHub, classifieds and our advertising
businesses all performed above our expectations." Skype net
revenues totaled a record $98 million in Q3-07, representing
a year-over-year growth rate of 96%. Skype had 246 million
registered user accounts at the end of Q3-07, representing
a year-over-year increase of 81%.
Note: The GAAP effective tax rate
for Q3-07 was (4%), compared to 26% for Q3-06 and 23% in Q2-07.
Strong management and talent in the executive suite. The company's
cash, cash equivalents, and investments totaled $4.44 billion
at the end of Q3-07.
Read the article, "Green
San Jose Company,"
in vol. 4, iss. 8. Governor Schwarzenegger (CA) took Secretary
General of the U.N. Ban Ki-Moon on a tour of Echelon's HQ
in Silicon Valley the week before ELON confirmed an order
from Russia valued at $35 million. What other orders could
come into this company that reported sales of $26.7 million
in the 2nd quarter, over 19.4 million a year ago. On July
10, 2007, Echelon signed a contract with McDonald's to help
it reduce energy costs and improve efficiency. Reported 3rd
quarter results on 10.23.07 of $24.7 million in revenues compared
to revenues of $13.3 million for the same period in 2006.
The GAAP net loss for the quarter ended September 30, 2007
was $5.4 million, or $0.14 cents per share, compared to net
loss of $6.3 million a year ago. "We are still on track
to achieve non-GAAP profitability in the fourth quarter. We
believe our strategies have positioned us well for the remainder
of the year and for 2008," said Ken Oshman, Echelon's CEO
and Chairman. "Our infrastructure product line did not
grow as expected, especially in the Americas -- and it will
receive special attention in coming months."
Eastern Europe -- U.S. Global Investors
Vanguard 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.
See the article, "Gap's
from vol. 3, iss. 12. Sales are still weak, but the company
is beating analyst expectations and searching for the perfect
design and management team. The first hire was impressive
indeed! The Gap hired Todd Oldham as the design creative director
for Old Navy, and immediately the television ads began to
pop with sensuality and style. Who will helm The Gap's creative
ship? It's hard to get too excited about a man whose last
job was in Canada at Shoppers Drug Mart, but perhaps Glenn
Murphy, 45, Gap Inc.'s Chairman and Chief Executive Officer,
is a lot more fashionable than his pedigree would show. The
Oldham hiring was genius.
In the "show me your friends
and I'll tell you who you are" category, the friends
surrounding Gap these days are mighty, powerful and successful.
You've got Goldman Sachs advising them on the turnaround strategy.
GAP is one of an elite group of companies that are attached
to PRODUCT (RED), the pet project of Bono and Bobby Shriver,
alongside Apple, American Express, Motorola, Emporio Armani
and more. The fast, definitive action, the ongoing commitment
to Bono and Bobby Shriver's PRODUCT (RED) and having Goldman
Sachs in their corner really sets the stage for some promising
surprises for this legacy clothing retailer. Especially if
the team comes up with a winning designer. Things could hardly
be worse for the Gap, but, with the talent assembled for this
turnaround, we're optimistic that it is always darkest before
the dawn. Upgraded from Neutral to Positive by Susquehanna
Financial on 8.28.07. Beat analyst earnings estimates on 8.24.07.
With regard to the child labor
allegations that hit headlines on October 27, 2007, it doesn't
appear to have been Gap's fault and certainly isn't the company's
practice. According to a Gap press release, "An investigation
was immediately launched. The company noted that a very small
portion of a particular order placed with one of its vendors
was apparently subcontracted to an unauthorized subcontractor
without the company's knowledge or approval. This is in direct
violation of the company's agreement with the vendor under
its Code of Vendor Conduct." According to Marka Hansen,
president of Gap North America, "In 2006, Gap Inc. ceased
business with 23 factories due to code violations. We have
90 people located around the world whose job is to ensure
compliance with our Code of Vendor Conduct… While violations…
are extremely rare, we have called an urgent meeting with
our suppliers in the region to reinforce our policies."
Announced its 2007 third quarter
earnings on October 15, 2007: U.S. product sales of $2,155
million, an 18 percent increase over U.S. product sales of
$1,830 million in the third quarter of 2006. GAAP operating
revenues of $2,908 million, which include recognition of $3
million of deferred royalty revenue associated with the acquisition
of Tanox, Inc. Avastin sales are up 37% over 2006, to $597
million for the quarter. Lucentis is up 29% to $198 million,
while Tarceva is flat at about $101 million in sales. Major
growth for a big cap, and trading at prices not seen in over
two years! Purchased Tanox on 1.16.07. Received 8 FDA approvals
in 2006. 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 on track to exceed $2 billion in
annual sales in 2007. Tarceva is rocketing up the sales charts,
with sales of $406 million in the first three quarters of
Great Blue Chip Hold for your long-term
portfolio. Owns YouTube.com, one of the most popular sites
on the web, which got hit with a billion dollar lawsuit from
Viacom on 3.13.07. Dr. Eric Schmidt was one of our Executives
of the Year in 2007. Read the article in vol. 4, iss.
1. The growth continues to be amazing, and the share price
continues to be amazingly volatile! The savvy day-trader would
buy on disappointment and sell on hot headlines. The long-term
investor would buy at the 52-week low and hold to will to
the kids. (Notice that Google is NOT highlighted and is not
considered to be a good buy right now.)
Google reported revenues of $4.23
billion for the quarter ended September 30, 2007, an increase
of 57% compared to the third quarter of 2006 and an increase
of 9% compared to the second quarter of 2007. Traffic Acquisition
Costs totaled $1.22 billion, or 29% of advertising revenues.
GAAP net income for the third quarter of 2007 was $1.07 billion
as compared to $925 million in the second quarter of 2007.
We currently estimate stock-based compensation charges for
grants to employees prior to October 1, 2007 to be approximately
$801 million for 2007. Dilution is expected to be capped at
2%. Cash, cash equivalents, and marketable securities were
$13.1 billion at the end of September 2007.
On a worldwide basis, Google employed
15,916 full-time employees, up from 13,786 full time employees
as of June 30, 2007 - all enjoying the Google 20 (pounds you
gain from all of the free food provided by the company). As
part of their "Do no evil" plan, Google has gone
green, installing solar panels at HQs.
Giants Tap a Small Hawaiian Company For Silicon," in
the Oct. 2007 ezine, vol. 4, iss. 10. Contracted to build
a polysilicon facility in Idaho and supply Suntech, Sanyo
and Solar-Fabrik. Exiting the fuel cell business, in favor
of solar, according to the fiscal 1st Q 2008 earnings
report. The planned polysilicon manufacturing facility is
still in the financing stages. According to Dustin Shindo,
in the Hoku earnings report of 10.23.07, Hoku "received
letters of credit of $25 million and $45 million for two of
our polysilicon customers, Global Expertise Wafer Division,
a subsidiary of Solar-Fabrik Group, and Suntech, respectively,
to secure their prepayment obligations to us if we achieve
various milestones in the construction and operation of our
planned polysilicon plant." The $13 million line of credit
with Bank of Hawaii has allowed Hoku to commit capital to
the design and engineering of the plant, to purchase long
lead-time items such as the reactors, and to stay on schedule
for our planned 2009 product deliveries, according to a company
press release. Hoku Materials, plans to build and equip a
polysilicon production facility capable of producing up to
2,500 metric tons of polysilicon per year in Pocatello, Idaho.
Hoku Materials estimates the total cost to construct and equip
the polysilicon facility with an annual capacity of 2,500
metric tons will be approximately $300 million. Assuming the
financing can be obtained, Hoku anticipates the availability
of polysilicon beginning in the first half of calendar year
in vol. 4, iss 2. Intel is beating Advanced Micro Devices
in products and price. AMD is fighting back in court and by
slashing costs. The price war is tough on both, but easier
for Goliath to win. Intel's sales were down in in 2006
(largely due to AMD competition) from $38.8B in 2005 to $35.38B
in 2006, but has posted gains in two out of three quarters
in 2007. A Good Blue Chip long term hold for your portfolio,
with dividends. On 10.16.07, Intel announced 3rd
quarter earnings: revenue of $10.1 billion, operating income
of $2.2 billion, net income of $1.9 billion and earnings per
share (EPS) of 31 cents. "A combination of great products,
strong and growing worldwide demand, and operational efficiency
from our ongoing restructuring efforts led to record third-quarter
revenue and a 64-percent year-over-year gain in operating
income," said Intel President and CEO Paul Otellini. "Looking
forward, we see each of these elements continuing to improve
into the fourth quarter." Meanwhile, in the third quarter,
AMD reported an operating loss of $226 million, and a net
loss of $396 million, or $0.71 per share. AMD completed a
$1.5 billion convertible debt offering and used the net proceeds,
together with available cash, to repay in full the $1.7 billion
outstanding balance of the term loan used to acquire ATI.
If you invest in JetBlue, bear
in mind that a spike in gas or oil prices would severely ping
profitability at the airline, which is why it is not highlighted
this month. Fuel is one of the biggest expenses of any carrier,
and operating margins are sliver thin. George Soros and David
Neeleman (CEO) both sold millions at the end of May, at $10/share.
Both still have millions of shares remaining as well. Because
of the proportions of this selling (and the amount of shares
both have remaining), the proximity of the sales and the relatively
low price of the stock, it almost smells of an operations-type
funding deal, rather than lining one's own pockets. Any way,
with higher rates and seasonally strong travel, the quarterly
earnings should improve for the next two quarters. The company
has been able to raise fares, partially offsetting the oil
spike. Operating revenues for the quarter totaled $765 million,
representing growth of 21.9% over operating revenues of $628
million in the third quarter of 2006. Operating income for
the quarter was $79 million, resulting in a 10.3% operating
margin, compared to operating income of $41 million and a
6.6% operating margin in the third quarter of 2006. Net income
for the quarter was $23 million, representing earnings of
$0.12 per diluted share, compared with third quarter 2006
net loss of $ $0.5 million, or $0.00 per diluted share.
During the third quarter, JetBlue
achieved a completion factor of 98.9% of scheduled flights,
compared to 99.6% in 2006. On-time performance, defined by
the U.S. Department of Transportation as arrivals within 14
minutes of schedule, was 73.7% in the third quarter compared
to 74.6% in the same period in 2006. JetBlue attained a load
factor in the third quarter of 2007 of 82.0%, an increase
of 1.6 points on a capacity increase of 10.9% over the third
quarter of 2006. This, the new planes, the tvs are just a
few reasons why fliers rank Jet Blue so high in customer satisfaction!
Johnson & Johnson
Read the article, "Bionic
in vol. 4, iss. 7. Johnson & Johnson is a mega-cap corporation
with many products, and a small presence in the hip resurfacing
arena. Growth is 16% annually, with a 17.40 P/E. Stable, dividend-paying
visited the Coffee Bean and Tea Leaf shops lately? Seen Krispy
Kreme doughnuts in the pastry case? KKD is expanding into
Asia - namely Macao, the Phillipines, Hong Kong, Indonesia
and Japan. There are currently approximately 296 Krispy Kreme
stores and 99 satellites operating system-wide in 41 U.S.
states, Australia, Canada, Hong Kong, Indonesia, Japan, Kuwait,
Mexico, the Philippines, the Republic of South Korea, United
Arab Emirates and the United Kingdom. If you love their product,
KKD's CEO has proven to be a turnaround specialist, and he's
done a great job over the past year. KKD caught up with all
of their SEC filings on 1.29.07, and is looking to the future
now. KKD refinanced old debt on 2.17.07. Lynn Crump-Caine
(a 30-year McDonald's veteran) and C. Stephen Lynn (former
Chairman and CEO of Shoney's and Sonic Corp.) were recently
elected for director posts. CFO, general counsel and board
member Bob Strickland have been replaced at KKD. Missed analyst
earnings estimates on 9.15.07 for second straight quarter.
Revenues for the second quarter of fiscal 2008 decreased 7.5%
to $104.1 million compared to $112.5 million in the second
quarter of last year. Company Stores revenues decreased 4.7%
to $75.3 million, Franchise revenues were flat at $5.1 million
and KK Supply Chain revenues decreased 16.8% to $23.7 million.
loss for the second quarter of fiscal 2008 was $27.0 million,
or $0.42 per diluted share, compared to a net loss of $4.6
million, or $0.07 per diluted share, in the comparable period
one of these geniuses figure out why Vanilla Bake Shop is
all the rage and KKD has become a ghost town? (It's certainly
not because America has given up its sweet tooth…)
MEMC was added to the S&P500
in August of 2007. Read "Sun
Powers Whole Foods,"
article in vol. 3, iss. 10. Silicon is in high demand, and
MEMC has been able to price its product and pick its customers
accordingly. On 7.25, the company reported earnings: 2Q net
sales were $472.7 million, which represents an increase of
7.3% from first quarter 2007 net sales of $440.4 million and
an increase of 27.6% over second quarter 2006 net sales of
$370.5 million. GAAP net income was $163.6 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. Supplies silicon ingots to
Suntech Power Holdings, and owns a stake in that company as
well. The CEO has cashed out over $78 million, and plans to
continue to "diversify" his holdings through 2010.
Investors have cashed out over $3 billion. This is colossal
insider selling, however, after decades of solar energy being
out of favor, this may be the first time the investors have
been able to roll out their decades long investments. According
to Memc's Chief Executive Officer, Nabeel Gareeb, "I
am taking advantage of this open window to directly exercise
and sell approximately 10% of my outstanding options as part
of my estate diversification plan. I believe that MEMC remains
on a positive trajectory as indicated by the results over
the last five years, and I am confident about our future as
indicated by the long-term nature of this plan." Implemented
a 500 million share repurchase program in the 2nd
quarter of 2007.
National Health Investors
Get more information in vol.
4, issue 9
the REITs article and accompanying stock report card. This
is a company that I featured in the April 2004 ezine at, believe
it or not, $29.89. There are rumors of a merger. We'll watch
this in the next few months to see if the merger comes to
fruition and/or if the Santa Rally pushes up the stock.
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 was 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 online. It's a great
product that allows you to connect to Skype and call anyone
worldwide anywhere there is a WiFi signal. An October 2006
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. With all of the promising new products
(Skype phones), and the product alliance with Avaya, NetGear
is poised to continue strong growth. Earnings on 7.26.07:
2Q 2007 net revenue increased to $164.3 million, 26% year-over-year
growth. Net income of 6.1 million, or $0.17 per diluted share.
This net income was a decrease of 38% compared to net income
of $9.8 million for the second quarter of 2006 and a decrease
of 56% compared to net income of $14.0 million in the first
quarter of 2007. Net revenue by geography: North America,
38%; Europe, Middle-East and Africa, 52%; Asia Pacific, 10%.
Vol. 2, iss. 10
Owns Fox TV and film studios, MySpace,
and print publications. Just sold DirecTV. 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. DVDs include: Ice Age: The Meltdown and X-Men. Theatrical
hits include: Borat, The Devil Wears Prada, Little Miss
Sunshine, Napoleon Dynamite, Die Hard and The Simpsons Movie.
MySpace CEO Chris DeWolfe and President Tom Anderson were
of the Year in 2006.
Read the article in vol. 3, iss. 1. Spam issues have lead
California teens to jump over to FaceBook. If Myspace were
led by less capable, passionate executives, I'd be plenty
worried right now. We'll monitor, but with the addition of
video and the strong music fan base, it's hard to imagine
MySpace imploding. According to Gabe, 17, from Santa Monica,
"I use Facebook more. It's become the easier thing. MySpace
has been corrupted by aliens - all of these hackers who send
people adverts." We'll be monitoring the possibility
of strikes by the Screen Actor's Guild, Director's Guild and
Writer's Guild in the October mid-month update. The WGA contract
is up on October 31, while the SAG and DGA contracts expire
in June 2008. Although the studios have all ramped up production
to stave off the effects of a strike by the unions, a strike
could certainly parch the investor appetite in film companies,
even if it doesn't cripple profits. So, far, the word is that
the writers have needs that they want addressed. Typically,
the writers work without a contract, and strengthen their
position with the alliance of SAG and DGA in June, rather
than force the issue alone, however, there is no foolproof
crystal ball in the world of organized labor versus corporations.
No news yet. Check the mid-month update on November 13th,
and we'll ping you if we hear anything before then.
See issue 44. 1st featured
Hewlett-Packard announced that
they would be acquiring Opsware for $14.25/share on 7.23.07!
Named to Deloitte and Touche's prestigious Technology Fast
50 Program for Silicon Valley on 10.26.06. Cisco distributes
Opsware's products worldwide. 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. Read the Company
of the Year article
in vol. 1, iss. 44. Surpassed $100 million in revenue for
full year 2006 ($101.7 million), up 67% over the prior year!
(Don't buy now. The price won't get above $14.25 for long,
as that is the acquisition price.)
Trading near 52-week low.
2005 Company of the Year.
Read vol. 1, iss. 56.
Announced 2Q 2007 earnings on July
30, 2007. Tarceva is the genetic based "cancer pill,"
and sales have been exploding, up to $402 million in 2006,
after being approved by the FDA in just 2004. OSIP is a 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.
VERY HIGH RISK
Read the article, "Golf
Carts and Sports Cars,"
from vol. 4, iss. 6. Reported 2Q 2007 results on August 9,
2007. "This has been a strong revenue growth quarter for SatCon,"
said David Eisenhaure, President and Chief Executive Officer.
"As we have been predicting for some time, the Photovoltaic
Inverter market opportunity is experiencing rapid growth and
we have been positioned well to take advantage of the technical
strength of our products." Revenues increased 31% over last
year to $11.7 million. Photovoltaic Inverters represented
$3.8 million or over 30% of that total, a 70% increase over
last year - highlighting SATC's growth in this major market
segment. Backlog grew to a record $48 million at the end of
the quarter, an 80% increase over last year. Projecting revenues
of $50 million for the year with an expectation of over $30
million of revenue in the second half of 2007. This compares
to 2006 annual revenue of $34 million, an increase of over
47%. Needs additional working capital to fund growth. Operating
Losses for the second Quarter of 2007 were $3.5 million. Warrant
holders exercised warrants at $1.31/share - a premium on the
common stock price, bringing in $4.7 million in revenue needed
for working capital. Who are SatCon's customers? On June 27,
2007, SatCon announced that its PowerGate(R) commercial grade
inverters had been installed as an integral part of Google's
corporate headquarters in Mountain View, California. The 1.6MW
system is the largest commercial photovoltaic system in the
$6.3 Bil Market Cap
Sirius and XM Satellite Radio issued
a joint press release on February 20, 2007 saying that they
will combine the companies, for an "enterprise"
value of $13 billion and net debt of $1.6 billion. Mel Karmazin
remains CEO of the combined company, while Gary Parsons, the
CEO of XM-SR, will become the Chairman. The merger is being
challenged in Congress and hearings have begun in the matter.
Sirius and XM issued a joint release, saying, "The commission's
published rules do not prohibit one satellite radio licensee
from acquiring control of the other." Thomas Hazlett, the
former Chief Economist of the Federal Communications Commission,
Professor of Law & Economics at George Mason University,
published a report on June 14th saying that the
merger increases audio competition and will "predictably
enhance consumer welfare." This story is developing and
we will keep you posted. In the meantime, Sirius has launched
backseat tv on Chrysler cars beginning in 2008, and is a factory
installed option for Land Rovers and Mini hard tops. Reported
earnings on 7.31.07: Revenue Up 51% to $226.4 Million. Company
Exceeds 7.1 Million Subscribers. Subscriber Additions of 561,493.
According to Mel Karmazin, CEO, "We continue to work
with the FCC and the DOJ to make the case that the merger
offers more choices, including a la carte offerings, and lower
prices for subscribers, and we continue to expect that the
merger will be completed by year-end." SIRIUS' net loss improved
by 44% to ($134.1) million, or ($0.09) per share, for the
second quarter of 2007, from ($237.8) million, or ($0.17)
per share, for the second quarter of 2006. Exceeded analyst
earnings estimates for second straight quarter.
Smith & Nephew
Read the article in vol.
4, issue 7. Announces earnings on 11.1.07. Smith and
Nephew are the first movers in the fast-growing US hip resurfacing
marketplace. Price-to-cash-flow ratio well below industry
average on 9.16.07.
Withdrew 185 of its BIRMINGHAM
HIP* Resurfacing System implants following a packaging error
at a subcontractor on Aug. 16, 2007. Smith & Nephew's
investigation confirms that this problem is confined to a
small number of batches. A number of implants have already
been recovered in their packaging. The devices have been distributed
to a number of countries, including the UK and the US. Proactive
notification is a good sign of the moral code of the executive
suite, but bad products can be Lawsuit City if they were implanted.
This is a developing story.
Sohu (Chinese Co. ADR)
RISK: MED HIGH
See NataliePace.com ezines, vol.
3, issue 4 and
2, issue 9 for
feature articles on Sohu. Dr. Charles Zhang, the Chairman
and CEO of Sohu.com, is one of our CEOs
of the year in 2007.
Read the articles in vol. 4, iss. 1. You can watch a Q&A
with Dr. Charles Zhang in an exclusive interview I
did on the Forbes.com
Video Network. Sohu
was selected as the official sponsor of Internet Content Service
(ICS) for the Beijing 2008 Olympic Games. Could be some
bumps in the road between now and Beijing Olympics 2008, which
should ultimately be worth it. Share price jumped in early
July 2007 and has been strong since!
SunTech Holdings Co. Ltd (Green
& Chinese Co. ADR)
See vol. 4, issue 1 for our Company
of the Year article,
which names SunTech the Company of 2007. Beat analyst earnings
expectations on 8.10.07. Also, check out vol.
3, issue 10,
2, issue 12 for
our articles on solar energy. On February 21, 2007, Suntech's
CEO, Dr. Shi joined the Global Roundtable on Climate Change
which is part of the Earth Institute of Columbia University
in the City of New York. The Global Roundtable brings together
more than 100 high-level, critical stakeholders from all regions
of the world. 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. SunTech is also the official
solar provider of the 2008 Beijing Olympics, so expect that
it will enjoy a lot of buzz over the next 18 months. Announced
earnings on 8.9.07: total net revenues grew 147.7% year-over-year
to $317.4 million. Annualized PV cell production capacity
expansion is on track to reach 480MW by the end of 2007. "Our
sales demand has been so strong that we have already signed
contracts to deliver over 150MW of our PV modules in 2008.
To put that in perspective, that is nearly equal to Suntech's
entire output in 2006,'' CEO Shi said, commenting on the development
of "semiconductor finger technology." Dr. Shi is
one of our Executives
of the Year in 2007. Read the article in vol. 4, iss.
1. Suntech picked up more clients at the 2007 Solar Conference
in Long Beach in August 2007, adding Irvine, Calif.'s Lumeta
and Los Gatos, Calif.-based Akeena Solar. In June 2007, Suntech
signed a 10 year supply deal for polysilicon from Hawaii's
T. Rowe Price Em Eur & Mediterranean
4, issue 3 and
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, like Germany and France.
International investing in the right sectors and countries
pays off! Upgraded to top Morningstar return rating in its
category on 7.27.07. Upgraded to Morningstar 5-star rating
on 8.12.07. (We first featured this rock star mutual fund
back in August of 2005!)
See vol. 3, issue 9, "eBay's
Skype Outpaces News Corp.'s MySpace" for a report
card that features Time-Warner. TWX's The Departed
won Best Picture of the Year! AOL and Time-Warner have finally
figured out how to work together. Chairman & CEO Richard
D. Parsons, successfully fought off Carl Icahn, and Mr. Parsons
has proven to be a decisive and visionary leader in other
matters as well. TWX is buying back company stock, and announced
a new $5 billion repurchase program on 8.1.07. According to
Mr. Parsons, "We remain committed to delivering superior returns
to our shareholders by driving execution, generating industry-leading
operating and financial results, and allocating our capital
effectively. In addition to targeting resources to key growth
areas of our businesses, our $20 billion share repurchase
program -- which recently surpassed one billion shares of
our common stock bought to date -- continues to be an attractive
investment at current price levels." Reports 3Q earnings on
Nov. 7, 2007. P/E to growth ratio suggests stock may be undervalued,
according to MSN.com on 9.16.07. 2Q 2007: Revenues rose 6%
over the same period in 2006 to $11.0 billion, led by growth
at the Cable segment. As of June 30, 2007, Net Debt was $35.0
billion, up $1.6 billion from $33.4 billion at the end of
2006, due primarily to the Company's prior stock repurchase
program. (Market value was $68.18 billion on 9.16.07.) We'll
be monitoring the possibility of strikes by the Screen Actor's
Guild, Director's Guild and Writer's Guild in the October
mid-month update. The WGA contract is up on October 31, while
the SAG and DGA contracts expire in June 2008. Although the
studios have all ramped up production to stave off the effects
of a strike by the unions, a strike could certainly parch
the investor appetite in film companies, even if it doesn't
cripple profits. So, far, the word is that the writers have
needs that they want addressed. Typically, the writers work
without a contract, and strengthen their position with the
alliance of SAG and DGA in June, rather than force the issue
alone, however, there is no foolproof crystal ball in the
world of organized labor versus corporations. No news yet.
Check the mid-month update on November 13th, and we'll ping
you if we hear anything before then.
Trina Solar Limited
See vol. 4, issue 4 for the article
Hits the Mainstream,"
and vol. 3, issue 10, and vol. 2, iss. 12 for other articles
on solar energy. This is a profitable solar energy company,
based out of China. The international management team is very
strong, as are sales, growth and profitability. Share price
jumped in early July 2007. Institutional holdings increased
significantly on 9.12.07, per MSN.com. Announced 2Q 2007 earnings
on 8.23.07. Net revenues increased 77% over the last quarter
and 160% over the last year to $75.3 million. Net income increased
51.4% over the last quarter and 540% over the last year to
Carts and Sports Cars,"
from vol. 4, issue 6.
trading on the AMEX stock exchange on 12.11.06. (Also trades
on the Toronto Stock Exchange.) See the feature interview
and Chairman Rob McEwen
in 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; is it a gold exploration company, based
in Nevada. 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." Motley
Fool added U.S. Gold to their "5 Low-Priced, High-Star
Stocks" on 2.6.07. As more press comes on board, the
price should reflect the wooing of Wall Street investors.
(Now, if the company strikes gold, we'll all be geniuses…)
UXG is "continuing their aggressive drilling and exploration
program at our top-priority targets: Keystone, Limousine Butte,
Gold Bar, and Tonkin." Read the article above for more detailed
info on this gold exploration company. Rob McEwen, Chairman
and CEO, was appointed to the Order of Canada, the country's
highest civilian honor on July 3, 2007. Rob is one of 71 new
appointments announced by Her Excellency, the Right Honorable
Michaelle Jean, Governor General of Canada. U.S. Gold was
added to the Russell 3000 on July 3, 2007.
4, 2007 UXG announced results from its recently expanded exploration
portfolio in Nevada. At Tonkin, the best gold assay results
were 0.147 opt (ounces per ton) over 55 ft. (feet) (5.030
gpt (grams per tonne) over 16.8 m (meters)) and 0.115 opt
over 23.9 ft. (3.937 gpt over 7.3 m); and at our Limo Project
0.166 opt over 26 ft. (5.685 gpt over 7.9 m) and 0.052 opt
over 184.5 ft. (1.781 gpt over 56.2 m).
our last exploration release on June 12, 2007, assay results
from 44 holes totaling 35,964 feet of drilling have been received.
We haven't hit any home runs yet, but we are on base and it
is early in the game. We have advanced our understanding of
the geology and confirmed that we have encountered wide sections
of the right rock types to host a Carlin style gold deposit.
In addition, we are fortunate to have a large land holding
in a prospective area and a healthy treasury to fund our objective
of exploring aggressively for the next Cortez Hills discovery.
I must emphasize that exploration is the research and development
of the mining industry, and it is typically a frustratingly
slow and expensive process with low odds of success. The results
in this press release are positive and encouraging, but not
thrilling," said Rob McEwen, Chairman and CEO.
World Water & Power
VERY HIGH RISK
Trading off the boards
See vol. 4, iss. 4 for the article
Hits the Mainstream,
and vol. 3, issue 10, and vol. 2, iss. 12 for articles on
solar energy. This is a very high-risk company in the solar-energy/water
purification sector. CEO Quentin Kelly was invited by Governor
Schwarzenegger to join him on the Governor's tour of Canada,
during the California-Canada Conference on Clean Technologies
in Vancouver. Mr. Kelley was selected due to WWAT's leading
role in building prominent solar energy projects in California,
including the recently-announced Fresno airport solar complex
as well as the largest solar-powered agricultural system in
the world and only self-sustaining water utility. Announced
on August 9, 2007, that they would be delivering 10 Mobile
MaxPure units for use in Darfur, Sudan. The portable solar
driven water pumping and purifying units, purchased for an
aggregate of $775,000, will provide approximately 30,000 gallons
of safe drinking water daily at each of 10 sites across the
ravaged desert region. Deliveries are scheduled for late September/October
with installation in October/November. Financial terms of
the contract were not disclosed. Financial results on 8.13.07:
Revenue for the second quarter was $2.2 million, compared
with $1.8 million reported in the second quarter of 2006.
Net loss for the second quarter of 2007 was $2.8 million,
or $(0.02) per share, compared to a loss of $2.0 million,
or $(0.01) per share, in the second quarter of 2006. The 2007
second quarter reflects an increase in marketing and sales
expense tied to the Company's aggressive growth goals. According
to Quentin T. Kelly, Chairman and CEO, "We have a $200 million
pipeline of potential contracts plus additional large, pending
projects. We believe WorldWater has the unique, proprietary
technology and resources to offer the most cost-efficient
solutions to a world demanding clean, renewable energy."
On May 24, 2007 WorldWater &
Solar Technologies Corp. announced the signing of a Strategic
Memorandum of Understanding that is expected to lead to the
expansion and increased efficiency of the marketing and sales
forces of both companies. WorldWater is an international solar
engineering and water management company with unique, high-powered
solar technology providing solutions to power and water supply
problems; Solargenix is in the business of maximizing patented
solar collection technology and other patents and know-how
to convert the sun's light into a variety of temperature ranges
for thermal heat, with worldwide experience in energy and
environmental engineering, solar design and building construction.
The Companies expect to offer a full spectrum of solar power
capabilities for industrial, residential and commercial buildings
-- from lighting to heating, from driving motors and pumps
to hot water supply and HVAC. The companies believe that these
collaborative applications of their respective technologies
will contribute to increased marketing and sales with attendant
increased revenues, profitability and market shares for both
Wilderhill Clean Energy Portfolio
3, issue 10,
2, issue 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. Top holdings
on 1.12.07: SunPower, OM Group, Ballard, Energy Conversion
Devices, SunTech, Ormat, Evergreen, Ormat and MEMC Electronic
4, issue 3, "Money
Grows on WisdomTrees." This is a well-managed "smart"
ETF, which updates its holdings regularly, and trades on earnings
instead of market cap. Trading off the boards with a war chest
of capital and a former SEC chairman as one of the senior
Annouces earnings on 10.16.07.
We just re-added Yahoo to the list effective 6.15.07. Over
the past few years, Yahoo has waxed and waned (and as a result
has been on this list and on the Cooling Off list). New President/former
CFO Susan Decker reports that,"As we look ahead, we are very
excited about the transformational changes taking place on
the Internet, creating greater opportunities for both users
and marketers, and we are confident that Yahoo! has the right
combination of assets to help lead this evolution." Yahoo
execs have been saying that for years now, and still under-delivering
relative to their peers, like Google, but with Terry Semel
coaching (as non-executive Chairman) and Jerry Wang leading
(as CEO) can Yahoo jumpstart their stalled potential? Why
do we believe her this time? eBay's CEO Meg Whitman has just
put a lot of ads on Yahoo, which were previously the exclusive
domain of Google. According to the Associated Press, the move
is "a test to see whether it could get more bang for
its buck if it increased its spending on other search engines,
including Yahoo, IAC/InterActiveCorp.'s Ask.com and Microsoft
Corp.'s MSN." If Yahoo really does have their game together
this time, then the ad dollars might stick around and even
grow. We'll keep reporting more, but with the sleeping giant
Yahoo, which still tops the Internet sites with registered
users, time online and page views (along with Google, Myspace,
AOL and MSN), even the first sign of waking is worth noting!
Former CEO Terry Semel stepped down officially on June 18,
in an amicable move, without taking a severence compensation
with him. The Financial Times reports that his compensation
package of $71.7M in 2006 was the highest among S&P500
chief executives surveyed by The Associated Press. Semel has
already exercised options valued at more than $450 million,
not including the 2006 compensation (so he can afford to "resign"
and forego the severance package). The new advertising platform,
code-named Panama, is expected to help revenues in the current
quarter, according to the Financial Times.
SNE) and Sunoco (NYSE: SUN) both had great runs for the list! LifeCell
(NASDAQ: LIFC) posted over 180% gains before being moved to the
Cooling Off list. Bioteq Environmental (TSE: BQE) had 144% gains.
Rio Tinto was removed on 11.15.2006 with 145% gains. Las Vegas Sands
was removed on January 5, 2007 with 139% gains, Agilent on 2.1.07
with flat performance, and RELM Wireless was taken off with 3% gains
on 2.1.07. Blockbuster ran up 82.5% in gains, which we cashed in
on February 12, 2007. Intuit, deleted in June 2007, was a wash for
us - up and down. Macerich posted 150% gains between May 2003 (when
it was first featured) and September 2007 (when it was removed from
Get more information in vol.
4, issue 9 in
the REITs article. We first featured Macerich in May of 2003,
when it was trading at $33/share. In September, the signs
were pointing toward a cooling off in retail shopping center
Companies. The companies that are listed are worthy of watching.
Some we're watching to add to the Cooling Off list and some for
the Hot List.
added on 10.01.07
deleted on 10.15.07
Price when featured
Gains since original feature
Advanced Micro Devices
Read the "Apple
Chips" article in vol. 4, issue 2 for our take
on the current battle between AMD and Intel. AMD's strategy
is litigate to win the war, but in tech, the geeks beat the
suits. Better products win, not lawsuits. The most recent
losses that AMD has taken (due to an acquisition they made
and the price squeeze on products that Intel put them in)
have also led to rumors that the company is in a cash crunch.
Intel was added onto our Hot News List earlier this year,
and has posted gains of 37%. AMD's sales were down from $5.8B
in 2005 to $5.6B in 2006. Dave Orton, the former president
and chief executive officer of ATI Technologies, resigned
as executive vice president, effective the end of July, on
7.10.07. ATI was acquired by AMD in October 2006. In the third
quarter, AMD reported an operating loss of $226 million, and
a net loss of $396 million, or $0.71 per share. AMD completed
a $1.5 billion convertible debt offering and used the net
proceeds, together with available cash, to repay in full the
$1.7 billion outstanding balance of the term loan used to
Get more information in vol.
4, issue 9 in
the REITs article. Boston Properties looks great. Think that
the office building REITs may begin to come under pressure
sometime in 2007. Will be monitoring cash flow, capital spending,
productivity, salaries, GDP growth and other signs of the
business economy, which are the customers of Boston Properties.
See the article, "Green
San Jose Company," in vol. 4, iss. 8.
See the article "Faded
Blue Chips" in vol. 3, issue 8. Almost every
risk factor which GM listed in the annual report has occurred
- prices for parts are higher due to the metals commodity
crunch and gas prices have turned consumers to gas efficient
vehicles. GM still has an enormous overhead that impedes its
ability to be profitable in the global landscape. Investors
got excited late Sept. 2007 about a tentative deal with the
United Auto Workers Union, however, expenses are still too
high and the cars are still too unpopular. I've not highlighted
this company because the CEO is doing a spectacular job in
an awfully challenging landscape. Want to check out the focus
on new products, including the electric car, and will be doing
a full report soon. Not a short, but certainly not a company
that one would expect to be turned around overnight.
Get more information in vol.
4, iss. 9 in
the REITs article. We first featured Macerich in May of 2003,
when it was trading at $33/share. In September, the signs
were pointing toward a cooling off in retail shopping center
REITs, so we removed the company from our Hot News list (meaning
that we're capping the performance at 150% gains). There is
a good chance that the Santa Rally will enthrall investors,
and push the MAC price up, even though it is in the decidedly
unpopular REITs industry. We'll look to putting MAC on the
Cooling Off list in January 2008, or if interim news warrant
World's largest software company.
$31 billion in cash. Launched Zune on Nov. 14, 2006 and Vista
earlier this year. New products have not received "buzz"
or outstanding sales. Great blue chip for your long term portfolio
because with the war chest and talent at MSFT, even this year's
assembly line of flops shouldn't bring the company down, although
it may bring out the firing rod. Will pressure come down on
Steve Ballmer, CEO? Trading near the 52-week high, so waiting
for a better buy-in opportunity might yield better returns.
Off Stocks List (may be Poised for a Decline in Share
The companies listed in bold have recently been added to this cooling
off list and/or may be currently poised for a 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. (Again, note, that the stocks on this chart are
expected to go DOWN in price.)
Companies (Cooling Off List):
Price when added to Cooling
Spending $1 billion on accounting
fees related to the accounting scandal. Fannie Mae is behind
on filing 2005 and 2006 annual reports. If it fails to file
the reports by December 31, 2007, the company could be delisted.
(In the meantime, FNM is subject to quarterly review by the
NYSE.) And yet investors are still in to the tune of $58.44
billion…. Are you? Better check your mutual funds. The recent
subprime lending fallout doesn't bode well for FNM. 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.
CEO Bruce Karatz resigned under
pressure Oct. 2006, after SEC investigation of backdating
options. 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.
On June 28, 2007, KBH reported a loss from continuing operations
of $174.2 million or $2.26 per diluted share in the second
quarter of 2007, largely due to a pretax, non-cash charge
of $308.2 million related to inventory and joint venture impairments
and the abandonment of land option contracts. In the second
quarter of 2006, the Company generated income from continuing
operations of $184.4 million or $2.20 per diluted share. Revenues
totaled $1.41 billion in the second quarter of 2007, down
from $2.20 billion in the year-earlier quarter, due to a decline
in housing revenues that was partly offset by an increase
in land sale revenues.
See the article (Sub)
Prime Time in the May 2007 ezine, vol. 4, iss. 5.
On July 27, 2007, Novastar announced a reverse stock split.
As a result of the reverse stock split, every four shares
of common stock were changed into one share of common stock.
Robert Toll, CEO, and brother Bruce
Toll have been on an insider selling spree, totaling hundreds
of millions, since May 2005 (source: MoneyCentral.Msn.com).
Read the article, "Rupert
Murdoch, Nobel Laureates and Top Real Estate CEOs. Find Out
Where They Are Investing," from volume 2, issue
5 in 2005, when we first reported on REITs as a burned out
sector. There is a pending securities action complaint, from
June 2007, alleging that Toll Brothers "and one or more
members of its senior management, violated federal securities
laws by issuing various materially false and misleading statements
that had the effect of artificially inflating the market price
of the Company's securities and causing Class members to overpay
for the securities." On August 22, 2007, TOL will announce
2Q earnings. You can access the call on their website at:
companies were taken off of the Cooling Off list effective 10.16.06:
Verisign (+15%). IMClone (-11%). Yahoo (-28%). LifeCell was removed
on 7.2.07 with -4.5% overall performance. (The cooling off list
anticipates that a company will lose share price value.) Google
was added on 7.16.07 and then removed on 8.1.07 with losses of -6.7%.
General Motors was removed on 10.01.07 with mixed performance.
note: NataliePace.com does not act or operate like a broker. We
are a publishing, media and information center. This article is
intended to educate and inform individual investors, and, thus,
to give investors a competitive edge in their personal decision-making.
The publicly traded companies mentioned in this article are not
intended to be buy or sell recommendations. ALWAYS do your research
and consult an experienced, reputable financial professional before
buying or selling any security, and consider your long-term goals
and strategies. IMPORTANT DISCLAIMER: Information has been obtained
from sources believed to be reliable however NataliePace.com does
not warrant its completeness or accuracy. Opinions constitute our
judgment as of the date of this publication and are subject to change
without notice. This material is not intended as an offer or solicitation
for the purchase or sale of any financial instrument. Securities,
financial instruments or strategies mentioned herein may not be
suitable for all investors.
Miss President Bill Clinton when he keynotes the GreenBuild Conference
in Chicago, or Natalie in person at T. Harv Eker's Extreme Wealth
Conferences in Las Vegas and Atlantic City! The whole world has
gone green, and there are conferences galore to enjoy and thousands
of ways to educate and enlighten yourself.
The NataliePace.com Calendar section features conferences, retreats,
educational opportunities, cultural events, galas and online chats
with executives and VIPs. Stay plugged in! Visit our calendar section
See below for
just a few of the amazing educational and networking opportunities
that world-class organizations are offering for you. To access links
to the event website and registration, go to the Calendar
section at NataliePace.com.
Energy Symposium, Carlsbad, CA
Thursday, November 1st, 2007
Theme: The Wind Power Imperative: Securing America's Economic, Environmental
& Energy Future. Sponsors include all of the top wind power
Conference: Chicago, IL
Wednesday, November 7th-9th, 2007
building, living, and working in green buildings is important to
you, come join 18,000 others, including former President Bill Clinton,
who is the keynote speaker. Sponsored by General Motors.
a Rich Life Conference: LA, CA
Friday, November 9th, 2007, Los Angeles
teachers from THE SECRET and other very special guests: Arnold Patent,
Bob Doyle, Dan Millman, Hale Dwoskin, Howard Martin, Janet Attwood,
Rick Jarow and more.
Update: Hot News on Cool Stocks
Tuesday, November 13th, 2007
our mid-month update on the home page between noon and 7:00 p.m.
You can access the article under the online magazines link as well!
Subscriber's Teleconference with Natalie Pace.
Wednesday, November 14th, 2007
through 6:00PM PT.
ETF, Santa Rally, solar and clean energy, socially conscious investing.
Outperform Wall Street with tips from a top stock picker. Get the
call-in instructions from Heather@NataliePace.com. Want to get in
on Opsware and World Water before they post 200-690% gains? If Sam
can be up 87% on the year, so can you…
signing at the Strand, NYC
Thursday, November 15th, 2007
7:00PM through 8:30PM ET
David A. Andelman, executive editor of Forbes.com, discusses his
new book, A Shattered Peace: Versailles 1919 and The Price We
Pay Today. Did colossal errors set the stage for today's war
in Iraq and troubles in Palestine? 828 Broadway (at 12th Street).
Harv Eker's Extreme Wealth Conference: Las Vegas!
Saturday, November 17th, 2007
Pace will be one of the fantastic money gurus teaching you how to
invest like the rich do, in this 4-day educational/blueprint changing
Green Conference 2007 at UCLA
Saturday, November 17th, 2007
Green 2007 is an unprecedented gathering of the prime movers and
shakers in the world of green business. Join 500+ industry professionals
and together explore the future of sustainable & profitable
Full Moon Meditation
Friday, November 23rd, 2007
through 8:00PM PT.
full moon, people worldwide meditate at the same time, to promote
greater health within and greater peace throughout the world. Meditate
for 5 minutes or quiet your mind and focus on peace for the full
Don Giovanni at LA Opera
Saturday, November 24th, 2007
and sensual Erwin Schrott returns as opera's greatest Lothario in
the ravishing production that won LA Opera kudos in 2003.
Full Moon Meditation
Saturday, November 24th, 2007
through 11:00PM ET.
full moon, people worldwide meditate at the same time, to promote
greater health within and greater peace throughout the world. Meditate
for 5 minutes or quiet your mind and focus on peace for the full
La Boheme at LA Opera
Sunday, November 25th, 2007
popular opera ever written. Against the festive holiday backdrop
of 19th-century Paris on Christmas Eve, starving artists in the
Latin Quarter engage in high jinks, high spirits and high romance.
Harv Eker's Extreme Wealth Conference: Atlantic City!
Tuesday, November 27th, 2007
Pace will be one of the fantastic money gurus teaching you how to
invest like the rich do, in this 4-day educational/blueprint changing
Wednesday, December 5th, 2007
Look for our ezine to be on the home page between noon and 7:00
p.m. You can access the articles by scrolling to the bottom of the
home page at NataliePace.com!
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MISSION: To provide the news, information and education investors
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PHILOSOPHY: Member Mosaic. Piecing together a more complete picture
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team and lining up the numbers of the publicly-traded company
with its competitors in a Stock Report Card.
For more information on NataliePace.com contact us at
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