Vol.1 Issue 48 May 1st. , 2004
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of the Week:
"Typically the sooner you buy a winning company, the better.
$10,000 invested in AOL on Day One in 1992 was worth over $2
million [by 1999]."
Jeff Fischer, www.fool.com
The People's IPO. In a controversial, unprecedented
move, Google gives individual investors the chance to
play on a level IPO playing field. Want to bid, but
dont know how much and how to do it? Were
here to help! By
Natalie Pace, CEO, NataliePace.com.
MINDS: What do Rupert Murdoch, Nobel Laureates and the
CIA have in common? The Milken Global Conference,
where the brightest business leaders in the world met
to discuss everything from the world economy and terrorism,
to China's amazing transformation into the world's fastest
growing free (yes free market!) economy.
that glitters isn't gold.Its copper, nickel,
iron and steel. The metals sector trounces earnings
on limited supply and skyrocketing demand. NataliePace.coms
Metals Report Card.
There is a Will, You Get Your Way. By David Glasser,
Attorney At Law.
Allocation: Protect your golden years from the next
stock market correction. By Paul Woods, President
& CEO of Odyssey Advisors, LLC.
Guide to Puts and Calls for Maximum Rewards. By
Deborah L. Harrington, President and Chief Executive
Officer, Harrington Capital Advisors, Inc.
for Successful Investing: Cook up serious profits
with the right ingredients, starting with your heart.
By Natalie Pace, CEO, NataliePace.com.
Out At the Step Up Women's Network's Inspiration Awards.
By Meri Anne Beck-Woods, Chairman Odyssey Advisors
Conferences, galas, networking, teleclasses, seminars
and other special opportunities! Check out what's happening
online at the Calendar section of the web site.
The People's IPO.
a controversial, unprecedented move, Google gives individual investors
the chance to play on a level IPO playing field.
Pace, CEO, NataliePace.com
need to tell you that if the editors of American Heritage are
forced to include a noun as a verb in the dictionary, you are
witnessing an historic phenomenon, and if you've ever used
Google's search engine, you're probably keen on buying Google
Page & Sergey Brin
continues to break the mold, and is committed to continuing that
trend, with an unprecedented IPO, which is likely to become one
of the most successful IPO's ever. What makes this IPO unique?
Google has leveled the playing field, putting you, the individual
investor, into the bidding action BEFORE the first day of active
trading. Not only that, but Google is one of the first technology
companies to come on the scene with three years of positive earnings
and net revenues of almost a billion dollars.
Gone are the
Dot Com dreamland days of endless negative earnings. The online
advertising revenue bonanza has arrived, and Google is the leader
in its market.
& cash equivalents
www.sec.gov from Google Inc.'s
Form 10 filing on 4.28.04.
one of the top five most active web sites on the Internet. The
Google Web site was used for 34.7% of Internet searches in the
U.S. in February, according to ComScore Networks, while Yahoo
was used for 30% of searches and MSN for 15%. And that's just
the U.S. Google is also the number one search engine in the UK,
Germany, France, Italy, Netherlands, Spain, Switzerland and Australia
(Nielsen/Net Ratings 6.03), with 81.9 million global unique users
per month. (Note: There are only 290 million people living in
the United States, according to the Census Bureau.)
could do very well out of this if everything goes perfectly. But
as with all high risk investments—just don't bet the house on
it," writes Paul Wager, the Google Investor editor. Not all
financial professionals agree that the Google IPO is a good bet,
however. Many are quick to point out that most IPO's are market
laggards. Jay Ritter, a finance professor at the University of
Florida, has research based on all the IPO's from 1980 to 1997,
which shows an average -22% negative return for the first five
years of trading for the IPO's launched during that period. On
the other hand, 31% of those same IPO's OUTPERFORMED the market
during that same five-year period, while 16% were merged or acquired
for a 17% net return. (http://www.iporesources.org//failipo.txt)
If you believe
that Google is indeed an uncommon company with unlimited prospects,
it's not hard to imagine that Google could be in the top third
statistical group of outperformers. Certainly, even in the worst-case
scenario, Google would be an M&A target. So, what's left to
consider? Price. You can buy the greatest company on the planet
at top dollar and lose money in a market correction. The U.S.
doesn't have much experience with Dutch auctions, and to use this
undertested IPO vehicle now, during the most anticipated IPO in
recent memory, is a risky, ballsy move—something to admire and
fear at the same time.
is Google different (better) than most technology IPO's?
particularly technology companies, are coming into their IPO with
the powerhouse positive income and the multi-billion dollar companion/competitor
organizations that Google has. Yahoo's market capitalization is
$33 billion dollars, and Yahoo is trading at 80 times earnings.
EBay's market capitalization is almost $52 billion, trading at
68 times earnings. (Please note that there are analysts who believe
both companies are trading at inflated prices.)
a lot of room to wiggle in the Google IPO, but the world's number
one search engine is taking bids from even inexperienced investors,
which could spell mania and mistakes. With 400 million common
shares outstanding (according to the SEC filing), a reported 264
million of that total being issued, and another 45 million available
(from the insiders), the Google market capitalization could get
tapped out on the first day, if the bidding run-up is too severe.
$27 per share brings the market capitalization to a healthy $8.3
billion, based upon 309 million shares sold. Quadruple the share
price to $108, something that is not out of the question on the
first day of heated trading for a popular IPO, and Google's market
capitalization will match Yahoo's on DAY ONE, leaving not much
room for vulnerability in a highly competitive space. The bottom
line is that money managers are still crunching the numbers,
and it will pay to keep yourself informed before your lay your
bid on the line.
if you don't like the idea that your common share gets you one-tenth
the voting privilege of the Preferred shareholders, you should
opt out of the Dutch Auction. (Google's controversial voting classification
is shared with few other companies on Wall Street--Berkshire Hathaway,
Warren Buffet's company, being another company to employ it.)
the most interesting outcome of the Google IPO is that it virtually
eliminates the insider's "first day premium," which
is the difference between an IPO's initial offering price and
the price at which it trades the first day. Typically, this is
when Wall Street veteran heavyweights, who have gotten in at the
IPO's offering price through their investment banking relationships,
have their hand on the broker's SELL throttle to cash out at the
height of the first-day trading frenzy, often for extraordinary
one-day gains. Toward this end, founders Sergey Brin and Larry
Page have remained true to their democratic ideals, something
admirable in the world of new billionaires. Since they've sworn
off interviews, it's hard to know if the Google founders still
don their blades and chase down their employees in the twice-weekly
roller hockey lunch competitions in the parking lot of their Northern
Page, Google's co-founder and former CEO grew the company to
more than 200 employees and profitability before moving into
his role as president, Products in April 2001, but Google is
now being guided by a more experienced CEO and Chairman, Dr.
Eric E. Schmidt, the former CEO of Novell. Naysayers believe that
bringing in experience and becoming a public company are just
the first of many necessary steps toward bureaucracy, bottom line
and blandness, but, at least for now, Google remains committed
to their unique corporate culture of fun (lava lamps and roller
hockey), hard work and independent thinking. Google's management
is refusing to provide quarterly earnings guidance and has promised
to focus on long-term goals. Google requires engineers to spend
a day a week on projects that interest them, unrelated to their
day jobs. One Google engineer recently decided to apply Google's
search and retrieve capacity to email, with the goal of making
it so that "users should never have to file or delete a message,
or struggle to find an email they've sent or received." Gmail
began testing on April 1, 2004. Since search is the number two
online activity, and email is number one, investors should be
happy to see Google embracing a new track of revenue, even if
it, too, will be heavily dependent upon advertising dollars.
It is important
to consider that most of Google's money comes from online advertisers.
Unlike traditional advertising sales that are tied to cyclical
corporate capital spending cycles, however, Google has an abundance
of mom and pop shops. While that's not exactly revenue diversification,
it provides a small amount of revenue stability, especially while
small businesses remain the meat and potatoes of the U.S. economic
Year End 12.31.2003: $916,603,000
Year End 12.31.2003: $ 45,271,000
Revenue Year End 12.31.2003: $961,874,000
IPO buzz has rock star status in employee break rooms, which are
aflutter with the words "Dutch auction," as everyone
scrambles to comprehend just how they can get in on the action,
and at what price. It's too soon to tell whether the Dutch Auction
soars or pops, and whether reasonable bids will be accepted or
if outrageous bidding action will drive the share price through
the roof. Obviously, the biggest winners already are billionaires:
Sergey Brin, Larry Page and the venture capitalists who were smart
enough to fund them.
Just how valuable
Google has become in our lives? I can type in a few words and
find out, within seconds, which champion stallions Smarty Jones
will join if he earns the Triple Crown this year. Horse races,
like IPO's, are gambles, but banking on winners, like Google and
Smarty Jones, is always the best bet.
At any rate,
even in the People's IPO, those who are more likely to profit
are those who best understand the game. If you intend to participate
in the Google IPO, keep informed, and get as many professional
opinions on a reasonable bidding price before you lay your money
on the line.
mathematical term for a one followed by 100 zeroes. Hopefully
that will also define your success!
information on how to register and bid in the Google IPO, check
out the following link:
MINDS: What do Rupert Murdoch, Nobel Laureates and the CIA have
Pace, CEO, NataliePace.com
Rupert Murdoch, Chairman and CEO, News Corp.
Dr. Gary Becker, Nobel Laureate in Economic Sciences
Rupert Murdoch, Nobel Laureates and the CIA have in common? The
Milken Global Conference, where the brightest business leaders
in the world met at the end of April to discuss everything from
the world economy and terrorism, to China's amazing transformation
into the world's fastest growing free (yes free!) market economy.
with Quotes from some of the most experienced minds on the planet,
on everything from cutting edge cancer drugs, to MCI, to the 2004
Olympics in Athens… For more information on the Milken 2004 Global
Conference, go to: www.MilkenInstitute.org.
Companies (News Corporation, Sony, Viacom, Vivendi Universal,
year, there will be major regulatory change in telecommunications,
and broad band will be in every house. The value will be the content
that you put through. You're seeing people working to grab content,
to capitalize on that option." John Rutledge, Rutledge Research
whole media sector, and Viacom particularly, will benefit from
the up-tick in the economy. Companies will generate advertising
revenue. 2004 has the whole presidential primary. The Olympics
coming up in September. These are just some of the events in 2004
that didn't happen in 2003. Media companies will benefit from
those trends." Phil Orlando, Federated Investors
a window for pretty fast growth. +12-15% satellite subscribers
per year. +10% Sky TV growth per year for some time yet. As for
BskyB: I hope there's more growth there." Rupert Murdoch,
Chairman and CEO of News Corporation
is dead man walking. I think it's a terrible investment. MCI,
like AT&T, will be left high and dry when the major regulatory
change in Congress happens."
Rutledge Research Group
particularly ImClone, Genentech and gene-based cancer treatments
is starting off very successfully… ImClone has an excellent pipeline.
They have a tremendous number of product candidates, and soon
they'll be in the clinic with a drug that looks a lot like Genentech's
Avastin." Michael King,
Bank of America
Securities, who puts a price target of $91/share within six months
is used in early stage colon cancer. Erbitux is currently being
used in very late stage, for people who have failed two or three
rounds of chemotherapy. Erbitux and Avastin are not competitive,
in fact, they should be complimentary." Michael King, Bank
of America Securities,
want to look at solid companies with solid earnings. Any health
care related product will perform well in the 2nd half
of the year. You want to stay away from technology and some of
the high flyers." Bill Strazzullo, State Street
Outlook and Diversification Strategies
is going to be a consolidation period, where the market ends pretty
much where it began… People should be defensive now. Take the
money off the table. Take advantage of the run-up we've had… Move
into pharmaceutical stocks, oil, staples…" Bill Strazzullo,
U.S. went through a series of major shocks, Internet crash, 9.11,
the Iraqi War, Enron. But if you look at productivity, it continued
to do unusually well. During the recession, productivity continued
to grow. After the recession ended, productivity grew even faster.
When you get a high productivity growth, there is no better measure
of how an economy is doing." Gary Becker, Nobel Laureate
in Economic Sciences
have forgotten asset allocation, which is extremely important.
How much do I have in cash, hedge funds, equities and fixed income?
It seems like people have forgotten that already." Thomas
Hughes, Global Head of Deutsche Asset Management
so many unknowns out there in the world, we should be pretty humble
in our predictions, though not so with our hopes. I find myself
looking at the world, and agreeing with Gary Becker, and being
extremely optimistic in the long term. There are dangers in the
short term." Rupert Murdoch, Chairman and CEO of News Corporation
will go a lot higher, over $40 a barrel. There is a very big supply/demand
imbalance. There is just not enough supply to meet the current
global demand for oil." Bill Strazzullo, State Street
could spike oil prices to $70-$80 barrel." Gary Becker, Nobel
Laureate in Economic Sciences
of the most outstanding things to worry about is Saudi Arabia.
If there is a revolution there, it would happen overnight, and
oil would go from $40 to $80. It would put all of us—the U.S.,
Japan and China--in a horrible state." Rupert Murdoch, Chairman
and CEO of News Corporation
has an immigration problem from the Middle East and Northern Africa.
There is a huge immigration of Muslims. They have major centers
of trouble that are just boiling up. Paris is surrounded by vast
amounts of apartment--all no-go areas. There is more danger of
terrorist attacks there than we have today here." Rupert
Murdoch, Chairman and CEO of News Corporation
World Economy and Europe
I'm optimistic about the world economy in general. I'm not optimistic
about Europe. I think Europe has real problems, particularly Germany
and France." Gary Becker, Nobel Laureate in Economic Sciences
where we'll be in five years, if we go forward at 4-5% year, and
Europe grows at 1% a year. At the moment, you can't see any hope
of Europe doing better than that. They have no political leadership
with the will to change. They know it ought to change, but you've
seen very weak attempts and immediate surrender to opposition.
Europe is over-regulating every business and everybody. When you
think of Europe as a whole, it's a great block of advanced democracies,
and it's tragic that they're being screwed up in the way they
are." Rupert Murdoch, Chairman and CEO of News Corporation
not ignoring the risks. China may be slow in transparency and
new accounting standards. The banking system is replete with non-performing
assets, at 30-40%. There are pressures on currency. Historically,
reporting has not been transparent. There is indeed corruption,
particularly in rural areas. There are also public health risks--AIDS,
SARS. All big bets have big risks." Sharon Allen, Chairman
of the U.S. Board of Directors of Deloitte & Touche
is on the verge of an overheating economy. Hopefully, the government
can do the right thing there and throttle back before that becomes
a problem. We hope we don't get into a boom/bust cycle there."
Thomas Hughes, Global Head of Deutsche Asset Management
witnessing the rise of two powers with over a billion people each—China
and India. This will have huge impacts in how our global economy
plays out in the future. Some of the tension in the oil markets
has been because of the demand pulling China. 40% of cement, 25%
of coal, steel and aluminum are [used in China]. It's staggering.
It is a boom for commodity producers." Jami Miscik, Deputy
Director for Intelligence for the Central Intelligence Agency
predict slow, but steady relaxation [of censorship in China].
There are 1.3 billion people. They are facing huge challenges.
If they can avoid mass unemployment, reform will proceed for some
time." Rupert Murdoch, Chairman and CEO of News Corporation
is going to grow old before it grows rich. This is a paradox and
challenge that is unprecedented in world history. China needs
to create 24 million jobs per year in order to keep its people
employed." John Holden, President of the National Committee
on U.S.-China Relations
Direct Investment in China equals $200 Billion. $40-$50 billion
per year goes into China. That's a level unprecedented in any
country, including the U.S. If you are not a major player in the
China market today, you will not be a global leader for this century."
Howard Chao, o'Melveny & Meyers
don't go to China to invest because of their legal system. They've
made progress, but it has serious problems. They don't have well-trained
judges and lawyers, and they don't have an independent judiciary.
You have a government system that is run by one party and that
party is not held accountable." Howard Chao, o'Melveny &
Western media hasn't been good in portraying a picture of China
today… [China is] hope and hunger. Hope comes from the fact that
the transformation in the last 15 years is nothing short of amazing.
They expect the next 15 years to be even more amazing. 15 years
ago, we would say, "We'll have pork on Saturday." We
ate vegetables because we couldn't afford meat. Hunger means,
"I want more. I want my piece of the transformation."
The existence of private property wasn't a concept to be guarded
until recently." Yibo Shao, Eachnet.com
progress in China is real and irreversible. The world has reshaped
us. Private businesses are allowed to take over state-owned businesses…
The Chinese people will not be able to deal with a slow down.
If the economy slows, which the government is trying to do, it
shouldn't slow so much that people's expectations are not quite
met." Yibo Shao, Eachnet.com
above were from the Milken Institute Global Conference in Los
Angeles, April 26-28, 2004 and CNBC, April 19-23, 2004.
that glitters isn't gold.
that glitters isn't gold. It's copper, nickel, iron and steel.
The metals sector trounces earnings on limited supply and skyrocketing
demand. NataliePace.com's Metals Report Card.
been the story in the world markets, as the sleeping giant that
is rolling out of its 1800s agrarian society at a staggering growth
rate. While in the United States we hear mostly of the trade deficit
the U.S. carries with China, in the world stage, China actually
consumes more than it exports. According to Ross DeVol,
the Director of Regional Economics at the Milken Institute, China's
Trade Deficit in March 2004 was $-.5 billion.
One of the
sectors that is benefiting from China's incredible growth is commodities.
The metals sector, in particular, has recently trounced earnings
estimates, and many metals stock prices have doubled or tripled
this year. "Global demand for nickel, iron ore, aluminum,
coal, oil, copper and soybeans is rising along with the economies
of China and India, so even if inflation doesn't pick up, commodities
stocks should do well," writes Timothy Middleton, CNBC contributor.
demand meets limited supply— a tale of high prices.
nickel consumption rose by more than 20% in each of the past four
years," says Scott Hand, Chairman and CEO of Inco Limited,
the world's 2nd largest producer of nickel. "Last
year, it was up by nearly 40%, and we expect it will rise another
20% in 2004… Supply growth is not expected to rise significantly
before our Voisey's Bay and Goro projects come onstream in 2006."
year, many commodities prices were depressed, and metal companies,
like Phelps Dodge, were carrying bare minimum labor forces and
struggling to stay alive. Now that profitability is back, companies
can't just ramp up labor, dust off machinery and crank out the
product. Often companies face restrictive environmental policies
and expensive R&D costs to locate and mine new reserves. Mike
Rhodes, the chief of Safford, Arizona's volunteer fire department,
jokes that Phelps Dodge has been trying to open a local mine since
the ‘60s, and is just now getting water rights secured.
can outsource a router to Singapore almost overnight; but it takes
years to dig a mine," says Paul Woods, CEO of Odyssey Advisors.
"We have not added to productive capacity in most resources
for several years. Demand is growing throughout the world, and
nowhere more than in China, whose gross domestic product skyrocketed
at a 9.7% rate in the first quarter and whose infrastructure building
has created the fastest-growing market for energy and materials."
Mr. Woods recommends that investors look at two "actively
managed" mutual funds—RS Global Natural Resources (RSNRX)
and T. Rowe Price New Era (PRNEX). He likes Noranda over Phelps
Dodge because they've been "blowing away estimates and they
pay a dividend." (Rio Tinto is right in line with Noranda's
dividend, at 64 US cents per share, as is Southern Peru and Freeport
McMoRan Copper & Gold Inc.)
Mr. Woods recommends that investors separate useable metals, like
copper, iron, steel, aluminum and nickel, from the vanity metals—gold
and silver. "Silver doesn't really have any industrial use,
and gold bugs like to recommend it for Armageddon. Gold is owned
by too many nuts--all the guys with bunkers and food supplies."
looking to add individual stocks to their portfolio, NataliePace.com
has lined up some of the metal company competition side by side.
There is a huge difference in the management, resources, labor
and environmental policies of each of these mega-corporations,
which reflects in the financial performance of each. Click
here to review the NataliePace.com Metals Stock Report Card.
story of the numbers points repeatedly to Rio Tinto, a London-based,
worldwide metals company, as the standout performer.
is the best value (lowest P/E). The company is in positive earnings
with one of the lowest debt/equity ratios of the sector, and the
highest dividend. This year, Rio Tinto was in a position to sell
back positions to competitors like Freeport-McMoRan Copper &
Gold Inc. for up to 76% profit.
edge, which is present in the numbers, is also reflected in the
proactive attitudes of the top executives. Rio Tinto's Chairman,
Paul Skinner, outlined how his company stays ahead of the game
on April 7, 2004 at the Annual Shareholder's Meeting in London,
saying, "All our operations produce an annual community report,
which is discussed with their local neighbors… These reports help
to demonstrate our operations' awareness and understanding of
sustainable development; and how they build social, environmental
and economic considerations into the business decisions and actions
that they take. I believe this way of operating - where we generate
increased shareholder value by balancing long-term and short-term
imperatives in every aspect of our business - will help to sustain
Rio Tinto's strong performance record in the years to come."
chairman and CEO roles are split, and the company takes corporate
governance seriously. "A large element of my role as Chairman
means acting as guardian of corporate governance in Rio Tinto,"
says Mr. Skinner. Many of the other companies still have one person
acting as both Chairman and CEO, a practice that has been widely
criticized by Wall Street pundits and investors who are pushing
for corporate transparency, accountability and reform.
On the other
hand, Phelps Dodge Chairman and CEO, J. Steven Whisler, painted
a fairly grim scenario of his industry, speaking just six months
ago, on 10.14.2003 at the London Metal Exchange, in London, England.
Mr. Whisler said, "Difficult prices and low demand… made
for rough sailing. Now, more aggressive regulations than we've
ever seen feels like the undertow that can take us to the bottom
of the ocean… The bad news is that dwindling returns weaken
us in the competition for capital and constrain our ability to
build for the future." Not surprisingly, Mr. Whisler
has cashed out $32 million in Phelps Dodge stock at $78.19/share
since that speech. Phelps Dodge's President/COO Timothy Snider
sold $6 million in P.D. stock since November 2003, according to
Phelps Dodge executives are cashing out and trying to return to
positive earnings and cash dividends, Rio Tinto is promoting both
value and growth. Rio Tinto's P/E to growth rate suggests that
the company is undervalued, according to Money Central. "The
improving global economic conditions will mean robust demand for
metals and minerals, and higher prices, from which we can expect
to benefit… China's ongoing demand for raw materials has created
a significant opportunity for the mining industry and provides
Rio Tinto with a strong growth prospect," according to Skinner.
If you believe
nickel is your cash cow, then take a closer look at Inco, the
world's 2nd largest nickel producer. As Scott Hand,
Chairman and CEO of Inco Limited points out, "We're in the
midst of one of the strongest nickel markets we've seen in over
a decade… and we're major participants in one of the most dynamic
world markets to emerge in our lifetime—China."
used in everything from bridges to buildings, from medical instruments
and International Space Stations to hybrid car batteries. Further,
it is able to be recycled multiple times. According to Inco's
chairman, "Our Inmetco facility in Ellwood, Pennsylvania
is the largest recycler of nickel batteries in the world."
So think of
adding a little copper and nickel glitter to your portfolio. It
could be more valuable than gold.
There is a Will, You Get Your Way.
David Glasser, Attorney At Law
Glasser has been practicing law for more then twenty-five years
and is a partner in the firm of Greenspan, Glasser & Rosson.
He is frequently quoted in the media on current aspects of estate
planning law and his articles are published frequently in the
press. The main emphasis of his practice is in the areas of estate
planning, business and real estate. He can be reached at 310-649-1991
are young or old, single or married, have children, own real estate
or assets in excess of $100,000.00, you absolutely need to think
about estate planning. If you don't decide what happens to your
offspring and your belongings, the State will, taking a significant
portion of your cashola in the bargain.
planning is the process one goes through to determine
the most effective method of meeting your legal and financial
needs and requirements while you are alive; and ensuring your
wishes are carried out when you are either not competent to manage
your affairs or pass away. On the legal side, an estate plan
will generally include a will, a trust and a durable power of
attorney for health care. Additionally, an estate plan should
also include consultations with one or all of the following: an
accountant or CPA; a financial planner; and an investment counselor.
These are the professionals that will advise you on the best methods
of maintaining your life-style as well as ways to increase your
portfolio and decrease or delay those horrible potential estate
and gift taxes.
don't properly plan your estate, unless you spend everything before
you go, a portion of the money you could pass on to your children
your cat or your favorite charity, instead will go to attorneys
and others. Additionally, your wishes on distribution, childrearing,
your health, and other important issues will have no legal effect
on the court unless you have some legally enforceable plan in
Did you change the beneficiary?
Are your divorced?
If you are hopefully you have been smart enough to change your
will, trust, property ownership title, 401k or insurance, beneficiary
designation or any other legal document in which your former spouse
was named. If not, watch out! Your ex's new trophy spouse, instead
of your children and your current love, could benefit.
If you are
re-married or about to re-marry, you should be sitting down and
discussing the Y.M.O. question (yours, mine, and others),
and how those assets will be distributed. If you don't properly
plan, and you predecease your second spouse, your children may
end up receiving less of what they would have been entitled to,
had you properly planned.
While no one
wants to think about death, age is not a factor when it comes
to dying. Accidents or sudden death can occur to someone in his/her
twenties as easily as someone in his/her eighties. If you want
your family to be protected as much as possible, and put as much
money in their pockets as possible (rather than into the pockets
of attorneys, appraisers, court appointed officials and others),
you should be making plans now.
I have conducted
a number of seminars over the last several years, and have been
surprised to find most people don't have wills. Without a will,
your property will be distributed based upon applicable state
law, which may or may not coincide with your wishes. In California,
the surviving spouse will receive the community property interest
of the deceased spouse.
where the deceased spouse had separate property, the surviving
spouse will not receive 100 percent if there are surviving children,
parents, siblings, or children of siblings. In the latter situation,
the surviving spouse could receive as little as one-third of the
separate property. Do you really want to be evicted from your
house by relatives you hate?
I have had
situations, where a person wished, for one reason or another,
to disinherit their children. If there was no will, the children
would be entitled to an interest in the decedent's separate property.
The amount of interest would depend on whether or not there was
a surviving spouse.
will, a judge will determine who will be guardian of any child
under the age of eighteen. While both spouses are alive and mentally
competent, it is not an issue. However, tragedy strikes without
notice, and unless there is a will, "the idiot brother"
may obtain custody of the children and control over any funds
left to the children.
High Price of Probate
compensation to the attorney for ordinary services is based upon
the gross value of the estate. The time the
attorney spends is irrelevant.
If the attorney spends ten hours or fifty hours, the compensation
will be the same.
double, as the administrator or executor will be entitled to the
same fee as the attorney. The following fees will be paid twice.
4% on the
first $100,000 = $4,000;
the next $100,000 = $3,000;
the next $800,000 = $16,000
the next $9,000,000 = $90,000.
If your house
has a gross value of $500,000.00, and is the only asset in probate,
the attorney and administrator/executor could each receive
$13,000.00 for their work. That is $26 grand that could have gone
to a worthy cause or your spouse and children instead!
The fees for
the attorney and administrator/executor are in addition to court-
related costs or appraiser fees. Additionally, if the attorney
or administrator/ executor has to perform duties outside of the
normal scope of activities, they would be entitled to even more
compensation, as determined by the Court.
best of circumstances, it will take the same amount of time it
does to have a baby or nine months for the Court to close the
estate. During that time, the judge will be reviewing the activities
of the administrator or executor.
is not just property obtained prior to marriage. It can also be
property received through inheritance or gift. A person could
give separate property to the community. However, under California
law the gift must be in writing. While having a will is certainly
better than being without one, there are additional steps you
should be taking to protect your interests, including having a
trust. A trust (sometimes called a living trust, family trust
or revocable trust) is a document that performs a number of different
functions saving you and your beneficiary's time and money.
I have heard
many people say, "I don't have that much. I don't need a
trust." If you own real estate, or have assets in excess
of $100,000.00, you should be seriously considering a trust. No
court action is necessary if a trust has been properly created
and the assets transferred. Thus the time and expenses of a probate
proceeding are avoided.
A trust provides
instructions if you are disabled and not capable of caring for
yourself. Without such a provision, a Court will appoint someone
to care for you and your assets. Of course, attorney fees, court
costs and conservator fees will be assessed. If you have not previously
designated someone to be your conservator; or there are no family
members locally (even if there are family members, and there is
infighting), the Court will appoint a conservator from an approved
list. I have seen, on too many occasions, the person's assets
evaporate under those circumstances. If a conservator provision
is in your trust document, then the management of your assets
remains private. Additionally, your wishes as to the manner
in which the assets are to be managed will be followed. If
a Court becomes involved, your financial affairs and mental status
If your taxable
estate exceeds a certain amount (in 2004-2005 that amount is $1.5
million), a trust may also be used to postpone, reduce or even
eliminate federal estate taxes. Depending on the trust provisions,
property can be immediately transferred to the beneficiaries,
without seeking court approval. Otherwise, the trust provides
instructions as to management of the assets and at what point
distribution is to take place.
A Vegetable, Being Fed Through A Tube, and Connected To A Machine?
of Attorney document allows the person you select to make health
care decisions for you when you are unable to make those decisions
for yourself. The document will also contain your wishes regarding
life sustaining treatment and other health care issues, as well
as organ donation and what you wish done with your remains. The
document can specify what treatment you want, as well as what
treatment you don't want. Without the power of attorney, your
wishes may not be carried out.
BOTTOM LINE ON BOOKS & BOILER PLATE
Will and trust
forms can be found at most stationary stores. Books on wills,
trusts and estate planning can be located at book stores, generally
in the "legal" or "reference areas". The books
provide information, as well as forms. Some books also supply
CDs of the forms.
there are standard paragraphs in the documents that may be applicable
to numerous situations. However, the chances are the books and
forms will not have all of the options that may apply to your
situation. While someone with experience in the field will be
able to prepare a provision that is best suited to your situation,
the books and documents will not be of much help. It is also easy
enough to place something in a document that may seem clear-cut,
but down the road turns out differently. (Does anyone see a problem
with: "I give my 1964 Corvair to my nephew John?").
If an error is made, the entire document, or at least the particular
provision may be unenforceable. The end result could be as if
there was no will or trust. There could also be unforeseen tax
consequences. You will also be relying on the book or document
being accurate. I have seen books where the information is not
correct. If you rely on inaccurate information, the
outcome you anticipate could be vastly different.
advertisements in the newspapers for estate plan services at reduced
rates (generally between $400-$600). These companies will send
the customer a questionnaire and will be happy to answer questions.
In most instances, people have no clue what questions to ask.
Depending on the company found in the newspaper ad, it may or
may not transfer assets into the trust. Instead, it may merely
give you instructions. If a trust is prepared and assets are not
transferred into it, a trip to the court will be required.
All of the
attorneys I know who work in the area of estate planning have
a considerable amount of questions to ask once they have spent
time with the client, are aware of the client's assets and have
an understanding of the client's intentions. Generally the attorney's
fees for preparation of will(s), a trust durable power(s) of attorney
for health care and transfers of property will range between $750-$2,000
depending on marital status, assets and location.
You may want
to check with your local bar association, AARP, or if you are
a member of a pre-paid legal plan, for a referral to an attorney
that will give you a reduced rate for estate planning. But be
sure the attorney you select has experience in the estate-planning
of proper estate planning now can save thousands if not tens of
thousands of dollars down the road for you and your beneficiaries.
Proper estate planning also takes decisions out of the hands of
the Court, and puts them in your hands-where they belong.
a number of sites on the Internet that may be of interest:
is a publisher that provides information in numerous areas of
the law. The section on wills and estate planning provides a number
of articles on the basics of planning one's estate.
is a site that provides not only general financial information
for the investor, but also explains the benefits of estate planning,
with details on the different types of trusts.
is the site for the National Association of Financial & Estate
Planning. This site explains basic estate planning strategy, as
well as providing information on asset protection and taxes.
David Glasser will be in the NataliePace.com Chat Room on Wednesday,
May 19th, at 8:45 a.m. PST (11:45 a.m. EST) to answer all of your
burning will, trust and power of attorney questions. Mark your
Allocation: Protect your golden years from the next stock market
Woods, President & CEO of Odyssey Advisors, LLC
One of the
interesting things about investing is observing how much time
investors spend on relatively unimportant decisions and how little
time they spend on the important ones. This problem isn't limited
to novice investors; I've seen professionals obsess for weeks
on whether to buy Intel or Microsoft while not addressing the
much more important decision on how much to invest in technology
stocks. However, the mother of all investment decisions is how
much of your portfolio to invest in stocks.
long term, no decision is more important than asset allocation.
The mix of stocks, bonds, and cash in a portfolio controls the
amount of income produced, the likelihood of a negative return,
and the long-term returns. More than anything else, this decision
will determine the size if your nest egg at retirement.
the real world means that, even though you're a yuppie, you can't
have it all. Every decision involves a tradeoff. Is income, safety,
or capital appreciation most important? You can pick only one.
Money market funds are the safest investment, but also provide
the lowest returns over time. Bonds produce income but most offer
little upside potential while still exposing your portfolio to
the risk of decline. The last few years reminded us again that
stocks occasionally become a horror movie. However, if you're
serious about wanting to retire one day, stocks are still the
only publicly traded securities worth considering.
Over the years,
I've met a lot of people who pretend to be long-term investors
and claim to understand that stocks go through periodic declines.
However, when the inevitable drop happens, the resolve crumbles
for many, as they run for the exits. The result is that they're
on the sidelines watching the real long-term investors make money
when the market turns around. The importance of making a decision
and then staying the course can't be overemphasized.
having about five weeks to remodel our office and get it open
by an SEC deadline. I asked our contractor whether he could do
it, and he said he could. Then he looked at me with a humorless
expression and said, "Only you can screw it up." He
made it plain that we had no chance of reaching our goal if we
changed our mind on the design half way through the process. We
made it, but every time I think of asset allocation, I think of
our crusty contractor.
To help with
the asset allocation decision, a good general rule is that investors
with a longer time horizon should take more risk. Younger investors
trying to accumulate assets should generally have a larger percentage
of their portfolio invested in stocks as a result. Once investors
accumulate assets and near retirement, a shift to bonds and more
emphasis to safety and/or income is appropriate.
that you have 30 years before retirement. Let's assume also that
you plan to invest $500 per month, or $6,000 per year. The best
way to do this is through a retirement plan at work, since gains
aren't taxed and no taxes are paid until the funds are withdrawn.
However, even if no retirement plan is available, you still have
to invest money to have any realistic chance of a comfortable
If we look
at the current yields available on Treasury Bills and 5 Year Treasury
bonds and look at compound returns on stocks from 1926, we get
Treasury Bonds 3.25%
500 Index 10.41%
Company Stocks 12.93%
500 Index is our proxy for big companies or "blue chips".
Midcap stocks have a medium sized market capitalization. By the
way, we didn't include foreign stocks in the above, since they
have a shorter history of returns. However, based upon returns
since 1970, foreign stocks appear to offer significantly lower
returns and more risk than their domestic counterparts.
that someone invests $500 per month or $6,000 per year and achieves
the above returns, here is the result after 30 years:
Treasury Bills $206,592
Treasury Bonds $297,792
500 Index $1,077,883
Company Stocks $1,761,665
noting that doubling the monthly investment to $1,000 will double
the size of the nest egg at retirement, etc. In this example,
the original investment is $180,000. With Treasury Bills or
money market funds, you nest egg is safe. However, at present,
you'll earn a return lower than the current rate of inflation.
This means that the money you take out in 30 years will buy less
than the money you put in. That's a pretty high price for avoiding
at least keep you slightly ahead of inflation. However, with the
cost of health care these days, the income from a nest egg of
less than $300,000 might just pay the premiums. If you plan to
eat and have a roof over your head upon retirement, this won't
retirement becomes a realistic possibility. Even the least
attractive segment of the stock market (blue chips) has the potential
to turn you into the millionaire next door. If you have the option
of investing in a mutual fund composed of smaller or midcap companies,
the biggest problem facing you in retirement will probably
Girl's Guide to Puts and Calls for Maximum Rewards.
business proceeds on beliefs, or judgments of probabilities, and
not on certainties."
As true as
this quote is to the financial assumptions made on behalf of any
business endeavor, it also holds true for the world of investing.
We all look for certainty, where certainty doesn't exist - - in
the markets. The stock market is filled with uncertainty and
is cyclical in nature, going up, peaking, going down, bottoming-out,
and then going up again. The market may be volatile or it
may remain fairly neutral for an extended period of time. Using
options offers you an opportunity to profit from these cyclical
and volatile times in the market.
be a very profitable technique to help you realize sizeable investment
returns without having to invest in the stock itself. Options
may also assist you with buying or selling stock at better than
market prices. Writing options on stock that you already own may
also be an excellent alternative to enhance your portfolio returns
and performance, while protecting the stock from decline (insurance!).
Investors use options in many ways, although the focus of this
article will solely address option strategies designed to maximize
returns, by using two of the most basic options strategies: buying
calls and puts.
by definition, derivatives, which means they derive their value
from an underlying asset such as common stocks or indexes of common
stocks. Options provide you with the contractual right, but
not the obligation, to buy or sell a stock. A call is the right
to buy a stock at the strike price at any time up to the option
expiration date. A put is the right to sell a stock at
the strike price at any time up to the option expiration date.
To acquire this right, you must pay a per share premium (the
option's price) to the seller of the option. Option premiums are
quoted on a per share basis and are bought and sold in 100 share
lots. In other words, every 100 share lot comprises one option
contract. Most options are for three, six, or nine-month periods,
or remaining fractions thereof. LEAPS (Long-Term Equity Appreciation
Security) are long-term options available for a year or two years.
buying a call or put depends on your opinion of the underlying
stock; whether you believe the stock will either appreciate or
decline in value over a short period of time. If you have a
bullish bias for a particular stock (you think the price will
go up), then buying a call would be considered. If you have a
bearish stance towards a particular stock (it's headed south hard
and fast), then a put would be considered for purchase. Buying
a call or a put requires a small amount of money, while controlling
a large investment, which is a very attractive advantage over
owning or selling the stock outright. An investor that rightly
predicts a move in a stock, can, for a fraction of the cost it
would have required if the stock was bought or sold out right,
make a favorable profit using options. Don't overlook the fact
that all leverage has inherent risk! Options can clearly enhance
returns, but they can also cost the investor dearly if their assumptions
are wrong and the stock moves away from their target.
a closer look at these two strategies to see when you should consider
purchasing either a call or a put for maximum returns.
If you purchase
a call, it gives you the right to call the stock
away from someone else at the strike price.
Calls are wasting assets. At the expiration date, call values
can decline to zero if the stock's price stays fairly stable or
Trade: When the price of the underlying stock increases significantly
above the strike price.
Loss: Limited risk, the most you can lose is the cost
of the option premium itself.
Case for Buying a Call - Bullish
Life Example for using a Call Buying strategy: Now let's
look at a very simple example of how a Call option works. In
early January of 2004, the share price of the leading mortgage
provider Countrywide Financial (CFC) declined approximately 16%
in anticipation that the company would not be able to meet or
exceed their 2003 fourth quarter earnings estimates due out on
January 27th. If you thought that the pace of mortgage refinancing
and new loans were still strong, the recent decline in the stock
price provided an excellent opportunity for a strong rebound in
the share price of CFC when the company announced earnings - a
perfect situation to utilize a Call Buying strategy. If
the earnings announcement is scheduled for late January, it is
always wise to purchase extra time so to allow the stock price
to appreciate fully based upon your assumptions.
If you bought
a three-month call (with expiration date in April) on Countrywide
Financial (CFC) with a strike price of $70 when the stock was
trading near $70 per share on January 13th, you would have likely
paid $5 per share (or $500 for each contract, which equals 100
shares). Exactly seven weeks later on March 2nd, Countrywide's
shares closed at $90.61 per share. You now have two choices
(or options, hence the name of this vehicle): (1) You can exercise
your Call option and buy the shares of CFC at $70 per share; or
(2) you can sell your call, which closed at $22.60 on March 2nd
(or, $2,260 per contract) for a $1,760 gain. If you are
wondering, "Why not just buy the 100 shares of CFC to begin
with"? Given the stock price moved from $70 to $90,
you would have had a nice profit from owning the stock too. First,
you would have had to invest much more money - $7,000 (plus commissions)
rather than just $500 (plus commissions). Also, if the price
of CFC shares had dropped below $65 per share, you would have
lost much more than you would with the option.
your expectation that the share price will rise is wrong, and
the stock value stays stable or declines? At the end of the expiration
period, your call would expire worthless, limiting your loss to
the cost of the option premium (in this example, $300)
If you purchase
a put, it gives you the right to put the stock with
someone else at the strike price.
Puts are wasting assets. At the expiration date, their values
can decline to zero if the stock's price stays fairly stable or
goes up in value.
Trade: When the price of the underlying stock declines significantly
below the strike price.
Loss: The maximum loss you can realize is the cost of the
option premium paid.
Case for Buying a Put - Bearish
You have become
extremely skittish over your ABC stock. It's now trading at $47
and you are expecting it to go lower. At this point you would
consider buying a put to either protect your long position in
the stock or to simply capture a large profit if your expectations
for the stock are realized over the short-term period. So, you
would buy a six-month put at a strike price of $50 for $400.00
(or $4.00 per share for 100 shares). The put has an intrinsic
value of 3, because ABC is selling 3 points below the exercise
price. If your prediction about ABC is correct and its share price
drops, the value of the put will rise to over 7 when the stock
falls to 43. If prior to expiration, the stock is 45, you can
sell the put for $500 ($5.00 per share) and profit $100.00 (less
commissions). If the stock falls farther, the profit will be greater.
If the stock does not depreciate significantly in value or remains
virtually flat, at the expiration date, your option will expire
worthless and the cost of the put (in this case, $400) is the
maximum loss you will take.
to enhance your investment returns can be very effective, provided
you understand how to use them. It may be beneficial to test several
hypothetical examples on paper yourself, before actually allocating
money to trading options. Using the above examples, calculate
the percentage gain that would be realized from the purchase of
the call or put, by substituting the stock at its current price
and subsequent sale at its estimated fair value at time t (including
commissions both in and out).
is not meant to make you an expert or even prepare you for option
trading. Options are much more complicated than this brief article
can attempt to address. Rather, I invite you to explore in the
world of option investing and trading (on paper first!) so that
you may gain confidence in manipulating these techniques for yourself.
It can be a rewarding investment alternative, if done with a disciplined,
well-defined approach, and clear and realistic objectives.
of the Basic Terms Used in Option Trading
the right, but not the obligation, to buy a stock at a specified
price. (Expecting that the share price will go up, and you will
sell for a profit.)
the right, but not the obligation, to sell a stock at a specified
price for a specified time. (Expecting the share price will drop,
so that you can sell for a profit.)
Price: the price at which an option may be bought
(called) or sold (put).
an option's selling price. Premiums vary with the price of
the underlying stock and its volatility.
transaction: buying or selling an option to close
a previously held position.
date: options last three, six, or nine months,
then they expire. The expiration date is the third Friday of the
month in which it can be exercised.
money: when a strike price is exactly the same
as the underlying stock.
an option that will make a profit if exercised.
an option that will not be profitable to exercise.
To emphasize the speculative nature of options, please be
certain that you deal with an experienced broker or advisor. For
the novice investor, it's often easy to confuse an option with
a future, although they are extremely different. Both can
be extremely effective tools, provided you know how to use them.
As a reminder, options have limited risk. On
the other hand, future contracts have significantly greater risk
inherent in the nature of the contract and the promise to deliver
the "goods". Speculations are not entirely investments.
Investments are deigned to preserve capital and to provide
income and speculations involve risk and are profitable primarily
because of market fluctuations. Being wrong on your assumptions
and correlated trade can be very costly. Beware, trading
commodities (futures) is considered one of the riskiest games
on Wall Street. It is 100% speculation!
L. Harrington is the President and CEO of Harrington Capital Advisors,
Inc. Ms. Harrington founded the investment management firm
after spending nearly 20 years in the investment industry as an
investment manager and advisor to high net worth individuals,
corporations, family offices and not-for-profit organizations.
In her experiences in working with clients to preserve their
wealth and enhance their investment results, she has earned an
invaluable reputation of integrity and credibility with clients.
Contact Information: (949) 206-6846 or email: Deborah@h-c-a.com
money manager, Deborah L. Harrington, will be in the NataliePace.com
Chat Room on Wednesday, May 26th, at 5:00 p.m. PST (8:00 p.m.
EST) to answer your questions on puts, calls, options and futures!
Mark your calendars!!
for Successful Investing: Cook up serious profits with the right
ingredients, starting with your heart.
Natalie Pace, CEO, NataliePace.com
as easy as it looks, but the most overlooked ingredients for successful
investing are much less complicated than you might think. Below
is a three-step, easy-to-use recipe OF the key ingredients in
successful investing. You might want to post this list in your
bathroom or next to your computer when the numbers, charts and
brain gymnastics associated with the due diligence of investing
overwhelms you. As most seasoned money managers point out, no
one has a crystal ball for the markets. However, the below strategies
are some tips from the masters that simplify at least some of
the process, while at the same time upping your odds of success.
No matter how complicated your recipe for success gets, don't
forget the main ingredients.
- Start with
companies (or real estate or collectibles) that you understand
AND care about.
- Pick the
leader in the sector.
- Buy low/sell
Start with your heart:
are many reasons to invest in companies you know and love.
This is not the only determining factor on whether or not your
favorite company is a great investment, but it's a great place
to start. Peter Lynch says, "If you like the store, chances
are you'll love the stock." Warren Buffet is notorious for
avoiding NASDAQ during the bubble (and bust). Buffet's portfolio
didn't see the highs or lows of the Internet cycle, but he did
see steady growth to the tune of staying the world's second wealthiest
man, according to Forbes magazine. If you understand,
like and use the product, you probably understand what makes your
favorite company's products BETTER than the competition. You
may not understand exactly HOW they do it, but you know firsthand
that the company is getting something right.
in companies you know and love also means promoting things
that you believe in (and vice versa). You can actively create
good in the world, AND put your money where your mouth is. How
many Americans who boycott or sue tobacco companies own mutual
funds with Altria stock (Philip Morris' parent company)? The
numbers might surprise you. Do you know which companies make up
your Janus, Hartford or Putnam mutual fund? Are you boycotting
and picketing companies that you own? In Cowboy terms, that's
the same thing as shooting yourself in the foot. Know your portfolio
and make a change if you don't approve of the company or the products.
for news on that company is always on high alert. If you pass
a newsstand with a headline on your favorite company, you're likely
to stop and buy the paper. If someone at a party mentions your
company, you're likely to find a way to eavesdrop or enter the
conversation. Since successful investing means predicting the
future—whether or not your company will continue to grow in earnings
and share price—you need to know what's going on!
get the information BEFORE it shows up in an earnings report!
If the product is headed downhill fast, and all of your friends
are shopping at the competitor's store, you can bet that the next
quarterly earnings report is not going to be a champagne-popping
affair. There are many signs when companies are booming (sales
are out of this world, consumers can't get enough, companies are
buying back their own stock, insiders are on a buying spree),
and equally enough red flags when times get rough (bond offerings,
empty stores, outdated product line, consensus insider selling,
decline in quality, poor customer service).
Pick the leader in the sector:
Here is where
the numbers are critical. You need a company that is poised to
lead its industry in market share and growth, while buying it
at a reasonable price. Lining up the numbers can help tremendously!
Is your company profitable? Is it carrying a lot of debt? Is it
vulnerable to younger, leaner companies? What are the insiders
doing—buying or selling? Once you line up your favorite company
alongside its competitors in a Stock Report Card (NataliePace.com publishes
one with every ezine), the puzzle pieces start to fill in and
the picture begins to reveal itself. To gain more competence in
this game, try the NataliePace.com online tutorial—the Member Mosaic,
in the research section of the web site.
in the NataliePace.com Cellular Providers Report Card (issue 45), Sprint
PCS was carrying a debt load that was significantly higher than
its competitors and was operating at a loss. Not surprisingly,
one of its divisions had filed for Chapter 11 in August of 2003.
Whether or not you like the service provided by Sprint PCS, it
is clear that your investment is much more at risk than if you
place your bet on a competitor that is making money and gaining
market share. (NataliePace.com picked BellSouth, which owns Cingular
Wireless and recently purchased AT&T Wireless.) Below is a
little information on some of the key financial indicators.
In general, the lower the P/E, the better the value (price). If
the P/E is high for the industry or N/A (negative earnings), then
either the share price is high, or the earnings are low. (Price
to earnings ratio is affected by both numbers: share price divided
by earnings per share.) P/E is not the easiest concept to grasp
initially. Read up on it, and keep looking at your report cards.
times, however, when you'd want to buy into a company with negative
earnings. Jet Blue launched an IPO with negative earnings and
in less than two years now has the lowest P/E in the industry.
How could an investor have predicted that? A quick peek at the
money Jet Blue was making per seat indicated that it was filling
its planes and making almost double on each passenger over what
the other airlines were making. Where can you find this info?
Google it! You'd be amazed what you can find online. Make sure,
however, that the numbers you're accessing are assembled by a
respected, independent news organization, like the New York Times
or the Wall Street Journal. (Press releases are the least credible
source of news. They are written by the company, and do not have
to include the "bad" news.)
high/52 week low: If the price can fluctuate between these
highs and lows, what are the chances that you can pick up your
company for a lower price this year, if you exercise a little
capitalization: Think of it this way. Multi billion dollar
market capitalizations are like Jabba the Hut. They are big beaurocratic
blobs that don't move very fast, have a lot of expenses, and rule
the universe. Micro capitalization companies (under a billion
in market capitalization) are like the hare. They can win the
short dash because they are speedy and full of energy. They are
not guaranteed to win the marathon, however. Jabba the Hut has
friends in high places, and will likely pull out all the stops
to be victorious in the end.
The company may have multi billions in sales, but is it profitable?
Make sure you look at the income, in addition to the sales. Hint:
If the P/E is N/A, then the company is losing money.
Ratio: You can identify the long-term debt of the company
by multiplying the debt/equity ratio with the market capitalization.
You'd be surprised at the kind of debt some of the more established
companies in America are carrying, particularly the domestic automakers,
network airlines, Sallie Mae and Freddie Mac, to name a few …
Trading: Insiders tip their hand on how they feel about their
company's future with their buying and selling of their own options.
Consensus insider selling is typically considered to be a red
flag, while consensus insider buying would indicate that insiders
have a reasonably good reason to believe in the future growth
of the company. This is not a reliable measure by itself.
Buy Low/Sell High.
Easy to say.
Hard to do. Buying low means that when everyone else thinks it's
the Apocalypse, you're out there planting seeds. Selling high
means that when everyone is popping champagne, partying and bragging
about their earnings, you're the one sobering up, selling out
and heading home, while everyone tells you how crazy you are to
leave when the party is just getting started! Check the 52-week
high and low, as well as the five and ten year highs and lows.
Consider seasonal market trends. Will there be a better buying
opportunity in a few months (or longer), or is it important to
buy in now? If your company has had a good run-up, is it time
to take some profits and redistribute your assets?
a "rising tide lifts all boats," while a sinking tide
grounds all! It is very difficult for even great companies to
swim against the tide during a market correction, and you could
have thrown a dart at a wall full of stocks in 1999 and seen incredible
profits. Your best protection against bear markets is asset allocation.
Be sure to read Paul Woods article in this ezine for more information.
PACE is the FEATURE SPEAKER at the SHARED VISION NETWORKING LUNCHEON
in Santa Monica, California on June 15th, 2004. Not
only will you learn how to value INFORMATION THAT YOU ARLEADY
HAVE and follow your heart to financial freedom, you can also
pick her brain on how rising interest rates and inflation may
move the markets. Register for the Shared Vision Network's
June 15th luncheon "How Investing you're your
Heart Can Make You Rich" NOW at: http://www.sharedvisionnetwork.com
Out At the Step Up Women's Network's Inspiration Awards.
Anne Beck-Woods, Chairman Odyssey Advisors LLC
30, 2004 was the inaugural "Inspiration Awards"
luncheon benefiting Peace4Kids and three incredible women
honorees: Martha Nelson, managing editor of People magazine,
Caryn Mandabach, partner/president of Carsey-Werner-Mandabach,
and Jane Kaczmarek, award-winning actress.
to Peace4Kids, there are over 40,000 foster children in
Los Angeles County alone and 35% of foster children change homes
up to five times per year. Sadly 50% of foster care youth will
be unemployed and under-educated after the age of 18, and the
same percentage will enter the foster care system before the age
of five. Presentations from young people who benefited from Peace4Kids
involvement were moving as they overcame their nervousness at
speaking before a large crowd, and, for the first time, spoke
from the heart, sharing personal experiences or reading an original
poem written to express their gratitude. Peace4Kids was
chosen as the non-profit to benefit from this Inspiration Awards
luncheon, but Step Up Women's Network has a long
and impressive list of both established and grass roots organizations
that have been aided by their efforts. These include Big Sisters
of America, Girls, Inc., Habitat for Humanity, and the USC/Norris
Comprehensive Cancer Center in Los Angeles. In the New York Step
Up Chapter, organizations such as Young Women's Leadership School,
Young Survival Coalition, and the 52nd Street Project
are just a few of many.
Think of Step
Up Women's Network as a boot camp for benefactors
engaging in philanthropy, volunteering, mentoring, and advocacy.
And like I always tell investors who might not have the maximum
contribution for an IRA, put something away, no matter how little
you can afford. So it is with Step Up Women's Network.
If you cannot give money, you can give time. You can be a mentor,
and even receive the opportunity to be mentored yourself by a
successful senior member of the organization.
Up Women's Network was born in L.A. six years ago, but has
been bi-coastal with a growing chapter in New York for the last
three years. Previous to this event, membership was a mere $40
per year with the opportunity to volunteer and attend signature
events as they occurred. On Friday they rolled out a new tiered
membership program where women have a choice of being an ingénue,
diva, star or corporate member of the organization with diva,
star, and corporate members contributing more on an annual basis
but being offered tickets to events, invitations to V.I.P. parties
and other benefits to enhance the membership experience. The turnout
on April 30 was approximately 450 women and brave men who raised
approximately $150,000. Plenty of press was on hand, and don't
think that do-gooders can't be divas! There were plenty of stars
in designer dresses. As a veteran of charity Gala and Award luncheons,
I gave it a 9 out of 10 because while the food was just good,
the inspiration was excellent.
organization has an impressive list of advisors and supporters,
the dynamic duo managing the New York and L.A. Chapters are Kaye
Popofsky, President and Founder, and Traci Fleming, President,
Step Up Women's Network, Los Angeles and newly appointed
Executive Director of the organization. Kaye started Step Up with
a group of 30 women to see what they could do to make a difference.
Traci is an accomplished businesswoman, and ex-COO of Citysearch.com,
and also the proud mother of a nine-month-old daughter.
Nelson, managing editor of People magazine has a long history
of being a media mentor of various charities. During her tenure
at In Style magazine she established the feature "Cause Celebes,"
focusing on celebrity non-profit passions. Annette Benning, who
graced the cover of the first In Style magazine and introduced
Martha, remembers well the initial focus of that feature to bring
music to inner city children. Martha and People gave Peace4Kids
a van to transport kids to their beloved peace garden located
at the 99th Street Elementary school in Watts saying,
"If you can get the drivers, we can provide the transportation."
Martha believes that "giving back is the highest expression
of personal style." Her ability to use media to highlight
organizations and issues for good has helped other causes such
as New York's Bottomless Closet and the Geffen Playhouse. Through
People magazine, almost 36 million people are given inspiration
and information regarding AIDS, eating disorders, and missing
and abducted children. People even helped give birth to
the Amber alert system. Ms. Nelson was generous in her praise
of her L.A. bureau chief , saying she was not only the wind, but
also the wings, propeller, and 800-horse power diesel engine behind
another Inspiration Awards honoree, created the first
comedy series to feature well educated, successful, people of
color, free of stereotypes. While Bill Cosby isn't as rich as
Oprah Winfrey, he can thank Caryn Mandabach for helping him create
what would be for her the first in a long line of successful and
entertaining programs. Caryn grew up under difficult circumstances
when her mother passed away at the age of 16 and her father abandoned
her. She recommended a book titled "Motherless Daughters:
The Legacy of Loss" by Hope Edelman for women
who have lost their mother at an early age, suggesting it would
be good reading for the foster children participating in the Peace4Kids
programs.. In a video shown at the luncheon, her peers praised
her for her ability to overcome obstacles and get the job done.
Kaczmarek's husband Bradley Whitford, who is well known for his
role on the award winning West Wing television program, said being
married to Jane was like "riding a wild tiger."
He praised his wife, for being a mother, an actress and an advocate
of her own causes, such as Cure Autism Now and her ingenious Clothes
off Our Back auction of gowns worn by stars to benefit charity.
When Jane came on stage, the wild tiger had a cane, as she was
recovering from hip replacement surgery. Patricia Heaton, an award
winning actress and the mother of Everyone Loves Raymond
fame, spiced up the praise for Jane with a little bawdy humor.
(You had to be there. Join Step Up now!) Jane Kaczmarek gives
hope to mature actresses in a business that idolizes youth above
all, as she came into her greatest celebrity at the age of 48.
She was passionate in her call to the women in the audience to
"make a living for what you get, because you leave
behind what you give."
for this worthy non-profit is www.stepupwomensnetwork.org.
Call 323-658-5288 to join Step Up now, and you can still become
a member for $40 per year. While the Inspiration Awards honored
some very famous Hollywood movers and shakers, the message of
the afternoon was that the real stars are all of the women who,
without fame and sometimes only modest fortune, quietly contribute
their, time, talent, money, and mentoring and tireless efforts
on behalf of others.
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