Hope Now for Distressed Homeowners.

by Natalie Pace.

The U.S. government is pulling out all the stops to keep you in your home.

If you are one of the 9 million people who has seen the value of their home drop beneath the price of the mortgage, don’t "just walk away," before reading this article.

Being "underwater" doesn’t change your ability to pay your mortgage, and there are benefits to being a homeowner, instead of just a renter. If you stay in your home, you benefit from the tax and credit benefits, even if the home value is, temporarily, beneath your purchase price. In the U.S., the interest you pay on your home mortgage is tax deductible, and being a home owner in good standing is going to make it easier to refinance any other debt you might have now and going forward. The ability to get credit cards and loans at the best interest rates is a very valuable (and leveragable) thing! Finally, as more buyers return to being renters, rent prices will rise to meet the demand, so, going forward, you might be paying as much or more to rent your home as you are paying to own it.

Phillip Swagel, the Assistant Secretary for Economic Policy at the Treasury Department reminded the audience at the Milken Institute Forum on June 19^th that, "It is not the government’s job to make people whole for their investment losses." However, the government is definitely bending over backwards to make it easy for you to renegotiate your loan with better terms. Below are a few resources that you should investigate before dropping the keys off at the mortgage lender’s office and going on a permanent fishing trip.

Believe it or not, borrowers with an affordability problem might be able to:
1. Reduce interest rates and
2. extend the mortgage term

According to Mr. Swagel, The Hope Now Alliance Hotline is receiving 3500 calls per day. 1.6 million people have received a workout since July, and 220,000 people have refinanced into FHA since August. Visit HopeNow.com or call 888.995.HOPE to see if you qualify!

How long will you have to swim underwater on your mortgage loan?
The official Treasury Department stance is that we’re not in a recession (even though second quarter 2008 GDP growth is estimated to limp in at just .4% GDP growth). However Mr. Swagel did admit that: 1) "It’s not a recession, but it’s going to feel bad for Americans," 2) "We have at least another year of pretty steep [home] price declines," and 3) "It’s a problem which really doesn’t lend itself to rapid solutions."

The top-25 "foreclosure hotspots" include areas where the housing downturn reflects the weak economy (Indiana, Michigan and Ohio) and areas where foreclosures reflect the end of a housing bubble that left the "last ones in" underwater (Arizona, California, Florida, Nevada). Stockton, California has the highest foreclosure rate, with 20 homes hitting foreclosure for every 1000 homes (or 2% foreclosure rate). Stockton’s home values ran up 65% over the last five years, but the city is giving up those gains rapid-fire these days. Detroit, with the second highest default rate in the U.S., at 19 per 1000, is experiencing problems due to a weak economy. The Detroit housing market has been flat for the last five years.

No, It’s Not the Depression
The economy, stocks and housing, are all expected to suffer this year and next, but should begin to recover in 2010, according to statistics presented by the Treasury Department on June 19, 2008. See below for the projected GDP growth rates for 2008 and 2009.

Source: Blue Chip Economic Indicators

There are about 80 million owner-occupied houses in the U.S. 25 million are paid off in full, with no mortgage at all. Of the other 55 million, 50 million are making their payments on time, according to Mr. Swagel. Only five million homeowners are behind on their payments, according to the Treasury Department statistics. Only 2 ½% of the 80 million homeowners in the United States are in the foreclosure process, as compared to 50% during the Depression.

So, now that you know, 1) yes, it’s bad, 2) no, it’s not the Apocalypse, and 3) whew! it’s supposed to get better in a couple of years, you can pick up the phone and call some of the counselors who are trained to serve you and keep you in your home. Below are some agencies, which have been recommended by the Department of Treasury, which you might try first. (Beware of scam artists on websites and/or businesses that you have never heard of before posing as someone who can help you. There have been horror stories of distressed homeowners who unknowingly sign away their property to shady business people who promise to help them restructure their mortgage!)

Housing Tools:
1. HOPE NOW Alliance. 888.995.HOPE. Resources and tools include: Refinance or rate freeze for those who can pay the starter rate and/or possible foreclosure pause for borrowers who ask for help.

2. FHASecure. Provides 30-year, fixed rate mortgages to borrowers. Refinancing for borrowers who defaulted due to a reset.

3. NeighborWorks America. NeighborWorks America creates opportunities for people to live in affordable homes, improve their lives and strengthen their communities.

4. HomeOwnership Preservation Foundation. This is a counseling service provided by the Homeownership Preservation Foundation. Their goal is to work with you to find a solution. The sooner you call, the sooner you can regain your peace of mind. Remember, you're not alone. Millions of people across the United States have trouble with their mortgage every year. Since 2002, their counselors have provided advice and education to more than 300,000 homeowners.

In about ½ of the foreclosures, there was never any contact with the lender and the borrower. Call now. Even if you think there is nothing left to do but walk away, you have nothing to lose by asking for help before you do.

When Stocks and Real Estate Burn Investors, Switch the Game Plan to Retired Beach Bum/Landlord.

by Shawn D Harris, Broker, Mortgage Planning Specialist

Photo Credit: Doug Mazell. www.mazell.com. Film and Video Production. Advertising Photography. 562-866-7662

You can’t read the paper these days without stumbling across one expert or another talking about inflation (and the real estate implosion).  Well, I’m going to put my two cents in as well.  
 
Here’s the summary:  
 
We’re seeing inflation, I expect to see higher inflation, and it is going to affect everything.   
 
There are many factors suggesting that we should anticipate the strengthening of core inflation rates:

1. The Fed has its hand’s tied
The job of the Federal Reserve board is to monitor monetary policy. Traditionally, its main concern has been to keep inflation in check.  It has done a fairly decent job at this for the past twenty years.  
 
The most potent tool that the Fed has is that it can adjust the federal funds rate, which in turn changes the prime rate (which most credit cards and equity lines are tied to).  When it lowers the interest rate, it stimulates the economy by making money cheaper to borrow and money starts turning over, creating commerce.  The downside to low rates is that it can lead to inflation.  Cheap money creates lots of borrowed money, which increases leverage, which puts more money into the marketplace.
 
If inflation starts to peak, it raises its interest rates, money becomes more difficult to borrow, commerce slows down, and inflation pulls back.
 
The natural thing for the Fed to do, now that we are seeing inflation creep back into our economy, is to raise interest rates.  However, our capital markets are still fragile, and much of our economy depends upon our capital market.  If the Fed raises interest rates, it will restrict lending and cut into the profits of these banks.  Also, we’re at the beginning of what looks like a recession, and the Fed doesn’t want to do anything at this time to curtail commerce.

2. Weak Dollar
$1 will buy you 1 Jr. Whopper at Burger King in California.  However, if you go to England, that $1 will only buy you about a half a burger.  Today, the exchange rate between the US Dollar and the Euro, is approximately, 1:1.6, meaning 1 Euro equals 1.60 dollars.  Two years ago that ratio was 1:1.2.  Our dollar has dropped (in comparison to the Euro) 33% in value in just two years.  
 
This means that anything we IMPORT has become 33% more expensive in the past two years.  Export companies are thriving, but the US has transformed into a largely importing nation (see our huge trade deficits).  Because we import much more than we export, this pushes our costs up, which increases inflation.
 
Commodities that are traded worldwide (gold, copper, lumber, gas, natural gas) are more expense because countries with strong currencies get more "bang for their buck".  
 
Everyone wonders why gas is so expensive…  $3.00 gallon per gas turns into $4.00 gas if we adjust for our drop in value of the US Dollar.

3. China
China is buying everything, and they don’t care too much about the price. They are experiencing tremendous growth, and this growth is placing a large demand on world supplies of commodities.  China does pin its currency on the dollar, so we don’t see the weak dollar affect here.  
 
However, China is at the point that America was back in the roaring 20’s.  There is newfound wealth in that country, and they are spending.  The biggest concern, is they have a massive amount of infrastructure improvements to bring their country to the forefront of the world economic giants.  Infrastructure requires tremendous natural resources.  
 
As a pure supply and demand argument, as China puts larger demand on a finite supply, this will drive up prices internationally, and lead towards inflation.
 
A note on gas.  Russia has been expanding its petrol (gas) production dramatically over the past decade or so.  The supply created from Russia has done a fairly good job of matching the demand from China (and India).  Russian productivity has hit a plateau recently, which is a large factor in global gas prices.

So What?
This will affect you directly, in one way or the other...  
 
First, there is a lag between when inflation shows up and when incomes are increased.  When inflation first shows up, providers of goods/services try and absorb most of the costs, shrinking their profit margins.  Short term fluctuations in costs of goods are common, and businessmen are worried their customers will jump ship if they raise prices alone.
 
However, once it is apparent that changes are permanent/long term, the market reacts quickly  (I hope you bought your plane tickets for your vacation a few months ago…).  Direct commodities change quickly (gas, natural gas, gold, building supplies), but the rest of the market takes a while to catch on.
 
Second, incomes take even longer to adjust upwards.  Increases in prices typically leads to a downturn in the economy, as everyone gets used to cinching the belt.  Jobs are lost, pay raises are postponed, benefits are cut.  The average Joe ends up taking it in the shorts until…
 
At some point the average worker must have a higher income. Private sector jobs will increase their pay.  Public sector jobs, well, who knows how long it takes the government to react to the new requirements.   All told, before the average consumer sees inflation affect their paycheck, it can take a tremendous amount of time.
 
Good News
Be prepared for your stock portfolio to do quite well (you may want to reconsider any bonds you may have).  Inflation increases the yield on bonds.  Higher yields on bonds will require that riskier stocks perform better.  Much speculation ensues, and all of a sudden, we’re out of the "lost decade" of marginal performance on equities.  
 
The Housing Market
It’s a mixed bag with regards to the housing markets.  As interest rates increase, this is going to put a downwards pressure on housing prices.  A 2% increase in interest rates makes a house about 30% more expensive, so that WILL have an effect on housing.  Once incomes start to increase, then the housing market will start climbing out of the bottom. However, people will have a bad taste in their mouths because of this lengthy downturn in the market, and may be emotionally more prepared to invest in a well performing stock market then an underperforming real estate market.
 
The good news is for that select group of people I like to call "landlords". Buy as much as you can get your hands on in the next two years.  Make sure it cash flows.  Inflation DOES affect rent, so expect your profits to increase in time.  It may take 7 – 10 years to be able to sell those properties, but in the meanwhile there will be deals galore, as the amateur investors will flee because of dropping house values.  In 7 – 10 years, we can rename the "landlords" as "millionaires" and "the retired".  

5 ways to prepare for an inflationary market
1)  Fix your debt.  Any adjustable debt that you have, prepare for the coming storm by fixing it in.  Rates will be jumping up.  If you have a lot of credit card debt, think about an installment loan / debt consolidation loan from your bank.  If you’ve got an adjustable mortgage (or one going adjustable in the next 3 – 5 years) fix it.
 
2) Re-assess your portfolio – Typically bond heavy portfolios don’t do the greatest in inflationary markets.  Rates are moving up, and you don’t really want to be holding fixed rate investments in an upwards-moving market (unless perhaps you are using bonds for income strategies).  Your 10-year bond that performs at 4% isn’t attractive and loses a lot of value in a market where new 10-year bonds will be paying 8%.  
 
3) Get in on inflation dependent investments.  In an inflationary market, "a rising tide brings up all ships".  It’s fairly obvious, but invest in companies or commodities that do well in inflationary times (ask your investment advisor for which ones, I’m just a loan guy).    
 
4) Be a landlord – Prices haven’t yet bottomed out on real estate, but when the prices become more attractive, buy as much as you can get your hands on and rent it.  Buy a house borrowing money that is a fixed expense, and earn income on a rent that will be inflation adjusted.  If it makes sense now, it will make more sense once rents start skyrocketing.  Caveat, the properties MUST cash flow, because you will have to hold on to them for a while.  No more buy & flip (and stop watching the tv shows; they all lie).  

5) Cut expenses, invest more – A penny saved is a penny earned. Save as much as you can while rates are rising.  Keep it fairly liquid.  When the market peaks (when does it peak? again, ask your investment advisor…), buy back into the bond market.  How smart were those people who bought long term government bonds in the early 80’s when they were returning 15% on what is basically zero risk, guaranteed money…
 
Well, I’m done with my rant.  If you have any questions or concerns, or if you think I just got something dead wrong, call me.  
 
One last thing, I put together a chart showing the relationship between Mortgage interest rates and inflation, see the relationship for yourself.

Cordially,

Shawn D Harris
Broker
Mortgage Planning Specialist

I Appreciate Referrals .... If you know someone who needs expert mortgage advice contact me.
Direct: 800.871.7987 x 702

Fire Sale in Clean Energy. Is the stock market overlooking the fundamentals?

by Paul Woods, President & CEO of Odyssey Advisors, LLC

After scorching the stock market in 2007, clean energy stocks are currently on sale. The WilderHill Clean Energy Index (symbol ECO) produced a return of 58.87% in 2007. However, in the first five months of 2008, investors have taken profits. Through 5/31/08, this index is down 18.68%, for the year while broader measures of the stock market like the S&P 500 were down only 5.03%. It’s hard to find a group of stocks that have done any worse. Is this a buying opportunity, or were these stocks just a flash in the pan last year?

The Next Big Thing?
In the 1980s, it was biotech. In the 1990s, it was the Internet. This decade, there’s a very good chance it will be alternative energy.

Clean energy stocks have the problem of being small and speculative in a declining market that usually makes investors gravitate to quality. However, the most attractive companies in this area have continued to grow while their stock price has declined. Some companies have several years’ worth of orders and their biggest problem is keeping up with demand. When it comes to finding companies that will benefit from oil over $100 per barrel and will also be helped by a likely turn to the left in national politics in 2008, clean energy stocks are at the top of a very short list of companies.

The two main catalysts:

• Fossil fuel production will be unable to keep up with demand. Oil prices continue to break records and we believe the rise in prices comes back to basic supply and demand. There have been no major oil fields brought into production for decades, while demand continues to rise. As older oil fields begin to show their age, it becomes increasingly difficult to produce the same amount of oil. World oil production will peak in the not too distant future, if it hasn’t already, while demand for oil will continue to grow. Energy alternatives will be the only way to make up the shortfall.

• Rising oil prices have done what government programs were unable to. Alternative energy is becoming competitive. The increasing demand for wind and solar is bringing down the price of those technologies while fossil fuel prices continue to increase. Wind technology already produces electricity for a price that’s competitive with a utility burning fossil fuel. According to First Solar, the current low cost producer of electricity from sunshine, they will be competitive in two years. Once the need for government subsidies is eliminated a huge potential market opens up. Many countries have chronic power shortages and would prefer to satisfy their needs with a technology that doesn’t leave them dependent on others.

Breaking the Conundrum
In the past, clean energy technologies could do little to impact the demand for oil from the Middle East. The problem was that wind and solar technologies produce electricity, while world oil supplies are primarily used as a transportation fuel. As long as the U.S. needs gasoline and diesel to power its vehicles, we’re dependent on the countries that control world oil supplies.

Without much fanfare, this problem is in the process of being solved. Electricity is likely to become the next transportation fuel, and two types of vehicles that can be powered by electrons instead of gasoline are going from concept to reality. The first half of this year (2008) will mark a watershed for this technology as Tesla Motors will begin shipping the first electric vehicle that’s fun to drive. It’s a sleek roadster that will turn heads and perform like a high end sports car.

The new Tesla Roadster all electric sports car.

However, electric cars still have limitations including range and the lack of charging stations. Until something like a recent breakthrough by a Stanford scientist extends the range of EVs, plug-in hybrids appear poised to become the next major market in the auto industry. The switch from nickel to lithium batteries will allow plug-in hybrids to go 50 miles before requiring a drop of gasoline. Once the battery power is exhausted, these will have the range of any other gasoline-powered car. What makes these compelling is the vast majority of Americans drive less than 50 miles per day, and consumers can benefit from very low electricity prices that will result in driving costs of pennies per mile if they plug in their vehicle overnight.

Electric cars and plug-in hybrids will also increase the demand for solar panels, as these will allow consumers to make their own fuel. It’s one thing for a homeowner to install solar panels on the roof and reduce or eliminate their electricity bill. However, if that same homeowner can eliminate their electricity bill and produce a lifetime supply of fuel for a vehicle, the economics of solar become much more compelling.

Too Much Money, Too Few Stocks
These technologies will become the next big thing because of economics and not because of doomsday forecasts about global warming. However, concerns over the impact of climate change appear to be the primary driver of the first initiative to invest public retirement plans in clean energy technologies. California, New York, Pennsylvania, and Oregon are the first, but almost certainly not the last, to announce plans to invest more than $1 billion in clean energy companies.

Odyssey Advisors maintains a database of publicly traded companies that derive most or all of their revenues from clean energy. At present, there are fewer than 100 companies, including ADRs. Eliminating companies that are the equivalent of the Roach Motel (you can check in, but you can’t check out) because of their small size reduces the list to less than forty. Of what’s remaining, three qualify as large companies. Right now, that’s the clean energy universe for banks, trust companies, and other institutional investors that limit their investments to the large cap segment of the stock market. Value investors that aren’t fussy about company size currently have five to choose from, one of which is an ADR.

Ultimately, what caused Internet stocks to skyrocket in the 1990s was too much investor money chasing too few investment quality companies. It wouldn’t be too surprising to see the same thing happen with clean energy. With state retirement plans and institutional investors now starting to line up to invest in clean energy, there are far fewer stocks available.

About Paul Woods
Paul is the President, Chief Executive Officer, and Chief Investment Officer of Odyssey Advisors. He has over 35 years of experience in the investment management and research analysis of common stocks. He manages the Odyssey Clean Energy Portfolio which produced a return of 141.9% before fees in 2007. Paul has done a great deal of independent research on clean energy and has written multiple articles on various segments of this industry. He can be contacted at pwoods@odysseyadvisors.com

Information has been obtained from sources believed to be reliable however Odyssey Advisors LLC does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this material and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

Copyright © 2008 by Odyssey Advisors LLC

NataliePace.com Note: Please note that the returns and statistics regarding the Odyssey Clean Energy portfolio was provided by Odyssey Advisors. Since Odyssey is not followed by an independent tracking firm, such as Hulbert’s Financial Digest, the results which the company provided have not been verified with an independent source.

Foreign Investing: From BRICs to Barbeys (As in Shrimp on the Barbey).

by Natalie Pace

Brazil, Russia, India and China. BRIC has been all the rage in investments for the last few years and was one of the most popular topics at the 2008 Milken Global Conference, as the subject of over 13 breakout sessions, on average four per day. Of course, as a smart investor, you know that once an investment becomes headlines, newbies are buying high on old news.

Brazil’s money center bank, Unibanco (symbol: UBB), returned eight times over for investors over the past five years, making the U.S. markets look like a flat line. So, if you are just now hearing of the incredible success that Brazil has had over the past few years, you’re going to make a millionaire out of someone who had the vision to invest $175,000 in 2003 and is willing to sell to you now.

India’s Central Bank, Icici (symbol: IBN), saw similar, though not quite as stellar, performance, with shares returning up to seven times on the investment between 2003 and November 2007.

Likewise, some of China’s most popular publicly traded companies, like Sohu.com (symbol: SOHU), and Baidu (symbol: BIDU), have doubled or more for investors since 2002, but are currently trading high, with price to earnings ratios of 28.50 and 77.40 respectively.

Worldwide Slow Down?
Since the U.S. is China's biggest customer (export market), foreign trade there could be severely affected by the current housing crisis in the United States. The first quarter 2008 U.S. GDP growth rate statistics were an anemic .9% GDP growth rate, and the 2^nd quarter is predicted to fall back to .4%, according to the Treasury Department. The housing crunch is predicted to deepen into 2009, with no real relief until 2010.

The U.S. economic slowdown is not just a U.S. problem. It is a global problem because the U.S. is a big global consumer, supplier and investor. The truth is that big business is global these days. What affects China, affects the U.S., affects Mumbai, affects Dubai and vice versa. And equally important, investors in all of those regions are thinking about capitalizing on the same things. Meaning that no one is looking at the rearview mirror at what made thousands of percent returns last year. Everyone is trying to pick the rocketship returns of tomorrow.

Clearly, though bricks make a sound building, BRICs may be a house more poised to fall upon new investors, than to withstand the recession. What has already happened is being discussed on stage and on television, but the preview of coming attractions are the stories whispered in the hallways. And in the hallways at the Milken Global Conference is exactly where two names kept coming up over and over again – Australia and New Zealand. Not one panel on Australia or New Zealand was offered at the Milken Global Conference, mind you, but I couldn’t talk to any VIP from China without hearing a story about this or that New Zealand accounting standard or this or that cutting edge Australian architect. Hmmmm…

Over the past few months, more than one Chinese friend was quick to point out to me that, though the U.S. thinks we have the cutting edge solar technology and architects and metals and even accounting standards, some of the strongest products and companies in the world are based in Australia. Dr. Zhengrong Shi, Suntech Power Holding’s founder, chairman of the board of directors and chief executive officer was a research director and executive director of Pacific Solar Pty., Ltd., an Australian PhotoVoltaic company, prior to founding Suntech. Dr. Shi received a Ph.D degree in electrical engineering from the University of New South Wales in Australia in 1992.

It’s not hard to imagine that China is reaching out to Australia, since Australia is much closer to China than the U.S. is. So, I began poking around to see if Australia (and New Zealand) might indeed be stealing China’s heart away from the U.S. That investigation revealed some interesting statistics, as you can see below.

Source: Trading Economics Global Markets Research and The 2008 Index of Economic Freedom, Heritage Foundation and Wall Street Journal.

The BRIC story in 2005 was a tale of two tales -- interest rates or GDP growth. India and China had low or mid interest rates, but led the world in GDP growth rates. Brazil wasn’t as impressive with GDP growth rates, but led the world in interest rates. Russia was a global leader in both.

With high interest rates, free economies and respectable architects, scientists and accounting practices, Australia and New Zealand are poised to pick up investment dollars as the world becomes more disenchanted with the U.S. China may be the first to lead the charge, but since the global marketplace is here to stay, it is likely that Australia can attract dollars worldwide, as well. According to The Index of Economic Freedom, Australia offers, among other benefits, streamlined immigration systems, grants for early stage commercialization projects, easy access to foreign exchange and the world’s ninth largest financial system, which is highly developed and competitive in equity, insurance and banking.

By now, I’m plenty infatuated with Australia, so I trim back the enthusiasm long enough to line up the numbers of a major Australian bank, compared to other international banks. As you can see in the International Banks Stock Report Card, the profit margins of Westpac are the highest of the competition by far, at 37%, and just as importantly, debt is the lowest, at a debt equity ratio of .39. The other banks on this report card, including the foreign money center banks of India, London and Canada, owe more than their current market capitalization, in debt (source: MoneyCentral.msn.com). As a comparison, Citigroup has negative profit margins -- the company is losing money — and debt that is almost six times it’s market capitalization.

Click here to access an International Banks Stock Report Card.

On May 1, 2008, Westpac issued their Half-Year earnings report. The company had a net profit of $2,202 million, up 34%. According to Westpac CEO Gail Kelly, "Our balance sheet positioning is conservative. We have a strong risk management culture and a prudent liquidity profile…. While we remain cautious in terms of our outlook, I am pleased to say that we are in good shape to continue to support our customers and build the next phase of our growth."

In my view, Westpac (and Australia) lines up well as the global leader to attract international capital looking for a safe home with high performance potential. The only question is, "Will the capital markets implosion bring the share price of Westpac with it, or will Westpac explode with popularity as the smart money jettisons over to safety?"

For that, I examined the last recession in the U.S. between 2000 and 2002. As you can see from the below charts, investors flipped into HSBC and Barclay’s bank investments late in 2000, when the U.S. equity markets began to dump their value. Both Barclay’s and HSBC are based out of London, with international exposure. Clearly, investors were relying upon their stability during uncertain times.

Source: MoneyCentral.msn.com

The 2008 recession, however, (which isn’t being called that yet by the U.S. Treasury) finds HSBC with more debt, less operating margins and higher exposure to the subprime mortgage problems than Westpac appears to be. Barclay’s has an exciting division in Barclay’s Global Investors and their cutting edge ETFs, but they also are carrying around four or more times the debt of the other banks listed on this report card. With a cooling off British economy, the Australian play seems more attractive.

As Dan Denning, a reporter for The Daily Reckoning Australia writes, "Australia is on the right side of what we called "The Money Migration" a few years ago. It is the vast transfer of wealth, incomes, savings, capital, and standards of living from the West to the East." In fact, just last week, the Australian government interrupted China Sinosteel’s bid to purchase Murchison Metals and Mid West, an iron ore junior company, putting a hold on the acquisition, while they figure out just how much of Australia is for sale to the Chinese.

What sounds like romantic whispering in the halls at the Milken Conference, may be the echo of the roar of deal-making going on between Australia and China across the Pacific. Sooner or later, global investors should hear it as well – and then we’ll see Australia making headlines here in the U.S.

Typically, I don’t like buying in July, however, since Westpac is performing so well in profits and margins and is trading near the 52-week low, I added Westpac to the Hot News on Cool Stocks list today.

Full Disclosure: I don’t have positions in any companies mentioned in this article.

Please note: NataliePace.com does not act or operate like a broker. We report on financial news, and are one of the most trusted independently owned and operated financial news corporations in the U.S. 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.

Investors should NOT be using the Hot News on Cool Stocks list or the Cooling Off list to trade their nest eggs. Your retirement plan should reflect a long, safe strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.

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.

So You Want To Be a Bestselling Author?

Learn the tricks of the trade from an expert who has TWO bestselling books. Reprint of our June subscriber chat with bestselling author, Chellie Campbell, author of Zero to Zillionaire and The Wealthy Spirit.

Chellie Campbell, Author of Zero to Zillionaire Photo credit: Mary Ann Halpin

Do you think it’s important for someone to have a book before they try to start booking speaking engagements? Can someone start by coaching and/or seminars first?

Oh, I didn’t even want to do a book when I got started. I invented my Financial Stress Reduction Workshop™ in 1990 because my bookkeeping clients needed to know more about money. Perfection is the oppressor. I’m a "ready, Fire, Aim" kind of gal. I always tell my classes that I’m the number one student in the room. I always learn more than everyone else.

Were you concerned that you weren’t ready to be the expert in front of the room?

Well I knew that I knew stuff. Not everything, but certainly more than a lot of people knew. One of the defining moments was when I was going to sing at a client’s dinner dance and there were 500 people there. I was nervous until I remembered that I sang better than those 500 people. It didn’t matter that I wasn’t Madonna.

Now that you’ve actually got two books out there. how has that helped your classes and/or helped you to get more/bigger/etc. speaking engagements?

Yes, yes, yes, the books help immeasurably!! They are brochures for the workshops.

Do you speak first or write the book first?

I spoke first! I taught my classes starting in 1990 and my first book wasn’t released until 2002. So, you can see I did a lot of work without a book. Experience happens by just going for it. I paid someone to book speeches for me. I did a lot of networking. I went to 10-12 meetings of different groups a month and then I called people afterword to see if they were interested.

What is one of the first questions that you ask clients?

Tell me about you! What is the work you are doing and why do you love it.

How do you find a speaker’s booking agent?

I met the booker while networking back in the day before the Internet. She went on to develop a paid speaker’s bureau.

Do they get a percentage of the royalties? How would I find someone like that?

Go to Susan Levin at www.speakerservices.com. She lists free and fee speakers. Google speakers bureaus and see what you get. Also, read books on speaking. Speakers bureaus usually charge 30% of the fee. Susan Levin books free speakers so she has a charge for the listing.

For a first time author, how do you find a publisher who will publish your book in a reasonable time (less than a year) and help promote your book with the media?

I got an agent first. Did a book proposal that she shopped to publishers. It took me a year and a half to get one.

I find it interesting that you call the books "brochures" for your workshops. As a bestselling author, aren’t you making money on the books themselves? Did you get a good advance for either book from your publisher?

Very few books make money. Advances are against future royalties. I get 10% of the wholesale price (think 55% of cover price) and then 15% goes to the agent, and 25% is held by the publisher as reserve against returns.

That doesn’t sound like it adds up to enough to live on!

No, you can’t live on book money, but so many people called me to sign up for my $2500 workshop after reading the book. That was a great deal!

Did you charge $2500 right off the bat? How many days was that for and what was the subject?

Nope, didn’t start at $2500. I started at $200 and raised my price every year, always thinking well, this is the end of the line. People aren’t going to pay this much, but they always did.

How many free speeches did you do before you started charging?

I did free speeches forever if it was to my target market – people who were likely to sign up for my workshops.

Did you start speaking because of an insatiable urge or some other reason?

I started speaking because after consulting with my clients to help them with their money issues, three of them in the same week said you should teach this. I did my first class and realized this was my dream path…

Did you market the workshops and "see who will come" or did you write it, practice, etc., then market?

hehehe I SOLD the workshop and then I wrote it.

So, you’ve been coaching clients for a long time before you began speaking?

Coaching was just something I did with my bookkeeping clients. I didn’t become official until 1990 when I started the workshops.

Do you get many speaking gigs from your bureau, or do you book most of your speaking engagements yourself?

I get almost all my gigs myself. The word keeps spreading and people email me.

There are so many different workshops on money. How is yours different?

My workshops are different. 1 ½ hours a week for 8 weeks and it’s a combination of living rich inside and outside. I am not all about saving for retirement. If you love your work, which you should, why would you retire from it?

Are they in person or online?

Only in person. I want all my senses working to help my participants. I have to see them, hear them, and feel their energy. You can’t hide out in my class, and you have to do the work.

How much do you charge for these workshops? Where do you teach them?

As of this year, I am not teaching them myself any more. I am licensing other people to teach them. I have trainers all over the U.S. now and more are training in September.

I want to find an agent for my book. My subject is today’s generation. Millennials (brought up with technology) and a methodology that guides kids to be intrinsically motivated to make healthy choices in friends, behavior and completing their education. We train educators and youth workers to facilitate the methodology and they see an improvement in behavior and academics. Our book will deal with how to Tune In and Turn On this generation. There is a real disconnect with adults. We also are doing workshops for parents and educators. We are taking the program nationally, any thoughts on getting the book out there?

For non-fiction books, "Platform" is the buzz word. How many people do you reach, what kind of media is paying attention to you. Do you have a website, blog, etc. And how many users?

We have about 4000 people in our database who will buy the book. I know we can make more individual dollars self publishing, however, I feel with the right publisher we will get better exposure, which will lead to more lectures and workshops. Your thoughts?

I believe when you get a publisher you will more easily get media attention. Anybody can self-publish these days and they haven’t been vetted. Media can’t read everything so they have to have something to go by.

Do you think that all speakers need to write books to be successful? Also, please give everyone an idea of what publishers are looking for, so we have a sober view of the book publishing world.

Book publishers are looking for volume of sales. That means that they want to know you can reach many people who will want your book. How many People in your database, see? Think of books as widgets.

The books seem to be an added bonus or advertisement for the workshops. Are they best treated this way?

Think beyond the book itself to the further mission you are trying to accomplish and all the ways you can do that. The book is for advertising. Book stats: 10 books out of 400,000 published each year sell one million copies.

Natalie’s Note: Chellie’s books are great. I’ve been reprinting excerpts from them and the content is spectacular. Go to Chellie.com to learn more.

Any thoughts on finding the right agent for our book. Subject matter and audience are parents, educators, adults in general and the kids.

The best way to find an appropriate agent is to go to the bookstore and look in the acknowledgment pages of the books that are similar in subject matter to yours. You can also purchase "Writer's Market" which lists publishers, agents, and what they do and don't do.

Do your workshops mainly focus more on strategizing the wealth I already have?

My workshops don’t deal much with investing. They are about making money so you will have something to invest!

More efficient use of resources?

My workshops are called "Financial Stress Reduction." Lots of people I know with lots of money still have financial stress, so it’s about building confidence in your ability to make and manage money.

Has your workshop evolved? Or is the workshop you are doing the same subject you started teaching?

The workshop has evolved as I have. But the format and subject matter has remained the same for 18 years. I tell different stories.

Where is your next workshop?

My next training of trainers is September 3-7 in Redondo Beach at the Portofino Hotel. I am licensing people with all the materials, speeches, networking tips, branding, etc. Think franchise. Although a Coffee Bean franchise costs $250,000, my program investment is $12,5000. ($10,000 early bird discount). My first trainer in Connecticut paid that back with her first workshop and made a profit.

With regard to the Financial Stress Reduction workshops themselves, I don’t teach individual classes myself, but I have six trainers in LA who are offering classes. You can find them at my website: www.Chellie.com.

Anything before September? I’m anxious to get started. Does the $10,000 include workshops or just training workshops?

The $10,000 includes 4-days of training and all materials, workbooks, etc. I teach the actual workshop to the trainers and then teach them how to teach it, and run the workshop business. I also record the entire process on CDs for the trainers.

What’s the best way that people can reach you?

Any of you can call me at 310.476.1622. If you want the first 30 days of The Wealthy Spirit, go sign up at my website and you can get a look at what I believe and do.

Natalie’s Note: Be sure to buy Chellie’s two books, Zero to Zillionaire and The Wealthy Spirit. Zero to Zillionaire. These are handbooks for many of the concepts she teaches in the workshops. Very amazing stuff there. Simple, powerful and a wonderful read because as you can see, Chellie knows how to delight people with her stories. Just go to Chellie.com to purchase.

How are Chellie’s workshops different from yours, Natalie?

Natalie: Chellie’s workshops are great for people who want to make their biz profitable. So she’s an income focused money person. My workshops are great for people who want to make money while they sleep. My workshops are investing focused, but also designed to help you learn how to live in a THRIVE lifestyle – focused on living the rich life first, and getting your basic needs down from 70% or more in line with 50% to survive and 50% to thrive. Much of this is realigning spending, more than anything and realigning how you think about your money. I say, "Put your money where your heart is and watch more love, more joy and more abundance pour in as a result."

Sounds like I need both workshops!

Chellie: I don’t touch investing. You need Natalie for that! Mine is more making money in your business through your passion and life’s purpose. I always offered my course with a money-back guarantee.

Natalie: And mine is taking that passionate money and making sure that you are investing your money where your heart is, which is where you’ll get the highest returns, both psychically and financially… and the planet benefits as well.

Ditto!

I believe everyone should be taking self-improvement workshops all the time. There’s no competition.

If you are interested in Chellie’s September 2008 workshop, be sure to contact her right away. Space is limited. Go to Chellie.com for more information.

If you are interested in Natalie’s September 2008 workshop, be sure to contact her right away. Space is limited. Call 866.476.7442 or email Heather@NataliePace.com for more information.

Chellie has also been responsible for helping countless people to increase the profitability of their businesses. If you are stuck having too much month at the end of your money, learn Chellie’s time-proven strategies to success in our chat room.

As a professional speaker and author of The Wealthy Spirit and Zero to Zillionaire, Chellie has been teaching Financial Stress Reduction® Workshops since 1990. The Wealthy Spirit was a book-of-the-week on the Doctor Laura Schlessinger radio show and a GlobalNet book-of-the-month selection. She has been quoted in Good Housekeeping, Lifetime, Woman's World, and Essence, and more than 30 popular books.

Allergies, Asthma, Upper Respiratory Illnesses and Parasites and Microorganisms.

by Dr. Rosalia Mariz ND, DNM, MPH, MH, MCP, CNHP HHP, CBT, Vital Hematology Department

Allergies, Asthma, Upper Respiratory Illnesses and Parasites and Microorganisms
With Vital Hematology at HealthWalk, we can observe parasites and other microorganisms that are afflicting clients who seek our services. One day we received an urgent request to see a tiny four-week old infant, who despite being flown from the valley in mid California to Children's Hospital in San Diego, was not responding to the various treatments he was put on. This delicate child had breathing problems, convulsions and other severe symptoms. The Children’s Hospital had put him on twelve different medications including methadone to no avail. Somehow the family heard about HealthWalk and pleaded for us to see him urgently. When they arrived, the baby's eyes looked like he was hallucinating. The family was very concerned because despite many tests and many drugs they did not have an explanation for why and what was happening to him.

A drop of the baby’s blood was analyzed under the microscope. First, at a lower magnification, we could see there were a very high amount of white blood cells indicating that the body was fighting hard against invaders. Then in mid capacity magnification we could see some of the red blood cells showed liver stress from the pharmaceuticals that had been administered. At 30,000X magnification we saw there were several types of parasites. It was obvious to us that this was the cause of his symptoms.

We asked if there were pets in the house. The family said yes. The other small children in the family had asthma. The mother also had severe allergies. We explained to the family that there was a high probability that their pets were transmitting parasites to the family members and they needed to address the health issues related to these parasites. The adults and older children were given HealthWalk’s ReVoxil™, a natural anti-parasitic and antimicrobial supplement and the infant was given the equivalent of ReVoxil™ in a form and amount appropriate to his age.

The entire family was so relieved that they finally had an explanation and a solution for the baby’s and many of their family’s long term health issues, as well as having the necessary solutions to rid themselves of the culprits! They were happy and grateful they found the support they needed in Vital Hematology at HealthWalk.

Many infants and children suffer unnecessarily from asthma and respiratory illnesses. In most cases these can be resolved by using ReVoxil™. We have had numerous clients address their parasite problems with ReVoxil™ and have their asthma and respiratory problems resolve.

Many allergies are caused by worm infections. The body’s tissue becomes inflamed when the body produces extra eosinophils (white blood cells) to fight the microorganism infection and as a result, the body becomes overly sensitive and exhibit allergic reactions to many foods. And with some parasites and other microorganism infections, extreme skin rashes with blisters, food allergies and/or sensitivities may also result.

Upper respiratory health issues, sinus inflammation or infections caused by an abscess in an upper tooth are often from bacteria and viruses. Parasites or candida can also take up residence in all those little of the respiratory system’s nooks and crannies and they are the hardest to eliminate. Mycoplasmas (no cell wall bacteria) infecting the sinus will cause drainage with bad nasal odors. Polyp or tumors, which bulge out into the nasal passage may also be filled with parasites. Other symptoms of parasite infections may be feelings of being bloated, tired or hungry, allergies, asthma, gas, digestive disorders, unclear thinking or feeling heavy and toxic. Damage and symptoms will vary based on the type of parasite infection. Many of these issues are often untreated because healthcare practitioners in the US seldom consider parasites to be a cause.

In the USA, about 85 percent of the population is infected with parasites. Some people may not have any obvious symptoms from infection. About 25 percent may only have some aches and pains which many ignore since they are vague and not easily defined. The quality of life and health may be compromised in another 55 percent. About 5 percent of the population is disabled from parasites related health issues. Almost all of these cases can be identified and dealt with by HealthWalk’s Vital Hematology and powerful natural supplements. At HealthWalk we have the technologies and solutions to support your return to optimal health.

HealthWalk is a healthcare company which offers leading edge, scientifically proven and effective products and services that provide an integrated healthcare system for a vibrant life. HealthWalk offers non-invasive and effective long-term support to enable the body’s own innate powers to do the healing. One of their leading edge services is to provide Vital Hematology™ http://www.healthwalk.com/ClinicServices/IndividualClinicServices/VitalHematology/tabid/60/Default.aspx - research quality live blood analysis with the only Richardson Technology Microscope (RTM technology) in public use in the world. They can observe your blood to 30,000 X resolution as compared to optical scopes which magnify to only 5,000X and can only do dead cell analysis. HealthWalk’s technology allows for a more accurate assessment of your health conditions and they can propose precise supplements and lifestyle changes to address health issues identified. HealthWalk’s ReVoxil™ http://www.healthwalk.com/ProductsStore/Supplements/ReVoxil/tabid/124/Default.aspx (to rid the body of parasites) is one in their line of clinically tested products to support your health and wellbeing. HealthWalk’s mission: Vibrant health, you can attain it and we are here to support you on your path to regaining and maintaining it. You can read and subscribe to their monthly newsletter at http://www.healthwalk.com/Newsletters/tabid/245/Default.aspx For more information, go to www.HealthWalk.com

Please note: This article has not been evaluated by the Food and Drug Administration. The information herein is not intended to diagnose, treat, cure or prevent any disease.

Bonds 101:

Investing In Bonds.

This information is published and available on the website FINRA.org and includes information provided by FINRA.org and other organizations.

Bonds are actually loans that investors -- individuals like you, as well as institutions -- make to the federal government, state governments, municipalities, companies, and government agencies. Investors who buy bonds become bondholders, or lenders. Bondholders get an "I.O.U." from the issuer of the bond, but the bondholder doesn't have any ownership rights like stockholders do.

Generally, bonds are fixed-income securities because they pay you, as the bondholder, a predetermined interest rate (also called "coupon rate"), regularly, that is set when the bond is issued. However, some bonds are issued with variable rates that can be affected by external economic factors. The borrower or issuer promises to pay back the loan in full on the maturity date. All bonds have set maturity dates--the date when it must be paid back to investors at its face amount, called "par value. "

Bonds are usually sold in $1,000 units. Like its interest rate, a fixed-income bond's term is set when it is issued. Short-term bonds are usually one year or less. Intermediate-term bonds run 2 to 10 years and long-term bonds are generally for at least 20 to 40 years. In most cases, the longer the term, the higher the interest rate paid. Just as bank certificates of deposit (CDs) pay higher interest rates for the right to keep your money for a longer term than an ordinary savings account, so do bonds. Be aware, however, that the risk level increases the longer the bond is held because of its vulnerability to interest rate fluctuations and inflation, over time.

Different Types of Bonds
Private corporations issue corporate bonds to raise money for capital expenditures, operations, and acquisitions. Corporate bond interest is taxable and the prices are well publicized (usually in newspapers), so it's easy to know what the bonds are worth. As with stocks, investing in corporate bonds carries risk. The value of the bond may change depending on changes in the company's credit rating and, in the event of a corporate bankruptcy, holders of corporate bonds suffer significant losses.

U.S. Treasury bonds are long-term debt instruments that pay for various government operations and are applied toward the national debt. Unlike stock and corporate bonds, Treasury bonds are backed by the full faith and credit of the U.S. government, which means that the resources of the United States would make sure that your investment was repaid, making them relatively secure investments.

Municipal bonds issued by states, cities, counties, and towns pay for public works projects like new schools and highways. Your investment in municipal bonds is generally exempt from federal income taxes, and in many states, from state income taxes, too. This may be advantageous if you are in a high tax bracket. A tax-free bond usually has a lower yield than a taxable bond. You can determine your net (after tax) yield from a taxable bond by subtracting the amount of yield from your marginal tax rate. (Your marginal tax rate is based on your filing status).

Secured bonds are backed by collateral that the issuer may sell to repay you if the bond is defaulted on at maturity. Unsecured bonds, called debentures, are backed by the promise and good credit of the bond's issuer. A convertible bond may at some time be exchanged for other securities from the issuing company under specified conditions.

Understanding Your Bond Investment
Interest rates affect bond prices--though, inversely. Usually, bond prices move in the opposite direction of national interest rates; when interest rates rise, bond prices fall. For example: you buy a 10-year, $1,000 bond issued at 7 percent today. Five years later, you want to sell that bond, but now interest rates have risen to 9 percent and new bonds are paying 9 percent. Few people would want to buy a $1,000 bond paying only 7 percent. So, you would probably have to sell that $1,000 bond for less than $1,000 to make up for the higher interest rate now being paid on other bonds.

Bond Quotes
Bond price quotations use eighths, but with a difference. Bonds are sold in units of $1,000 but are quoted as 100s. To find the correct dollar value, move the decimal one place to the right.

For example, a bond quoted at 98 1/4 is equivalent to 98.25. Move the decimal one place the right to find the dollar price of the bond, which is $982.50. This bond is selling for less than $1,000 so it is selling at a discount, probably because of a low rate of interest.

A bond quoted at 102 3/8 (102.375) equals $1,023.75. This bond is selling at a premium, probably because of a high interest rate or yield.

What is the dollar price of a bond quoted at 97 7/8?*_______

* This worksheet reprinted with permission and courtesy of Eastern Michigan University, National Institute for Consumer Education. The information is for general educational purposes and is not intended as specific advice for individuals.

Bond Rating Codes

For more information on bond ratings please contact: Moody's Investor's Service or Standard & Poor's.

Bond ratings measure credit risk. Several private agencies, such as Moody's and Standard & Poor's, rate bonds based on their assessment of underlying risk that the issuer may not be able to pay back the bond's principle and interest. The better the rating, the lower the interest the bond will usually pay. Generally the higher the yield, the greater the risk. Remember: in extreme cases, the issuer of the bond can suspend interest payments or default entirely. Issuers can also buy back, or "call," the bonds before maturity if interest rates fall. You should study the call provisions thoroughly before buying a bond.

Finally, some bonds, like U.S. Treasuries and municipals bonds, require large minimum investments, usually $10,000.

Bond Quotations

Column 2: Current Yield
At this day's price, the holder of a Chiquita bond annually will receive 10.7 percent or $10.70 for every $100 invested. The current yield is calculated by dividing the annual interest by the closing price.
"cv" indicates the K Mart bond is convertible and can be exchanged for K Mart stock.

Column 3: Volume
On this day, 500,000 K Mart bonds were sold. The number 50 has been multiplied by 10,000.

Column 4, 5
The final price for Chiquita bonds was $982.50 which was $3.75 more than the final price on the day before.

FINRA is the largest non-governmental regulator for all securities firms doing business in the United States. FINRA.org offers investor information, investor alerts and also a free BrokerCheck service, where you can find out if your broker/dealer has any complaints on file in the United States.

Benjamin Graham’s Candy Store: Your Potential for Gains are Established on the BUY End.

by Kelley Wright, managing editor, Investment Quality Trends stock newsletter.

Kelley Wright, Managing Editor, IQTrends.com stock newsletter.

In attempting to divine the future it can be useful to review the past. While we stipulate that each market cycle is unique, from experience we know that conditions, events and patterns from previous cycles can be analogous to the present, which could provide some insight and guidance to current investment considerations and decisions. More specifically, we believe the action in the Dow Industrials from 1st quarter ‘03 to the present is eerily reminiscent to the action in said Average from mid-May 1970 through 1973.

Time and space prohibit a detailed comparison (additional thoughts will be posted to Kelley’s Corner shortly) but suffice it to say both periods enjoyed an initial breakout, entered a primary rising trend and were challenged by multiple sharp corrective phases. With the Industrials making a new low we now wait to see if the Transports will confirm, which would mirror the pattern from 1973 to 1974.

Then as now the currency was in crisis, the nation was at war, oil was skyrocketing, unemployment was rising, inflation was threatening and recession loomed on the horizon. The Undervalued category methodically grew month by month until it reached levels established at bear market bottoms in 1966 and 1970. In similar fashion, the 103 stocks currently in the Undervalued category not only represent the highest number in this decade but the highest number in a decade. What remains to be seen is if the category reaches the 65% to 75% of our roster that has marked previous bear market lows.

By the end of 1973, the nation was gripped by the nightmare of Watergate and the potential for a constitutional crisis. The present state of political discourse can be fairly characterized as acrimonious and one must concede from intellectual honesty that some portion of current market weakness is directly attributable to concerns about the outcome of the November election.

Then as now, previously believed to be invulnerable sectors of the market were in tatters. Venerable oil giant Exxon-Mobil (XOM) was battered so badly by the oil crisis created by the Arab oil embargo that its dividend yield reached a heady 10%. Today mighty Bank of America (BAC) is trading so low its dividend yield is at 10%, which means the market believes it will cut its dividend. BAC doesn’t have to cut the dividend but given the cuts by other financial stalwarts it seems like the safe bet and it could happen. The pending acquisition of Countrywide Financial also makes people nervous because they don’t know the size of the reserves they’ll have to take against Countrywide’s loans. Long term the deal will be a positive, but it’s going to take 18 to 24 months.

In the meantime, trailing twelve month earnings are below the current dividend of $2.56 per share, which rightfully suggests the dividend is in danger. A potentially positive development, however, is Bank of America owns close to 20 billion shares of China Construction Bank. The initial shares they purchased will be marketable in October and those shares will have a big profit. If the profit is as high as expected some analysts are projecting earnings from $2.50 to $2.60 per share for ‘08, which would just about cover the $2.56 dividend. That would be a huge plus for the bank, the sector and the market.

The final comparison I will make about the two periods is this; both created generational values that Benjamin Graham would advocate buying. If Graham were alive today he would be like a kid in a candy store, snapping up shares of high-quality companies whose asset values, in many cases, are equal to or exceeding its stock values.

Why is this important? BECAUSE THE GAIN IS ESTABLISHED ON THE BUY. The market may indeed move lower but it will eventually establish a bottom. In the meantime many stocks have already reached or are close to reaching their respective bottoms. The lesson to take from the ‘73/ ’74 period; when investors buy high-quality stocks at extreme levels of value and are patient, the rewards are outstanding.

The Timely Ten
Investment Quality Trends primary purpose is to assist subscribers in growing their capital and income base from which to derive cash for their current and future needs. To that end we believe that high-quality stocks purchased at historically low-price-to- high-yield offers the best potential for downside protection and upside appreciation.

For subscribers to effectively mirror our Model Portfolio for performance tracking purposes (every stock in the Undervalued and Rising Trend categories), would require holding one hundred thirty two stocks as of the Mid-June issue; clearly too many positions to be practical.

The Timely Ten, therefore, is not just another "best of, right now" list. It is our reasoned expectation based on our methodology and experience for what we believe will perform best over the next five years. Do we believe that all 10 will go up simultaneously or immediately? Of course not. Our four decades of research and experience, however, lead us to believe that these stocks, purchased at current Undervalued levels, are well positioned for appreciation.

Whether you are looking to build a portfolio from scratch, are partially invested and looking to add new positions, or fully invested and in need of some affirmation and hand holding, The Timely Ten represents our top ten recommendations as of each issue. Short of utilizing the personal investment management services of our sister company, this is as close to hands on advice you can get.

The Timely Ten consists of Undervalued stocks that generally have a S&P Dividend & Earnings Quality rating of A- or better, a "G" designation for exemplary long-term dividend growth, a P/E ratio of 15 or less, a payout ratio of 50% or less (75% for Utilities), debt of 50% or less (75% for Utilities), and technical characteristics on the daily and weekly charts that suggests the potential for imminent capital appreciation. This issue’s selections are:

Kelley Wright’s stock newsletter Investment Quality Trends is currently performing at the top all of his peers on Wall Street for the past 20 years and is ranked #4 in risk-adjusted performance by Hulbert’s Financial Digest. Kelley’s stock newsletter, IQTrends.com, is earning 11.6% in annualized gains over the past 20 years, according to Hulbert’s, compared to general stock market performance of 11% (as of May 2008). IQTrends.com also has lower risk and volatility than the market average. To subscribe, go to IQTrends.com

Regulatory Reminder
Please keep in mind that as an investment newsletter, the staff at Investment QualityTrends are legally bound to only answer questions of a general nature and are unable to provide specific buy/sell recommendations or specific advice on an individual basis. For those interested in obtaining more information on individual management services in accordance with our approach, our sister company, I.Q. Trends Private Client Asset Management, is a Registered Investment Adviser with the U.S. Securities and Exchange Commission. Among the platforms available through I.Q. Trends Private Client are individual portfolio consultations and active account management. For more information, please contact Mr. Michael Minney at (866) 927-5250 ext. 201.

Disclosure documents are located at: http://www.iqtrendsprivateclient.com

Please note: 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.

 

Options Trading: The 2008 Strategy of #1 Stock Picker.

by Natalie Pace.

General Stock Market Performance

As you can see, so far in 2008, the stock market has been burning most investors. Ouch! During these turbulent, down-trending times, the strategies have changed, but the returns are continuing to shine for savvy NataliePace.com subscribers. How’s that? Well, more and more, you’ll find our top performers on the Cooling Off list, which means that if you haven’t sharpened your options trading skills, you are missing out on the easiest way to profit in a down-trending marketplace.

In order to keep performance up in your trading portfolio, it’s important to know which way the tide is flowing. It’s far easier to swim downstream than it is to fight the current!

In 2008, Natalie’s reporting and news analysis reflected a differentiated strategy for the turbulent times, with a focus on:

1. Taking profits early and often,
2. Banking on the markets heading south after every major rally
3. Recession proofing your nest egg immediately by making sure that a percent equal to your age + 10% is SAFE (i.e. in bonds, Treasury bills, money markets, Certificates of Deposit, etc.)

Put Options: The Top Performers On My Hot News on Cool Stocks List
If you know how to trade options, you could be buying puts on companies like Wells Fargo Bank when it trades for above $31 and selling those puts for great gains when it crosses below $27. This strategy paid off multiple times this year already. Additionally, you could be purchasing the puts in long windows, even buying the option with an expiration date of January 2010, so that your risk is not as high as is often associated with options trading.

In my view, this is an important strategy with options trading. If the window is too small, then your option could expire before the company’s share price does what you’re are expecting it to do. In the below chart, you’ll notice that in 2008, the Wells Fargo share price swingbacks were occurring faithfully at least once a month, providing multiple buy/sell opportunities.

Wells Fargo is the black line in the above chart. You could have bought the put on February 1, 2008 and sold it within the next 30 days for a big gain. (You can sell your option anytime, even if your option isn’t set to expire until January 2010.) You could have purchased a similar put again in mid-March 2008 when the share price was trading above $31, and sold it for a gain at the low point, below $27, in mid April. You could have purchased again on May 1^st and sold the put option on Friday, June 27, 2008 for another huge gain.

How does a put option work?
Well, first the disclaimer. Options are investing 102 – not for beginners – as is this year’s stock marketplace. If you haven’t traded stocks before, then you should understand that it’s probably best for you to wait on the sidelines this year. This is not the time to adopt a new trading strategy, unless you’re willing to use your education money or fun money to learn on. (When you are learning, that’s education, NOT an investment!) For your nest egg, you need to make sure you have a percent plus 10% safe and the rest of the holdings diversified.

What’s so great about a recession? Buying Low!
Make sure that you are taking a long term view for your stock portfolio, tithe to your nest egg every month and keep a list of your favorite stocks handy, in case one or two of them REALLY goes on sale. As an example, March 2008 was your chance to own companies, like Google, for prices that haven't been seen for years! If you bought Google for $411 on 3.11.08, you were buying at a 45% discount from the high of $747. As Kelley Wright notes in his excellent article this month, buying low is the key to great gains. That’s what’s great about a recession to savvy investors. It’s a chance to stock up on your favorite companies at bargain prices!

Options: The Basics
The basic strategy of a put option is easy. You can look up the legal definition in a financial dictionary. The layman’s lay of the land is this: You are making a bet that the price of XYZ company will go down before XYZ date. If the company goes down within that time period, you make money. If the company goes up during the time period, the value of the option you purchased will be reduced in value or potentially be even worthless, if you don’t sell before the expiration date.

Yes, you got it! Big risk! But that risk is lessened, somewhat, if you buy a longer window. So, if you’re new to options, having a put or call option that expires in July of 2009 or January of 2010 is going to give you more time to be right than buying one that is less expensive, but set to expire in a few weeks.

So matter what the expiration date is or the "strike price," if you are "in the money," you should be able to trade your option for a gain anytime the markets are open. For instance, on April 17, 2008, you could have purchased a Wells Fargo put with a $20 strike price that would be open until January 17, 2009 for 85 cents per unit, or $85 for one lot of 100 positions. (Options are sold in lots, and each lot contains 100 positions.) On that day, the Wells Fargo share price was trading in the $29-$31 range. On June 27, 2008, when Wells had dropped down to a trading range of $24/share, that put was valued at $1.85 – which means that your investment of eighty five cents per unit (or $85 for each lot of hundred) more than doubled for a value of $185 for each lot of hundred.

Cooling Off list winners
Some of our other Cooling Off stocks have dropped far more substantially than Wells Fargo (meaning that put options were rolling in the dough), including: Novastar Financial, Fannie Mae, KB Home and Toll Brothers. If you haven’t reviewed those recently, check out the bottom of the Hot News list, where the Cooling Off list is located, for an explanation of why these companies were in trouble and when that trouble was first identified on our Cooling Off list.

Saavy subscribers were warned that the housing crisis was poised to tank in April of 2005. Imagine that! You and your friends could have gotten out of REITs at the high of 2005, if you were religiously reading my ezine. What warning is on the cooling off list today that you are missing because you are not reading the article thoroughly on the 1^st and 15^th of each month?

So far in 2008, betting that share prices are going down has been a big payoff. The big question is: Will that trend continue? No one has a crystal ball, but here’s how the markets performed over the summer of 2000 (another down-trending, recessionary election year).

Now the markets held up steady over the summer of 2000 (before NASDAQ slid down in the last quarter), largely because then Federal Reserve Board Chairman kept lowering the Fed Funds rate – leaking more cheap money into the system. This year, the Feds have their hands tied. The Fed Fund rate is already at 2% (historically low) and with ‘sell-your-blood’ gas prices and a low dollar value, the Feds can’t afford to keep lowering it. According to the Federal Open Market Committee press release on June 25, 2008, "In light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflation expectations, uncertainty about the inflation outlook remains high." In other words, they can’t put more cash in your pocket, when the value of what that dollar can buy keeps dropping.

While traditionally the Feds job, at least partially, is to create a sound economy for the election, this year, all bets are off and all of the crystal balls are cloudy. Economists from Nobel Laureate Dr. Gary Becker to Phillip Swagel, the assistant secretary for economic policy at the U.S. Treasury Department, say that things will get worse this year and aren’t likely to get better before 2010. The future doesn’t look bright. So, odds are that your best investment is going to be in sunglasses and sunblock, while you take a vacation from the markets. If you really want to enjoy yourself, consider coming to my September 2008 retreat, where you’ll learn how to: 1) profit in down-trending turbulent times and, 2) recession proof your portfolio. There are only a few seats remaining in this intimate, 12-person only retreat, so I encourage you to call 866.476.7442 or email Heather@NataliePace.com right away to sign up.

One thing you don’t want to do is panic and think that selling everything now is the best bet. The historical trends on that losing strategy are well-established. Stocks are the best game in town over the long term. When you stay in the game and keep contributing on a regular basis, you are actually "buying low" when share prices go down. Overall, more years win than lose, so the returns for religious tithing to your nest egg are very reliable, historically. See the below chart for the performance of stocks, bonds, real estate and gold over the past 39 years.

Have faith in the long-term potential of one of the most free, innovative, entrepreneurial nations on the globe – the United States. But also understand that the hard times of the real estate downturn, the credit tightening, the stock market turbulence, increasing unemployment, decreasing corporate profits, low dollar value, skyrocketing gas prices, sky-high medical care costs and everything but the locusts are on the horizon. (Read my report on the Treasury Department’s real estate strategy in this ezine). Also, understand that the world is likely to become enchanted with other lands while we go through our beautification process. (Read my From BRICs to Barbeys article this month, as well.)

In other words, protect your portfolio. Turn off the tele and the financial news, if it’s stressing you out. Take a stay-cation, this year. Keep liquid and maintain a stock shopping list. Have low expectations for everything but gold and alternative energy. And understand that the only investors having fun these days are those who are reading my Cooling Off list and/or profiting on the market volatility by buying low and selling high in very short windows. You can join them, or sit on the sidelines and learn a few things by educating yourself. Put Option A and Option B at the top of your trading strategy, or sit on the sidelines, but don’t jump into the stock market this year expecting to have an easy profit when the markets are humbling financial stalwarts, like Bear Stearns, which recently had to be bailed out, and Merrill Lynch, which reported a net loss of $1.96 billion in the first quarter of 2008.

Some NataliePace.com Featured Companies that Have Doubled or More

Companies featured in 2008: Short term gains and put options = winning strategy
Notice how an investment strategy of taking profits early and often and focusing on profiting in a down-trending marketplace has turned up only one losing stock in 2008 – Wisdom Tree – for ten companies that are in a position of profit on the year. The put options (positions that the share price will go down) are the top performers to date.

The Hot News and Cooling Off lists have even more companies to choose from – 26 winners for just 6 in the red, as of the June mid-month update.  The Apple put, which was added to the Cooling Off list when Apple was trading at $186 has made quite a good return.  When it was added, the put cost was at $20.40.  On June 27, 2008, that put was worth $26.50, a gain of 30%, whereas the share price of Apple had dropped to $168 (for a loss of 10%).  

Get Smart! at the September Get Rich and Enrich Retreat in Santa Monica, CA

There are only a few seats left for the September retreat, which will be an intimate training retreat with Natalie Pace, limited to under a dozen people. If you’re interested in joining Natalie, be sure to call 866.476.7442 or email Heather@NataliePace.com right away.

You’ll learn how to:
profit in a down-trending marketplace
recession proof your portfolio
trading tips for turbulent times
buy low/sell high strategies
construct your own Stock Report Card™
options strategies!
live the rich life…

AND you will
tour the first platinum LEED rated home (as part of our group)
visit Agape International Spiritual Center (if you choose), the home of Michael Bernard Beckwith

AND
visit the alternative energy car show in Santa Monica over the weekend (if you choose to)

Come join me. I’d love to teach you what I know!

Full Disclosure: Natalie Pace currently owns positions in Suntech Power Holdings and World Water and Solar.

Please note: NataliePace.com does not act or operate like a broker. We report on financial news, and are one of the most trusted independently owned and operated financial news corporations in the U.S. 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.

Investors should NOT be using the Hot News on Cool Stocks list or the Cooling Off list to trade their nest eggs. Your retirement plan should reflect a long, safe strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.

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.

Pump and Dump Scams, Microcap Stocks and "Wrong Messages" Left Intentionally on Your Phone: A Guide for Investors.

By the Securities and Exchange Commission.

August 2004

Introduction
Information is the investor's best tool when it comes to investing wisely. But accurate information about "microcap stocks" — low-priced stocks issued by the smallest of companies — may be difficult to find. Many microcap companies do not file financial reports with the SEC, so it's hard for investors to get the facts about the company's management, products, services, and finances. When reliable information is scarce, fraudsters can easily spread false information about microcap companies, making profits while creating losses for unsuspecting investors.

In the battle against microcap fraud, the SEC has toughened its rules and taken actions against wrongdoers, but we can't stop every microcap fraud. We need your help in winning the battle. Before you consider investing in a microcap company, arm yourself first with information. This alert tells you about microcap stocks, how to find information, what "red flags" to consider, and where to turn if you run into trouble.

What Is a Microcap Stock?
The term "microcap stock" applies to companies with low or "micro" capitalizations, meaning the total value of the company's stock. Microcap companies typically have limited assets. For example, in cases where the SEC suspended trading in microcap stocks, the average company had only $6 million in net tangible assets — and nearly half had less than $1.25 million. Microcap stocks tend to be low priced and trade in low volumes.

Where Do Microcap Stocks Trade?
Many microcap stocks trade in the "over-the-counter" (OTC) market and are quoted on OTC systems, such as the OTC Bulletin Board (OTCBB) or the "Pink Sheets."

* OTC Bulletin Board The OTCBB is an electronic quotation system that displays real-time quotes, last-sale prices, and volume information for many OTC securities that are not listed on the Nasdaq Stock Market or a national securities exchange. Brokers who subscribe to the system can use the OTCBB to look up prices or enter quotes for OTC securities. Although the NASD oversees the OTCBB, the OTCBB is not part of the Nasdaq Stock Market. Fraudsters often claim that an OTCBB company is a Nasdaq company to mislead investors into thinking that the company is bigger than it is.

* The "Pink Sheets" The Pink Sheets — named for the color of paper on which they've historically been printed — are listings of price quotes for companies that trade in the over-the-counter market (OTC market). "Market makers" — the brokers who commit to buying and selling the securities of OTC issuers-can use the pink sheets to publish bid and ask prices. A company named Pink Sheets LLC, formerly known as the National Quotation Bureau, publishes the pink sheets in both hard copy and electronic format. Pink Sheets LLC is not registered with the SEC as a stock exchange, nor does the SEC regulate its activities.

How Are Microcap Stocks Different From Other Stocks?
Lack of Public Information The biggest difference between a microcap stock and other stocks is the amount of reliable, publicly available information about the company. Larger public companies file reports with the SEC that any investor can get for free from the SEC's website. Professional stock analysts regularly research and write about larger public companies, and it's easy to find their stock prices in the newspaper. In contrast, information about microcap companies can be extremely difficult to find, making them more vulnerable to investment fraud schemes.

No Minimum Listing Standards Companies that trade their stocks on major exchanges and in the Nasdaq Stock Market must meet minimum listing standards. For example, they must have minimum amounts of net assets and minimum numbers of shareholders. In contrast, companies on the OTCBB or the Pink Sheets do not have to meet any minimum standards.

Risk While all investments involve risk, microcap stocks are among the most risky. Many microcap companies tend to be new and have no proven track record. Some of these companies have no assets or operations. Others have products and services that are still in development or have yet to be tested in the market. Another risk that pertains to microcap stocks involves the low volumes of trades. Because microcap stocks trade in low volumes, any size of trade can have a large percentage impact on the price of the stock.

Which Companies File Reports With the SEC?
In general, the federal securities laws require all but the smallest of public companies to file reports with the SEC. A company can become "public" in one of two ways — by issuing securities in an offering or transaction that's registered with the SEC or by registering the company and its outstanding securities with the SEC. Both types of registration trigger ongoing reporting obligations, meaning the company must file periodic reports that disclose important information to investors about its business, financial condition, and management.

This information is a treasure trove for investors: it tells you whether a company is making money or losing money and why. You'll find this information in the company's quarterly reports on Form 10-Q, annual reports (with audited financial statements) on Form 10-K, and periodic reports of significant events on Form 8-K.

A company must file reports with the SEC if:
* it has 500 or more investors and $10 million or more in assets; or
* it lists its securities on the following stock markets:
- American Stock Exchange
- Boston Stock Exchange
- Chicago Stock Exchange
- Cincinnati Stock Exchange
- International Securities Exchange
- Nasdaq Stock Market
- New York Stock Exchange
- Pacific Exchange
- Philadelphia Stock Exchange; or
* its securities are quoted on the OTCBB.

If you'd like to learn more about the SEC's registration and reporting requirements, read Q&A: Small Business and the SEC

All OTCBB companies must file updated financial reports with the SEC or with their banking or insurance regulators. Any company that does not file timely reports with the SEC or their banking or insurance regulators is removed from the OTCBB.

Tip: When an OTCBB company fails to file its reports on time, the NASD will add a fifth letter "E" to its four-letter stock symbol. The company then has 30 days to file with the SEC or 60 days to file with its banking or insurance regulator. If it's still delinquent after the grace period, the company will be removed from the OTCBB. You'll find a list of securities that have been removed from the OTCBB at www.otcbb.com.

With few exceptions, companies that file reports with the SEC must do so electronically using the SEC's EDGAR system. EDGAR stands for electronic data gathering and retrieval. The EDGAR database is available on the SEC's website at www.sec.gov. You'll find many corporate filings in the EDGAR database, including annual and quarterly reports and registration statements. Any investor can access and download this information for free from the SEC's website. Click here if you want to view detailed instructions on how to use EDGAR.

Caution: By law, the reports that companies file with the SEC must be truthful and complete, presenting the facts investors find important in making decisions to buy, hold, or sell a security. But the SEC cannot guarantee the accuracy of the reports companies file. Some dishonest companies break the law and file false reports. Every year, the SEC brings enforcement actions against companies who've "cooked their books" or failed to provide important information to investors. Read SEC filings — and all other information — with a questioning and critical mind.

Which Companies Don't Have to File Reports With the SEC?
Smaller companies — those with less than $10 million in assets — generally do not have to file reports with the SEC. But some smaller companies, including microcap companies, may choose voluntarily to register their securities with the SEC. As described above, companies that register with the SEC must also file quarterly, annual, and other reports.

A Word About Offering Requirements
Any company that wants to offer or sell securities to the public must either register with the SEC or meet an exemption. Here are two of the most common exemptions that many microcap companies use:

* "Reg A" Offerings Companies raising less than $5 million in a 12-month period may be exempt from registering their securities under a rule known as Regulation A. Instead of filing a registration statement through EDGAR, these companies need only file a printed copy of an "offering circular" with the SEC containing financial statements and other information.

* "Reg D" Offerings Some smaller companies offer and sell securities without registering the transaction under an exemption known as Regulation D. Reg D exempts from registration companies that seek to raise less than $1 million dollars in a twelve-month period. It also exempts companies seeking to raise up to $5 million, as long as the companies sell only to 35 or fewer individuals or any number of "accredited investors" who must meet high net worth or income standards. In addition, Reg D exempts some larger private offerings of securities. While companies claiming an exemption under Reg D don't have to register or file reports with the SEC, they must still file what's known as a "Form D" within a few days after they first sell their securities. Form D is a brief notice that includes the names and addresses of owners and stock promoters, but little other information about the company. You may be able to find out more about Reg D companies by contacting your state securities regulator. You will find the contact information for your state securities regulator at www.nasaa.org.

Unless they otherwise file reports with the SEC, companies that are exempt from registration under Reg A, Reg D, or another offering exemption do not have to file reports with the SEC. For more information about the registration requirements and offering exemptions, read Q&A: Small Business and the SEC.

What's So Important About Public Information?
Many of the microcap companies that don't file reports with the SEC are legitimate businesses with real products or services. But the lack of reliable, readily available information about some microcap companies can open the door to fraud. It's easier for fraudsters to manipulate a stock when there's little or no information available about the company.

Microcap fraud depends on spreading false information. Here's how some fraudsters carry out their scams:
* E-mail Spam Fraudsters distribute junk e-mail or "spam" over the Internet to spread false information quickly and cheaply about a microcap company to thousands of potential investors. Spam allows the unscrupulous to target many more potential investors than cold calling or mass mailing.

* Internet Fraud Fraudsters often use aliases on Internet bulletin boards and chat rooms to hide their identities and post messages urging investors to buy stock in microcap companies based on supposedly "inside" information about impending developments at the companies. For more information about Internet fraud and on-line investing, read Internet Fraud and What You Need to Know About Trading in Fast Moving Markets.

* Paid Promoters Some microcap companies pay stock promoters to recommend or "tout" the microcap stock in supposedly independent and unbiased investment newsletters, research reports, or radio and television shows. Paid promoters are generally behind the unsolicited "junk" faxes you may receive, touting a microcap company. The federal securities laws require the newsletters to disclose who paid them, the amount, and the type of payment. But many fraudsters fail to do so and mislead investors into believing they are receiving independent advice.

* "Boiler Rooms" and Cold Calling Dishonest brokers set up "boiler rooms" where a small army of high-pressure salespeople use banks of telephones to make cold calls to as many potential investors as possible. These strangers hound investors to buy "house stocks" — stocks that the firm buys or sells as a market maker or has in its inventory. To learn more about cold calling, read Cold Calling Alert.

* Questionable Press Releases Fraudsters often issue press releases that contain exaggerations or lies about the microcap company's sales, acquisitions, revenue projections, or new products or services. These fraudulent press releases are then disseminated through legitimate financial news portals on the Internet.

Microcap fraud schemes can take a variety of forms. Here's a description of the most common schemes:

The Classic "Pump and Dump" Scheme It's common to see messages posted on the Internet that urge readers to buy a stock quickly or to sell before the price goes down, or a telemarketer will call using the same sort of pitch. Often the promoters will claim to have "inside" information about an impending development or to use an "infallible" combination of economic and stock market data to pick stocks. In reality, they may be company insiders or paid promoters who stand to gain by selling their shares after the stock price is pumped up by the buying frenzy they create. Once these fraudsters sell their shares and stop hyping the stock, the price typically falls, and investors lose their money.

The Latest Variation of the "Pump and Dump" Scheme
Some people are finding that they have received a "misdialed" call from a stranger, leaving a "hot" investment tip for a friend. The message is designed to sound as if the speaker didn't realize that he or she was leaving the hot tip on the wrong answering machine. If you get a message like this, it's not a wrong number at all. Instead, it is from someone who is being paid to leave these messages on a whole lot of answering machines. Check out "Wrong Numbers" and Stock Tips on Your Answering Machine for more information and to hear one of these scams.

The Off-Shore Scam Under a rule known as "Regulation S," companies do not have to register stock they sell outside the United States to foreign or "off-shore" investors. In the typical off-shore scam, an unscrupulous microcap company sells unregistered Reg S stock at a deep discount to fraudsters posing as foreign investors. These fraudsters then sell the stock to U.S. investors at inflated prices, pocketing huge profits that they share with the microcap company insiders. The flood of unregistered stock into the U.S. eventually causes the price to plummet, leaving unsuspecting U.S. investors with enormous losses.

How Do I Get Information About Microcap Companies?
If you're working with a broker or an investment adviser, you can ask your investment professional if the company files reports with the SEC and to get you written information about the company and its business, finances, and management. Be sure to carefully read the prospectus and the company's latest financial reports. Remember that unsolicited e-mails, message board postings and company news releases should never be used as the sole basis for your investment decisions. You can also get information on your own from these sources:

* From the company Ask the company if it is registered with the SEC and files reports with us. If the company is small and unknown to most people, you should also call your state securities regulator to get information about the company, its management, and the brokers or promoters who've encouraged you to invest in the company.

* From the SEC A great many companies must file their reports with the SEC. Using the EDGAR database, you can find out whether a company files with us and get any reports in which you're interested. For companies that do not file on EDGAR, check with the SEC's Public Reference Room to see whether the company has filed an offering circular under Reg A.

* From your state securities regulator We strongly urge you to contact your state securities regulator to find out whether they have information about a company and the people behind it. Look in the government section of your phone book or visit the website of the North American Securities Administrators Association to get the name and phone number. Even though the company does not have to register its securities with the SEC, it may have to register them with your state. Your regulator will tell you whether the company has been legally cleared to sell securities in your state. Too many investors could easily have avoided heavy and painful financial losses if they only called their state securities regulator before they bought stock.

* From other government regulators Many companies, such as banks, do not have to file reports with the SEC. But banks must file updated financial information with their banking regulators. Visit the Federal Reserve System's National Information Center of Banking Information site at www.ffiec.gov/nicpubweb/nicweb/nichome.aspx, the Office of the Comptroller of the Currency at www.occ.treas.gov, or the Federal Deposit Insurance Corporation at www.fdic.gov.

* From reference books and commercial databases Visit your local public library or the nearest law or business school library. You'll find many reference materials containing information about companies. You can also access commercial databases for more information about the company's history, management, products or services, revenues, and credit ratings. The SEC cannot recommend or endorse any particular research firm, its personnel, or its products. But there are a number of commercial resources you may consult, including: Bloomberg, Dun & Bradstreet, Hoover's Profiles, Lexis-Nexis, and Standard & Poor's Corporate Profiles. Ask your librarian about additional resources.

* The Secretary of State Where the Company Is Incorporated Contact the secretary of state where the company is incorporated to find out whether the company is a corporation in good standing. You may also be able to obtain copies of the company's incorporation papers and any annual reports it files with the state. Please visit the National Association of Secretaries of State website at www.nass.org for contact information regarding a particular Secretary of State.

Caution If you've been asked to invest in a company but you can't find any record that the company has registered its securities with the SEC or your state, or that it's exempt from registration, call or write your state's securities regulator or the SEC immediately with all the details. You may have come face to face with a scam.

What if I Want to Invest in Microcap Stocks?
To invest wisely and avoid investment scams, research each investment opportunity thoroughly and ask questions. These simple steps can make the difference between profits and losses:

1. Find out whether the company has registered its securities with the SEC or your state's securities regulators.

2. Make sure you understand the company's business and its products or services.

3. Read carefully the most recent reports the company has filed with its regulators and pay attention to the company's financial statements, particularly if they are not audited or not certified by an accountant. If the company does not file reports with the SEC, be sure to ask your broker for what's called the "Rule 15c2-11 file" on the company. That file will contain important information about the company.

4. Check out the people running the company with your state securities regulator, and find out if they've ever made money for investors before. Also ask whether the people running the company have had run-ins with the regulators or other investors.

5. Make sure the broker and his or her firm are registered with the SEC and licensed to do business in your state. And ask your state securities regulator whether the broker and the firm have ever been disciplined or have complaints against them.

We've spelled out the questions you'll need to ask in the following publications: Internet Fraud and Ask Questions. When you ask these questions, write down the answers you received and what you decided to do. If something goes wrong, your notes can help to establish what was said. Let your broker or investment adviser know you're taking notes. They'll know you're a serious investor and may tell you more — or give up trying to scam you. We've developed a Form for Taking Notes to help you. You'll find these and other useful publications on the Investor Information section of the SEC's website or from our toll-free publications line at (800) SEC-0330.

Also, watch out for these "red flags":
* SEC Trading Suspensions The SEC has the power to suspend trading in any stock for up to 10 days when it believes that information about the company is inaccurate or unreliable. Think twice before investing in a company that's been the subject of an SEC trading suspension. You'll find information about trading suspensions on the SEC's website.

* High Pressure Sales Tactics Beware of brokers who pressure you to buy before you have a chance to think about and investigate the "opportunity." Dishonest brokers may try to tell you about a "once-in-a-lifetime" opportunity or one that's based on "inside" or "confidential" information. Don't fall for brokers who promise spectacular profits or "guaranteed" returns. These are the hallmarks of fraud. If the deal sounds too good to be true, then it probably is.

* Assets Are Large But Revenues Are Small Microcap companies sometimes assign high values on their financial statements to assets that have nothing to do with their business. Find out whether there's a valid explanation for low revenues, especially when the company claims to have large assets.

* Odd Items in the Footnotes to the Financial Statements Many microcap fraud schemes involve unusual transactions among individuals connected to the company. These can be unusual loans or the exchange of questionable assets for company stock that may be discussed in the footnotes.

* Unusual Auditing Issues Be wary when a company's auditors have refused to certify the company's financial statements or if they've stated that the company may not have enough money to continue operating. Also question any change of accountants.

* Insiders Own Large Amounts of the Stock In many microcap fraud cases — especially "pump and dump" schemes — the company's officers and promoters own significant amounts of the stock. When one person or group controls most of the stock, they can more easily manipulate the stock's price at your expense. You can ask your broker or the company whether one person or group controls most of the company's stock, but if the company is the subject of a scam, you may not get an honest answer.

Additional Red Flags Don't deal with brokers who refuse to provide you with written information about the investments they're promoting. Never tell a cold caller your social security number or numbers for your banking and securities accounts. And be extra wary if someone you don't know and trust recommends foreign investments. For more tips on avoiding danger, be sure to read Cold Calling and The Fleecing of Foreign Investors.

What If I Run Into Trouble?
Act promptly! By law, you only have a limited time to take legal action. Follow these steps to solve your problem:

1. Talk to your broker and explain the problem. What happened? Who said what, and when? Were communications clear? What did the broker tell you? Did you take notes about what your broker said at the time? If so, what do your notes say?

Note: If you believe your broker engaged in unauthorized transactions or other serious frauds, be sure to put your complaint in writing right away and send it to the firm. Your written complaint may be the only way to prove that you complained to the firm about unauthorized transactions. For more information about unauthorized transactions, please read our "Fast Answer" on that topic.

2. If your broker can't resolve your problem, then talk to the broker's branch manager.

3. If the problem is still not resolved, put your complaint in writing and send it to the compliance department at the firm's main office. Explain your problem clearly, and tell the firm how you want it resolved. Ask the compliance office to respond to you in writing within 30 days.

4. If you're still not satisfied, then send a letter to your state securities regulator and attach copies of any letters you've sent already to the firm. Or send your complaint to the SEC using our online complaint form.

We will forward your complaint to the firm's compliance department and ask that they look into the problem and respond to you in writing.

Please note that sometimes a complaint can be successfully resolved. But in many cases, the firm denies wrongdoing, and it comes down to one person's word against another's. In that case, we cannot do anything more to help resolve the complaint. We cannot act as a judge or an arbitrator to establish wrongdoing and force the firm to satisfy your claim. And we cannot act as your lawyer.

http://www.sec.gov/investor/pubs/microcapstock.htm

We have provided this information ass a service to investors. It is neither a legal interpretation nor a statement of SEC policy. If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.

Ask Natalie: Everyone is Green These Days.

Which stock newsletter is legit?

Photo by: Stacie Isabella Turk, Ribbonhead.com ©2008. Stylist: Arlene Hylton-Campbel, 818-710-0079.

Dear Natalie: In doing research on bio-fuels, I found this stock newsletter and subscribed.  In reading it, I find it very similar to your point of view on "going green"...even the stocks they talk about.   I would like to present it to our investment club as another source of information on the green investment market. Have you ever heard of these guys?  

Thanks so much.
Is Green Ripe for Picking? 

Dear Green:

Good for you for checking up on your newfound source of information. As Alexander Pope says, "A little learning is a dangerous thing; Drink deep, or taste not the Pierian spring." In my own plain language, the water you drink is only as good as the well it comes from. Make sure that you are drinking in wisdom from someone who is a master in the field.

Green is in
When you have the "next great thing," as green is, you will always have Johnny Come Latelys touting that they have been there all along and know the story. And because green earned almost 60 cents on the dollar in 2007 and was the top performing industry BY FAR, every smart money manager or stock newsletter editor on the planet is going to claim that they were there for those returns. Your best FIRST CALL is to FINRA.org to see if they have ever received a complain about the person.

Results, Experience and Longevity Count
It’s all about the return ratio – OVER TIME. Anyone can list green companies today, but how long have these guys been around?  What is the average return annually for their clean energy portfolio for a minimum of seven years? If they boast a return that looks really high, make sure that it is an annual, not cumulative return.

Cumulative returns must be divided by the number of years to get the actual annual return, 50% cumulative over a ten-year period is going to be 5% annual or less. 500% returns could be a selective portfolio, over a brief period of time, when the overall portfolio of every stock they own or report on could be even negative! You have to listen and ask questions with a critical ear, always wondering how they are trying to play the numbers to seem more impressive than they are.

Never Pay Retail!
What is the return so far this year? This has been a tough year for all stocks, but green stocks have suffered the most! As you know, in your trading portfolio (which stock newsletters are supposed to be helping you with), buying low and selling high is just as important as sticking with companies you know something about and picking the best company in the sector. In a market like today, even a great company like Sunpower can lose money if you buy at the wrong time. Knowing good price points is as important as naming a list of the leading green companies. (You’ll not that we took Sunpower off the Hot News list on January 30, 2008, locking in the gains at 107% and 57%, whereas today the stock price has dropped back to near the price we listed it at, as a buy, in January of 2007.)

Throwing Darts or Reading Charts?
Also, check to see what the methodology the stock newsletter editors use for picking the leader is. For instance, in a field that is innovating very rapidly, you cannot simply rely upon press releases and Forbes or Financial Times articles. People, even brokers, who buy on headlines, are late. It’s important to get the latest and greatest market research.

Refer to my article, "Solar Springs Up Again," for an example of very important cutting edge research that has not hit the mainstream yet. Do these guys have access to this information? And if so, where did they get it (from my stock newsletter or the scientist who forwarded the information over to me)? As a result of this cutting edge information, I put the most popular solar energy stock on the Cooling Off list section of my Hot News on Cool Stocks report (where companies that are expected to lose share price are listed). This company is still being applauded by those who haven’t read the research.

Verifiable Data
Check to see which, if any, independent ranking organization (like Hulbert’s or Tipstraders) ranks the performance of the stocks that they pick. Make sure they have been around for a minimum of seven years, so that they will have endured at least one downturn in the markets. Do a BrokerCheck on Finra.org to make sure these guys don’t change their strategy every time some new industry attracts headlines. If they’ve been hitting homerun returns for at least seven years, that alone usually weeds out the newbies from the experienced pros. If they weren’t around in 2000-2002, then the newsletter has not been tested yet! The markets performed pretty well between 2003 and October 2007.   

I guess I should say, brokers, lovers and stock newsletter editors: it pays to pick a good one!

BEFORE you subscribe ALWAYS get the years in business, the annualized returns and verify the performance with an independent raning agency.  There are millions of newsletters making tons of false and/or misleading claims, and they make the legitimate stock newsletters, of which there are many to choose from, look bad.  The green space is going to be even more ripe for people claiming to be good in the area (because it performed so well last year).  Green and foreclosure specialists are probably going to attract more shysters and scam artists than any other industry in 2008 simply because they are the headline stories this year.

So, just because the stock newsletter is green, even if they mention some of the companies that I feature, that alone doesn’t make them ripe for picking. Give them a smell test. And a taste test. And a touch test. And listen to the answers of the questions you ask carefully.

If you would like to Ask Natalie a question about stocks, go to NataliePace.com and click on Sharing Wisdom bulletin board. Feel free to enter your questions there and get feedback from other subscribers, in addition to potentially having your question featured in this article.

6 Winning Strategies For a Down Market.

by Natalie Pace

How can you focus on scoring in a challenging, slow-growth, almost recessionary, environment? Same way as the Celtics won Game 4, after trailing the Lakers by 24 points in the 2^nd quarter.

Winning Strategies in a Challenging Environment

1. Get Your Defensive Game On: Stop the opponent from scoring against you. How do you stop Wall Street from cracking your nest egg, when the Dow Jones Industrial Average drops over 200 points in one day? Make sure that you are in it for the entire game, taking a long term view, tithing to your nest egg regularly (participating in buying low points), properly allocated and diversified, etc. This week’s loss is not the end of the game. Over the lifetime of your investments, stocks return over 10% per year. If you’re set on winning the long-term game, you’re more likely to. If you panic and insist that your broker sells all of your stocks low, you are on the buy high; sell low game plan – a losing proposition every time.

For tips on how to "Recession Proof Your Nest Egg," read that article from the February 2008 ezine (vol. 5, iss. 2).

2. Rest Your Super Stars: There is nothing wrong with sitting on the bench and catching your breath. If you like trading individual stocks (in a small portion of your portfolio, not your nest egg), then keep a list of your favorites handy and watch for a great buy-in price. Don’t be tempted to buy high. Any NBA champion coach will tell you that the all-stars get winded, and need rest time on the bench. While they are hanging out on the sidelines, they can review the lay of the land with a different perspective and fresh eyes. They can formulate a different strategy. Having fresh legs when you jump in the game is as important as buying low. You don’t want to be trying to score big to make up for losses when you are tired, worn-out and fed up from the point deficit.

3. Buy low! Recessions and/or slow growth environments are your chance to buy low. Don’t be in a hurry to buy low -- the Treasury Department is predicting that the tough times are here this year and good times might not return until 2010! Patience is your friend. Stocks, real estate AND bonds are all expected to underperform in 2008. On the other hand, don’t give up on the overall game plan or the players that you already have on your team. Even if the value of your home goes down, you’re likely to be paying the same (or lower) mortgage this year than you were a few months, and you still get the tax and credit benefits of owning your own home. Even if the value of your stock portfolio goes down, if it is properly diversified and allocated, some portions of the portfolio will hold strong, others may be poised for a more dramatic return and you should be protected if you’ve kept a percent equal to your age in safer, yielding investments.

4. Not Losing is Winning: When you are down by 24 points, winners focus on narrowing the gap, point by point. Don’t incorporate stop losses, which is essentially giving up and throwing the towel in on the game. But do make sure that you have a sound strategy, especially with regard to the bulk of your investment portfolio -- your nest egg. And, if you wish to buy and sell individual stocks, make sure that you have the education, wisdom and patience to excel. This is a pros only market, where most of the gains are being made on options and shorting. If you don’t have an advanced level of education, wisdom and patience, then you shouldn’t be trading in this volatile, pros only, down-trending marketplace. You should be educating yourself, shoring up your nest egg and avoiding money traps, scams, shysters, get rich quick schemes, double up to make up strategies, etc. This is probably a time to hit the weight-training and exercise your brainpower and emotional muscles (including getting smart and developing wisdom and patience) before jumping back on the court. In other words, now is the time for learning investment strategies from the best pros in the business, not for competing against them.

5. Hire Phil Jackson: Jackson has a total of 11 NBA championship rings: two as a player with the New York Knicks, six as coach of the Bulls, and three as coach of the Lakers. He may have lost the NBA championship this year, but, overall, odds are he’s going to do the best job in the NBA for you. Same with your all-star certified financial planner. If you pick a winner, s/he’ll do better in a tough environment and s/he’ll outshine when the stars align.

Now’s the time to evaluate your team and in particular your leader. Check out the article, "How to find a Broker," in the Investor Edu section of NataliePace.com. Also, read the Ask Natalie column this month, where we talk about how to find a stock guru from which to learn. You can’t just assume someone on television, or behind the broker’s desk, or even someone on late night tv infomercials, with a catchy software that claims to be 88% accurate, is a master financial planner or stock guru. Learn what questions to ask and what data to demand, to make sure that you are hiring someone who has the longevity, expertise, experience and ethics to develop a winning financial strategy for your dreams.

6. Play Your Strengths: If the opponent is shutting down your fast breaks and keeping you out of the zone, call in your 3-point shooters. Surprise them with a rookie player performing an Alley-Oop.

What are your strengths? If you’re a Nervous Nellie and the stock market drops are giving you a heart attack and night sweats, meet with your certified financial planner and develop a strategy that is more in alignment with your personality type and risk tolerance. You might be more of a bond person. If you’ve got a stomach of steel and want to try your hand at options, keep your investment exposure limited to your experience. If you’ve never tried options or individual stock investing, trade in a fictitious scenario ONLY. You won’t beat Kobe Bryant the first time you step on a basketball court, so don’t expect to score on Wall Street pros the first time you learn a thing or two about stocks and options. If you’re an optimistic, but newbie investor, whether it is stocks, bonds, classic cars, postage stamps or Beanie Babies, your first investment should be in education and practice, practice, practice in a pain-free, fictitious scenario!

For more "Trading Tips for Turbulent Times," read that article in volume 5, issue 2 (February 2008) of the archived ezines. Check out the FAQs article in the Investor Edu section on the home page at NataliePace.com for tips on how to read the Hot News on Cool Stocks list for best advantage.

If you follow the recipes for cooking up profits found in those resources, odds are great that you will be picking eight winners for every loser (as the Hot News list was in the June mid-month update), making incremental gains in your nest egg, taking profits in shorter windows in your trading portfolio and taking a sound, profitable, rewarding approach to your nest egg investment strategy. Be sure to understand the tax ramifications of short-term capital gains in your trading portfolio, and ask your broker how you can trade in a tax-protected account, like an IRA to reduce your tax exposure.

Please note: NataliePace.com does not act or operate like a broker. We report on financial news, and are one of the most trusted independently owned and operated financial news corporations in the U.S. 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.

Investors should NOT be using the Hot News on Cool Stocks list or the Cooling Off list to trade their nest eggs. Your retirement plan should reflect a long, safe strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.

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.

2008 Company of the Year! Yes, Finally!

by Natalie Pace.

Includes my Hot News on Cool Stocks List.

The Bird’s Nest Stadium of the 2008 Beijing Olympics Powered by Suntech Power Holdings solar panels

2008 COMPANY OF THE YEAR ANNOUNCEMENT:

SUNTECH POWER HOLDINGS (Symbol: STP)

For the second year in a row!

This is hot off the presses. We are announcing Suntech Power Holdings as the 2008 Company of the Year, based upon the extraordinary buying opportunity the current price presents. This is a monumental moment because the new Bird’s Nest Stadium at the 2008 Beijing Olympics is powered by Suntech Power Holdings solar panels! I am anticipating some very positive press once the world sees this beautiful new structure and just how amazing solar power can be. Suntech Power Holdings is the official solar sponsor of the 2008 Beijing Olympics, according to a press release from the company issued last year. (GE is also providing a lot of the greening at the Olympics.)

This information is so late-breaking that we’ll have to do the full Company of the Year article next month, in August; however, those of you religious Hot News readers are getting the news first! You also know to look at the list below for additional information and the links to other articles where more information on Suntech appears.

Full disclosure: I own shares of Suntech Power Holdings.

General Stock Market Performance

Market Commentary
Winners Focus on Scoring
Last month’s theme was take your profits early and often (for your trading portfolio, not your nest egg). This month’s theme is Focus on Scoring. Now, as you know, I’m a Santa Monica girl, which means that I’m crying right now because the Lakers didn’t win another championship ring this year (and I'm $5 poorer). But, whether you’re a Celtic fan, or a Lakers fan or a couch potato, the lessons you can learn by watching Kobe Bryant and Paul Pierce (and Leon Powe, the star of game 2) score are applicable to anyone who wants to succeed in anything, and quadruple the importance for anyone who wants to make money in investing.

As you can see in the below picture of Paul Pierce, those who make things happen – those who score – keep their eye and their focus on the basket. They dribble and dive and dodge the competition and soar above the crowd to succeed, swatting away and soaring above the obstacles before them.

2008 NBA MVP Paul Pierce.

Now, what does that have to do with investing? In short, stop losses are the strategies of the losing team, not the winning team – especially in a challenging environment, like we’re seeing today. When the defense is preventing you from scoring easily, don’t forfeit the game and take a loss. That’s a losing strategy. The best strategy is to examine the game, beef up your defense, figure out how to score and go out and score. This year, the stock market is volatile. Most investors are down on the year so far. So, you can’t take a business as usual approach. In fact, some of the top earners on this Hot News list are on the Cooling Off list! Adjust your strategy! Get focused. Get smart. Get your game on!

If you’re stopping out your losses at 10%, you’re losing money unnecessarily because the markets are volatile and swinging hundreds of points in either direction on this or that headline, taking great companies up and down with the rising and waning tides of market fever!  Oftentimes, if you were just waiting a few days, you’d be making massive profits instead of losses, based solely upon the crazy swings of the marketplace.

Take a look at one of the most explosive Wall Street earners of this century (and my 2003 Company of the Year) – Taser International. Taser was another company that looked like nothing for the first few months after I first found it and featured it as my 2003 Company of the Year. Based upon cutting losses at 10%, Taser would have been stopped out within two months – in mid-February.

Now, look at the gains you would have missed if you’d taken losses on your investment with a stop loss of 10%, instead of hanging on for the payday. As you can see below in the MoneyCentral chart, Taser International scored 9000% gains between January 2003 and January 2005. Hmmm. Which do you prefer? Having an investment that (temporarily) goes down 12% in the first few months and then turns $10,000 into $900,000, or stopping out your losses with $9000 left in the bank?

If you say you’d rather have the $9000, then you shouldn’t be trading individual stocks at all. If you can’t stomach a drop of 10% for the hope of the big gain, and don’t have a research strategy that works for you, then individual stocks are too risky for you to be buying. If you do your homework initially, by, 1) constructing the Stock Report Card™, 2) answering the Four Questions for Picking a Leader, 3) picking a company that is leading the pack in an industry that is poised to do well, and 4) buying at a low price, then you should have the confidence to wait until that story hits Wall Street and gives you your payday, even if the share price drops below your initial buy price. (If you don’t know those trading strategies, call Heather at 866.476.7442 and come to my September investing retreat.)

As for the prognosis for today, the stock marketplace is predicted to continue to be challenging. According to Phillip Swagel, the Assistant Secretary for Economic Policy at the Department of the Treasury, who spoke at a forum sponsored by the Milken Institute on June 23^rd, 2008, "With growth slated to remain soft throughout the year, I think we all understand that the labor market will remain soft as well... It’s not a recession, but it’s going to feel bad for Americans." According to data issued by the Treasury Department at that forum, GDP growth in the second quarter of 2008 is predicted to be .4%, or less than half of the anemic .9% in the 1^st quarter of 2008. The housing market is expected to continue to post declines in 2009, with no recovery until 2010. For more information on the housing market and general economic conditions this year, read my report in this ezine, entitled, "Hope Now."

Track Record of our Reporting
While the markets have fallen in 2008, the Hot News and Cooling Off lists below have a winning track record – in bear and bull market years. 26 companies listed below have delivered impressive gains, even while the Dow Jones Industrial Average is down 13% on the year! Only six of our listings went in the opposite direction of the reporting. Yes, many, but not all, of them are shorts, so it’s time to brush up on your options strategies and/or learn a new game.

Even during the flat year of 2007, our featured companies had outstanding performance between Oct. 2006 and June 2007! 4 out of 9 companies – almost half – doubled or more from the time they were featured to the time they were taken off of the list. 48% of the companies featured in my stock newsletter between 2002 and 2005 – 25 out of 52 companies -- DOUBLED as well, 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.)

3 out of 5 Company of the Year selections more than doubled.  My 2003, 2004 and 2007 Companies of the Year have posted up to 9000% gains (Taser), up to 690% gains (Opsware) and up to 215% gains (Suntech Power Holdings), respectively.  MySpace, my 2006 Company of the Year, was a large part of News Corp’s success with shareholders that year.  Only OSI Pharmaceuticals, my 2005 Company of the Year, has lost money.  So three out of five are superperformers, one is performing well above the market and one is down. That’s the kind of record that puts you on top on Wall Street.  (I launched my first publication on 11.15.02, and featured the first Company of the Year on 1.1.03.)

TipsTraders.com continues to list me as a Highly Recommended Stock Picker, with their independent ranking system, where I’ve repeatedly occupied the #1 position. Some of our best picks include: Bioteq Environmental (BQE) +144%, Blockbuster Video (BBI) +82.5%, Genentech (DNA) +415%, Google (GOOG) +545%, Las Vegas Sands (LVS) +139%, LifeCell (LIFC) +180%, Macerich (MAC) +150%, Opsware (OPSW) +690%, Rio Tinto (RTP) +145%, Sohu (SOHU) +150%, Suntech Power Holdings (STP) +107%, Taser (TASR) up to 9000% gains and World Water & Solar (WWAT) +181%.

Market Movers:
The Bureau of Economic Analysis released its preliminary report on the 1st quarter 2008 GDP growth on April 30^th. The numbers came in at 1% -- anemic growth, down from the robust 4.9% GDP growth in the 3^rd quarter of 2007 (though up from the dismal .6% GDP growth of the 4^th quarter). The next GDP growth report – advance numbers for the 2nd quarter 2008 GDP growth – will be released on July 31, 2008, the day after the Federal Open Market Committee meeting concludes.

For more BEA release dates, go to the BEA.gov website and be sure to visit the NataliePace.com calendar section often.

The Federal Open Market Committee and Monetary Policy
The Federal Open Market Committee paused at the June session, after dropping the Fed Fund Rate each of the prior six sessions. The Fed funds rate currently stands at two percent. Expect the Federal Reserve Open Market Committee to continue to ease investor worries, while monitoring inflation. The prevailing sentiment is still weak growth, a continued housing slump, more subprime foreclosures, a weak dollar, anemic consumer spending, turmoil in banks and financial services, rising gas and food prices and rising unemployment. (Yikes!)

Even with continued strain in the financial markets, the housing markets and the consumer wallet, we didn’t think that another Fed Fund interest rate reduction was likely to happen in June, and advised our subscribers of that in the June Hot News article. So, it pays to read and be informed!

EDUCATIONAL OPPORTUNITES AND INFORMATION:

1. FOMC Information: Interested in reading the press release of the June 24-25, 2008 FOMC meeting for yourself? You can. The official Federal Reserve document is available online. Click on FOMC, or go to FederalReserve.gov to read! According to the press release, "In light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflation expectations, uncertainty about the inflation outlook remains high… Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased."
   
   The tentative FOMC meeting schedule for the 2008 calendar is: August 5, 2008 (Tuesday), September 16, 2008 (Tuesday), October 28-29, 2008 (Tuesday-Wednesday), December 16, 2008 (Tuesday).
   
   In a speech on June 9, 2008 at the Federal Reserve Bank of Boston’s 53rd Annual Economic Conference, Federal Reserve Board Chairman Ben S. Bernanke said, "One of the most effective means by which the Federal Reserve can help to restore moderate growth over time and to reduce the associated downside risks is by supporting the return of financial markets to more-normal functioning… Inflation has remained high, largely reflecting sharp increases in the prices of globally traded commodities." More-normal functioning is economist speak for having a higher interest rate than our current 2% Fed Funds rate.
   
   
2. Calendar 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, life coaches, economists, respected money gurus, real estate veterans and CEOs! Be sure to check out the dates of the mid-month Hot News on Cool Stocks Update and the publication date of our next ezine. Get more information on how to best use our articles in the FAQs article, located under the Investor Edu link on the home page of NataliePace.com. Don’t miss the Online Chat with global strategist, Dr. Marc Miles on July 16^th.
   
   
3. Survey Results: This month, we examined which country China is infatuated with. Which country are you most interested in investing in? Vote and view on the home page at NataliePace.com. Simply click on the survey that is currently on the home page, and you will be taken to a page with all three of the current surveys. Cast your vote there!

Hot Stocks List
Investors 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 strategy.

Hot News List (highlighted). Be sure that you are buying low.
Altair Nanotechnology (ALTI)
General Electric (GE)
Hoku Scientific (HOKU)
LDK Solar (LDK)
New Zealand Dollar ETF (WisdomTree ETF symbol: BNZ)
PowerShares CleanTech Portfolio (PZD)
Powershares Wilderhill Clean Energy Portfolio (PBW)
Smith and Nephew (SNN)
Suntech Power Holdings (STP)
Trina Solar (TSL)
U.S. Gold (UXG)
Westpac Bank (WBK)
Wisdom Tree (WSDT)
Zoltec (ZOLT)

DELETIONS (Remember to take your profits early and often):
None

HOT NEWS on COOL STOCKS LIST

2008 Companies featured:
Echelon +20%, GE, +13% and +18%, Google, +15% and +31%, Johnson & Johnson +10%, LDK Solar +18%, Microsoft +12%, Satcon +13%, Suntech +35%, Trina Solar +22%, World Water & Solar +22%.

Recently Deleted: Take your profits early and often!

Stocks to Watch
Some of these are great companies that we’re thinking of adding to the Hot List and some are stinkers we’re thinking of adding to the Cooling Off List.  Read carefully to identify which is which! Note that right now most of our favorite companies are on the Watch List, anticipating continued weakening of the stock market, and share prices.

Recent Additions:
Microsoft (MSFT)
Ross Stores (ROST)
Satcon Technology (SATC)
TJ Maxx (TJX)

Recent Deletions:
Apple Computer (AAPL) (moved to the Cooling Off List)
Genentech (DNA) (moved to the Hot List)
International Rectifier (IRF) removed 6.1.08
PowerShares CleanTech portfolio (moved to the Hot List on 7.1.08)
Smith & Nephew (SNN) (moved to the Hot List)
UQM (UQM) removed on 6.1.08 

Cooling Off Stocks List (may be Poised for a Decline in Share Price).
Note: 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.)

Highlighted Companies (Cooling Off List):
None

Recent Deletions:
Novastar Financial (NFI) removed 6.1.08
Fannie Mae (FNM) removed on 6.30.08
Sears Holding Corp. (SHLD) removed on 6.30.08
Wells Fargo Bank (WFC) removed on 6.30.08

Recently Deleted in 2008:

Fannie Mae was deleted on 2.11.08 after losing -50% and -56% of its share price value, and then again on 7.1.08, after losing another -40%. (Both puts more than doubled.) Novastar Financial (NFI) was deleted on 6.2.08 with -95% share price implosion. Sears Holding Corp. was deleted on 7.1.08 with 64% gains on the put option. Wells Fargo was deleted on 7.1.08 with 83% gains on the put.

Please note: NataliePace.com does not act or operate like a broker. We report on financial news, and are one of the most trusted independently owned and operated financial news corporations in the U.S. 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.

Investors should NOT be using the Hot News on Cool Stocks list or the Cooling Off list to trade their nest eggs. Your retirement plan should reflect a long, safe strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.

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.

NataliePace.com Calendar:

Don’t miss the Subscriber Chat with Global Strategist Marc Miles, the former senior economist of the Heritage Foundation and the editor of the 2006 Index of Economic Freedom. Find out how to profit in a recession and which parts of the international marketplace will be more attractive to invest in this year!

The calendar features important ezine publication dates, teleconferences, conferences, chats with CEOs, millionaire money managers and VIPs, and more. Stay plugged in! Visit our calendar section often.

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.

4th Campus Progress National Conference, DC
Tuesday, July 8th, 2008
A FREE dynamic one-day event that brings more than 1,000 young people from across the country together to discuss issues that matter, connect with each other, and hear from prominent politicians, activists, journalists, scholars, and artists.

Premium Subscriber Online Chat with Natalie Pace
Wednesday, July 9th, 2008
8:45AM through 9:30AM PT
Where do you profit when the markets head south? Put options! Learn a few tricks of the trade from a top Wall Street stock picker. Also, what's up with last year's Hot industries, like solar energy? Is it fried? Learn trading tips for turbulent times

eWomen Network International Conference, Dallas, TX
Thursday, July 10th, 2008
7:00AM through 9:00PM
Attend the largest 4-day women's conference and expo in North America with CEO Sandra Yancey. Access new customers, expand your business resources and hear Mimi Donaldson share her tips on Negotiating for Dummies.

Glow Project Film Premiere, Dallas, TX
Saturday, July 12th, 2008
7:00PM through 9:00PM
How is it that some women are wildly successful, while others with the same education, skills, stumble. Learn what powerful essence can be tapped to put you on top!

Mid-Month Update: Hot News on Cool Stocks
Monday, July 14th, 2008
Access the link to the update in the calendar section. Online Chat with Marc Miles, global strategist, economist Wednesday, July 16th, 2008

Online Chat with Marc Miles, global strategist, economist
Wednesday, July 16th, 2008
8:45AM through 9:30AM PT
Natalie Pace hosts an online chat for subscribers with Marc Miles, a global strategist and the former senior economist for the Heritage Foundation. Marc is the editor of the 2006 Index of Economic Freedom. He is an expert on international economics.

Soul Sisters Retreat, LA, CA
Friday, July 25th, 2008
7:00AM through 10:00PM
The annual Agape Soul Sisters Retreat with Dr. Rickie Byars Beckwith, Reverend Greta Sesheta and more. Our roots run deep. Discover, bond, transform, meditate, celebrate...

I Dream To... Teen Photo exhibit, La, CA
Saturday, July 26th, 2008
6:00PM through 9:00PM
45 underserved teens explore careers that they dream to pursue. The "I Dream to…" gallery exhibition is sponsored by Crystal Light and Step Up.

GDP growth rates for 2Q 2008 (advance) are released
Thursday, July 31st, 2008
8:30AM through 8:45AM ET
The U.S. Dept. of Commerce, Bureau of Economic Analysis (BEA.gov) releases its advance report on GDP growth in the 2nd quarter of 2008. Final numbers for 1Q GDP growth at .9%. Expectations for GDP growth 2^nd Q are .4%.

7th Annual UC/CSU/CCC Sustainability Conference
Thursday, July 31st, 2008
Join over 850, students, staff, faculty and administrators n California higher education to explore the ways in which we can implement social, environmental, and economic sustainability on our campuses statewide and prepare future generations for "green college"

Federal Open Market Committee Meeting
Tuesday, August 5th, 2008
The Feds meet for one-day to determine whether or not to increase, pause or lower the Fed funds rate. Summer doldrums. Wall Street is getting ready for vacation.

European Council Interest Rate Announcement
Thursday, August 7th, 2008
11:30AM through 12:45PM GMT
ECB Governing Council meeting in Frankfurt, Germany, followed by interest rate announcement. News conference directly thereafter.

Premium Subscriber Chat with Natalie Pace
Wednesday, August 13th, 2008
8:45AM through 9:30AM PT
Where do you profit when the markets head south? Put options! Learn a few tricks of the trade from a top Wall Street stock picker. Also, what's up with last year's Hot industries, like solar energy? Is it fried? Learn trading tips for turbulent times

Agape Consciousness of Wealth Seminar, LA, CA
Friday, August 15th, 2008 7:00PM through 10:00PM
Natalie Pace will keynote this special seminar, which is hosted by Michael Bernard Beckwith at Agape Sanctuary. How would you live if you had all the money in the world? Live that life now. Access registration link online at the calendar section.

Agape Beach Party, LA, CA
Saturday, August 16th, 2008
8:00AM through 10:00PM
Join Michael Bernard Beckwith and the Agape International Spiritual Center devotees at the beach to celebrate, frolic, break bread and enjoy sunny Southern California.

21-day Get Rich and Enrich Coaching Call Series
Monday, September 8th, 2008
7:00AM through 7:30AM
How would you live if you had all the money in the world? Wake up to Natalie for 21 days in a coaching call series designed to activate and maximize the creative, abundant potential in your life. Live your dreams starting right now! Call 866.476.7442.

Premium Subscriber Teleconference with Natalie Pace
Wednesday, September 10th, 2008
5:00PM through 6:00PM PT
Want to get in on stocks like Suntech, Sohu, Opsware, Google and World Water and Power BEFORE they make 300 to 600 percent gains? Have questions about where the stock market is headed? Get the news, information and education you need to succeed!

Agape Music Symposium and Arts Festival, LA, CA
Wednesday, September 10th, 2008
7:00AM through 10:00PM
4 extraordinary days of workshop, panel discussions, choir practices, and visioning through music, dance and spoken word ministries.

Federal Open Market Committee Meeting
Tuesday, September 16th, 2008
The Feds meet for one-day to determine whether or not to increase, pause or lower the Fed funds rate. How are the Back to School stock sales looking?

Get Rich and EnRich Retreat, Santa Monica, CA
Tuesday, September 23^rd – 25th, 2008
3-day Get Smart about investing beach retreat. Green and recession proof your portfolio. Learn how to pick stocks that are poised for rock star gains. Email Heather@NataliePace NOW to be one of just ten lucky individuals to attend this intimate training. Only a few seats remain!

AltCar Expo & Conference, Santa Monica, CA
Friday, September 26th, 2008
7:00AM through 10:00PM
Electric, natural bas, biodiesel, hydrogen, ethanol, propane, hybrid and other vehicles. Join the debate by test driving your fave new rad car!

NOTICE: NataliePace.com is NOT a stock brokerage service, and does not operate or act as one.