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Vol.5 Issue 12 December 1st, 2008
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Quote of the Month:
"A bailout would simply postpone the needed reforms in labor
contracts, the business model of General Motors, and its management."
Dr. Gary Becker University Professor, Department of Economics,
and Sociology Professor, Graduate School of Business, The University
Dr. Becker won the Nobel Prize in Economics in 1992 for his groundbreaking
work in "human capital."
Out the Big Three Auto Producers? Not a Good Idea.
big three American auto producers General Motors, Ford, and Chrysler,
are in terrible financial shape. They have asked the government
for a bailout, and the Democratic leadership in Congress is eager
to give them one. The United Auto Workers union was a strong supporter
of President-elect Obama and of Democratic candidates.
have lost tens of billions of dollars during the past few years,
and they will shortly run out of cash. GM's shares have lost almost
all their value, and Ford has not done much better. Cerberus Capital,
a private equity company, owns Chrysler, and it has lost most of
what it invested in the company. For this reason, Cerberus is trying
get out of the automobile manufacturing business. All three companies
were heavily into producing trucks and SUV's when the sharp run
up in gas prices induced consumers to shift away from these gas-guzzlers
and toward smaller and more fuel-efficient cars. Moreover, what
money GM had been making came mainly not from car production but
from its automobile credit business, (GMAC). This company would
borrow from banks to lend to consumers who needed help in financing
their GM car purchases. The financial crisis has dried up the money
available to auto financing companies, and hence eliminated the
major source of their profits.
If GM is not
bailed out, the company claims it will be forced into bankruptcy
within a few months, and Ford's situation is only slightly better.
GM is blitzing Congress, President Bush, and President -elect Obama
with pleas for a bailout, followed by a warning that bankruptcy
will also hurt auto suppliers throughout the nation that depend
on GM's business. GM is also claiming that bankruptcy will put major
financial pressure on the Pension Benefit Guaranty Corp, the federal
agency that insures benefits to retirees in the auto industry as
well as to millions of other workers.
I believe bankruptcy is better than a bailout for American consumers
and taxpayers. The main problem with American auto companies is
that during the good times of the 1970s, 1980s and 1990s, they made
overly generous settlements with the United Auto workers (UAW) on
wages, pensions, and health benefits. Only a couple of years ago,
GM was paying $5 billion per year in health benefits to retirees
and current employees because their plans had wide health coverage
with minimal co-payments and deductibility on health claims by present
and retired employees. In those days, the UAW was one of the most
powerful unions in the US, and it bargained aggressively with the
auto manufacturers, carrying out strikes when its demands were not
met. When the American auto industry began to face tough competition
from Japanese and German carmakers, they were saddled with excessive
pay to their workers, and vastly excessive pensions and health benefits
to their current and retired workers.
It is not that
cars cannot be produced profitably with American workers: the American
plants of Toyota and other Japanese companies, and of German auto
manufacturers, have been profitable for many years. The foreign
companies have achieved this mainly by setting up their factories
in Southern and border states where they could avoid the UAW, and
thereby introduce efficient methods of production. Their workers
have been paid well but not excessively, and these companies have
kept their pension and health obligations under control while still
maintaining good morale among their employees. In recent years GM
and the other American manufacturers have chipped away at their
generous fringe benefits, but their health and retirement benefits
still considerably exceed those received by American autoworkers
employed by foreign companies. As a result of lower costs, better
management, and less hindrance from work rules imposed by the UAW,
about 1/3 of all cars produced in the US now come from foreign owned
help GM and Ford become more competitive by abrogating significant
parts of their labor contracts with the UAW. One of the greatest
needs would be sizable reduction in their health costs through sharp
increases in the deductibility and co-payments, and a reduced coverage
of medical procedures. Bankruptcy should also help bring the wage
rates of GM and Ford in line with those of foreign producers in
the US. Some of their pension liabilities may be shifted onto the
Pension Benefit Guarantee Corp, but even that would be preferable
to an overall bailout.
A good analogy
is what happened to United Airlines. By entering bankruptcy, it
was able to reduce its inflated cost structure by breaking contracts
it had with the pilots union and other employee unions. It exited
bankruptcy a slimmer and more efficient airline. Whether it is able
to compete effectively in the long run is still not certain, but
it is in much better shape to compete than before it entered bankruptcy.
also force out the current management of GM and Ford. I do not know
for certain whether they have competent management- GM surely did
not have top management for much of its recent history. I do believe,
however, that when a coach of a team loses a few games, he might
legitimately explain that by injuries, bad luck, or even bad officiating.
These excuses become lame when he consistently loses many games,
and the correct and common practice is then to fire the coach. The
same considerations apply to top management. When a company consistently
does badly while some of its competitors (like Toyota) are doing
well, its time to fire the management team, and see if another team
can do better.
Is GM "too big"
to fail? I do not believe the company is too big to go into a reorganization--which
is what bankruptcy would involve. Such reorganization would abrogate
its untenable labor contracts, and give it a chance to survive in
the long run. A bailout, by contrast, would simply postpone the
needed reforms in these labor contracts, the business model of GM,
and its management.
Gary S. Becker is a University Professor, Department of Economics,
and Sociology Professor, Graduate School of Business, The University
of Chicago. He won the Nobel Prize in Economics in 1992 for his
groundbreaking work in "human capital."
To keep track
of Dr. Becker's continuing research and commentary, visit his web
site and blog.
To hear more of his recommendations for strengthening the U.S. economy,
check out his panels from the 2008
Milken Global Economic Conference.
Picking the Cherry Bombs.
Hedge Funds Could Spoil the Santa Rally. Includes a Hedge Fund Stock
for a Hedge
Fund Stock Report Card.
Stacie Isabella Turk, Ribbonhead.com ©2008. Stylist: Arlene
imploding may be the next financial meltdown, taking down a few
of most beloved brands of the past century with them.
The banks in
the U.S. are struggling, but that could be nothing compared to what
is waiting in the wings for hedge funds. Hedge funds are private
investment companies (mostly; there are a few that are publicly
traded) that are designed to take on high risk for higher performance
for high-net-worth individuals, who can, presumably, afford the
risk. Trouble is that most high net-worth individuals don’t have
much stomach for losses, and redemption day (the day when people
notify their hedge funds that they want to end the relationship
and cash out their investments) was November 15, 2008. Just a few
days later, on November 20th, 2008 the Dow Jones Industrial
Average closed at its lowest point in ten years – at 7552.
Now, the markets
had a rally after that, but I wouldn’t get too optimistic about
it. Payout day from hedge funds to clients that are cashing out
is December 15, 2008. If this day is as bad as advance indicators
portend, the stock markets could see the worst financial storms
of the year during the week before Christmas. This is why this article
is entitled, "Cherry Picking the Cherry Bombs," instead
of "Stocking Stuffers for the Santa Rally."
is not just for traders. It is even more important for anyone
with an annuity, a 401(k), a pension plan, an IRA, etc., to make
sure that they have realigned their nest egg to have at least a
percentage equal to their age safe, plus 10-20% (since we’re in
a recession) and have trimmed their exposure to the companies mentioned
in this article. If hedge funds start imploding, they account for
over a trillion in stock market assets, meaning that they will really
drag the Dow down as fund managers are forced to liquidate their
positions to cover cash-outs by their clients.
at least one former Blue chip corporation has become a hedge fund,
without people really knowing it. You may have this hedge fund in
your nest egg!
As I mentioned
in my March 2007 article, entitled "Money
Grows on Wisdom Trees:"
one of the largest, oldest retail chains in the U.S, and formerly,
was as American as baseball and apple pie. These days, however,
Sears is more of a hedge fund, which might help to explain why you’ve
been trying to get that appliance repaired (under warranty) for
months or been waiting for a replacement for your coffee pot for
so long that you’ve taken up drinking tea.
of the board directors at Sears are in the investment business,
not the retail business. Edward Lampert, Sears Chairman, has his
own investment fund. The COO of Lampert’s investment company, William
C. Crowley, is one of the eight-member board, as is a senior advisor
to TPG Capital (formerly Texas Pacific Group investment corporation).
In fact, board director Emily Scott, a TV station founder, is the
only person on the board without significant (direct) financial
services experience. No one on the Sears board has any experience
at all in retail.
to being more "financial services" than retail, Sears
Holding Corporation (SHLD) has had a number of red flags recently
that spell bad news for any company in any industry. Their CFO just
retired to spend more time with his family. The S&P credit rating
is BB (somewhat speculative) with a Negative Outlook (11.9.08).
Net income for the first half of 2008 was $9 million compared to
$396 million last year. Short-term borrowings jumped from $80 million
last year to $974 million this year. The corporation has $7 billion
in long-term debt (including pensions and OPEBs). And their former
CFO’s parting words were, "I am very confident that Mike Collins
will continue to enhance the business acumen and financial discipline
of the company."
Just as "retiring
to spend more time with the family" can be CFO speak for "I
didn’t want to sign off on the earnings statements," "enhance
the financial discipline" is an odd way of encouraging the
company to continue focusing on that area. Sears went on to say
that they will "miss Miles' thoughtful advice and passion for
analytic clarity." Miles Reidy, the retiring Sears CFO jumped ship
in time to miss having to sign off on the year-end earnings report,
which will now be overseen by the new-hire, Mike Collins, who has
never held the position of CFO before, but will be responsible for
the 2008 earnings report of one of the oldest retail chains in the
United States, with over $50 billion in annual sales. Hmmm.
their 3rd quarter’s earnings on Tuesday, December 2,
2008. The corporation is battling a downgrade by Fitch, which could,
potentially, make it more costly to borrow more money. It is pretty
much a given that the earnings report will frontload any possible
good news at the top of the press release and list any net loss
as far down in the report as legally possible. (Fortress Investment
Group, another publicly traded hedge fund, had several line items
of "good news" ahead of their net loss.)
There is a phenomenon
very common in high-risk money management, called "double up
to make up." When an investment firm gets into trouble, many
managers tend to take on even more risk to try and claw their way
back to profitability. As you can well imagine, this strategy rarely
works. But the managers will try to buy as much time as possible
to give themselves every opportunity to get lucky.
Enron was essentially
a hedge fund by the time it began its rapid descent into bankruptcy.
Once the short-term loans were due and Enron hadn’t made enough
by trading to fulfill their commitments, the company was doomed.
The restating of past cooked earnings reports was something Enron
might have endured if the profits and gains had been there. But
the company is an example of how fast the tides turn when the loans
I’m not implying
that Sears is Enron, but the corporation has a lot of challenges
given the current state of retail, the current state of the home
improvement industry, the lack of money available for borrowing
and the current freakish fallout of financial services stalwarts,
like Bear Stearns and Lehman Brothers. It doesn’t take a crystal
ball to see that Sears is facing a very daunting, even hostile,
Group (FIG), the first publicly traded hedge fund, announced their
earnings on November 13, 2008. Fortress’ losses for the quarter
were $57 million. The losses for the year are $182 million. A significant
portion of the losses include the massive compensation charged by
the principals of the firm – something I warned about in March
of 2007, writing.
of hedge funds is the exceptionally high compensation of the principal
executives, who are making the best living there is to be made -
anywhere. According to the IPO papers that Fortress filed with the
SEC, "In 2007, $98.1 million, $95.1 million, $63.8 million, $59.4
million and $92.8 million was distributed to Mr. Briger, Mr. Edens,
Mr. Kauffman, Mr. Nardone and Mr. Novogratz, respectively" (the
five principals at Fortress). And "subsequent to September 30, 2006,
[the company] distributed $528.5 million to our principals in the
period prior to the consummation of this offering."
package makes these Fortress five principals the best-paid executives
on Wall Street! They are better paid than Bob Nardelli, who took
so much heat for his $210 million golden parachute from Home Depot
-- an $83 billion company. (Fortress had an $11 billion dollar market
valuation in March of 2007, and about $1 billion valuation on November
Hedge fund managers
are certainly trying to earn their keep; it is likely that the massive
volatility we’ve been seeing in the stock market is the result of
managers trying to eke out a few gains in short windows to keep
their business alive. When you have the market swinging wildly –
1000 points in either direction over the course of a few days –
there is a lot of money to be made by anticipating the volatility.
This tactic might be buying them a little time, but it is hard to
imagine that the worst market climate in the past eighty years isn’t
going to kill off a lot of investment managers (more than just Lehman
Brothers and Bear Stearns).
typically have a lockout period of one year, which is why we haven’t
seen massive implosions of hedge funds -- yet. (Yes, we have seen
a few.) The next few weeks – which could potentially be a hedge
fund customer exodus -- will be key to seeing just how well that
segment of the marketplace has done and just how large of an impact
the potential fall-out will have on the general stock market – including
your nest egg.
12, 2008, I put Fortress Investment Group and Sears Holding Corporation
on the Cooling Off list, anticipating that the share prices of these
two publicly traded corporations would go down in value. As of December
1, 2008, Fortress’ share price had lost -27% and Sears was down
-36%. See the Hot News on Cooling Off article at the end of this
ezine for additional information.
discounts galore and a "new hope" in the White House,
Americans are safe and warm and even a bit optimistic, despite the
financial storms, this holiday season.
Each year, we
post a Best Gift survey to help you select the Wow gift for your
sacred beloved, your child, a family member or a friend. Wow. What
a difference a year makes. Last year, stocks, not diamonds, were
a girl’s best friend (the #1 most desired holiday gift by women)
and guys wanted massages and pampering as much as they desired a
flat screen TV (presumably at the same time).
This year, with
flat screens on sale for as low as $2500 and stocks in the toilet,
the most loved gifts are likely to be as upside down as this economy.
So, we recommend clicking over to the survey
page on the home page at NataliePace.com now – both to cast
your vote and help others get a clue, as well as to peruse some
of the ideas that are weighing in as favorites.
decide on an iPhone, mini-speaker system, TV, books or a vacation,
you might consider that all of the above can be enjoyed at the NataliePace.com
retreat. You’ll gain the wisdom to determine if you
want to own Apple stock (and listen to some great iTunes while you’re
there), you will find out where to get better nest egg information
than is currently found on television, you will have your new book
autographed by Natalie Pace, all while enjoying a great vacation
in one of the most beautiful cities in the world (Santa Monica,
California, average temperature: 80 degrees Fahrenheit). What a
way to jumpstart your New Year; New You resolution!
have treated the retreat as a great anniversary gift, a great birthday
gift as much as a great Buy My Own Island blueprint/educational
retreat. We have more fun than you can possibly imagine stocks and
nest eggs could ever be! Nancy was inspired to lose 30 pounds and
to triple her income. Dr. Jeff, someone who teaches options trading,
found Natalie’s systems to be the easiest and most effective he’d
ever learned. Many retreat alumni volunteer so they can experience
the retreat again! So, whether you are a newbie or an experienced
trader who needs a better system, give yourself the gift of the
February 2009 Natalie Pace Get
Rich and Enrich Retreat. Get more information on the
home page at NataliePace.com, under the Retreat banner ad. Call
866.476.7442 or email Heather@NataliePace.com
to register NOW. There are only a dozen seats available and the
last three retreats have SOLD OUT.
Some of the best gifts are still made by hand. If you want to
mix up some fantastic sugar scrub for that special person in your
life (guys love it to – falls under the massages and pampering category),
you can find a great recipe in the 2006 holiday issue, vol.
3, issue 12, located in the archived editions of the
NataliePace.com online magazines. (Be sure to use a manly scent,
like rosemary, when mixing it up for the guys.)
And while you
consider what to wrap for Kwanzaa/Hanukkah/Christmas, here are a
few ideas of what to do with that troublesome brokerage statement
that is taking up all of the creative space in your brain.
Cleansing Rituals for a Bad Brokerage Statement
ritual. Fold, spindle and mutilate the brokerage statement.
Allow toddler to scribble scrabble with nail polish, then let
cousin Eddie wad it up and use it to light his dank chronic spliff.
ritual. Stomp on the statement, throw dust in the air and
howl at the moon while you rip it to spreads. Sprinkle with cat
food and leave near the garbage cans. Don’t worry about littering.
The raccoons will eat it.
ritual. Assuming you don’t live near a waterfall or have access
to a fire hydrant or fire hose, take the statement out to a wilderness
area and sprinkle with cat food. Some wild animal will want to
claim it and odds are high it will be marked in that special loving
way that animals mark their territory – animal water ritual.
- Wind ritual.
The most wicked wind ritual involves eating too many beans, scratch
and sniff tape and a holiday gift card to your money manager.
However, if you’re just not that mean-spirited or if your CFP
hasn’t been seen since September, the best wind ritual/remedy
would be to turn off the hot air that has been blustering from
your television and/or financial planner (who may still be telling
you to be patient, the winds will turn), and come to my retreat
to set up your nest egg properly. That way you will never need
four rituals for a bad broker statement ever again.
Now that we’ve
let off a little steam, let’s focus on the positive side of having
a holiday season right smack dab in the middle of a financial meltdown.
While 36% of the readers surveyed at NataliePace.com are going to
spend less this holiday season, 27% noted that they could spend
less and give away the same number of gifts! An additional 18% said
they would be spending the same amount on holiday gifts that they
always spend. So, cheer up! You could be getting some awesome gifts
this year, despite the challenges Americans face going forward.
Which of the
following is your favorite thing about this holiday season? Be sure
to take our survey on the home page at NataliePace.com.
Great Things About the 2008 Winter Holiday Season
- The finest
gifts don’t cost a thing – health, love, family. Now if I could
only convince my tween of that!
- Two for one
sales all over town!
Obama and Vice President Biden help the rest of the world like
the U.S. again
- I can fill
up the tank for $40 again!
- The dollar
is gaining in strength. (I can travel to Europe again!)
Sarah Palin: coldest state; hottest governor (but not another
Dan Quayle-like VP!)
Dollar to Euro Exchange Rate
just in case the Gods are listening. All I, Natalie Pace, want for
- For everyone
to buy a copy of my new book, Put
Your Money Where Your Heart Is so that we can
collectively get rich while enriching our world.
- That I can
be a beneficial presence in service of my namesake. (My name literally
means "birth of peace." Imagine trying to live up to
- A 3-week
trip to Machu Picchu, down the Amazon and to Brazil during the
Spring Solstice 2009! Where I’m told that cachaca, caipirinhas
and coca leaves contribute to chakra/spiritual awakening. (Just
Have a delightful
holiday season, surrounded by family and friends, enjoying the fruits
of our collective labors in great health and high spirits. Be blessed.
Be bold. Tell a few jokes. Shine.
of NYC and LA: Insider’s Guide.
Stop Shopping at the Big Apple’s Best Bite and Room Plus L.A’s World-Class,
of LA: Santa Monica Beach
Santa Monica, California is not just the crown of Los Angeles.
It is also one of the finest cities in the world. If you want to
stay at a beachfront hotel, Shutters, Casa del Mar, Loews and Le
Merigot are all oceanfront, whereas the Viceroy, the Georgian and
Hotel Oceana are right across the street, with a full ocean view.
Sheraton Delfina is walking distance – just four blocks from the
beach, and has rooms with an ocean view as well. The Ambrose Hotel
offers shuttle service to the beach and is the only Green hotel
in Santa Monica.
is driving distance to all the major attractions in Los Angeles,
including Disneyland, Universal Studios, Hollywood Boulevard and
Malibu. Be sure to bike or blade along the beach down to Venice,
to see the architecture of the homes (south, near Washington Blvd.),
the drum circles (on weekends), the artists, artisans, massage therapists
and performers, etc.
Under the general direction of Placido Domingo, the Los
Angeles Opera has become one of the most admired opera
houses in the world. Domingo attracts the most gifted performers
to his stage, including Renee Fleming, the most respected directors,
including Woody Allen, the most talented artists, including David
Hockney as set designer. Placido Domingo has an eye for controversy
as well – putting Cleopatra naked in a hot tub for Handel’s Julius
Cesare and staging a startlingly minimalist interpretation of
This isn’t boring
opera at all! The respected music director, James Conlon, inspires
heart-stopping performances from his musicians and singers. Expect
to be delighted, surprised and engaged with the fantastic performances
and dramatic interpretations staged at the Los Angeles Opera.
See George Bizet’s
one of the most popular operas of all time now through December
15, 2008. Raymond Aceto plays a stylish, sexy Escamilla, the matador
who steals Carmen’s heart away from Don Jose – prompting the tragic
ending of the opera. You’ll recognize (and probably sing along with)
all of the songs, and for those of you who wish to follow the story,
there are English subtitles.
students can enjoy RUSH
the day of the performance for just $20 (90 minutes before the
curtain rises). See the LAOpera.com website for additional information.
of New York City
If you ask any New Yorker what is the best burger and best breakfast,
you’ll hear, "Norma’s and the Burger Joint." The good
news is that both places are located in my favorite NYC hotel, The
Parker Meridien. The bad news is that every New Yorker
knows about them and the wait for each can be hours long on a weekday.
Weekends are impossible. Thankfully, Parker Meridien guests get
preferred treatment and don’t have to wait in line!
So, what you
want to do to enjoy all the best that NYC has to offer is this.
1) Book your stay at the Parker Meridien. 2) Know your rights! 3)
Think of Christmas in NYC. The room rates between December 15-26,
2008 are some of the best of the year! Simple!
As a Parker
Meridien hotel guest, you have priority treatment EVERYWHERE within
the hotel. That means that Norma’s squeezes you in at the last minute
and you skip the line at the Burger Joint (picking up your burger,
fries, shake and brownie -- that’s all that’s offered -- on the
left, near the cashier).
Ha ha! Isn’t
that valuable! It bought me bragging rights FOREVER when a group
of NYU college students joined me at Norma’s for breakfast a few
weekends ago. They couldn’t get over the Norma’s eggs Benedict and
the crème brulee waffles and had a difficult time deciding
whether or not to try the foie gras French Toast. I’ve had them
all and the only advice I give is that Norma’s is an experience
akin to the Eighth Wonder of the World and you should treat is as
such. You’ll be reliving whatever you eat for decades, so go all
out. If you really want to push the envelope, you can even have
the Zillion Dollar Lobster Frittata, which comes with caviar and
gold flakes. (Norma dares you to expense it!)
Now, some Parker
guests don’t know these tricks, and they wait, unnecessarily, in
line for these places. Or they walk by wondering what all the fuss
and those lines are about. The Burger Joint doesn’t have a name
out front – just a neon burger sign -- and isn’t even visible really,
unless you’re looking for it. You have to just know it exists.
That’s how popular it is.
So, trust me
when I say that you get the best of everything in New York City
by starting at the Parker Meridien, if you know how to work it.
And here are some more "working it" tips.
Park. Just two blocks away from the Parker Meridien. Walking
distance. A view of the Park is available in the towers. Ask for
an upgrade to your room. It’s worth it!
Osage County by Tracy Letts. Wow. One of the best plays
of this century, with the best performances I’ve ever seen on
stage. This is wickedly funny and will remind you of some of the
worst family dinners you’ve ever endured. Times Square, the hotbed
of Broadway, is walking distance.
Chaplin and Bugs Bunny in the elevator. Making your romp
up 50 floors well worth it!
Palm Springs. Parker’s policy is uptown; not uptight.
Parker Palm Springs takes it a step further and actually challenges
you to try something you’ve never done before. Whether it is tennis
on a clay court, cocktails and quaint games on the lawn before
lunch or the risqué décor at Mr. Parker’s restaurant,
expect to be surprised at the quirkiness of every detail at this
unusual and delightful getaway. (Norma’s has a restaurant in this
West Coast resort as well!)
ballroom. Great for weddings, conferences, lunches, birthday
parties. Great 360-degree view of the city from the penthouse
floor of the Parker Meridien!
gym. The best gym in any NYC hotel (as good as Equinox)
plus the Parker Meridien is one of the only hotels with an indoor
of humor and irreverent. From the Fuhgetaboutit door signs
(Parker’s Do Not Disturb sign) to the Zillion Dollar Frittata
to the Artichokey Eggs Benedict (artichoke heart replaces the
English muffin), expect the unexpected at every turn. Get in the
spirit of things and watch the staff respond.
not uptight. First class all the way. With a sly grin.
And a wink… And decadently delicious food. And all that you need
to have a great time.
Real Estate Buyers
Pick Up Bargains with Foreclosures and Short Sales.
with Lawrence Yun, Chief Economist and Senior Vice President at
the National Association of REALTORS®.
Yun is Chief Economist and Senior Vice President at the National
Association of REALTORS®.
He writes regular columns on real estate market trends, creates
NAR’s forecasts, and participates in many economic forecasting panels,
including Blue Chip and Harvard University Industrial Economist
Dr. Yun has
been quoted on the real estate market and the economy in the mass
media, including the Wall Street Journal, the New York Times, NataliePace.com
and the Washington Post. He also appears regularly on CNBC and Bloomberg
TV. Dr. Yun received his undergraduate degree from Purdue University
and earned his Ph.D. from the University of Maryland at College
there any good news in Real Estate today?
Home sales for
both existing and new homes rose in September. Inventory dropped
a bit, though still remain elevated. Existing home sales were up
in September from the same month a year ago. It was the first such
year-over-year increase in nearly three years.
a little hard to imagine that sales are up when the headlines are
screaming foreclosures, prices are falling and no credit is available.
About 35% of
current sales are related to people buying foreclosed homes or requiring
Ah ha! So,
it’s mainly smart buyers, who are out there getting deals. Are you
optimistic about the increase in home sales?
rates will continue to rise deep into 2009, but the bigger question
is whether there are more buyers to easily absorb the foreclosed
homes reaching the marketplace.
Buying is most
active in areas with significantly lower prices. Buyers are taking
advantage of these lower prices. Homeowners are feeling the pain,
but buyers are getting a great deal.
are the prices "significantly lower" and just how much
lower are they this year, than say, three years ago at the high?
Florida, Nevada and Arizona are states with much lower home prices
and these are the areas where we are seeing a strong return of homebuyers.
economic prediction going forward? Have we hit the bottom yet?
We are in a
recession. The question is over whether we will have a short mild
one or a deep prolonged one. That depends on whether the housing
market can recover. The economy will not recover without a housing
Natalie: Wow, an economist who is honest about the "r"
word! When I used that word back in February, people came out of
the woodwork to remind me that we have to have two quarters of negative
GDP growth (even though we had two quarters of .9% and .6% wink
wink). Thanks for the honesty.
So far, we have
not had two quarters of GDP contraction. However, a third quarter
GDP is due tomorrow and it will be negative, and the fourth quarter
will also be a negative in my prediction.
How do you
know that foreclosure rates will continue to rise? Do you have the
statistics on distressed homeowners who are ready to fold?
generally lag other housing indicators. Given that larger numbers
of homeowners are underwater, some of these people will choose to
foreclose if facing mortgage payment difficulty. Also job losses
from recession will force additional people to foreclose.
Do you think
the Hope Now Alliance will do a good job of keeping homeowners in
Hope Now claims
it has modified up to 2.5 million loans in the past year. That is
sizable, though I do not know to what extent the loans are being
modified. Generally, modified loans are less costly for lenders
than having to go through foreclosures.
Natalie: So, if we have any distressed homeowners reading, at minimum,
that statistic of 2.5 million loans getting modified with the help
of Hope Now is a good enough reason to log onto HOPENOW.com
and find out how that agency can assist you through troubled times.
are experiencing the greatest reduction in home values?
Sacramento, California, Bakersfield, California, Ft. Myers, Florida,
Phoenix, Arizona, Las Vegas, Nevada, DC suburbs are some key areas
that have experienced sizable declines in prices. Some neighborhoods
have seen prices drop to the tune of 40%. Many in excess of 20%.
we have areas in Michigan, right? What other states are having trouble
more as a result of the economic downturn (job losses) hitting their
Midwest is also hard hit. Michigan has lost jobs for seven straight
years and is still shedding jobs to this day. It is a very difficult
environment for housing or for any business when job losses pile
on this high.
indeed. There was a headline that someone couldn’t sell her home
for a dollar in Detroit. Very sad. But there is a lot of manufacturing
infrastructure and talent there and hopefully, there will be an
industry that can come in and rebuild.
The right business
climate will lead to smart people creating new businesses and hiring
I have a
couple of houses in the San Diego area that are underwater and that
don’t have cash flow. Do you have any suggestions on how to get
out of this mess?
There is less
help for investor property owners. But National Association of Realtors
pushed for a higher loan limit so Fannie and Freddie can buy more
loans in high cost areas like San Diego. Buyers returning to the
market will help stabilize home prices. Many California markets
are now seeing inventory conditions returning close to historical
normal. That correlates to about 3-5% home price appreciation a
say the San Diego real estate investor wants to try and survive.
How long will he need to hang on? Perhaps this isn’t your area,
but with more people coming on the market to rent, do you think
he might get some relief with rental prices coming up a bit? (I
know a Malibu homeowner who is supplementing her income by renting
her home for weddings and vacation rentals.) San Diego is a pretty
desirable vacation destination, if the locations of his particular
property are good.
outlook for San Diego is bright. Baby boomers – the wealthy ones
– will seek out good climate areas as they retire.
to hear. I just need a way to hang on until the market turns.
concerns are over buyer hesitancy and how to absorb and limit foreclosed
homes reaching the marketplace.
what are some stable markets for real estate investors?
I see price
gains in Denver, Dallas and Houston. I also like affordable places
like Indianapolis, Cincinnati and Pittsburgh, if jobs come around
in these markets. There is more risk in California, Nevada and Arizona,
but the long-term fundamentals are solid.
one thing you mentioned was "more traditional" housing
returns. What is the statistical annual return of housing? It was
crazy 2002-2005 and it seems a lot of newbie real estate investors
thought that increasing 20%+ per year was average…
have been 1-3 percentage points above consumer price inflation.
Inflation runs about 3% per year, so home prices generally rise
4-6% per year.
I know you
are housing more than stocks, but just how bad do you think investors
will react to the negative GDP numbers on Thursday and how will
the stock market reaction to that affect housing over the next 6-12
for the U.S. and the world economy is already priced into the stock
market. I believe if we have a short recession, we could see respectable
gains in the stock market because corporate profits are running
about double the rate of what it was in 2000.
there are housing indicators that help to determine whether foreclosures
will continue to rise in a community/state, etc. What are the real
determinants of whether your city is ready to recover and move forward,
is experiencing a "boom/bust" or is headed for a prolonged
and painful period of slow growth?
on vacancy rates showed steady conditions in the third quarter.
It is still high, but no longer rising. Also, new home inventory
has fallen sharply because builders have cut back production. We
are moving in the right direction in controlling inventory. There
is still more risk because of foreclosures. But if you can pick
up properties at "bargain" prices, then the risk is minimized.
people forget about the Big Kahuna challenges of real estate, like
high cost to carry, illiquid, natural disasters (drought and earthquakes
in California and Nevada and hurricanes in Florida). Can you speak
just a little bit to that? Even with "insurance" you have
higher insurance costs in riskier areas and people in New Orleans
were being denied claims because the "flooding" when the
levies failed was not covered. (Only wind damage from the hurricane
was.) This was eventually challenged in court, but it took years
and in the meantime, many people lost their homes and were unable
to hang on long enough to rebuild.
Florida is hampered
with high insurance costs related to hurricanes. So many second
homeowners could not carry the cost of mortgages and insurance and
put their homes on the market. If the insurance cost falls, then
home prices will pick up. It is an inverse relationship.
we learned from the real estate bubble and what lessons can real
estate investors now carry as their wisdom talisman going forward?
Any time there
are strange new behaviors – watch out! No income/no document loans
– that is a clear warning sign. People buying with the intention
of selling in a month or two. That is not normal and suggests exuberance
and the "finding of the next fool." Abnormal new trends
= be very cautious.
I know one
investor who was saved because she refused to lie and say she would
be living in the home. Any last words of wisdom?
has proven to be a solid long-term investment for homeowners and
investors. Short-term is always a difficult call. But long-term
returns have been consistently solid. With that in mind, best of
Underwater on Your
Harris, Mortgage Specialist.
3 Ways to Avoid Foreclosure.
the past month, I have been asked over and over again what are the
options available to people that owe more on their house than it
is worth. I figured I should write an article so everyone
can at least have an idea of what is out there.
There has been activity by the federal government, the courts, and
by the lenders themselves that has created an air of mystery as
to what your options are IF you are upside down and would like to
change your current loan, or sell your home.
There are several
options available to you, and I will go over the most common.
Housing Stabilization and Homeownership Retention Act
Refinance your existing debt so that your new loan is 90%
of CURRENT market value. When you sell, you kick a little of your
profits back to the federal government.
Primary Residences only. If you own more than one
property, you do not qualify.
Current lenders must agree to it. Your current lender has
veto power, and must cooperate. In addition to losing principle
balance of loan, they must agree to pay 3% of loan amount to FHA,
as well as pay for 2% of new loan expenses.
Must pay off all mortgages. If you have a 2nd mortgage, it
must agree to it as well as the 1st.
Loan must have originated prior to 2008
As of March 2008, housing payments must be at least 35% of your
total income. If it’s less, then you can afford the home and can’t
use this program.
You must qualify for the new loan using actual income (tax returns).
If you can’t qualify for the new loan, FHA will not do the
Most lenders are not entertaining this option, because it
is so prohibitively expensive. If you bought a house for $500,000,
and it is now worth $300,000, the lender must take a $230,000 loss.
In addition to that, they must come out of their pockets,
in CASH of 5% of the new loan amount, which takes their loss up
to $243,500. It is true that this is cheaper than a
foreclosure, but banks are afraid if they start allowing this, they
will "open the floodgates" and create much more default
than should actually happen.
Also, it’s not in writing, but you must currently be in default
to on your loans to even be considered.
Banks are currently negotiating with homeowners that are currently
default on their mortgages. If you have missed mortgage payments,
you should attempt to do a loan modification. You can do this
by yourself, or you can hire a specialist that can do the work for
There is no "primer" as to what to expect as an outcome
for a loan modification as each lender has his own policy.
In most cases, the banks will rewrite your current mortgage to a
lower interest rate, maybe interest only. In most cases, it
is for a fixed period of years (5) so that when/if the market turns,
the banks are not locked into an artificially low interest rate.
Current market rates are around 6%, though I have heard of
lenders offering short-term rates as low as 4%.
If you are currently delinquent on your mortgage, some banks will
require that you come current on your mortgage, and some banks will
allow you to add the delinquent amount to your principle balance.
Many lenders will not modify your loan if you do not have the ability
to continue to make payments based upon the new interest rate. Banks
want you to keep your home, but they typically do not lower the
rate if they think it is only a short-term panacea.
Also, though it is not written in stone, all reports that I have
heard state that you must be in default (at least 30 days late)
on your mortgage to be eligible. If you are current on your
mortgage, note that going late on your mortgage will drastically
negatively affect your credit, and remove all refinance and purchase
opportunities for you for at least a year.
If you choose to work with a loan modification company, be VERY
careful. All those loan officers that sold sub-prime loans
a few years ago are now selling loan modification services. Generally,
you should be wary of anyone who wants a large amount of money up
front, and has no incentive to complete his services. A modest
amount of money up front is fair, as there is a bit of work involved
in the process, and a fee for success once the loan has been modified
is also fair.
department of real estate requires that anyone who accepts money
UP FRONT register with the state. If you do not see their
name on the following web page, do not pay them an up front fee.
I am currently researching these companies to find the ones that
charge a FAIR amount of money and are reputable. I have a
few that I am comfortable referring, so feel free to call me directly
at 800.871.7987 x 702.
Suing over Truth In Lending Violations and Right of Rescission
This is something that has started to occur over the past few months.
When the lender has you sign your loan documents, they are
required to provide to you a "Truth in Lending" statement.
This document states all of the fees that have been charged to you
for the loan transaction, and shows how those fees affect the effective
interest rate, or A.P.R. Unfortunately (for the lender), this
document is easy to mess up, and there are often changes to the
exact fee after the loan documents have been signed. In addition,
lenders must disclose all the features, reset dates, and adjustment
periods properly on the TIL.
Lawyers (well, probably their paralegals) go over the truth in lending
statement and compare it to the final closing statement, and if
there are any discrepancies, errors, or lack of property disclosures
they go back to the lender and call foul. There is a statue of limitations
of three years, so if your mortgage is older than that, there aren’t
too many options.
If an attorney finds errors in your paperwork, then you are in luck.
Many people will claim that you get your mortgage rescinded,
or you will get cut a huge check by the bank. Fat chance at that.
If you find an error, this basically enables you to use that
as leverage to negotiate a loan modification in your favor. Or,
you can hire a hugely expensive lawyer, sue your bank, fight the
system, and a few years later maybe perhaps win a lawsuit that pays
you actual damages (great news, you get that $300 fee back, plus
interest!) plus attorney fees.
In some cases, people have had errors on a document called the 3
Day Right of Rescission. These are quite serious, and if there are
errors on this document you may be able to have your mortgage rescinded.
Sound great? Kind of, you still owe the money, and if
the loan get rescinded you need to find a new loan to replace it.
If you’re upside down, this isn’t an option.
Again, I am investigating several attorneys who claim they are experts
in this field. By next week I hope to have a good referral.
Be wary of anyone saying they can get you cash payoffs.
In summary, be careful what you believe and who you trust. There
is no panacea available to make everything better. If you
are legitimately hurting by making your current mortgage, there
may be some minor relief available to you.
If you have
a subprime mortgage, you should be able to have that high rate lowered
to current (or maybe even below) market rates, if you can show you
have the desire and the ability to make the payments.
If you think that the bank was negligent in the paperwork they provided
you with (common among "option arms" and sub-prime loans),
you can have an attorney take a look at your paperwork and perhaps
find cause to go back to the lender for a loan modification.
If you have any specific questions, please give me a quick call
and I will try to answer your questions accurately. If you
know of someone that is facing problems with their current mortgages,
please feel free to forward my contact information.
Shawn D Harris
Mortgage Planning Specialist
I Appreciate Referrals .... If you know someone who needs expert
mortgage advice contact me.
Direct: 800.871.7987 x 702
Program for Money Market Mutual Funds:
You Should Know.
Alert from FINRA.org (the Financial Industry Regulatory Authority)
market mutual funds play an important role in America's financial
markets, offering a relatively lower-risk alternative for investors
who seek stability and liquidity. Recent market events put a spotlight
on the money market fund industry—including the U.S. Treasury Department's
announcements on September 19 and 29, 2008, of a temporary guarantee
program for the money market fund industry. In creating the guarantee
program, Treasury seeks to address temporary dislocations in the
are issuing this Alert to help investors better understand money
market funds and to answer some of the questions investors may have
about Treasury's guarantee program.
are money market funds?
A money market mutual fund is an investment company that pools
money from investors to purchase short-term investments—such as
Treasury bills, certificates of deposit, and short-term bonds (known
as commercial paper) issued by large corporations—that meet certain
standards set forth by the Securities and Exchange Commission for
credit quality, liquidity, and diversification. As of July 2008,
there are more than 800 money market funds in the United States—roughly
10 percent of all U.S. mutual funds.
federal securities laws set limits on the types of investments a
money market fund can make. Money market funds have traditionally
attracted investors seeking to preserve their principal or who need
a short-term place to invest their cash. As with any securities
investment, investing in money market funds involves risk—and while
rare, investor losses are possible. In contrast to bank money market
deposit accounts and other bank savings accounts, money market funds
are not insured by the Federal Deposit Insurance Corporation or
the National Credit Union Administration. However, as explained
below, for an initial three-month period, money market funds can
participate in a guarantee program offered by Treasury that will
insure assets held in money market mutual funds as of September
does it mean to "break the buck"?
Like other mutual funds, a money market fund is required to
calculate its net asset value (NAV) at least once a day, typically
after the U.S. markets close. A fund's NAV is its price per share,
which reflects the total value of the fund's investment holdings.
Money market funds invest with the goal of maintaining a stable
NAV of $1.00 per share. That means that investors can typically
expect to get back one dollar for every dollar they invest in the
fund, plus any returns (meaning the interest or dividends the fund
money market fund is said to "break the buck" when its NAV falls
below $1.00 per share. In the nearly 40-year history of money market
mutual funds, this has happened on only two occasions—in 1994, when
a fund lost approximately four cents on the dollar, and in September
2008, when the NAVs of money market funds issued by The Reserve
Fund fell below $1.00.
there has been an expectation that when a money market fund reaches
a point where it might break the buck, the investment management
firm that sponsors the fund will take action to infuse the fund
with cash so that the fund can maintain a stable NAV of $1.00 per
share. Most money market funds in the U.S. are sponsored by large
financial institutions that may provide assistance in the case of
is Treasury's Guarantee Program?
On September 19, the U.S. Treasury announced the establishment
of a temporary guarantee program to protect shareholders of money
market mutual funds—and on September 29, officially opened the program
to eligible money market funds. Eligible money market funds include
publicly offered funds that are registered with the SEC, are regulated
under Rule 2a-7 of the Investment Company Act of 1940, and seek
to maintain a stable $1.00 NAV. Both taxable and tax-exempt money
market funds may participate. As explained in Treasury's September
29 announcement, eligible funds must apply and pay a fee to participate
in the program: the program is not automatic. The program is not
available to any fund that broke the buck prior to the close of
business on September 19.
program will insure shareholder assets in participating money market
funds as of the close of business on September 19. In other words,
if a money market fund that participates in the guarantee program
subsequently fails to maintain a stable $1.00 NAV, the program will
provide coverage to shareholders up to the amount they owned on
the date the program was announced. This action is intended to enhance
market confidence and alleviate investors' concerns about the ability
of money market funds to absorb a loss.
cannot sign up for the guarantee program on their own. Instead,
each money market fund must decide whether to participate in the
program—and, if so, must [have applied] by October 8, 2008. You
can find out whether a money market fund participates in program
by contacting the fund directly or checking their Web sites.
addition, you should be aware of the following features of the guarantee
1. Limits on the Guarantee—The insurance provided by
the guarantee program extends only to the total value of a shareholder's
account in a participating fund as of the close of business on September
19, 2008. Here are some examples to illustrate how the guarantee
Let's say you owned 200 shares of ABC money market fund on Sept
19 and bought 100 more on September 30. Let's also assume the fund
is participating in the guarantee program and breaks the buck on
October 10. Under the guarantee program, you would receive a guaranteed
$1.00 per share for the 200 shares you owned on September 19--but
your remaining 100 shares would be redeemed at NAV.
-- Now let's say you owned 200 shares of ABC on September 19, sold
100 on September 22, and purchased 50 on September 30. If the fund
breaks the buck on October 10, all 150 of your shares would be covered
under the guarantee program-even though some of those shares were
purchased after September 19. As long as it remains in effect, the
guarantee program will protect your investment in ABC up to the
amount you held as of September 19.
Tax Issues—Participation in the program by a tax-exempt money
market fund will not jeopardize the tax-exempt status treatment
of payments. The Treasury and the IRS have issued guidance confirming
Duration—Initially, the program will be in effect for three
months, beginning September 19, 2008. After three months, the Secretary
of the Treasury will assess the program, including whether to extend
it (up to September 18, 2009).
bottom line is that whatever amounts you held in a participating
money market fund as of September 19 will be protected under Treasury's
guarantee program for as long as the program remains in effect.
For more information, see Treasury's
for Reserve Fund Shareholders
Because certain of the Reserve money market funds broke the
buck prior to September 19, these funds are not eligible for the
Treasury guarantee program. On October 30, 2008, the Reserve announced
a plan to make an initial distribution to shareholders in the Primary
Fund. The Reserve's board of trustees is continuing to work on plans
to liquidate certain of its other money market funds. For more information
and updates on the liquidation plan, be sure to check Reserve's
the meantime, investors who need cash but cannot access their holdings
in the affected funds should understand their alternatives. These
include awaiting implementation of the
Reserve's liquidation and distribution plan, liquidating
other investments, or arranging for a loan from their broker (which
might require signing a margin agreement). Each of these choices
has consequences that investors should carefully consider before
to Turn for Help
If you have questions, be sure to contact your brokerage firm—or
the fund company if you purchased your shares directly. If your
firm did not resolve the problem to your satisfaction, you can file
a complaint online at FINRA's
Investor Complaint Center.
Treasury, Frequently Asked Questions About Treasury's Temporary
Guarantee Program for Money Market Funds
Order-In the Matter of The Reserve Fund (09/22/2008)
Division of Investment Management Responses to Frequently Asked
Questions about The Reserve Fund and Money Market Funds
Investing with Borrowed Funds: No "Margin" for Error
Alert, Your Brokerage Account and Money Market Funds
receive the latest Investor Alerts and other important investor
up for Investor News.
Put Your Money Where Your Heart Is. Q&A
with Natalie Pace, author.
book everyone with a job must own).
Pace is the only financial pundit in the U.S. who has a Nobel Laureate
winning economist writing the preface to her book and enthusiastically
recommending her nest egg strategies. Her new book, Put
Your Money Where Your Heart Is, is available for pre-order
NOW at Amazon.com. This book outlines the basic, fundamental GOLDEN
NEST EGG strategies that Nilo and Bill Bolden used to protect their
nest egg during tough financial storms. Using a pie chart that Natalie
drew up on a napkin, Nilo protected her nest egg, while her bosses
lost hundreds of thousands of dollars. As of December 2008, Nilo
had lost nothing. If you lost more than 11%, there is a better way
and buying Natalie’s new book is the start of a new life of taking
ownership in your Buy My Own Island Fund, as well as the world at
large. Natalie calls it getting rich and enriching – a definite
- In what
ways does your system differ from conventional investment strategies?
My book is the solution for the current financial crisis.
There is a saying that you must never confuse wisdom with a bull
market, and what you are seeing right now is a lot of blowhards
standing naked with the tide out.
I warned investors
to recession proof their portfolio in February of 2008, to get
Fannie Mae out of their mutual funds and nest eggs in 2003, to
steer clear of General Motors in 2004, that housing was a house
of cards in 2005 (when the KB Home and Toll Brothers’ insiders
were cashing out hundreds of millions of their own stock) and
to avoid Lehman Brothers in June of 2006. Bear Stearns was so
bad it didn’t even make the grade. I’ve also been religious about
telling investors that they should always keep a percent equal
to their age safe, i.e. not invested at all in the stock market
– not in funds of any kind, including those held by annuities.
In recessions, you overweight into safety an additional 10-20%.
And for those
of you who think all of this is going to be long and boring and
impossible to understand, I try to use pheromones – making investing
sassy and sexy – instead of mind-numbing charts. Just forensic,
investigative, financial journalism summed up in sassy, actionable
chapters with easy-to-implement instructions.
- Give us
an example of your defensive strategies.
keep a percentage equal to your age safe (+10-20% during
recessions). Safe investments right now are Treasury
bills and high-quality bonds that you already own. In a
recession, cash is king and not losing is winning.
When real estate and stocks bottom out, the cash-rich investor
will be in a fantastic position for great gains going forward.
the remaining portion of your nest egg into 10 ETFs: small,
medium and large cap (both value and growth) and four industries
that are in favor. Industries that are in favor this
year should be clean energy, gold mining, biotechnology
and Australia/New Zealand (international). NASDAQ was in
favor in 1999 (but not 2000-2002). Real estate was in favor
2002-2005 (but not 2006-2008). Clean energy was the top-performing
industry in 2007, earning almost 60 cents on the dollar.
twice a year. Meet with your certified financial life
partner twice a year to make sure that your Buy My Own Dream
Life fund (formerly called your retirement plan) is following
your blueprint. In late January, take your profits on any
ETFs that might have excelled. In late September, buy back
into any ETFs that might be undervalued.
would have allowed you to profit from NASDAQ in 2000, and would
have saved you from the DOT COM crash in 2000-2002. It would have
allowed you to profit at Dow Jones Industrial Average 14,000 (October
2007) and would have saved you from this year’s market crisis.
Reading my book will help you to understand this better. Coming
to my retreat gives you the time – 3 full days – to implement
all of the knowledge and wisdom that is found in the book. Having
someone to work with you while you make the change is priceless
(and the retreat is only a fraction of what you’d pay to go to
one year of college).
- How do
you make investing as much fun as shopping?
Earning great gains is more fun than winning the lottery!
When you know what you own, care about your life plan and can
easily see that you’re making gains while you sleep, that is a
I have penned
a 3-ingredient recipe for cooking up profits that works for stocks,
real estate, classic cars, postage stamps, Beanie Babies – you
name it! 1) Stick with what you know and love; 2) Pick the leader
(in real estate, it’s location, location, location); 3) Buy low;
sell high (easy to say; hard to do). The hardest parts are two
and three, so I designed four easy questions for picking a leader
and I also outline various buy low; sell high strategies in the
Just so you
know how easy this can be, Bill and Nilo Bolden have lost nothing
in their nest egg using a pie chart that I drew up on a napkin.
And the Green Goddess Investment Club earned 40% gains on their
first trade EVER this year, in a volatile, downtrending market.
Put Your Money Where Your Heart Is is truly a book that
everyone with a job should own.
- How have
your own background and investment experiences influenced your
I was a busy soccer mom, as were all my friends, but we are
also the shoppers of the family. So, I wanted a strategy that
used skills we already have as shoppers, and I wanted to make
my friends look forward to opening their brokerage statements.
I like so
many people needed peer pressure to start getting smart about
investing. So, I started an investment club. The book makes it
easy to start your own investment club, if you need a discipline
to help you jumpstart your own dream life.
And if the
shoppers of the world – mostly women – compared notes with the
investors of the world – mostly men – imagine how much better
the gains of the household would be! The shoppers know the best
products and services and the investors (after they read my book)
know how and when to buy into the ownership of the company.
- What advice
do you have for investors during an economic downturn?
1. GET SMART NOW. THE WORLD HAS SHIFTED!! Stocks don’t earn
12% per year anymore. For the last ten years, stocks have earned
4%. Treasury bills earned 3.3% with much less risk. If you want
gains, you have to be invested in the companies of tomorrow, not
the faded blue chips (like Fannie Mae, General Motors, AIG, US
Airlines and more). This is something I’ve been saying for three
years! In November of 2005, I wrote an article exposing the pension
plan debt of the large corporations that were founded before 1980
and still carried defined-benefit pension and health care plans,
saying, "Blue Chips and pension plans are becoming endangered
species these days, and those of you who work for companies founded
before 1980 may be at risk of eating cat food in retirement, if
you don't protect (roll over) your retirement plan now. (From
the article, "Celebrities,
Style and Parties: While You Dream of the Good Life, Your Future
Could be Cat food." Vol. 2, issue 11.)
pundits say, "Don’t even open your 401(k) or IRA statements."
I say, "Open them immediately." If you are over 25 and
you lost more than 20% of your portfolio, your nest egg was cracked
to begin with. If you are over 50 and you lost more than 11%,
you were not properly protected. If you want to resurrect your
nest egg and protect it against further losses next year, you
need to get a better blueprint right now. You can’t even wait
another 30 days because the next tsunami to hit Wall Street could
be hedge funds imploding.
Buy my book,
Your Money Where Your Heart Is as a start NOW. Call
866.476.7442 or email Heather@NataliePace.com now to register
to attend my next retreat. Tell your friends. Come with them.
(You get a huge discount when you come with a friend.) Heather@NataliePace.com.
- What tips
do you have for choosing a competent broker?
BROKERS AND LOVERS IT PAYS TO PICK A GOOD ONE! If you lost
more 20% then you need to shop for a better one -- someone who
is commission-free, knows Modern Portfolio Theory and has the
good sense to get information from great news sources, like my
ezine. There’s a chapter in my book on how to select the perfect
certified financial life partner, along with questions you need
to ask to select someone who is a right for you. Interview the
broker as if your life depends on it because your lifestyle
the Billionaire Game?
HOW WOULD YOU LIVE IF YOU HAD ALL THE MONEY IN THE WORLD?
Why not live that life now? Why not take ownership of your investments
instead of relying upon blind faith and a whistle and a prayer?
Imagine how fast our world becomes more beautiful when we invest
only in the products, goods and services that we want to own and
buy, instead of putting our money in a collective pot, which brokers
sell off to the highest bidder?
model, protestors of the war in Iraq actually owned the oil fields
and people who lost a family member to cancer owned stock in Phillip
Morris Tobacco Company. In the world of tomorrow, if you like
Priuses more than Hummers, you own Toyota instead of GM. You can
get rich while enriching our world. Today, GM and Ford combined
are worth less than 1/10 of the market value of Toyota Motor Company.
money where your heart is would have made you a lot richer over
the last five years. Handing your hard-earned dough over to your
employer (for your pension plan) or your insurance provider (your
annuity) or your broker (for mutual funds) to invest for you has
cost you dough, decreased your net asset value, funded a lot of
the things that you don’t want to flourish in our world and given
you heart burn.
- What socially
conscious businesses might make the best long-term investments?
Socially conscious companies always make the best long-term
investments because happy people make better products faster cheaper.
the most successful IPO in the history of Wall Street in 2005.
GM and Ford insisted on making SUVs and gas guzzlers while Toyota
shifted to hybrids (switching production lines and retraining
their employees) and are today faded blue chips that are worth
less than $5 billion each. Toyota is the number one auto manufacturer
in sales, profitability and market value and is currently valued
at almost $100 billion. Now GM and Ford were also strangled with
costs far above their competitors, but they lost market share
because people didn’t want to drive their vehicles and preferred
what other corporations were putting out on the market.
- What lessons
can be learned from such companies as Enron and WorldCom?
That your intuition is really complex pattern recognition
and that our world does not support the violation of human and/or
investor rights for long.
As a consumer,
you can sniff out the evil companies! When long distance rates
drop from 25 cents to 4 cents, the company can’t keep having increasing
earnings! The analyst who reads the earnings reports might buy
this nonsense, but you, the consumer, know better!
are dying of heat exhaustion while energy traders are laughing
their way to the bank, the company will not be in business very
long! If Enron hadn’t imploded under the weight of its’ own accounting
lies, it would have been sued to oblivion by the State of California
for price gouging, market manipulation and carpet bagging.
these lessons in my book in the chapter, "Top 10 Signs the
CEO is Rolling in Your Dough."
- What are
the biggest mistakes made by new investors?
Listening to money managers and/or brokers who were actors
or rodeo riders or mortgage brokers or car salesmen only six months
ago. Trading on headlines or analyst recommendations. Buying options
software packages that claim to trade with 80% accruacy (with
accuracy misspelled). There are 11 common mistakes listed in my
book. That chapter alone could save you tens of thousands of dollars!
or not, in today’s marketplace, where stocks are only earning
4% each year (the returns of the last ten years, according to
Hulbert’s Financial Digest), having 30-years of experience in
stocks could be a bad thing, rather than a good thing. Judge your
CFP based upon the performance in 2008. If you lost more than
20%, your money manager is not knowledgeable enough about defensive
strategies to help you. My book outlines strategies that you can
rely on for top performance in bull and bear markets.
- How can
you know your heartfelt choice will be profitable?
You don’t. That’s why you have a long-term strategy for your
nest egg and don’t trade individual stocks in your Buy My Own
Island Plan unless you are Natalie Pace or Warren Buffett! If
you want to trade individual stocks, you have to consider your
level of experience. If you’re Warren Buffett, that’s one thing.
But most people don’t have that much experience trading individual
I’m not saying
don’t try to learn. I’m saying that learning something requires
you set aside "fun" or "education" money –
i.e. money that you can afford to lose. The Buy My Own Island
fund is money you want to make while you sleep, with the emphasis
being on sleep! Low-risk, steady performance, twice a year rebalancing,
tithing once a month, etc. Individual stocks require more work
than that. And of course, they can also be more rewarding when
you invest in them successfully.
My book outlines
some easy, effective strategies for anyone who wants to have some
fun investing in individual stocks. I developed these strategies
and used them to earn my reputation as a number one stock picker.
So, you can definitely improve your gains by incorporating them!
Your Money Where Your Heart Is now on Amazon.com.
Be bold. Shine!
Get Rich and Enrich
Workshop Truly Makes a Splash in Santa Monica
for Sixty Plus Lucky People (Including Lucky Me)!
Santa Monica, CA.
That about sums it up.
has done it again! She has taken sixty people on a journey of showing
them how to save their financial "ass-ets" during this "recession".
Natalie is probably
one of the smartest, most intuitive investigative financial journalists
in today's economic community (not just my opinion). She
tells it like it really is, without the hype. No wonder she has
been a number one stock picker for some time. Natalie has a sure
grasp on the stock market, the economy in general, and knows excellent
ways to hedge bets in the "worst possible financial climate".
economy, NOT LOSING IS WINNING," Natalie emphasizes. "These are
very different times. We cannot do things in the same way we always
have, nor can we look at the stock market the same. The markets
return 12% a year in the past, but for the last ten years, only
4% per year, only slightly above the returns of Treasury bills at
3.3% (with almost no risk)." In Natalie’s model, however, investors
are able to capture their gains, rely on a blueprint that is appropriate
to their age and always keep a percent equal to their age safe.
In fact, her strategies are "enthusiastically" recommended
by Nobel Laureate winning economist, Dr. Gary Becker, a professor
at the University of Chicago. Despite the blue chip endorsement,
Natalie’s goal is to make investing as much fun as shopping and
to get rich while enriching the world – to enjoy life, know what
you own in your retirement plan and make the world around you more
beautiful in the process.
Sixty of us
were sitting in the room at the beautifully remodeled Sheraton Delfina
Hotel in Santa Monica. Nine of us were volunteers, assisting the
participants in Natalie's amazing process of teaching subjects on
(to name a few):
- The basics
of the stock market
- The language
of the investment industry
- Modern Portfolio
Theory, ETFs and rebalancing twice a year (easy!)
- How to know
what you own and own what you love (and get rich in the process)
- The secret
formula of how and why to keep your "nest egg" safe, with a portion
invested in the stock market and a portion in safer financial
- How to grade
stocks in her trademarked STOCK REPORT CARD
- What "stocks
on steroids" are and how they can play an important part of your
educational and fun portfolio
- How to simplify,
diversify and rebalance your Buy My Own Island Plan
- How to talk
to your broker, what to look for in hiring a new one, and how
brokers get paid
- How to make
great returns while you sleep
- How to "float
downstream catching fish" (profit in bear markets)
- The differences
between mutual funds and exchange traded funds and why "ETF's"
are the wave of the future
- The importance
in having your money invested in tax protected structures
- The best
- What the
up and coming hot industries are
- Why clean
energy is the wave of the future and how to profit now
- How the new
democratic government will effect the markets
one of her jewels: "Look at your investments like a pie, " she explained.
"Make sure that whatever age you are, have that amount invested
in "safe" financial instruments, then add another twenty percent
to the "safe" category just during this recessionary time. You can
re-allocate it later when the tide turns. Cash is king and you’ll
be in the best seat for returns going forward if you protect and
for sure. This is one smart, beautiful woman. Her words rang true
in everyone's ears. I have to admit, as I sat in the room, I observed
everyone's faces and energy (I'm like that woman on Star Trek
that senses emotions). A light kept clicking on in each person's
eyes at different times. I could almost "hear" them saying, "Wow,
I get it. I understand what I need to do. I am so relieved."
Yes, we were
given a LOT of valuable information to take in. Yes, it all seemed
overwhelming at first (especially for the first timers, like
myself in the previous workshop...I was like a deer caught in headlights).
But, more importantly, everyone KNEW they were taking control of
their own financial futures...standing up and taking charge,
one by one. It was wonderful to witness. For some participants,
it was an eye opening, heart-awakening experience. For others, it
was a matter of fine-tuning the knowledge base they walked in with...leaving
with a more in-depth understanding of their own circumstances and
WHAT TO DO about their financial circumstances.
This was no
ordinary "dry" financial three-day workshop. This "Get Rich and
Enrich Retreat" was a spiritually-infused, heart-warming, intuitive
rally...raising everyone's consciousness to their own endless possibilities.
not "just" cover statistics, nor does she "just" teach the language
of the stock market industry. Natalie does much more. She gets to
the HEART of WHY we want to make money in the first place from a
soul perspective (my favorite motivating factor, by the way).
And, she presents analogies of those models who have MADE billions
of dollars, like Bill Gates, Steve Jobs, Warren Buffet and Oprah
Winfrey. She created and offered a brilliant process, called the
"BILLIONAIRE GAME", designed to challenge us to think BIGGER...to
expand our level of awareness and to literally step out of our comfort
zone into a world maybe we never took the time to IMAGINE. So, ask
yourself this question: "How would you live if you had all the money
in the world?"
When we got
back in the room, Natalie showed us that by stepping into that picture
we envisioned today we don't have to wait until we "make all that
money"...We just have to live it NOW and scale it back. Simple and
profound? Absolutely. (And believe me, "stuff" came up for everyone,
especially for those who believe that it's not okay to "make money."
Natalie calls these people the "philanthropist mentality").
Let me tell you, "stuff" really did come up (even for me, who
was facilitating my group. Thank you guys for creating such a safe
environment to reveal each other's deepest unspoken thoughts).
For lucky me,
by volunteering my time, I got to help others learn Natalie's systems,
(which as you all know, is the best way of learning and reinforcing
something yourself). I shared with everyone what a great mentor
of mine once told me years ago, that "an expert is someone who knows
just a little bit more than someone else." We all laughed at that
one. Then throughout the seminar, when everyone broke up into partners
to do STOCK REPORT CARDS, each person helped another and they instantly
became "experts". You could feel the joyous energy in the
Each day we
walked away with precious gems from the mine of Natalie's brain.
We were given the resources for finding particular pertinent information
online. (Thank God for computers, we all had our laptops and
information was simply a "click" away. What did we ever do before
laptops? Well, that's another story). Anyway, we were taught
how to navigate the Internet for those resources she gave us and
how to use her brilliantly conceived (and user-friendly)
website to access the information necessary to learn about the companies
we were researching for our stock report cards.
recipes, Natalie has a way of getting to the point and sharing her
philosophy of investing:
1. Stick with what you know and love. When companies are socially
conscious, they do their best. When you invest in the world of TOMORROW
(and NOT THE PAST), and you fuel desire with dollars, you
invest in a greener and cleaner world.
the leader in the sector. (In real estate, it’s location, location,
3. Buy low
and sell high. (This sounds obvious, but knowing when the low
is low and the high is the high is another story).
So, the "RICH
AND ENRICH RETREAT" is over and we are fully equipped to know what
to do and how to do it with regards to our investments
and in addition, what we have walked away with is the knowledge
that living a life of BEING ENRICHED starts NOW. No one has to "wait"
until they manifest ooh-gobs of money (and maybe you don't even
want ooh-gobs of money, that's not the point).
the "Billionaire Game" gave us the tools of imagining ourselves
with all the money in the world and what it feels like to live the
life of BEING ENRICHED RIGHT NOW! I think I can speak on behalf
of all the participants, we are ENRICHED, feel GRATEFUL and look
FORWARD to making our lives even better than they are now.
I would highly
recommend that EVERYONE sign up for her next retreat in February.
(Details are posted on the home page at NataliePace.com under
Rich and Enrich Retreat banner ad). Only twelve (12)
people will be allowed to attend. And believe me, if you are one
of the lucky twelve, you will thank your lucky stars that you signed
up and attended. Save your "ass-ets" NOW before you watch your boat
sink to the bottom with the low tide. I'm sure glad I attended.
It has changed the way I THINK about my finances and how I can truly
make a difference in our world of TOMORROW. Thanks Natalie!
Whizin is an "Eclectic Renaissance Woman." She has training as a
certified yoga teacher, as well as a master results coach, and NLP
practitioner. While her background is as a marketing designer Shelley
is a professional speaker and trainer bringing illumination to those
looking for success in the arenas of health, finance and relationships.
Shelley has traveled worldwide and studied a multitude of cultures
and traditions, and as a result she has always felt naturally inspired
successfully imparting spirituality and integrating the spiritual
substance of life—the soul of living—into the personal and professional
lives of those she touches. Her aspirations include creating a non-profit
organization acknowledging those who actively do something to make
a difference in this world.
Universe Within: How to Reduce Stress and Depression and Gain Mental
and Emotional Balance.
Dennis Maness, HealthWalk
noise surrounds you. The crowd, the barking dog, the lawn mower,
the roar of the loud motorcycle and those sounds in your mind which
scream the loudest, often even drowning out the voices of those
speaking to you and just a few feet away.
As the sounds
engulf you, you walk toward the door ready with your key. You place
your key in the door and walk in. As the door closes behind you,
you feel as if you have stepped into another world.
You look around
and see a well-organized place; the air is filled with soft music;
music as smooth as silk gently dancing on your senses. You almost
feel uncomfortable as your senses melt into a state of relaxation.
For in this moment, you have transformed from the world that just
a few minutes earlier crowded your mind and senses to serenity and
focus. Now that you are in this room, relax. Let it all go. You
are safe, alone. As you begin to feel secure, you begin to notice
your surroundings. Where is this place you ask; so pleasant, so
calm, so relaxing? Welcome to the world of you.
Most of the
world doesn’t even know this place exists as anything but a state
experienced shortly as our mind and body drifts off to sleep. This
special place we are discussing is not a place for sleep but a refuge
where we find balance. This world is one that you may enter and
exit anytime, 24 hours a day.
symptoms, ADHD, multiple competing priorities, attention, and focus
can be controlled from the inside of this room.
A Mental Environment
To help you develop a strong and balanced mental environment,
we will follow three people who found lasting relief when they learned
how to step away from stress, depression, cognitive and memory issues
into this room. Sue came into HealthWalk’s MindSoul Technology office
and soon teared up explaining how depression had been a constant
visitor since she was a child. Victor had ADHD, dyslexia and was
quick to anger. David had been in a serious accident that crushed
his skull, which in turn caused cognitive and memory difficulties.
place of mental transformation and balance is developed by creating
a safe mental environment. Clients of HealthWalk’s MindSoul Brain
Technology often fall asleep shortly after the treatment begins
as they sit comfortably in our zero gravity chairs. I prefer this
process over meditation or standard relaxation techniques because
as good as these methods may be, they are also limiting. Relaxation
may be one of the least understood concepts in applied psychophysiology
due to both therapist and client misconceptions about it. I don’t
want you "only relaxed;" I want you relaxed and in control.
While the client
is sitting in the zero gravity chair, I dim the lights and begin
a lobe specific mapping of their brain and then start a relaxation
procedure using specific sound envelopes. As they begin to relax,
I would touch them gently on the forehead and ask them to concentrate
on my touch. This leads their thoughts away from the state of fight
or flight and moves their focus to frontal lobe brain activity.
During this exercise, I measure their thoughts and subconscious
thoughts and teach them how to close thoughts up and devote all
their attention to one single thought so that they can come to a
point of total focus / total attention.
these techniques, Sue, Dave and Victor were able to find the place
within their minds where they could go to regain control. For each
of them, they have been able to enter and exit this state of mind
for over six months. Victor is doing great in school with no more
dyslexia symptoms and is controlling his own ADHD with his thought
control. Sue has not experienced the bad bouts of depression since
her MindSoul Brain Technology sessions and Dave is back at work
and doing quite well.
is simple. Find that private place where you can be alone without
disturbances for at least one hour. Turn off the telephone, radio,
television and other potential disturbances. Do a model relaxation
exercise. While relaxed, close your mind to all thoughts, create
a mental flush of all mental activities; develop this mental state
so that gradually you can maintain it for five, ten, fifteen minutes.
Get to know this quiet place and go there often.
exercises may help you transfer relaxation skills to your everyday
environment helping you develop this special place where you can
go within your mind to de-stress, manage multiple competing priorities,
focus and improve memory and attention. It is all within you. If
you need support to get started, please come to visit us at HealthWalk.
We are here to work with you to find that special place within you
so that you have control over your thoughts, moods and focus.
offers customized, non-invasive and effective support to enable
your body’s own innate powers to regain and enhance health, performance
and healing. HealthWalk is
dedicated to supporting and empowering you to achieve and maintain
vibrant wellness. HealthWalk
is a non-invasive, integrative healthcare facility with a global
umbrella of leading edge technologies, services, natural supplements
and products backed by over 20 years of research. HealthWalk
is based in Carlsbad, CA. www.healthwalk.com
high stress world, you face a host of special health needs and challenges
from work and home demands. Health issues include physical and emotional
stress, sleep issues, memory and information retention, weight control,
gastro-intestinal distress, hormonal imbalances and emotional and
MindSoul Brain Technologies creates a brain map of the brain’s
neuro pathways which shows the imprints in the brain that an individual
experiences as memories, trauma, thoughts and experiences. MindSoul
Brain Technologies supports the rebalance of the misfiring, blocked
or damaged neural pathways to restore homeostasis and balance to
the brain and to reduce or eliminate negative symptoms associated
with emotional and physical stress and trauma, memory issues, addictive
behavior(food, smoking, drugs etc), ADHD, ADD, dyslexia, autism,
loss of mobility due to stroke, physical trauma etc. Some of the
symptoms may include the inability to focus, frustration, anger,
headache, hyper vigilance, impaired memory, multiple competing priorities,
stress-related illness, weight gain or loss, gastro intestinal discomfort,
mood swings, insomnia, depressive symptoms, fight or flight response,
physical movement impairment etc.
assessment Mind Map and a series of ten sessions - $1,500
In Clinic Package. In one full, comprehensive and enlightening
day at HealthWalk’s clinic you will learn more about your health
and bodily functions (hormonal balance, blood composition, biological
activity, diet analysis) than you have ever known. The whole analysis
and consultation process is non-invasive, thorough and deeply informative.
You will come away with the solutions, supplements and support to
guide you on your path to enhancing, regaining and maintaining your
vibrant health. HealthWalk’s special package includes
Vital Hematology, Comprehensive Hormone and Adrenal Analysis and
Consultation, Digital Infrared Thermal Imaging (breast and lymph
screening), Galvanic Skin Response (G. S. R.) and a consultation
session with the Health Guide.
for NataliePace.com subscribers - $995 regularly $1170
Remote Program allows you to obtain a comprehensive analysis
and support for your health so you can achieve wellness from your
own location. HealthWalk has contracted with labs throughout the
country to work with you to obtain the blood and saliva samples
to do a thorough analysis and consult with you via phone and email
on your specific health issues and to offer you appropriate support.
This program gives you a comprehensive analysis and solutions on
what and how your body is functioning at the adrenal, biological,
hormonal, cognitive, mental and metabolic levels. The significant
majority of all illnesses and promotion of wellness can be related
to the proper functioning and understanding of the endocrine system,
the biochemical aspects of the body and the proper functioning and
understanding of nutrient uptake, allergies, inflammation, and potential
or current toxins in the body. This program will give you the information
and support you need to enhance, regain and maintain vibrant health.
The cost of
the Remote Program is $1395
HealthWalk at 877-255-4703 or email firstname.lastname@example.org
HealthWalk, 5825Avenida Encinas suite 111, Carlsbad CA 92008
You can lose everything in life and make it all back With one exception…
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. HealthWalk is a separate entity from NataliePace.com
and NataliePace.com offers no guarantees of, nor do we endorse,
their products and/or services.
Energy, Clean Coal or Just Coal in Your Stocking?
my Hot News on Cool Stocks List.
Stock Market Performance
3-yr , 2-yr & 10 mo.
-19% & -29%
-31% & -37%
-29% & -37%
your profits early and often:
markets have been volatile and down-trending, meaning that it’s difficult
to make money if you are trying to buy low and sell high. The only
way to do that this year was to pay close attention and take your
profits early and often – often between issues of the Hot News on
Cool Stocks list. So, unless you are willing to monitor your investments
daily, you shouldn’t be investing in individual stocks at all.
If you don’t
know how to read this article, you shouldn’t be investing in individual
stocks at all. Come to the retreat and learn how to invest and how
to read the article first!
profits have been made on put options and shorting. So, this is
the first year in a long while where you’ll see most of the companies
I’m featuring monthly are the biggest losers – companies that I
expect to go DOWN in value.
Investing 102, so, again, your first investment should be in education
– my retreat – if you wish to learn and do this successfully.
News, Information and Education you Need to Succeed
are 11 other articles in the NataliePace.com ezine that are designed
to help anyone who has a job to get rich and enrich the world. Be
sure that you are reading those! Some of the most important information
I’ve ever written is found there.
on the LA Times last week was about insiders cashing out of now
defunct New Century Mortgage Co. Imagine if investors were
getting that info in 2007 — before the company went bankrupt. Or
in 2005, before housing started to collapse. As you know,
that is the beauty of forensic, investigative financial reporting,
which is my area of expertise since 2000.
on Yahoo Finance on December 1, 2008 read, "Panel Says U.S.
Has Been in a Recession Since December 2007." On February 1,
2008, I wrote an article, entitled, "Recession Proof Your Portfolio,"
which included strategies that would have saved your nest egg from
the big cracking it has received this year. Some people told me
that we weren’t in a recession. I said we were, but that it wouldn’t
be called that for about a year. Bingo.
Google, MySpace, Sohu, Suntech, Taser International, Rio Tinto,
Opsware, Goldcorp and more: I found them first before they went
on to earn gains between 100% and up to 9000% in the case of Taser
International. I also warned to get Fannie Mae out of your mutual
fund holdings in 2003, to get GM out in 2004, that housing was a
house of cards poised to collapse in 2005 (when insiders at KB Home
and Toll Brothers were cashing in hundreds of millions of dollars
of their own stock) and to avoid Lehman Brothers in my stock report
of June 2006. (Bear Stearns was so bad, it didn’t even make the
grade to be included on the stock report card.)
If you want
to learn these strategies for yourself, or if you want to take three
days to set up your nest egg with a blueprint that adjusts to your
age and risk tolerance and market conditions forever going forward,
please come to my February 10-12, 2008 retreat. Only a dozen people
will be there. We’ll have a blast while we transform your life forever
and fill up your wisdom bank with a great investment plan that works
for real estate, stocks, bonds, Beanie Babies, classic cars, postage
stamps and anything that you can think of.
Alerts: Fortress Investment Group (FIG) and Sears Holding Company
November 11, 2008, I issued an alert on Sears Holding Company and
Fortress Investment Group, both of which are publicly traded and
operated, essentially, like hedge funds. Since Fortress announced
earnings on November 13, 2008 and Sears was expected to release
earnings before the end of November, I added both of these companies
to the Cooling Off List on the 11th, anticipating that
there would be significant losses at one or both companies and that
the share prices would suffer as a result. Sears announces earnings
tomorrow (Tuesday), so check your mutual funds, annuities, IRAs,
etc. now to see if you have exposure there. Sears is a major mutual
fund and institutional fund holding in Vanguard, SPDR, Janus, Fairholme,
Legg Mason, Davis and more.
Gold was highlighted as within buying range at 60 cents on November
1, 2008 and removed (for a hefty gain) at $1.03 on November 6, 2008.
See the Alert on the Sharing Wisdom bulletin board. (Check the Sharing
Wisdom bbs for updates early and often.)
to always refer to your "winning" stock picks, which reminds me
of the gambler that tells you how much they won but, will never
will divulge what they lost. My sister-in-law called and sent email
messages out to her entire network of family an friends last week
ecstatic over the fact she had won a little over $31,000 playing
the slot machines that Wednesday, but didn't mention she is over
$60,000 in debt from her gambling habit. So, Ms. Pace, please tell
us what your record is for the past four months.
Good for you
for questioning the performance of your guru! That's what everyone
should be doing.
your questions, I’m curious as to whether or not you read my Hot
News articles because there, in every single issue, I "divulge"
the performance of every company that I report on, listing both
those that doing fantastic as well as those that are not doing well.
Additionally, I list every ezine I’ve ever published since May of
2003 in the archives on my website. So, when I say that I first
warned of Fannie Mae and Freddie Mac in September of 2003, you can
actually go back and read that article firsthand. When I say that
I listed Google at the IPO, you can read the exact article that
I wrote and published in May of 2004 before the Dutch Auction. You
can create charts on MoneyCentral to see that Taser did indeed post
up to 9000% gains from the time I first featured it as 2003 Company
of the Year.
But, even more
important than the performance of the individual stocks that I’ve
listed, which has been overwhelmingly positive (more details to
follow below), was that I warned everyone to "Recession
Proof" their nest
egg in February of 2008, spelling out the exact formula of what
to keep safe and where and why and how to diversify the remaining
nest egg. That was a huge call and it turned out to be critically
important. Those who heeded the call are dancing on the ceiling.
Those who didn’t are dazed and confused of where to turn. If you
are in the dazed and confused category, do yourself a favor and
read my "Resurrecting
Your Nest Egg," article in the November 2008 ezine
and pre-order my new book Put
Your Money Where Your Heart Is on Amazon.com.
It’s very important
to remember that the Buy My Own Island nest egg plan (i.e. your
401k, IRA, annuity, etc.) is THE MOST IMPORTANT stock investment,
and getting the right blueprint and rebalancing twice a year are
KEY to its success. If you are 50, your total losses to date would
not have been more than 11%, so if you lost more than that, your
nest egg was cracked to being with. It’s not a lot of work, but
it does require wisdom and rebalancing and to know what good strategies
are. Many, but not all, Certified Financial Planners are rewarded
for selling you things, instead of doing a great job for you, which
is why it is critically important that you get your information
from a tried and true source. I am proud to have worked so hard
to earn the distinction of the most trusted name in financial news.
You are the architect of your future and if you want to create a
great future for yourself, come to my February 2009 Get Rich and
Enrich Retreat. Get more information and register at the JOIN NOW
link at NataliePace.com and at the Get Rich and Enrich banner ad
on the home page.
As for the "stocks
on steroids" trading portfolio, no one has a better track record
than me – especially this year. Below is just a brief overview.
1, 2008, I added Rio Tinto and U.S. Gold to the Hot News on Cooling
Off List. As of November 4, 2008, just four days later, Rio Tinto
jumped from $138/share to $200/share. U.S. Gold jumped from 60 cents
to over a dollar on Thursday that week.
of 2008, I added MGM Mirage, Wynn Resorts and Las Vegas Sands to
my Cooling Off List. (These companies were added on September 1,
2008 and the article outlining all of the problems was published
on October 1, 2008.) Each of those stocks dumped dramatically and
anyone who had a put option on them would have more than doubled
their money in under 30 days. Wells Fargo was also added to the
Cooling Off list on September 1, 2008. As of November 6, 2008, the
put had earned over 35%.
In August of
2008, First Solar was added to the Cooling Off list. It lost over
$100 off the share price, more than doubling in gains for the put
option. In fact, the only company that I feature in my monthly headline
articles that went in the opposite direction of what we were expecting
was Melco, the 6-star casino resort in Macau that is owned by Stanley
Ho’s son, Lawrence.
So, for the
last four months, I’m almost batting a thousand and investors are
doing quite well for their "Stocks on Steroids" account,
if they are reading the NataliePace.com ezine and investing in put
It is important
to remember that the Stocks on Steroids account should only be a
small percentage of the nest egg and should be limited to your experience
and wisdom. In other words, if you have never traded individual
stocks, then you should not use any nest egg money there at all.
You should use "education" or "fun" money –
that you can afford to lose while you learn. And yes, the top individual
performers of 2008 were "puts" and "shorts"
so if you wish to learn effective options strategies, again, come
to my February 2009 retreat.
My track record
of featuring great companies to invest in (or gain when the share
price goes down) has been consistently above my peers since I began
publishing in 2002, averaging almost 50% of the companies that I
feature doubling or more in value. You can read the Hot News on
Cool Stocks list for a list of all of the gains that have been made
this year alone, as well as a report of what happened since 2002
(almost half of the companies featured doubled or more in value).
I will be running a more detailed report on my features in the January
Your Portfolio" article in this month’s ezine outlines
a new "napkin" pie chart strategy for your asset and industry
diversification, now that the big hit has occurred. The new strategy
will be different going forward than it was before the big drop.
Be sure to read it. If you do not diversify properly or protect
at least a percent equal to your age, then you are vulnerable to
even more losses, without the potential for much upside. If you
stick everything into Treasuries and bonds, you’re not positioned
to recover well and you have just sold your nest egg on the cheap.
And if you stick your head in the sand and keep things exactly the
way they are, you could be left in the dust of dying industries
and corporations, while others are profiting.
If you have
a degree and certainly if you have an advanced degree, you have
spent a quarter of a million or more learning how to earn income.
No one ever taught you how to invest that money. As a result, unfortunately,
last week you may have lost half of your nest egg. If you did lose
that, or anything close to that, then you need to shift into the
new paradigm NOW and you need someone to guide you into that new
territory. For less than one percent of what you spent to get your
degree, you can be well on your way to earning gains in your nest
egg while you sleep – and having a more restful night during the
hard days ahead. This financial crisis is not over yet – not by
a long shot. If you didn’t get the wake up call at the NASDAQ DOT
COM bust of 2000-2002, then I certainly hope you hear the call this
Sign up NOW
for the February 10-12, 2008 retreat at the Join
Now link on the home page at NataliePace.com.
You Lost More than 20%, Your Nest Egg Was Cracked to Begin
Your Portfolio (and Recession-Proof it against further market
Natalie Pace (Natalie Pace is a #1 stock picker and the
only stock market pundit whose book is enthusiastically recommended
by a Nobel Laureate economist) for
three full days of hands-on training
is the chance of a lifetime – to learn directly from Natalie:
keep a percent equal to your age SAFE (plus 10-20% in recessions)
in emerging products, energy and technology, not dying industries
Invest in wisdom, not the old way of doing things (that just
lost you half of your nest egg)
Diversify and rebalance with a Buy My Own Island Blueprint
that is appropriate to your age (instead of blind faith, buy
and hold and whatever my broker says)
what you own (instead of holding a big basket of everything,
including companies you despise)
Myspace, Sohu, Suntech, Taser International, Rio Tinto, Opsware,
Goldcorp and more: Natalie found them first before they went
on to earn gains between 100% and up to 9000% in the case
of Taser International. Natalie also warned to get Fannie
Mae out of your mutual fund holdings in 2003, to get GM out
in 2004, that housing was a house of cards poised to collapse
in 2005 (when insiders at KB Home and Toll Brothers were cashing
in hundreds of millions of dollars of their own stock) and
to avoid Lehman Brothers in her stock report of June 2006.
(Bear Stearns was so bad, it didn’t even make the grade to
be included on the stock report card.)
spend three days with Natalie Pace, author of Put Your
Money Where Your Heart Is, respected journalist, and CEO.
Natalie hosted her own series on the Forbes.com Video Network,
has published articles with Forbes.com,
Sohu.com (China’s "Yahoo"), Kiplinger’s and
more, and is a repeat guest on national
television shows, including: Forbes on Fox, Your World
with Neil Cavuto, Cavuto on Business,
Good Morning America, Time magazine, More
magazine, USA Today, NPR, Kiplinger’s
Forbes.com, Sohu.com and more. She’s been adding a splash
of green to Wall Street
and transforming lives on Main Street since 2002.
3 full days of hands-on training with Natalie Pace.
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learned how to balance my portfolio so that it is actually
pretty much bullet-proof regardless how much of a meltdown
the economy is in. No, this is not about putting your money
in a bunch of mutual funds. "Modern Portfolio Theory" is a
very clever and practical way to arrange your portfolio so
that your account will grow while other people are losing
their shirts. Best of all, you only need to look at your portfolio
twice a year. I also learned a quick and painless way to pick
stocks and options that I have never seen taught before. I
just wish I knew this when I was trading stocks in the late
90's. This information is for traders/investors of all experience
levels. I was not asked to buy one thing during the entire
3 days. How refreshing!
- Experienced Options Trader
saw the flyer for Natalie's workshop last March. I was interested,
but I still trusted my financial advisor at that time and
the weekend workshop seemed expensive....Oooh, nothing in
my life, including buying a house in Venice, has ever been
as expensive as trusting that advisor! - Eva
Wynne Pace is the Rosetta Stone which translates, even transcends,
the gibberish white noise of today's investment media into
actionable financial articles for her readers. Her writing
betrays the pheromones of sassy street-smart intuition; her
stock features are insightful, even inspired; and her mission
to the individual investor, desperately needed. - Executive
Managing Director and Investment Banker (anonymous) of a very
well-known, publicly traded bank
brilliance rocks! Allow her financial wisdom to permeate and
give you your freedom." - Mark Victor
Hansen, co-author of the Chicken Soup for the Soul series
husband and I spent our 30th anniversary at Natalie's Living
the Rich Life Retreat, and it was the turning point in our
lives. I've since lost 30 pounds and am now well paid for
doing work I love with incredible people, and my husband has
become way more successful with his investing." - Nancy
helped to reawaken my passions and dreams after the drab year
I had following my accident. My goals are once again in sight."
takes the mystery and confusion out of personal finance and
liberates you from the myth that Wall Street smarts are the
monopoly of professional brokers. Whether your current financial
means are modest or substantial, her time-tested, hands-on,
interactive and intuitive methods of successful investing
will assist you in dissolving your money obstacles."
- Michael Bernard Beckwith, founder of Agape International
excellent advice about how to allocate one’s monthly budget
with what she calls a "Buy My Own Island Plan" is
an important component of achieving economic security and wealth
at older ages." - Dr. Gary S. Becker, winner of the 1992
Nobel prize in economics
no reason why people can’t be generous, compassionate, loving
and really, really rich. That’s Natalie Pace. She skyrocketed
from poverty to America’s #1 stock picker. Now this gifted
teacher is sharing her techniques so you can skyrocket, too!"
- T. Harv Eker, author of the New York Times #1 bestseller,
of the Millionaire Mind
forward this article to at least a dozen friends that you wish to
Record of our Reporting
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.
36 positions listed below – 59% -- have delivered impressive gains
this year, even while the Dow Jones Industrial Average is down -32%
over the past year! Only twenty-five of our listings went in the
opposite direction of the reporting, which is quite impressive given
the horrible market drop of this fall. Yes, many, but not all, of
our top performers were shorts, which is why we added options training
to the retreat, but today you’ll see more companies highlighted
on the Hot News list, since the prices are lower than they’ve been
in many years. Remember that the trading portfolio should be a small
portion of your nest egg, equal to your experience. If you’re new,
you should be using education or fun money, not your nest egg, to
learn on. Take your profits early and often in this volatile, down-trending
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 vol. 4, issue
4, the April 2007 ezine, for a listing of companies.)
of 6 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. OSI Pharmaceuticals, my 2005 Company of the Year
is back on track for gains and we still believe that Suntech Power
Holdings, which is the market leader in solar panels, will be a
big winner! So three out of six are superperformers, one performed
well above the market and two are down (in a recession). 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.)
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%.
(Some of the best picks in 2008 were put options – on the Cooling
Off list. Look there for details.)
Open Market Committee and Monetary Policy
The Fed funds
rate was cut on October 29, 2008 to 1 percent. In the 10.29.08 press
release, the Federal Reserve Board further elaborated on the reasoning
behind the rate cut, writing: "The pace of economic activity
appears to have slowed markedly, owing importantly to a decline
in consumer expenditures. Business equipment spending and industrial
production have weakened in recent months, and slowing economic
activity in many foreign economies is damping the prospects for
U.S. exports. Moreover, the intensification of financial market
turmoil is likely to exert additional restraint on spending, partly
by further reducing the ability of households and businesses to
GDP growth rates for 3Q 2008 were released on November 25,
2008 at 8:30 a.m. ET. The BEA preliminary estimates were negative,
at -.5%. These numbers are preliminary and are subject to change
over the next month.
Final GDP growth
estimates for 3Q 2008 will be released on Tuesday, December 23,
2008 at 8:30 a.m. ET. For more BEA release dates, go to the BEA.gov
website and be sure to visit the NataliePace.com calendar section
often. There can be quite a big change from advance to preliminary
reports, so this report could carry a lot of weight and volatility
into the marketplace.
OPPORTUNITES AND INFORMATION:
Interested in reading the minutes
of the October 29, 2008 FOMC meeting for yourself? You can.
The official Federal Reserve document is available online. Click
or go to FederalReserve.gov to read!
FOMC meeting schedule for the 2008-2009 calendar is: December 16-17,
2008 (Tuesday-Wednesday), January 27-28, 2009 (Tuesday-Wednesday),
March 17, 2009 (Tuesday), April 28-29, 2009 (Tuesday-Wednesday),
June 23-24, 2009 (Tuesday-Wednesday), August 11, 2009 (Tuesday),
September 22, 2009 (Tuesday), November 3-4, 2009 (Tuesday-Wednesday),
December 15, 2009 (Tuesday).
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.
What are the best gifts this holiday season? Vote so others
know what you want and check out others responses for great ideas
on what to give. 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!
interest rates: At the European
Governing Council meeting on November 6, 2008, it was announced
that the ECB would lower rates by 50 basis points to 3.25% (main
refinancing), 3.75% (marginal lending) and 2.75% (deposit facility).
The next meeting and interest rate announcement is scheduled for
December 4th, 2008 at 2:30 p.m. CET.
who "never pay retail," note that the BOLD 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.
(If the stocks are not highlighted, then in our estimation, this
is not a good time to buy. Reasons are explained in the news commentary.)
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. And remember that these "Stocks
on Steroids" are not intended to be part of your nest egg strategy.
If you’ve never traded individual stocks before, this is your "fun"
or "education" money. You should not stake your future
on anything that you don’t have mastery over.
News List (highlighted). Be sure that you are buying low.
Altair Nanotechnology (ALTI)
HOKU Scientific (HOKU)
Kinetic Concepts Inc. (KCI)
LDK Solar (LDK)
MEMC Electronics (WFR)
New Zealand Dollar Currency (BNZ)
OSI Pharmaceuticals (OSIP)
PowerShares Wilderhill Clean Energy Portfolio (PBW)
Rio Tinto (RTP)
Smith & Nephew (SNN)
Sociedad Minera y Chemica de Chile (SQM)
Suntech Power Holdings (STP)
Trina Solar Limited (TSL)
Westpak Bank (WBK)
Conergy (sort of). If you purchased the stock at $4.50, then you
should have taken your profits of 51% at the Nov. 7, 2008 price
on COOL STOCKS LIST
since original feature
from the Hot News list ON AUGUST 7, 2008 and added back on
Nanotechnologies Inc. (NASDAQ: ALTI) announced on Nov. 21,
2008 that its one megawatt (MW), 250 kilowatt-hour battery
storage system met requirements to participate in the PJM
Regional Transmission Organization (RTO) control area. This
milestone marks the first commercial acceptance of an advanced
Lithium-Titanate battery to provide grid regulation services
in one of the largest electricity markets in the US.
Bush's signing of the Continuing Resolution (CR), which contains
appropriations for the Department of Defense, Altair Nanotechnologies
Inc. (NASDAQ: ALTI), a leading provider of advanced materials
and products for power and energy systems, and the United
States Navy were granted an additional $4 million for the
continued funding of a 2.5-Megawatt stationary power supply
program. Total funds appropriated by Congress for Altairnano's
naval battery program now total $12.5 million. (press release
earnings on 11.8.08: Revenues = $1.8 million. Net loss of
-$9.1 million. Cash on hand and short term investments: short-term
investments decreased by $26,415,557, from $50,146,117 at
December 31, 2007 to $23,730,560 at September 30, 2008, due
primarily to net cash used in operations (approximately $25,130,000)
purchases of property and equipment (approximately $2,130,000),
and payment of notes payable ($600,000). As of September 30,
2008, Altair Nano entered into a purchase and settlement agreement
with Al Yousuf LLC. One of the provisions of that agreement
was the issuance of 2,117,647 shares of common stock to Al
Yousuf LLC in exchange for a release of potential breach of
contract and other claims related to their 2007 investment.
As part of the agreement Al Yousuf LLC also committed to an
additional $10 million investment in the Company. This investment
was received on October 14, 2008.
has switched focus from all-electric cars to hybrids and to
supplying the Navy with batteries for their large surface
ships and subs, according to the Annual
You can review the entire 4-page report from the CEO on the
investor page at AltairNano.com. You
can also read my article “Golf Carts and Sports Cars” (vol.
4 issue 6) for a review on electric and hybrid vehicles, which
includes an electric car report card.
Rolls Out Worldwide,"
in vol. 4, issue 12. Competitors include GE (NYSE: GE), Siemens
(NYSE: SI), Rockwell (NYSE: ROK), and DRS (NYSE: DRS). High
Temperature Superconductor (HTS) wire is able to transmit
150 times more energy than a copper wire of the same dimensions.
This enables electric utilities to replace multiple conventional
copper cables with one HTS-powered cable, leaving valuable
underground real estate available for other uses – including
future power upgrades. The worldwide cable market represents
a multi-billion-dollar annual opportunity, but their power
converters are also in the exploding marketplace of wind turbines
and fuel cells. American Superconductor’s backlog of orders
exceeds $634 million, with growth primarily driven by the
wind energy market. AMSC expects the Asia-Pacific marketplace
to account for up to 50% of sales in fiscal year 2007.
for the second quarter of fiscal 2008 (released on 11.4.08)
were a record $40.4 million, an 87 percent increase from $21.6
million in revenues for the second quarter of fiscal 2007.
Gross margin for the second quarter of fiscal 2008 was 26.5
percent, which compares with 26.0 percent for the second quarter
of fiscal 2007. The company’s net loss for the second quarter
of fiscal 2008 was $4.1 million, or $0.10 per share. This
compares to a net loss for the second quarter of fiscal 2007
of $6.7 million, or $0.17 per share. Cash, cash equivalents,
marketable securities and restricted cash at September 30,
2008 were $128.9 million, a decrease of $2.6 million from
$131.5 million at June 30, 2008. Nearly $2 million of this
sequential decrease is due to a foreign exchange-related revaluation
of euro-denominated cash balances.
reported backlog as of September 30, 2008 of approximately
$597 million compared with $634 million as of June 30, 2008
and $180 million as of September 30, 2007. Nearly $8 million
of the sequential decline is attributable to a foreign exchange-related
revaluation of backlog.
continuing to execute well on all fronts and expect to achieve
profitability on a GAAP basis for the first time in AMSC’s
history in the fourth fiscal quarter," said Greg Yurek,
AMSC’s founder and chief executive officer. "The strength
of AMSC’s primary markets, our unique offerings and our significant
presence in the Chinese wind market positions us for continued
solid growth amidst the global economic downturn."
out of Germany
Power article in
vol. 4, issue 11. Has multiple sales agreements with Suntech
Power Holdings to utilize STP panels in their global systems
Hamburg/ Philadelphia, PA - Conergy and its subsidiary Epuron
have announced the completion and sale of the Exelon-Conergy
Solar Energy Center. The 3 MW project is located on the Waste
Management G.R.O.W.S 16.5-acre landfill site just outside
of Philadelphia. Conergy's Projects Group (formerly SunTechnics)
provided design, engineering and installation for the system.
EPURON provided financing for the project. Exelon Generation,
LLC is purchasing the power and renewable energy credits through
a long-term power purchase agreement.
power plant is Pennsylvania’s first utility scale plant and
the nation's largest solar photovoltaic (PV) generation project
east of the Mississippi River.
Corp (EMCORE) is a provider of compound semiconductor-based
components and subsystems for the broadband, fiber optic,
satellite and terrestrial solar power markets. The Company
operates in two segments: Fiber Optics and Photovoltaics.
Was awarded an R&D 100 award by R&D Magazine for the
IMM solar cell as one of the most innovative technologies
of 2008. Received $29 million order in June 2008.
sold two million of its Series D preferred stock in WWAT to
the Quercus Trust, a major shareholder of both EMCORE and
WorldWater, at a price equal to $0.654 per share of common
stock on June 30, 2008. The sale includes 200,000 warrants
to purchase at $0.317/share equivalent. Emcore reports proceeds
from the sale at $13.1 million, or 130% Return on Investment.
Albuquerque-based Emcore Corp. reported $75.5 million in revenue
for the third quarter (April-June) of the current fiscal year.
Reports 4Q earnings on December 11, 2008.
a 70 percent increase over the $44.4 million Emcore reported
in the same quarter last year, and a 34 percent increase over
the previous (January-March) quarter. Net loss $8 million,
compared to $15 million a year ago.
Coverage was initiated by Stanford Research 8.15.08: Buy $10.
U.S. Global Investors
Eastern European mutual fund
vol. 2, issue 8. Great way to diversify, as well as to add
growth. Eastern EU economy rocks. Western EU economy stalls.
Your international fund should reflect the difference. Did
a 3-for-1 stock split on May 23, 2008.
GE is providing innovative solutions
to more than 350 infrastructure projects in and around Beijing,
including work at all 37 official Olympic venues and 168 commercial
buildings. GE’s NBC-TV is also the official network of the
Olympics. Should be great exposure and great press all rolled
into one. All that and dividends, trading at the 52-week low.
We just couldn’t resist. GE is a big presence in renewable
energy these days. Very green…
Genentech, Inc. (Genentech) is
a biotechnology company that discovers, develops, manufactures
and commercializes pharmaceutical products to treat patients
with unmet medical needs. It commercializes multiple biotechnology
products and also receives royalties from companies that are
licensed to market products based on the Company’s technology.
Genentech commercializes various products in the United States,
including Avastin, Rituxan, Herceptin, Lucentis, Xolair, Tarceva,
Nutropin, Activase, TNKase, Cathflo Activase, Pulmozyme and
As of July 21, 2008, Roche Holding
Ltd. held a 55.9% interest. On August 13, 2008, Genentech,
Inc. announced that the special committee of the Board of
Directors of Genentech, Inc. announced that, after careful
consideration, it has unanimously concluded that Roche Holding
Ltd.'s proposal to acquire the shares of Genentech not owned
by Roche for $89.00 per share substantially undervalues Genentech,
Inc. Therefore, the special committee does not support the
proposal. However, the special committee would consider a
proposal that recognizes the value of Genentech, Inc. and
reflects the significant benefits that would accrue to Roche
as a result of full ownership.
(We took DNA off of the Hot List
on 8.1.08 at a price of $96.25 with gains of 40%. We added
it back on 10.10.08, when the market crashed.)
Google is such a popular stock.
And now, finally, it is trading at a 4-year low! This marketplace
may not be through with its correction, but if you add Google
to your nest egg now, you are getting it for over half off
what investors were willing to pay a year ago, last October!
Google is so pervasive in our lives that it is unlikely that
it is going to have trouble posting gains over the long term.
When low risk meets low price with moderate growth, that’s
as good as it gets – even if the price fluctuates or even
falls slightly in the short term.
SCIENTIFIC, INC. announced 2Q 2009 (fiscal) earnings on 10.23.08:
Net loss of $1.4 million, compared to $1 million a year ago.
Revenue was $1.9 million, up from $239,000 a eyar ago.
4, 2008, Hoku announced that they were terminating supply
agreements with Solar Fabrik and Sanyo and entering into new
agreements on more favorable terms with Kinko Energy, Tianwei
New Energy, and Wealthy Rise International, Ltd (Solargiga).
November was a busy month of announcing supply agreements
with regard to the manufacturing facility. On Halloween, I
received the following note from Hoku (by email): "As
of October 31, 2008, the date of the filing of our 10Q, we
indicated that we will require additional funding either through
debt or equity. Per the 10Q, we also disclosed that we broke
ground in May 2007 and plan on delivering polysilicon in the
first half of calendar year 2009 and be at full capacity in
the first half of calendar year 2010."
realignment of production capacity is a positive development
for Hoku," said Dustin Shindo, Chief Executive Officer of
Hoku Scientific. "We resolved the issue of our plant being
oversubscribed, and gained the flexibility to allocate that
capacity to customers that are able to provide up-front capital
for plant construction costs, which the Sanyo and GEWD contracts
did not do. Owing to Hoku's demonstrated progress, we are
now able to secure contracts with more favorable prepayment
and pricing terms."
the 3Q results on 10.23.08, Dustin Shindo, chairman, president
and chief executive officer of Hoku Scientific, said, "The
recent extension of federal solar tax credits through calendar
year 2016 was significant because it enables us to continue
our focus on building long term growth in our PV system installation
business. We believe we remain on track to meet our fiscal
year 2009 revenue guidance of $15 million to $18 million,
contingent on the successful third-party financing of our
power purchase agreements with the Hawaii State Department
of Transportation, Airports Division and Hawaiian Electric
Giants Tap a Small Hawaiian Company For Silicon,"
in the Oct. 2007 ezine, vol. 4,issue 10. Contracted to build
a polysilicon facility in Idaho capable of producing up to
2,500 metric tons of polysilicon per year in Pocatello, Idaho.
In June 2007, Suntech entered into a supply agreement with
Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific,
to purchase up to $678 million of polysilicon from Hoku Materials
over a ten year period, with the first shipment scheduled
for delivery in 2009.
is Skin Deep,"
in vol. 5,issue 5.
EARNINGS ON 10.22.08. Total revenue increased 22% to $503.3
million, including $61.2 million of LifeCell revenue. Net
earnings decreased 4% to $56.6 million. Kinetic Concepts,
Inc. (NYSE:KCI) announced on 10.22.08 that its Board of Directors
has authorized an investment of up to $100 million for the
repurchase of its common stock as part of a new share buyback.
30, 2008, total cash was $245.2 million and total long-term
debt outstanding was $1.74 billion.
on 9.1.08 after gains of 29% and 46% were realized, re-added
back to the Hot News list on 9.30.08. (Take your profits early
and often!) Read the article, "Solar
Springs Up Again",
in vol. 5,issue 4.
on November 19, 2008: Net sales for the third quarter of fiscal
2008 were $541.8 million, up 22.7% from $441.7 million for
the second quarter of fiscal 2008, and up 241.4% from $158.7
million for the third quarter of fiscal 2007. Net income for
the third quarter of fiscal 2008 was $88.4 million, or $0.77
per diluted ADS, compared to net income of $149.5 million,
or $1.29 per diluted ADS for the second quarter of fiscal
2008. LDK Solar ended the third quarter of fiscal 2008 with
$347.8 million in cash and cash equivalents and $115.0 million
in short-term pledged bank deposits.
24, 2008, LDK Solar closed a follow-on offering of 4,800,000
ADSs, resulting in net proceeds of $192.4 million from the
offering. As disclosed in the prospectus, LDK Solar expects
to use approximately 60% of the net proceeds to fund the construction
of its polysilicon manufacturing plant, approximately 30%
to fund the capacity expansion of its wafer production facilities
and the remaining 10% to fund other general corporate activities.
look ahead, our business will not be immune to the current
global economic downturn. However, given the strength of our
business model, conservative financial management, and our
strong cash position, we remain confident in our long-term
growth opportunities, and in our ability to succeed and to
continue our role in driving the solar industry forward,"
concluded Mr. Peng.
Melco Crown Entertainment
Check out the article,
Viva Las Vegas"
(vol. 5,issue 10). Operates
Crown, a 6- star Resort and Casino in Macau, the trendy Mocha
slot machine cafes and is developing City of Dreams in Macau,
with Hard Rock, Hyatt and Dragone Entertainment. CEO/Chairman
Lawrence Ho is the son of Macau gambling billionaire Stanley
added to the S&P 500 in August of 2007. Read "Sun
Powers Whole Foods,"
article in vol. 3,issue 10. Silicon is in high demand, and
MEMC has been able to price its product and pick its customers
accordingly. Volatile marketplace. Great company. With more
silicon manufacturing companies coming online this year and
next (like HOKU Scientific), MEMC’s operating margins (currently
at 33%) could suffer. Look for this to start impacting the
top line and profit margins in the coming quarters.
Dollar currency ETF by WisdomTree
Investing: From BRICs to Barbeys," in vol. 5,issue
7, for more information on why New Zealand is the new attraction
on the world currency markets.
of the Year
Watch. There is a lot of M&A activity in the biotech sector.
I’m keeping this active so see if there is a bid for OSIP…
OSIP is a partner of Genentech (DNA) and Roche, and Roche
just made a bid to buy Genentech. NataliePace.com’s
2005 Company of the Year. Read vol. 1,issue 56. Tarceva
is the genetic based "cancer pill," and sales have
been exploding. OSIP is now testing Tarceva as an application
for other cancers, including lung cancer.
was added to the NASDAQ Q-50 Index(sm) (Nasdaq:NXTQ) on September
to this stock is that the majority of the revenues are currently
attached to one drug – Tarceva. In the event of a serious
problem with the drug, the company would likely be doomed.
The company reported on September 23, 2008 that two cancer
patients died of liver complications after using the drug,
and have added a warning to the label telling doctors to carefully
monitor any patients with liver issues while taking the cancer
pill. This cancer medication is used for pancreatic cancer
(often fatal with a fast, painful death) and lung cancer,
two harsh, virulent forms of the disease, which may be why
patients and doctors can stomach more liver risk for the extension
earnings on 10.22.08: net income from continuing operations
of $34.5 million (or $0.56 per share) for the three months
ended September 30, 2008, compared with net income from continuing
operations of $35.9 million (or $0.59 per share) for the third
quarter of 2007. Total revenues from continuing operations
of $95 million for the third quarter of 2008 compared to revenues
of $100 million for the third quarter of 2007. The decline
was primarily due to greater license and milestone revenue
received in 2007, which was partially offset by the growth
in revenues relating to worldwide Tarceva® (erlotinib)
sales. Total worldwide net sales of Tarceva for the third
quarter of 2008, as reported by the Company’s collaborators
for Tarceva, Genentech, Inc. and Roche, were approximately
$279 million, representing a 23% growth in global sales compared
to the same period last year. For the nine months ended September
30, 2008 worldwide Tarceva net sales were approximately $837
million, representing a 32% increase over the same period
PowerShares CleanTech Portfolio
The PowerShares Cleantech Portfolio
(Fund) tracks the Cleantech Index™ (ticker: CTIUS),
which is designed to track the leading cleantech companies,
from a broad range of industry sectors, that offer the best
investment returns. 'Cleantech' companies derive the majority
of their business from knowledge-based products or services
that improve productivity and/or product performance while
reducing total costs, energy and resource consumption, pollution,
article in vol. 5,issue 9.
Wilderhill Clean Energy Portfolio
Traded Fund in the green, clean, renewable energy space. See
Your Portfolio article
in vol. 5,issue 9.
is a 4-Letter Word,"
vol. 5,issue 11.
Tech. Satcon is a developer and supplier of power management
and system architecture solutions for the alternative energy
and distributed power markets.
earnings on 11.6.08. * Revenue increased 38% to $18.5 million
from $13.4 million in Q2’08. Gross margin improved to 18.9%
from 11.7% in Q2’08. Backlog grew 30% over Q2’08. Company
expects to achieve operating profitability in 2H 2009. Net
loss from continuing operations for the third quarter was
approximately $1.3 million, compared with a net loss of $2.4
million for the third quarter of 2007. Cash and cash equivalents
at September 27, 2008 were $10.5 million, compared with $9.8
million at June 28, 2008. The company reported an ending backlog
on September 27, 2008 of $39 million, compared with backlog
of $30 million at June 28, 2008.
commercial grade inverters are an integral part of Google's
corporate headquarters in Mountain View, California. The 1.6MW
system is the largest commercial photovoltaic system in the
United States. On August 17, 2008, SatCon Technology Corporation
announced that the company is a key member of a team of best-in-class
clean energy industry leaders recently awarded the Solar Energy
Grid Integration Systems (SEGIS) contract by Sandia National
Laboratories. Sandia is a government-owned/contractor operated
(GOCO) facility – a collaboration between Lockheed-Martin
and the U.S. Department of Energy's National Nuclear Security
initiated by Cantor Fitzgerald on 8.15.08: Buy $5.
1st half of the year earnings on August 7 at 6:00
a.m. ET. Read the article in vol.
4,issue 7. The company is based out of London, England,
and with a market cap of $10.57 billion, it is a good diversification
strategy for your portfolio. Additionally, SNN has a piece
of an exploding marketplace in the hip resurfacing business
with its premiere product, called the BIRMINGHAM HIP* Resurfacing
System. Hip resurfacing is far less invasive than the total
hip replacement and even has athletes like Floyd Landis and
Gary Kobat back competing in running and biking within a year
from Neutral to Buy by Piper Jaffray on 7.15.08.
Minera y Chemica de Chile
Hunting, in vol.
earnings on 10.28.08: Sociedad Quimica y Minera de Chile S.A.
(SQM) (NYSE: SQM; Santiago Stock Exchange: SQM-B, SQM-A) reported
today earnings for the first nine months of 2008 of US$381.1
million (US$1.45 per ADR), an increase of 181% with respect
to the same period of 2007, when earnings totaled US$135.4
million (US$0.51 per ADR). Revenues for the first nine months
of 2008 totaled US$1,376.2 million, representing growth of
56% over the US$881.3 million reported in the same period
Chief Executive Officer, Patricio Contesse, stated, "We are
pleased to announce that SQM has once again achieved record
earnings, with net income for the third quarter alone exceeding
not only net income for the first six months of this year
but also net income for the full-year 2007. These results
are due in large part to higher prices for our potassium-based
fertilizers. In addition, during 2008 we observed positive
developments in both the iodine and lithium markets that allowed
us not only to report higher results than we initially projected
for these two businesses, but also to improve our outlook
for both of these markets. In particular, we recently announced
a 25% price increase for iodine, reflecting changes in the
equilibrium between supply, which has become tighter than
expected, and demand, which has grown faster than expected."
2008 Company of the Year! Read "2008
Company of the Year,"
in vol. 5,issue 8 and "Solar
Springs Up Again,"
in vol. 5,issue 4. Suntech was the official solar sponsor
of the Beijing Olympics, our 2007
Company of the Year,
as well as our featured Company
of the Month in October of 2007. Go to vol 4,issue 1 and
vol. 3issue 10 to access those articles.
results on 11.20.08: Third quarter 2008 total net revenues
grew 53.7% year-over-year to $594.4 million. GAAP net income
for the third quarter was $55.9 million or $0.33 per diluted
American Depository Share (ADS). Due to the depreciation of
the Euro versus the U.S. dollar combined with the impact of
tighter credit markets, Suntech has revised its full year
2008 revenue guidance from a range of $2.05 billion to $2.15
billion to a new expected range of $1.85 billion to $1.87
billion. Suntech has revised its full year 2008 PV product
shipment target from 550MW to approximately 490MW.
to CEO Dr. Shengrong shi, "We have been implementing
a range of measures to prudently manage this temporary downturn.
These include the minimization of cash outlays, renegotiation
of high priced, short-term silicon contracts, optimization
of our supply chain and production, and the enhancement of
currency risk management. We believe that these steps will
enable us to weather the short term market disturbances and
we expect our profitability will steadily improve in 2009
as multiple long term, low cost silicon contracts initiate
T. Rowe Price
Em Europe & Mediterranean
4, issue 3 and vol.
2, issue 8 for articles
on why Eastern EU rocks, while Western EU stalls. Great way
to diversify, as well as to add growth. Go global with the
emerging countries. Avoid the countries in the EU that are
stalling in economic growth, like Germany and France. International
investing in the right sectors and countries pays off! Upgraded
to top Morningstar return rating in its category on 7.27.07.
Upgraded to Morningstar 5-star rating on 8.12.07. (We first
featured this rock star mutual fund back in August of 2005,
took profits in Jan. 2008 and added it back on 9.30.08!)
Springs Up Again",
in vol. 5,issue 4.
earnings on November 19, 2008: Solar module shipments were
66.36 MW, up 213.7% from 21.15 MW in 3Q 2007 and 39.5% from
47.57 MW in 2Q 2008.
net revenues increased to $290.7 million, up 252.1% year-over-year
and 42.4% sequentially. Net income was $32.1 million, compared
to $7.8 million in 3Q 2007 and $17.1 million in 2Q 2008. Net
income includes a foreign currency exchange loss of $4.9 million.
Convertible Notes Offering
24, 2008, Trina Solar completed a public offering of $138
million of Senior Convertible Notes due 2013. The net proceeds
of the offering is being used for the expansion of manufacturing
lines for the production of silicon ingots, wafers, solar
cells and solar modules, the purchase of raw materials, research
and development and other general corporate purposes.
September 30, 2008, the Company had $136.3 million in cash
and cash equivalents, excluding the Company's restricted cash
balance of $48.5 million. The restricted cash comprises deposits
pledged to banks to secure bank borrowings and letter of credit
October 31, 2008, the Company's total approved credit facilities
totaled approximately $450 million, of which includes approximately
$150 million in available credit.
net revenues to be in the range of $800 million to $850 million,
compared to previous guidance of $850 million to $900 million.
RISK: VERY HIGH
Note: U.S. Gold is not producing
gold at this time; is it a gold exploration company, based
in Nevada. U.S. Gold is an exploration company, not a mining
company, meaning that if they strike gold, the stock should
spike and if they don’t, you could lose your investment. Very
If you purchased at $.60, the 55%
profit is a good one! Consider taking it. We sent out a notice
to subscribers that the price had popped to $1.03 on November
6, 2008 for over 70% gains. See the Sharing Wisdom Bulletin
board for more information.
According to a press release issued
on October 30, 2008, drilling in its Cortez Trend properties
have produced positive results. According to the press release,
"Drilling has intersected what appears to be a new mineralized
zone at Gold Bar. The mineralization at the property exists
along zones situated northeast and northwest, with intersections
of these zones being especially favorable. Three holes were
drilled to test this area, and each hole intersected encouraging
gold mineralization. Drilling 1,000 ft. (300 m) to the northeast
also intersected gold mineralization, indicating that the
two areas maybe connected, which could increase the size of
the prospective zone considerably."
The Company's primary objective
in Nevada is to discover the next Cortez Hills deposit. Cortez
Hills, owned by the world's largest gold producer, is Nevada's
largest gold discovery of the past decade and located just
10 miles (16 km) north of U.S. Gold.
Began trading on the AMEX stock
exchange on 12.11.06. (Also trades on the Toronto Stock Exchange.)
See the feature
interview with CEO and Chairman Rob McEwen in vol.
3,issue 2, and click to hear Natalie
Pace’s Q&A with Rob McEwen
on the Forbes.com Video Network.
Will probably need more capital
in 2009, so make sure that you’re buying near the 52-week
low to maximize your upside potential.
Investing: From BRICs to Barbeys," in vol. 5,issue
7, for more information on why this Australian bank is the
new attraction in the world. Annual General Meeting December
See vol. 4, issue 3, "Money
Grows on WisdomTrees,"
and vol. 5,issue 2, "International
Money Grows on WisdomTrees."
Launched New Zealand and South
African currency ETFs on June 26, 2008, with the symbols BNZ
and SZR respectively.
3Q Earnings report on 10.30.08:
Net loss of -$5.6 million in the third quarter of 2008, compared
to -$8.0 million in the second quarter of 2008. As of October
29, 2008, assets under management tied to WisdomTree Indexes
was approximately $3.7 billion.
"Overall assets under management
have decreased as a result of unprecedented market declines,
which has continued in October," said WisdomTree CEO,
Jonathan Steinberg. "When the market eventually finds
equilibrium and investors look at the relative outperformance
of our funds, we believe that the ETF industry, and WisdomTree,
will be the beneficiary of money coming back into the market."
WisdomTree (Pink Sheets: WSDT),
an industry leading index developer and exchange-traded fund
(ETF) sponsor, announced the addition of Jarrett Lilien, former
E*TRADE FINANCIAL Acting CEO, President and Chief Operating
Officer, to the Company’s Board of Directors on 11.14.08.
World Water & Solar
On 3.21.08: Dr. Frank W. Smith
was promoted from COO to Chief Executive Officer and elected
to the Board of Directors of WorldWater & Solar Technologies
Corp. Former CEO Quentin T. Kelly retires from the CEO position
and will continue as non-executive Chairman of the Board of
WorldWater. CFO Larry Crawford resigned on June 18, 2008 to
"spend more time with his family."
8.18.08: 1Q 2008 results: Revenue
for the second quarter was $7.6 million, compared with $2.2
million reported in the second quarter of 2007. The increase
in revenue was driven by the Company’s project at Denver International
Airport and the recently dedicated installation at Fresno
International Airport. Net loss for the quarter was $24 million
related to a non-cash expense of $15.5 million for the Quercus
Trust conversion (below). Cash and Cash Equivalents = $19,562,166.
Emcore sold two million of its
Series D preferred stock in WWAT to the Quercus Trust, a major
shareholder of both EMCORE and WorldWater, at a price equal
to $0.654 per share of common stock on June 30, 2008. The
sale includes 200,000 warrants to purchase at $0.317/share
equivalent. Emcore reports proceeds from the sale at $13.1
million, or 130% Return on Investment.
Read the article, "Green
Hits the Mainstream," from vol. 4,issue 4, for
Deleted/2008 Companies featured:
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%. Genentech (8.1.08)
+40%. Altair (deleted on 8.7.08) posted gains of +3% and +57%. Zoltek
(deleted on 8.18.08) lost 30% before being removed. LDK Solar was
deleted on 9.2.08 with 46% and 29% profits. U.S. Gold profit taking
on 11.6.08 amounted to 72% gains. Conergy gains of 51% were taken
from the Hot News list:
term gains on U.S. Gold and Conergy.
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
(added back to the Hot News list on 10.10.08)
Mutual Fund (added back to Hot News list on 10.10.08)
Price when featured
Gains since original feature
See archived ezine Vol. 4, issue
2, for the feature article, "Apple
Steve Dowling, PR person at Apple,
has said that reports on October 3, 2008 that Steve Jobs had
a heart attack and was rushed to the hospital are "not
true." However, the company is not providing any sort
of statement on the health of Mr. Jobs. This is suspect and
of concern because the company has a history of being circumspect
with regard to Mr. Jobs’ health. In 2004, when Steve Jobs
was off for a month recovering from surgery to remove cancer
from his pancreas, the company was not forthcoming about the
health issue while it was occurring. Even today, it is internal
policy to avoid talking about the cancer, and though we’ve
been told that Mr. Jobs did not suffer from a heart attack,
no details have been provided assuring investors that Mr.
Jobs is healthy, happy and on the job. Bad news or even lack
of an update about Jobs’ health could continue to weigh heavily
on the stock, which is why we’re not highlighting it on the
Hot News List, even though it is trading at a two-year low.
The volatility of Apple is a good
example of why you need to take profits early and often this
year. Rest assured that while we love Apple products as much
as any techno-phobe, the problems with the economy, squeeze
on the consumer wallet, concerns over Steve Jobs health (cancer
recurrence or flu bug?) and the company’s history of not reporting
pertinent information about Jobs (they reported his pancreatic
cancer after his surgery and recovery) are, we believe, a
potential large drain on the stock price.
2008 Annual Report on November
5, 2008: Net sales of $32.5 billion compared to $24 billion
a year ago. Net income of $4.8 billion versus $3.5 billion
last year. $24.5 billion cash on hand with no long term debt.
from vol. 5, issue 6.
Canadian Imperial Bank
Refer to the "Banking
on Iraqi Dinars" article in vol. 5, issue 2 for
details on CIBC’s appeal. CIBC, like all of the financial
services industry, will continue to see hard times into 2008.
This is a price that might be attractive for your long-term
portfolio. Don’t expect wild gains in the short term with
this company, and there could be more losses before you’ll
see the upside. Again, the price is attractive if you’re looking
at a 7-year plus horizon, not if you’re looking to post great
gains in the next 12 months.
Bailed out by the Feds November
Add back to Hot News list on
December 20, 2008? Owns Skype. The growth potential there
Relatively new Skype President
Josh Silverman co-founded eVite and served as CEO of Shopping.com
before assuming his role as President of Skype. We’ll probably
add eBay back to the Hot News list if there is a down day
in the markets, which makes the price more attractive.
Springs Up Again,"
article in vol. 5, issue 4. Deleted from Cooling Off List
First Solar uses cadmium telluride
instead of silicon to transfer sunlight into useable energy.
This was a huge competitive advantage when silicon was hard
to get at a reasonable price. Thus First Solar’s operating
margins were the highest in the industry – at 31.42%. That
is shifting, however, for two reasons. Silicon manufacturing
is heating up and cadmium telluride isn’t as abundant or as
efficient a power source as silicon. Read the article for
Intel is a great blue chip. However,
the chip business is highly competitive and the business spending
is expected to moderate during the next year. Wait and see
what happens to the share price! Read my article about Apple
Chips from vol. 4,issue 2 for more info.
Green: Intel and Google launched
in 2007, with a goal of achieving a 50% power consumption
reduction by 2010. They have convinced all kinds of partners
to come on board, including competitors: Advanced Micro Devices
Great Blue Chip for your Long Term
Portfolio. Waiting for lowest buy-in point.
Silicon Valley, CA
Announced 3Q 2008 earnings on
Oct. 23, 2008 at 2:00 p.m. PT.
With the financial crisis and the
crush it has put on the consumer’s wallet, I would be wary
about NetGear’s earnings reports in the coming quarters, since
so many of the company’s many products are reliant upon the
consumer electronics industry. The CEO’s earnings estimates
for the next quarter are below what the analysts are expecting.
This company has a great CEO, great products, a reasonably
low price to earnings ratio and the marketplace for broadband
consumer products worldwide is still growing. Share price
is getting hammered. I don’t think this trend is over yet.
Pace’s Exclusive Forbes.com Video Network Q&A with Patrick
Lo (from August 2006). Award Heaven! Patrick Lo, CEO,
won the Ernst & Young’s Entrepreneur of the Year Award
(on 6.16.06), NetGear was on Business Week’s Hot 100 list
(for the 2nd year), NetGear was awarded Best Buy’s
Bravo Award for Business Excellence and POPULAR MECHANICS
just gave NetGear’s Skype phone its Breakthrough Award.
from vol. 5,issue 6.
Sohu (Chinese Co. ADR)
See NataliePace.com ezines, vol.
3, issue 4 and
2, issue 9 for
feature articles on Sohu. Dr. Charles Zhang, the Chairman
and CEO of Sohu.com, is one of our CEOs
of the year in 2007.
Read the articles in vol. 4,issue 1. You can watch a Q&A
with Dr. Charles Zhang in an exclusive interview I
did on the Forbes.com
Video Network. Sohu was the official sponsor of
Internet Content Service (ICS) for the Beijing 2008 Olympic
Games. Don’t get sucked into buying at high P/Es in a
declining world marketplace – even for excellent companies,
like Sohu. Sohu had a great story through the Beijing Olympics
and the quarter beyond, but now, the advertising marketplace
may wane, do to the global slowdown. Don’t buy high, and always
be poised to take profits when the share price has rocketed
on the news.
from vol. 5,issue 6. Owners of TJ Max and Marshall’s designer
discount clothing stores.
Wisdom Tree Chinese Yuan ETF
Read the article, "Banking
on Iraqi Dinars,"
from vol. 5,issue 2. This ETF is not available yet.
Wisdom Tree Emerging Markets Hi-Yield
Read the article, "Banking
on Iraqi Dinars,"
from vol. 5,issue 2.
Wisdom Tree Emerging Markets ETF
Read the article, "Banking
on Iraqi Dinars,"
from vol. 5,issue 2. Hold off. Think these holdings may suffer
since so much investment is placed with international shipping
companies. The high cost of oil is predicted to bring factories
local – as in back home. Shipping companies could suffer from
Wisdom Tree Indian Rupee currency
Read the article, "Banking
on Iraqi Dinars,"
from vol. 5,issue 2.
Wisdom Tree International ETF
Read the articles, "International
Investing," and "Banking
on Iraqi Dinars,"
from vol. 5,issue 2. Most holdings are in international finance,
including HSBC, Banco Santander, Australia, Argentina, Scotland
and Lloyds of London.
Off Stocks List (may be Poised for a Decline in Share Price).
The companies listed in bold have recently been added to this cooling
off list and/or may be currently poised for a decline in value.
Investors who have them in their portfolio should read the recent
news and consider whether it is time to sell and take profits, dump
losses, short the position and/or simply weather the storms, while
keeping the company in their long-term portfolio. At any rate, always
consult your certified financial partner before making adjustments
to your portfolio. (Again, note that the stocks on this chart are
expected to go DOWN in price.)
Companies (Cooling Off List):
Boston Properties (on 10.9.08)
Las Vegas Sands (on 10.09.08)
Macerich (on 10.09.08)
Wells Fargo (11.6.08 and 12.1.08)
Price when added to Cooling
Fortress Investment Group
Read the article, "Money Grows
on Wisdom Trees," from vol.
4, issue 3. Reported
earnings on 11.12.08. 3Q 2008 GAAP net loss of $57 million.
Net loss for the first 9 months of 2008 equals $182 million.
Read the article, "Rupert
Murdoch, Nobel Laureates and Top Real Estate CEOs. Find Out
Where They Are Investing," from vol.
2, issue 5. In
May 2005, we called REITs a burnout sector, and the fallout
should continue, with high home prices, rising interest rates,
people backing out of contracts and rising inventory. Housing
is not expected to recover until the 2nd half of
2009 or even 2010, and while housing is in the toilet, so
are housing REITs, like KB Home and Toll Brothers.
McMansions are going the way of
Hummers (extinct) in the new cleaner, greener, fuel-efficient
world. Who can afford to heat these huge homes? Who is buying
new real estate these days?
3Q 2008 earnings on 9.26.08: Revenues
totaled $681.6 million for the third quarter ended August
31, 2008, down from $1.54 billion for the third quarter of
2007, largely due to lower housing revenues. Third-quarter
housing revenues totaled $668.3 million, down from $1.53 billion
in the year-earlier quarter, reflecting a 51% decrease in
homes delivered and a 10% decline in the average selling price.
The Company delivered 2,788 homes at an average selling price
of $239,700 in the third quarter of 2008 compared to 5,699
homes at an average selling price of $267,700 in the third
quarter of 2007.
The Company posted
a net loss of $144.7 million, compared to a net loss of $35.6
million for the third quarter of 2007. The
Company’s cash balance at August 31, 2008 totaled $942.5 million,
up 46% from $645.9 million at August 31, 2007. The Company’s
debt balance at the end of the current quarter was $1.88 billion,
down $284.1 million from $2.16 billion at the end of the 2007
third quarter, largely due to the redemption of debt. The
Company’s ratio of debt to total capital at August 31, 2008
was 62.3% compared to 44.8% at August 31, 2007.
Get more information in vol.
5,issue 6 in
article. I’ll have an update
in the December 2008 ezine. Sears is one of the largest, oldest
retail chains in the U.S, and formerly, was as American as
baseball and apple pie. These days, however, Sears is more
of a hedge fund, which might help to explain why you’ve been
trying to get that appliance repaired (under warranty) for
months or been waiting for a replacement for your coffee pot
for so long that you’ve taken up drinking tea. Almost all
of the board directors at Sears are in the investment business,
not the retail business. Edward Lampert, Sears Chairman, has
his own investment fund. The COO of Lampert’s investment company,
William C. Crowley, is one of the eight-member board, as is
a senior advisor to TPG Capital (formerly Texas Pacific Group
investment corporation). (Can you spell cronyism?) In fact,
board director Emily Scott, a TV station founder, is the only
person on the board without significant investment experience.
No one on the Sears board has any experience at all in retail.
Supposed to report earnings on
Get more information in vol. 5,issue
10 in the (No)
Viva Las Vegas
article. The City Center project looms as exceedingly problematic
in today’s vast downturn of real estate in the Las Vegas area.
Anticipating very bad news on this project in the near future.
RISK: MEDIUM HIGH
Read the article, "Rupert
Murdoch, Nobel Laureates and Top Real Estate CEOs. Find Out
Where They Are Investing," from vol. 2, issue
5 in 2005, when we first reported on REITs as a burned out
Total revenues for the past 9 months
= $2.5 billion. Net loss for the past 9 months = $361 million.
Cash and cash equivalents = $1.5 billion. $2.1 billion in
McMansions are going the way of
Hummers (extinct) in the new cleaner, greener, fuel-efficient
world. Who can afford to heat these huge homes? Who is buying
new real estate these days? Real estate is expected to continue
to decline through 2009, at minimum. (Toll Brothers cashed
out hundreds of millions beginning as early as 2005.)
Check out the article,
Viva Las Vegas"
in vol. 5,issue 10.
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. Apple was deleted
on 8.1.08 with 35% gains on the put. The Google put, deleted on
8.1.08, was another great performer, with over 50% gains. First
Solar had gains of over 32-34%. Mentor was deleted on 9.30.08 with
75% gains on the put option (-17% on the share price); Medicis was
deleted with gains of over 37% on the share price (down direction).
Boston Properties, Las Vegas Sands and Macerich were deleted on
10.9.08 with gains of 16-30%, 66% and 28-42% respectively. Wells
Fargo was deleted on 11.6.08 with 35-50% gains on the put and again
on 12.1.08 for 17% additional gain.
Price when listed
Price when closed
Losses (which are gains on the
Cooling Off list!)
-16% & -30%
Deleted from Cooling Off list
on 10.09.08. Get more information in vol.
4,issue 9 in
the REITs article. Boston Properties looked great prior to
2007. With a pullback in profits and GDP growth, corporate
spending and hiring should abate. The office building REITs
should begin to come under pressure in 2008, just as they
did in the 2000-2002 recession. Will be monitoring cash flow,
capital spending, productivity, salaries, GDP growth and other
signs of the business economy, which are the customers of
Las Vegas Sands
Deleted from Cooling Off list
on 10.09.08. Check out the article,
Viva Las Vegas"
in vol. 5,issue 10. Owns
Venetian, Palazzo, Venetian Macau and will operate a large
number of prospective hotels in the New Macau Cotai Strip,
once they are all constructed.
Deleted from Cooling Off list
on 10.09.08. Get more information in vol.
4,issue 9 in
the REITs article.
Is in the process of securing over
a billion in loans, over half of which is to pay down old
loans. Five loans totaling $895 million have closed and the
sixth, which is the Broadway Plaza deal, was expected to close
in September. The closed financings paid off $576 million
in prior loans and generated excess proceeds used to pay down
Macerich's line of credit.
In the earnings report of August
7, 2008, Arthur Coppola, President and Chief Executive Officer
of Macerich stated, "In light of the economy, we are pleased
with the continuing strong fundamentals with occupancy levels
near 93%, strong releasing spreads and solid same center growth
in net operating income. In addition, we had a tremendous
amount of financing activity which generated substantial liquidity
and further strengthened our balance sheet. The majority of
our redevelopment effort is on The Oaks and Santa Monica Place,
both of which saw significant progress during the quarter."
The problem is that California’s
jobless rate just hit 7.3% in July and the Oaks and Santa
Monica Place are Southern California retail malls, and real
estate values continue to decline…
Total funds from operations ("FFO")
diluted of $103.2 million or $1.16 per diluted share, up 11.5%
compared to $1.04 per diluted share for the quarter ended
June 30, 2007.
-16% and -11% on the share price
= +35-50% gain on the put
DELETED ON 11.6.08 and on 12.1.08
(at a price of $23.41)…
Fargo’s Incredible Exploding Earnings"
in vol, 5,issue 9, and "Wells
Fargo’s Great Depression,"
in vol. 4,issue 12.
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Natalie Pace’s new book, Put
Your Money Where Your Heart Is now on Amazon.com. It hits
bookstores on December 23, 2008 for a New Year; New You release.
It’s a great gift for anyone who wants to resurrect his/her nest
egg and/or anyone with a job who plans on buying her own island
in the future!
Calendar section features conferences, teleconferences, retreats,
educational opportunities, cultural events, galas, market events
and online chats with executives and VIPs. 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.
Your Money Where Your Heart Is
by Natalie Pace
Pace's first book is available for pre-order now! Be the first to
Rich and EnRich Retreat, Santa Monica,
retreat with Natalie Pace. Resurrect Your Portfolio, while keeping
it recession-proofed. Learn how to profit in downtrending, turbulent
times. Invest in the companies of tomorrow and avoid dying industries.
Early bird registration NOW through December. 15, 2008 ONLY. The
October and November Retreats SOLD OUT, so be sure to ACT NOW to
ensure your seat at this life-changing, transformational, educational
retreat. Only one dozen people will be in the room! Imagine getting
such intimate, personal hands-on training with one of the most successful
financial pundits this year!
Get Rich and Enrich Coaching Call Series
December 1st, 2008
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. (value: $595). Get
information on how to call into the call series on the Sharing
Wisdom bulletin board at NataliePace.com.
Conference and Expo in DC
Tuesday, December 2nd, 2008
open forum for research and development of electric drive including:
battery, plug-in, hybrid, and fuel cell. researchers, educators,
designers, policy makers and end-users to promote sustainable vehicles.
Subscriber Teleconference with Natalie Pace
December 11th, 2008
through 6:00PM PT
how to resurrect your portfolio? Want to hear more details about
the strategies that saved Bill and Nilo Bolden's portfolio. To date,
they haven't lost anything. If you lost more than 20% of your portfolio
and you are over 25, your nest egg was cracked to begin with. You
need a better Buy My Own Island blueprint!
Open Market Committee Meeting
December 16th, 2008
meet for one-day to determine whether or not to increase, pause
or lower the Fed funds rate. Is the Santa Rally in full swing this
Monday, December 22nd – 30th, 2008
means "dedication" and is also referred to as "The Festival of Lights."
Your $ Where Your Heart Is by Natalie Pace!
Tuesday, December 23rd, 2008
Pace's first book will be released just in time for Christmas and
the New Year, New You gift-giving. Pre-order now!
3Q 2008 (Final)
December 23rd, 2008
through 8:45AM ET
Dept. of Commerce, Bureau of Economic Analysis (BEA.gov) releases
its final report on GDP growth in the 3rd quarter of 2008. Preliminary
numbers for 3Q GDP growth came in at -.5%.
December 25th, 2008
of the birth of Jesus Christ.
a Celebration of family, community and culture.
Friday, December 26th, 2008 through January 1, 2009
year’s focus is on repairing and renewing the world.
Year's Meditation Retreat, Joshua Tree, CA
Monday, December 29th, 2008
go of the past and greeting the New Year in the silence is a tradition
at Agape International Spiritual Center. Join Michael Bernard Beckwith
in meditation and Dr. Rickie Byars Beckwith in sacred song and chanting.
Opera: The Magic Flute
January 10th, 2009
Flute is both a fanciful fairy tale and an allegory hinting at deeper
mysteries at the same time. This ever-popular work has enchanted
young and old alike for over two centuries.
Rich and EnRich Retreat, Santa Monica, CA
February 10th, 2009
retreat with Natalie Pace. Resurrect your nest egg. Recession Proof
Your Portfolio. Learn how to profit in down trending, turbulent
times. Clean and Green, not dying industries. Only 12 people at
this intimate retreat!
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