13 Stocks to Stuff in Your Stocking

by Natalie Pace.

...and one to Hold and One to Sell Now.

In October, we predicted a post-election Santa Rally for the markets, and true to form, the markets have lit up for this most festive season of the year. NASDAQ has rallied up over 8% since August, the Dow Jones Industrial Average is up 3% and S&P500 has gained 4%. Will the gains continue or should you consider this an opportunity to take your profits and/or get out while the getting out isn't too painful?

NataliePace.com is still picking the NASDAQ as the 2004 Cinderella story, based upon strong earnings, solid growth in the technology sector, and the fact that NASDAQ is still off 50% since the March 2000 highs (see chart below). With pension fund problems, continued low margin profitability and competition from leaner, younger companies both here and abroad, investors should be very selective about the more mature companies they invest in, most of which are concentrated in the NYSE. [NataliePace.com note: NASDAQ companies have four letters. NYSE and ASE companies have only three.]

David Zion, an accounting expert with Credit Suisse First Boston estimates that 32 companies in the S&P 500 will be required to contribute more than $200 million to their pension plans in 2004 or in 2005. Outside of the airline group, which is already making headlines for seeking the bankruptcy courts to approve cutbacks in pension plans, Zion predicts that some of the biggest amounts will be forked over next year by Ford Motor (NYSE: F), $1.3 billion; Exxon Mobil (NYSE: XOM), $1 billion; Hewlett-Packard (NYSE: HPQ), $472 million; ChevronTexaco (NYSE: CVX), $450 million; and Altria Group (NYSE: MO), $392 million.

This year, with total returns including dividends expected to be a mere 6%, investors have to be extremely selective about their stocks and their buy in/sell off price points, in order to beat the indices. 2005 is likely to be another year of day-trader's paradise--with flat to mild annual gains, but spectacular whipsaws--rather than a robust bull runÉ

MARKET PERFORMANCE

Note: The market highs were in March of 2000, while the lows were in October of 2002.

NASDAQ, BIOTECH, MEDIA, METALS and ENERGY
So, what sectors and which companies are ripe and delicious for the picking these days? In general, metals, energy, technology, media and biotechnology are expected to perform well on growth and demand. Earnings growth in technology have far outpaced other sectors, however, skittish investors with distasteful memories of the 2000 crash are not rushing inÑyetÑto buy into them. Expect that to change as the earnings stories and the NASDAQ rally start to catch the eyes and ears of the American public.

With the baby boomers retiring, Americans are instinctively eyeing companies with cutting edge cancer treatments, joint replacements and anti-aging pharmaceuticals. The fall of Merck is a painful reminder of the volatility of investing in the health care industry. Merck lost $19 billion in its market capitalization on the day it was announced that Vioxx was being pulled from the shelves. Even in the most popular companies, like Genentech (NYSE: DNA) and Amgen (NASDAQ: AMGN) there can be wild volatility in share price. Buying low and selling high, or "trading around the core," as some professionals call it, can be very rewarding.

Metals and energy companies are reaping the harvest of having limited supply and ravenous demand, but their share prices have already, in a lot of cases, doubled and tripled this year. If you're looking to purchase today, you may have missed the best buying opportunity, and should consider exercising patience, to buy your favorite metals company on opportunity at a better price (say a commodities sell-off, or on any day with bad news).

There's a saying in the markets that holds true. "A rising tide lifts all boats." Just so, a sinking tide grounds all boats. It is very difficult for a company to push through to highs while being drug under by a falling market. These days, the markets have been reacting almost daily to fluctuating fuel prices. If there is a successful significant strike on oil wells or oil lines in Iraq or elsewhere (and the terrorists are targeting the oil), it is likely that the markets will react swiftly and severely downward, ( with the possible exception of the energy sector). While it is difficult to gauge consumer confidence in the markets, historically, the reaction to terrorism has a very strong correlation with swift, severe sell-offs, and relatively prompt recoveries. (After 9.11.01, the markets were up above pre-9.11 share prices by January 2002.)

What to do, buy or sell? Let's start with a checkup on the companies that we recommended in the October ezine. In general, NataliePace.com considers December to be a hold month and January to be a profit-taking month. However, this year, the Santa Rally run-up hasn't been too robust yet. Many of our October recommendations, though up in price, are still within a buying range. If you bought when we originally touted these companies, hang on and enjoy the profits! If you're just now considering buying in, chances are that you'll be a happy investor come January, unless a major disaster (terrorist strike, bad news in Iraq, earthquake, volcanic eruption, Black Monday) drags the markets down severely. In that event, consider disaster to be a buying opportunity, not a reason to fire sale at a lossÉ If we've learned anything since 9.11.01, we've learned that this is not the Apocalypse and that the Western economies and people are solid and strong.

Let statistics be your solace. What many individual investors don't realize is that markets, historically, recover swiftly from adversity. By January 2002, the NASDAQ was up 30%, the DOW was up 12% and the S&P500 rose 9%, off the 9.11.01 lows. (The rest of 2002 was pretty dismal, however, when the markets slid back into decline, due to the recession that began in March of 2000.) Since the bottom-out lows of October 2002, the markets have posted healthy gainsÑthe NASDAQ has rocketed up 50%, the S&P is up 30% and the Dow Jones Industrial Average reports in positive territory of 20%.

SELLING TO LOCK IN YOUR PROFITS
All roads for the last four years (and continuing into 2006) lead back to selective stock picking and shorter windows on profit taking. NASDAQ 1999 was indeed the stuff that dreams are made of, a stock market utopia that will not be recreated without a good deal of corporate restructuring, particularly with pension plans, health care and Social Security. The one index that has a chance of rallying is the still-undervalued NASDAQ, with its younger work force and solid earnings growth.

See below for our current Stock Picks, along with comments on buying in and profit-taking strategies. Again, it is important to remember that no one has a crystal ball, and bad news always flushes the share price in the toilet, at least for the short term. Don't panic on bad news and sell (that's always a losing strategy, unless you've got an Enron or US Airways), and don't wait too long to take your profits (they can disappear in the blink of an eye). If you are new at stock picking, invest a very small amount that you are willing to learn on (and potentially lose).

: If I had to pick my six favorites of the picks below, they would be: Opsware, Jet Blue, Krispy Kreme, Sony, OSI Pharmaceuticals and LifeCell. I'd buy them at today's trading price. (Advanced Micro Devices was my favorite a few months ago, but I'd wait for a buying opportunity today.) SELL AU Optronics NOW. Due to falling prices for plasma TV screen panels, they'll miss annual earnings, which will take another whack at their share price.

Join NataliePace.com NOW and receive an updated Stock Pick List FREE, so that you can start earning great returns, too. We update our list mid-month, before the next e-zine's publication for our members who request to receive the new list (by emailing us at info@NataliePace.com). i-Sophia's subscription is just $6.50/month (less than lunch). You'll receive THREE MONTHS FREE, paying just $54.00 for the year (less than one night on the town) AND the FREE Updated Stock Picks List. Getting smart about passive income, like the stock, real estate and bond markets, is an investment that pays off for a lifetime!

Full Disclosure: Natalie Pace owns stock in the following companies mentioned in this article: Opsware, NetGear, Sony, Jet Blue and Advanced Micro Devices.

Haute Con Job

By Bill Gross, PIMCO Bonds.

"The CPI [Consumer Price Index] as calculated may not be a conspiracy but it's definitely a con job," according to Mr. Gross. (A reprint of his October 2004 Investment Outlook.)

The CPI [Consumer Price Index] as calculated may not be a conspiracy but it's definitely a con job foisted on an unwitting public by government officials who choose to look the other way or who convince themselves that they are fostering some logical adjustment in a New Age Economy dependent on the markets and not the marketplace for its survival." Bill Gross

William H. Gross Managing Director

Fashion models are gorgeous. Fashion models are thin and desirable. Fashion models wear the clothes that every woman will wear next year. Fashion modelsÉagh, enough already. How about haute fashion is one big con and the models are the carnival barkers, swishing down that runway, body language shouting, "Be a winnah, be like me!" Except no one can. The ladies with figures that can fit into a Jeffrey Chow creation are all 18-23 years old and can't afford to buy them. And the women with some bucks have had a baby or two or better yet a meal or two in their 30+ years and can't fit into Ôem. Still the charade goes on, fall season after spring season after fall season as if something very important was happening here. Writers for the NY Times speak of the new '05 fashion season "entering Phase 3 of its post 9/11 life (displaying) the contrived simplicity of ethnic orientation." Say what? I thought we were talking about a dress here, not some editorial on the cultural ramifications of 21st century geopolitics.

But I jest of course ladies. You can have your haute couture if it makes you feel good just like we guys have our cars with phony wings and "Goodyear" printed in big bold letters on the side of our tires. After all, don't those NASCAR/Indy/Formula 1 cars have Ôem? Doesn't matter that we can't buy a Dodge like Jeremy Mayfield who just took the checkered flag at Richmond. Those Dodges have gotta be damn good cars if they can whip team Toyota year after year! Con, Con, Con. The American way of advertising. You can fool some of the people most of the time and that apparently is good enough to ring enough cash registers to perpetuate the cycle whether it be fashion, cars, or politics. After all, if $10 million in ads are enough to convince the American public that something about John Kerry and swift boats didn't quite float during the Vietnam War, then I figure you can sell anything to just about anybody these days. My solution to all of this is for the next Administration (whoever they are) to work with Congress (whoever they are) to purchase a TIVO for each and every TV set in these United States. To hell with Hoover's "A chicken in every pot." I'm going for "A TIVO in every family room." That way whenever a commercial comes on you just blast right through it - except for Super Bowl Sunday - and you can't get conned. No more haute couture, no more "haute cars," no more "haute con jobs." Not sure who would pay for the TV programs, but I'll figure that out later. Forget about Bush and Kerry. Gross for President!

TIVO probably wouldn't help much when it comes to the con job perpetually foisted on the American public about the low level of inflation. "Inflation under control" - (ex food and energy of course) shout the carnival barkers. "The CORE is running at just under 2%," the barkers shout with glee because a low CORE number tells us that we can continue to run monetary policy with negative real interest rates and fiscal policy with $400 billion dollar deficits. A low CORE number allows us to pretend that American productivity is the best in the world, that the dollar should be strong, and that the markets, by golly are going up. No matter that a gallon of gasoline is over 2 bucks or that a half-gallon of milk will set you back $3.69; the CORE is under 2%. Still as Todd Heft, a 44-year-old salesman recently quoted in The Wall Street Journal said, "People have to buy groceries and drive to work. It's not realistic to strip out food and gas prices." Ah the core, the core, the core. Semper Fi to low inflation, I guess.

My quarrel though is not just with those who are fixated on the core CPI or the core PCE, but with those who support what we know as hedonic adjustments. Talk about a con job! The government says that if the quality of a product got better over the last 12 months that it didn't really go up in price and in fact it may have actually gone down! Why, we could be back to Bernanke deflation real soon if the government would quality adjust enough products. For instance, prices of desktop and notebook computers declined by 8% a year during the past decade, The WSJ reports, but because the machines' computer power and memory have improved, their hedonically adjusted prices have dropped by 25% a year since 1997. No wonder the core is less than 2% with computers dropping by that much every year. But did your new model computer come with a 25% discount from last year's price? Probably not. What is likely is that you paid about the same price for hedonically adjusted memory improvements you'll never use. Similarly, government statisticians manipulate the price increases for cars and just about any durable good that comes off an assembly line but find it difficult to extend that theory to underwear or a pair of shoes. Perhaps that's next. Talk about Uncle Sam getting into your shorts!

Actually, to make the case for a government con job, it's important to point out that the bulk of these hedonic adjustments have come only in the past few years, when it became necessary to buttress Greenspan's concept of our New Age Economy. Back in the 1990s the Clinton Administration blessed a start to quality adjust inflation statistics. But then in 1998, the methodology was adopted for computers - surely the biggest step backward in realistic inflation calculations. Since then, the BLS has expanded the concept to include audio equipment, video equipment, washers/dryers, DVDs, refrigerators, and of all things, college textbooks! Today no less than 46% of the weight of the U.S. CPI comes from products subject to hedonic adjustments. PIMCO calculates that without them, and similarly disinflating substitution biases, Greenspan's favorite inflation measure, the PCE, would be between 0.5% and 1.1% higher each year since 1987. This implies as well that since inflation was higher than actually reported, that conversely, real growth must have been lower by the same amount.

The first chart shows the hedonically adjusted numbers vs. what would be reported if this hedonic stretch didn't exist

.

Peter Bernstein in a recent Economics and Portfolio Strategy piece makes the hedonic point, as have Jim Grant, Stephen Roach, Marshall Auerback, Caroline Baum, and a host of other voices in the inflationary wilderness. Bernstein points out that since 1990, total CPI inflation was 2.7% a year, yet hedonically adjusted durable goods suspiciously managed to increase by only .1% annually. Over the past 12 months the BLS reports that non-durable were up at a 4.61% rate while those quality adjusted computers, cars, and refrigerators by golly managed to actually go down by 1.25%. "Holy Greenspan, Batman!" If we just could focus on those durable goods we could lower interest rates to 0% like the Japanese and drive up the markets one more time!

In addition, when "substitution bias" (a BLS maneuver that follows your preference for Chicken McNuggets vs. a Quarter Pounder) is eliminated, the gap gets even worse. For those of you sophisticated economists who feel the substitution bias is more than justified, chew on this for a second. If you substitute a pound of chicken for a pound of beef because it's cheaper, then switch back to beef later on because it came back down in price, the overall round trip which resulted in no ultimate substitution and no relative price change winds up reducing the stated PCE. Oh man, what a con.

Which brings me to a question that no rational money manager or economist wants to answer for fear of becoming a fool, or a conspiratorial kook. Why does the U.S. government and the Fed continue to foist this hedonic/substitution mantra on a gullible public when they should know better and when, by the way, no other government does it in the same magnitude and with the same conviction? Let me just answer it this way - and hopefully not seem foolish (or worse) in the process. Alan Greenspan has a dual prerogative at the Federal Reserve. He is charged with keeping inflation low and economic output high. The magic of hedonic/substitution adjustments keeps both of these birds flyin' at the same time, one under the magical 2% radar, which marks the dividing line between benign and worrisome inflation, and the other (real GDP), over the hurdle of 3% which suggests the continuation of high productivity, along with its concomitant implications that the stock market should be healthy, the dollar strong, and all's well with the Greenspan legacy. Granted Greenspan doesn't run the BLS, but he pounds the table hard for hedonically adjusted statistics. They might serve him well, but they do a disservice to those grounded in the reality of stretching a paycheck for new cars, laptop computers, and cell phones that somehow haven't gone down as much in price as the government says they have.

Deceptive hedonic/substitution adjustments also serve a government burdened not only with hundreds of billions of annual deficits as far as the eye can see, but ladened with a demographically aging U.S. workforce rapidly approaching Social Security time. By fudging on inflation, they pay less and the amount could cumulatively run into the hundreds of billions over the next few decades. They disserve, of course, all of those who receive social security, as well as other private pensioners dependent on an accurate accounting of prices paid. They disserve buyers and holders of TIPS - inflation protected securities - which adjust inadequately to a faulty and near fraudulently calculated CPI that one day could total billions of dollars per year for TIPS holders. And they disserve all owners of U.S. Treasury obligations - including foreign central banks and institutions - who mistakenly assume that they are earning a real return over and above inflation, and that the dollar upon which they are denominated is justifiably strong because of GDP growth and productivity numbers that are pumped by hedonic magic to resemble the Arnold Schwarzenegger of 1980 instead of his verbal "girlie man" analogy of today.

No I cannot sit quietly on this one, nor as I've mentioned, have other notables in the past few years. The CPI as calculated may not be a conspiracy but it's definitely a con job foisted on an unwitting public by government officials who choose to look the other way or who convince themselves that they are fostering some logical adjustment in a New Age Economy dependent on the markets and not the marketplace for its survival. If the CPI is so low and therefore real wages in the black, tell me why U.S. consumers are resorting to hundreds of billions in home equity takeouts to keep consumption above the line. If real GDP growth is so high, tell me why this economy hasn't created any jobs over the past four years. High productivity? Nonsense, in part - statistical, hedonically created nonsense. My sense is that the CPI is really 1% higher than official figures and that real GDP is 1% less. You are witnessing a "haute con job" and one day those gorgeous statistics just like those gorgeous models, will lose their makeup, add a few pounds and wind up resembling a middle-aged Mom in a cotton skirt with better things to do than to chase the latest fad or ephemeral fashion. If those Moms are holders of government bonds based upon a benign outlook for inflation, they had better cash some of them in, especially at today's 4.0% yield for 10-year Treasuries.

William H. Gross, CFA
Managing Director

Mr. Gross is a founder and Managing Director of Pacific Investment Management Company (PIMCO) and has been associated with the firm for more than thirty-three years. As Chief Investment Officer of PIMCO he oversees the management of over $370 billion of fixed income securities. He is the author of numerous articles on the bond market and has frequently appeared in national publications and media. Morningstar named Mr. Gross, and his investment team, Morningstar's Fixed Income Manager of the Year for 1998 and for 2000. In 2000, Mr. Gross received the Bond Market Association's Distinguished Service Award. In 1997, Mr. Gross authored Everything You've Heard About Investing is Wrong, published by Times Books / Random House. In December of 1996, he was the first portfolio manager inducted into the FIASI's Hall of Fame. In a survey conducted by Pensions and Investments magazine in its September 6, 1993 issue, Mr. Gross was recognized by his peers as the most influential authority on the bond market in the United States. He has thirty-five years of investment experience and holds a bachelor's degree from Duke University and an MBA from the UCLA Graduate School of Business.

Past performance is no guarantee of future results. This article contains the current opinions of the author and such opinions are subject to change without notice. This article has been distributed for informational purposes only and is not a recommendation or offer of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

Each sector of the bond market entails risk. Inflation-indexed bonds issued by the U.S. Government, also known as TIPS, are fixed-income securities whose principal value is periodically adjusted according to the rate of inflation. Repayment upon maturity of the original principal as adjusted for inflation is guaranteed by the U.S. Government. Neither the current market value of inflation-indexed bonds nor the value a portfolio that invests in inflation-indexed bonds is guaranteed, and either or both may fluctuate.

No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of Pacific Investment Management Company LLC. ©2004, PIMCO.

I'm Dreaming of a Green Christmas:

by Natalie Pace.

When Buying Your Holiday Gifts This Year, Think Green!

Who wants to buy shoes made by 8-year-olds in Indonesia or flat screen TVs from companies have no recycling plan? The idea of endless research can stop altruism right at the wish stage, however. After two minutes in a packed mall parking lot in December, Scrooge starts making sense.

For all of you with hearts of gold and overloaded schedules, here's the short cut. Below are helpful clicks, so that with the tap of a finger and fifteen minutes of scanning this page, you can buy those delightful gadgets from companies that are doing the right thing. If two companies manufacture comparable computers at the same price, perhaps the one with the most proactive recycling program might factor into the equation.

Each of the blue-highlighted, underlined phrases below continues a link to more information. Before we dig in, however, I'm going to give you one shock.

Truth #1: You are probably invested in a tobacco company.
Most investors who have 401ks and mutual funds are invested in a tobacco company. Altria (NYSE:MO), Philip Morris' parent company, is a very popular company for institutional investors. The pretty corporate name is one that keeps investors from suspecting that they are supporting "the enemy." You may be one of the many consumers who are suing or boycotting the tobacco companies, while at the same time supplying the capital that Philip Morris needs to keep putting out more cancer sticks. You should be able to get a list of the companies that your mutual fund is invested in by requesting it from your broker or directly from the company. If you know the name of your mutual fund, try a Google search with that name and Altria to see if the fund discloses an Altria investment. That process of weeding out at least one company, assuming you are anti-smoking, will likely give you warm, fuzzy feelings for days after the holiday pie. You may even find yourself wanting to share this important GIFT of 401k wisdom with ALL of your friends.

Truth #2: Hewlett Packard Recycles and Rewards
Hewlett Packard's HPShopping.com rewards you with up to $50 when you recycle your consumer computer hardware through HP's recycling service and then purchase a new hardware product on HPShopping. While all of the major computer manufacturers have some sort of recycling program in development or in place, Hewlett Packard is the only company to actually give the consumer a strong incentive to do the right thing, while making the process relatively easy. Dell offers free recycling (for a limited time) when you purchase a new Dell desktop or notebook and select the free recycling option. Apple charges you $30 to recycle your old computer. Sony has a free statewide "take back" electronics recycling program in Minnesota and Connecticut, with a goal of having the program nationwide by 2005.

Truth #3: Reebok vs. Nike: Some companies LEAD with socially conscious policies, while others are EMBARRASSED into compliance.
In issue 41, we did a feature article entitled No Sweat: How Levi Strauss and Reebok Eliminated Child Labor in the Garment Industry. Levi Strauss, a privately-held company, had a foreign labor policy that was the blueprint by which the others followed. Reebok led the publicly traded companies in establishing policies that actually worked to eliminate child labor. It turns out that child labor is a very complex issue, based in the larger problem of rampant poverty and illiteracy, that Reebok and Levi Strauss addressed in an incredibly responsible, forward-thinking way. All that and great clothes and shoesÑsomething to think about when you're shopping this holiday season AND when you're considering your investments.

Truth #4: Shareholder Activism Works
43% of Disney shareholders voted no confidence in Michael Eisner's reelection to the Disney Board and succeeded in getting a new Chairman of the Board within hours of the Disney Annual Shareholder meeting. As Marilyn Tam wrote in September, "In the USA, shareholders boycotted Home Depot to make them stop selling lumber from endangered hardwood trees. The result was that not only did Home Depot stop selling endangered hardwood, but other home improvement store chains also stopped selling endangered hardwood."

If you love a product (like Krispy Kreme) and flat out HATE the low-carb craze, boycott Atkins Diet books and eat Krispy Kreme donuts naked in Times Square to ensure that those of us here on the West Coast aren't stripped of our decadent delight just when it finally arrived here! Okay, I'm kidding about the naked part. But if you love a product or service, and you find out that the company needs a little guidance in one of its policies, don't just throw the baby out with the bath water. Do what Gandhi would do. Act for Change. Remember: "We must be the change we wish to see." The good news is that it works!

Truth #5: Ford Motor Companies is as Green as It Gets
You might be surprised to learn that Ford was the first to release a hybrid SUV, and that Ford's CEO, Bill Ford, is known as a "greenie" who furnishes his office with environmentally friendly furniture and building products (including ceiling tiles made from recycled newsprint). "Our vision for the future is simple," Mr. Ford writes. "We want to build great products, a strong business and a better world." Ford has many "green" cars that are rated right behind Honda, Toyota and Nissan for fuel efficiency and reduced greenhouse gas emissions, namely the Mazda 3, the Ford Focus and the Volvo S60 and V70. (Mazda and Volvo are owned by Ford Motor Company.) For a list of green cars that will cut your gas bill in half, click on "green cars."

The Ford Motor Company is also one of the founding companies of the Chicago Climate Exchange. The Chicago Climate Exchange is a Cap-and-Trade Exchange that is succeeding in reducing green house gas emissions. This test program provides financial incentives for corporations to get green, while at the same time promoting "offsetting" environmental strategies, like reforestation in Brazil. For more information on how the Chairman of the Chicago Climate Exchange, Dr. Richard Sandor, is convincing capitalists to buy clean air and for a list of the twelve other founding companies, click on the highlighted Chicago Climate Exchange above.

If you want to surprise yourself or your sweetheart with a new car this holiday season, it might make that down payment easier to swallow, knowing that you are supporting one of the founding companies of the U.S., which is actively promoting eco-friendly policies to better our world.

Note to investors: Ford Motor Company is not on our Stock Picks List. The auto industry will continue to feel financial pressure on their bottom line, with higher fuel and metals costs, and the pension fund problem in the auto industry is more than substantial (akin to what we're seeing in the airline industry). Perhaps, however, if American consumers begin supporting Ford by buying their vehicles and increasing Ford's market share, these problems will be more easily addressedÉ

There now. You've done your homework for the month. Reward yourself with spiked eggnog and feel twice as delighted with the gifts and investments you've chosen this holiday season!

Investor's Guide to P/E Ratios:

by Paul Wood, President & CEO of Odyssey Advisors, LLC.

An ongoing education series intended to enrich your knowledge of investing.

The Equation

Paul Woods CEO, Odyssey Advisors, LLC

Like most professions, investing is littered with jargon. However, most of this jargon leads to a deceptively simple equation. The primary job of the stock market is to place a value on businesses. The value of a business, as measured by the stock price, is expected earnings (per share) multiplied by valuation.

The term P/E ratio is a synonym for valuation. In this equation, p is the price of the stock and e is the earnings per share. P/E ratio is price of the stock divided by earnings per share. This is also known as a multiple (of earnings). In this equation, the price of the stock is pretty straightforward and is the current or last price of the stock. The earnings per share side of the equation is a bit more interesting.

Discounting the Future
One of the things the stock market is supposed to do is to discount the future, and it does this with varying degrees of success. As one pundit said, "The stock market has predicted 7of the last 3 recessions". Be that as it may, professional investors still mostly use expected earnings when they evaluate stock prices.

Ah, but which expected earnings? And how do you compare companies on calendar years with companies on fiscal years? (Note: calendar year earnings are reported as of the end of December. Companies on a fiscal year report 12-month earnings as of the end of any month except December.)

To make all companies comparable, our answer is to adjust earnings estimates to put all companies on a calendar year basis. For example, assume a company has a June fiscal year and reported earnings per share of 1.00 in June 2004. For June 2005, the estimate is 1.20. The expectation for calendar 2004 would be 1.10. This adjustment allows us to compare apples with apples, but we're still faced with the question of which estimates to use.

For most of 2004, we look at expected earnings for the calendar year and this is the basis for most of our decisions on valuation. However, sometime early in the fourth quarter, once we have a pretty good handle on earnings for the current year, we begin to shift our focus to the next year. Our valuations are now based upon calendar estimates for 2004 and 2005.

Historic Ranges
Since 1970, P/E ratios for the S&P 500 have ranged from a low of just under 7X to a high of just over 29X. The median has been about 16X, so we'll consider that to be average valuation. However, before jumping to the conclusion that the stock market is cheap at 7X and overvalued at 29X, there are a few other things to keep in mind.

The Competition
The stock market is in constant competition with bonds and real estate for investor attention. Investors know that, depending upon the time period measured, the long-term return on stocks is around 10-11%, which is similar to the long-term return on unleveraged real estate. Investors also know that bonds with an average maturity of about 5 years have about half the risk of stocks.

As a result, when bond yields are high and approach the long-term return on common stocks, the rational response is to sell stocks and buy bonds. When Treasury bonds have a yield of 10% or higher, it's hard for investors to find a good reason to put up with the aggravation of owning stocks. The result is that money flows out of stocks and into bonds and stock valuations decline. As a result, the periods of low valuations in stocks invariably correspond with high bond yields.

This works in the other direction also. When bond yields are low, more investors are willing to consider stocks. If you check the data, you'll see that periods of high valuations in stocks generally correspond with low and relatively unattractive bond yields.

The Present
Which brings us to the present. Right now, bond yields are near their historic lows. However, The S&P 500 is trading at about 18X its 2004 earnings per share estimate, which places the valuation close to the middle of its historic range. Given current bond yields, stock valuations should be about 15% higher, and stocks look cheap as a result. What's going on?

The answer is that stocks appear to be losing ground to real estate in the battle for the affections of long-term investors. Not only have stock investors had to endure the perfect storm of 2000-2002, but the equity market is now becoming overrun with hot money halfwits exempt from SEC regulation. In some segments of the stock market, relatively minor changes in company expectations can produce a 25-50% drop in the underlying stock price. Only short sellers and hedge funds view this as a positive.

Following is a comparison of the volatility of the S&P 500 and NASDAQ for the last four decades:

The standard deviation of monthly returns measures the amount of fluctuation in returns. A higher number indicates more volatility, which is one proxy for risk. For the S&P 500, risk in this decade is about 6.5% more than average. However, S&P 500 stocks are mostly too boring for short sellers and hedge funds, so they focus their attention on NASDAQ stocks. Here, volatility has increased a staggering 44% from average.

As risk and volatility increase in some segments of the stock market, we come back to the same consideration. In this case, there are two asset classes (real estate and stocks) with similar returns over time. However, as one has become riskier, investors are shifting funds to the other. Money that should have gone into stocks has instead gone into real estate, and this has kept P/E ratios in the equity market relatively low.

A Few More Considerations
At this point, you're probably wondering what else influences P/E ratios? The answer is just about everything. A proper answer to this question would make War and Peace look like a short story. However, here are a few more rules of thumb:

• The higher a company's growth rate, the higher the valuation
• Consistent earnings produce higher valuations than companies with unpredictable earnings
• Companies with proven managements have higher valuations
• Companies gaining market share have higher valuations than companies losing share
• Clean balance sheets produce higher valuations than companies with a lot of debt

The gist is that uncertainty in any form produces lower valuations. From this, it's tempting to conclude that the ideal investment is a company with an above-average growth rate, consistent earnings, a proven management, and a clean balance sheet. That's what a lot of professionals have concluded, and an explanation of why this makes most of them unable to produce even average returns will be the subject of an upcoming article.

Paul Woods is the CEO of Odyssey Advisors, where he manages investments for high net-worth individuals, families and institutions. He can be reached at 310.568.4700.

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

Fed Up With the Fed:

by Meri Anne Beck-Woods, Chairman & CFO Odyssey Advisors, LLC, Investment Management 310-568-4700.

What you MUST know about bonds and rising interest rates.

"The bottom line is that bonds are not a less risky asset if they are of low quality or if you have to sell them prematurely when interest rates are rising."

Meri Anne Beck-Woods Chairman and CFO, Odyssey Advisors, LLC

On November 10, 2004, the Federal Reserve again raised its target for the Federal Funds rate, the benchmark U.S. interest rate a quarter points to 2 per cent. From their latest comments, the Federal Reserve Governors echo the point that monetary policy in the United States "remains accommodative" and the fed funds rate still seems low relative to inflation and the economy. As of November 10, the level of the primary discount rate was 3 percent and the prime-lending rate charged by most banks was 5 per cent.

The comments of most Federal Reserve Governors indicate that the fed funds rate will continue to go up perhaps as soon as December 14^th, when the Federal Reserve Open Market Committee meets again. Since late June, the Fed funds rate has gone up 100 basis points, or one per cent at the same time energy prices have soared and inflation has been less benign.

While the Fed governors have said they will raise interest rates at a "measured pace," one cannot help but think of 1994 when the Fed funds rate was raised five times from 3.25% on 2/04/1994 to 4.75% on 8/16/1994 devastating the bond market. In five out of six meetings, the Fed was tightening in their bias. That period also marked a period of inter-meeting increases in the Federal Funds Rate.

So far this activity has dampened home sales, as sales of existing homes and condominiums dropped 1.8% from the second quarter and prices, which had risen 8.9% in the prior quarter, were only up 7.7%, putting the real estate market on notice that times may be harder in the future.

The Federal Reserve was founded in 1913 and established a central banking system long used in Europe to pool bank reserves and create a lender of last resort. In 1920, the fear of inflation caused the Fed to raise interest rates on 12-month treasury certificates to 7.75%. This caused a drop in the value of corporate bonds by 11%, pretty big for a so-called less risky asset. Will they do it again? I hope not. Productivity is still strong and even though inflation is back, it is not out of hand.

What do you do in a rising interest rate market? There is the "buy and hold" strategy, ignoring the Federal reserves ups and downs and the subsequent drop in the price of your bonds and collecting your coupons and principal at maturity. The market timers are a different breed and try to anticipate the direction and timing of interest rates--a dicey job at best. It is better to have higher quality bonds when interest rates are rising, as the spread or difference between different sectors of the bond market may not justify lower credit quality. Consider callable bonds, as the likelihood of a call is diminished due to rising interest rates and a more expensive cost of money.

If rates are rising rapidly, you will get more out of your money market funds as rates go up, and if your bond holdings are short to intermediate term, your price fluctuations will be less than if you had long term bonds. In 1987, when the stock market dropped over 500 points, interest rates on 7-year bonds soared to almost 10%. That made them very competitive with the long-term return on stocks and, if non-callable, a good buy.

Allan Greenspan has been chairman of the Federal Reserve since 1988 (Paul Volcker was chairman from 1979 to 1987, and the two are completely different characters.) Where Greenspan will make public comments that can dash the hopes of equity and bond investors alike, Volcker was close-mouthed and never entirely comfortable with the press. You would never hear him speak of irrational exuberance to deliberately affect the market.

When Greenspan appears before congressional committees, which are open to the public, he may choose politely to decline to answer committee questions on his intent or use dense technical language to confuse the public and the panel. Some points you should watch for in Fed stories are if the Fed says it sees the economy growing faster, inflationary pressures increasing or the money supply expanding at a faster clip, it may be preparing to push interest rates higher. Also look out for announcements of low unemployment levels or increasing labor costs.

On the other hand, if the Fed is concerned about economic weakness and high unemployment and confident that inflation and labor costs are well contained, the central bank may push interest rates lower.

In the usual case of conflicting or confusing statements, you must weigh the emphasis given for each statement. Tarot cards or an Ouija board might help. In any case, a government official has a lot of power in this country and perhaps it is time we reined that power in a little bit. Greenspan is well past the age of retirement and who knows whom the next Federal Reserve Chairman will be.

If you have high coupon bonds that are of good credit quality, you might lose the premium or high price but you will still collect the coupon. If they are government bonds, presumably get you money back at maturity. If you have lower quality bonds be prepared for some significant price volatility and make sure you don't need the money before the bonds mature. The bottom line is that bonds are not a less risky asset if they are of low quality or if you have to sell them prematurely when interest rates are rising.

For over 35 years, Meri Anne Beck-Woods has managed investments for an expanded client base including Norton Simon and the Federal Reserve Pension Fund. She is a member of the CFA Institute, the Los Angeles Society of Financial Analysts, a past President of the Los Angeles Association of Investment Women, and a lifetime member of the Network for Empowering Women Entrepreneurs. She is Chairman, CFO and Co-founder of Odyssey Advisors. Meri Anne is a contributing writer of the new book, Inspiration to Realization, in which real women reveal proven strategies for personal, business, financial and spiritual fulfillment. To order the book or to contact Meri Anne, call 310.568.4700.

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

Women: Burned, Beaten and still in Burqas in Afghanistan:

By Natalie Pace, founder and editor in chief, NataliePace.com.

Interview with Dr. William Schulz, the Executive Director of Amnesty International, on why equality on paper has not translated into a better life for women in Afghanistan - yet.

Then Afghan Interim Chairman Hamid Karzai meeting with First Lady Laura Bush at a USAID ceremony.Photo credit: U.S. Agency for International Development.

In 1999 and 2000, there were hundreds of emails circulating, mobilizing women in the U.S. to improve the circumstances of women living in Afghanistan, under the misogynistic Taliban regime. If there can be any silver lining to war, giving women the right to vote in that country seemed like a huge coup. But, if things are so great for women now, why were so many Afghani women still in burqas at the voting booths, and why, in the only part of their body that was visibleÑtheir eyesÑdid they look so frightened?

The story on October 9, 2004 was a positive one, and I eagerly tuned in, ready to applaud. The first democratic elections in Afghanistan were including women, and U.N. reports had registration as high as 41% of female participation. The programs aired images of women holding their ballots to the camera, giving the impression that things in Afghanistan had dramatically improved since the U.S. invasion. There was even one female presidential candidate, Massouda Jalal, though she received little press. Certainly the right to vote was a huge step forward, but why was I so haunted by the look in their eyes and their timid body posture? Was there more to the story?

Synchronicity
Forgetting, momentarily, about my discomfort (which is so easy to do in a country where horrible circumstances in faraway places are aired every minute), I turned my attention back to the tasks at hand. That task included a call to Amnesty International to find out about another storyÑthe rape and murders of women in Juarez. A friend of mine was putting the final touches on a film exposing this issue and my spinning class had recently done a fundraiser. We're still working on that story, but, while I had Amnesty on the phone, did she happen to know anything about women living in Afghanistan? Why was I so disturbed by those photos at the voting booths, when getting the right to vote is such a giant leap forward in human rights? Was I crazy or did those women look almost identical to the women I saw back in 1999, when Americans were so motivated to improve their desperate lives?

What I learned from Amnesty International, and they sent me over reams of information on focus groups and ongoing research in Afghanistan, was extremely disturbing. Pictures never lie. The daily life of a woman living in Afghanistan has not measurably changed since the fall of the Taliban, even though the new Constitution is written according to international standards of human rights and equality. In the words of an Afghani woman, speaking to an international worker under conditions of anonymity, "No one listens to us and no one treats us like human beings." Three women were killed in an attack on a voter registration bus in June 2004. Warlords threatened women to deter them from registering, and there are reports of targeted killings of Afghan women holding voter registration cards. In the villages, female voter registration was well under 10%, though women make up almost half of the population (source: Amnesty International).

WorldPictureNews/RAWA at http://www.rawa.org/mar8-04.htm

It is often the case, especially in rural areas outside of Kabal, that the men and women don't even know that the new Afghan Constitution guarantees women equal rights. There are no phones and illiteracy rates run high in rural Afghanistan. Thus, twelve year old girls (and younger) are still traded off in marriage to keep peace between two families or to raise money, women who are raped can be imprisoned as the criminal (instead of being cared for as the victim), and election workers seeking to register women get blown up. Further, there are few escape routes from these unbearable conditions, where a woman cannot walk the streets without a male relative and there are only a handful of shelters in Kabal, except the one exit plan that is resorted to all too often--to set oneself on fire and hope to break on through to the other sideÑdeath.

Below are just a few of the worst circumstances and biggest challenges that are currently being addressed by the international community in Afghanistan. Focus groups of women were assembled in each location visited by Amnesty International. These groups provided a forum for discussion where women of different ages were able to talk in confidence. Participants were drawn from village communities or urban neighborhoods with the cooperation of international agencies, in particular UN Habitat (UN Human Settlements Programme).

1. Crimes of rape, violence and undermarriage (under the age of 12) are not reported because, in the words of an Afghani woman, "A woman would be killed [if she sought help] because it is the Pashtun Wali tradition, and because it is a big shame if a woman brings her problems outside the home."
2. Seeking help causes more violence. Some women also expressed fear that seeking help would result in increased violence in the family. "In our community and tradition, if a girl complains to a government body, they say this girl is a bad girl who doesn't obey her father or brother."
3. Domestic Violence is her fault because presumably, the woman did not obey her husband.
4. No Access to Support Groups. In some communities, women cannot leave the home without an accompanying male relative or mahram. To be seen to travel alone might result in loss of reputation, or worse, a license to rape her. How can a woman even leave home to seek outside help?

Do the women in Afghanistan want change? Do their religious beliefs prevent them from believing that life can and should be any different? It appears, while Afghani women are very faithful to their religion, they do not necessarily believe their doctrine condones a life of abuse, rape, trading young girls off in marriage and limited access to jobs. Bearing evidence to the desire for a new life, on March 10, 2004, in Peshawar, over 1,000 people attended International Women's Day, sponsored by the Revolutionary Association of the Women of Afghanistan, RAWA.

(rawa.org/mar8-04.htm, 5^th photo. "The hall was full and a large number of womenÉ) Get rights approval at info@worldpicturenews.com.

According to the Amnesty International report:

Putting Paper Into Practice
Like any major shift in social ethos, writing a law doesn't mean that people change their thinking overnight. Abolishing slavery was just the first step in leveling the playing field for all races in the U.S. It took the Civil Rights movement, over one hundred years later, for a Black woman to get a seat on a bus, much less any job that she wanted. "Today, with the help of oversight organizations, international human rights' laws and the power of the United States government, we can push the process along much faster," according to Amnesty International Director, Dr. Bill Schulz. However, as early as the 1920s, before the establishment of all these support mechanizations, one man, Mustafa Kemal Ataturk, transformed an Islamic nationÑTurkeyÑand instituted equal rights for women. How did he do it?

Following Turkey's Example
Turkey is often held up as an example of a progressive Islamic country, where women are not only entitled to the same privileges as men in all things, they actually hold positions of authority. How did Turkey, another country with strong Islamic presence, end up having the world's first women Supreme Court justice? It all started by example.

Leading by Example
Part of the challenge of reform is getting the word out to the people, and in the case of Turkey, a picture isn't just worth a thousand words. It may have saved 100 years of painstakingly slow progress. Even the illiterate can understand a photograph, and word travels fast when the leader of a nation makes a bold, new stand. Mustafa Kemal Ataturk and his staff made it a point to be photographed with their wives in Western dress at presidential functions. Ataturk's reform movement was so successful that Turkey had 18 women in the national parliament by the mid-1930s, and the world's first women Supreme Court justice.

In 1919, King Amanullah Khan, credited as being a champion of women's rights in Afghanistan, followed the modernization movement advanced by Mustafa Ataturk in Turkey and abolished the traditional Muslim veil. In the Independence Day Celebration of 1919, Khan's wife, Queen Soraya, joined by the wives of the cabinet officials, shed her burqa, and showed up in modern formal attire. This reform was subsequently dashed in a land notoriously torn with violence and war, and current reform in Afghanistan, particularly in regard to women, is decidedly measured. Is that any reason, however, to hide President Karzai's First Lady? What kind of message of reform does that send to the people of Afghanistan?

The Invisible First Lady
Just who is President Karzai's wife? She rarely ventures beyond the palace security, and few people worldwide even know that President Hamid Karzai is married. Halima Kazem, a correspondent for Womensenews.org, wrote in September 2002 that Karzai's First Lady, Dr. Zeenat Karzai, a gynecologist, wants to "work for my people and my own country." I searched archives, the Internet and found no photos of First Lady Kazem. I sent repeat requests to the Afghanistan embassy in Washington D.C., asking for any press release or image of the First Lady. Though I was passed around the Embassy and promised a return call, my inquiries remained unanswered at press time.

Can Afghanistan be committed to women's rights when it hides its own first lady, even in photo opportunities with the First Lady of the Unites States, Laura Bush?

We put these questions and more to Dr. William Schulz, the Executive Director of Amnesty International, to understand the plight of the oppressed Afghani women, who are still burning themselves to escape abusive husbands and fathers, who are still beaten and imprisoned for morality crimes and are still terrified to be seen without their burqas on. At the end of the interview, we will provide you with an email address, where you can sign a petition to mobilize President Bush, President Karzai and the U.N. to keep the focus on enforcing the new laws that protect women.

Natalie PaceÑWhat is the significance of having women voting in Afghanistan? Was this a media event, where a handful of women turned out and posed for cameras, or are women really out there taking charge of their lives and government?

Dr. William Schulz --It's a significant event, but there is no question that women were intimidated, harassed and discouraged from voting. Men monitoring the stations may have intimated women and prevented them from voting. There is a lot more to the story than you see in the pictures.

The story was Women Vote in Afghanistan, with a subtext, "Life is So Much Better There Now!" Those women looked exactly the same to me as the pictures I saw under the TalibanÉ They were wearing burqas, with eyes and body language steeped in fear.

The fundamental problem is that despite all the changes in the law, there is a cultural lag there. There are not yet institutions in place to enforce the Constitution and to make the quality of life more than just pretty words on paper. Women were prevented from voting by family members--by threats they received when they tried to exercise their rights. The fall of the Taliban was just the beginning of addressing this issue. We receive reports of rape and sexual abuse that never gets responded to. Women are in prison for committing crimes of adultery or running away. Women who are assaulted are treated not as victims, but as criminals.

It sounds like the enforcement and/or the judicial system is failing themÉ. Since the education of women in Afghanistan was cut off for so long, is the problem that there just aren't any women in positions of authority?

Most of the female judges are regarded as clerks, rather than adjudicators. There are four women shelters in Kabal, and none outside of Kabal. The voting is a manifestation of a much larger ongoing problem.

What's the next step, and can the international community help or is this something that should be left to the new government in Afghanistan?

Clearly the next step is for the U.S. and other countries to both insist that these things be redressed and to offer ongoing assistance in the creation of institutions that can protect and train women. This needs to be addressed at the systemic levelÑfrom the police, to the judges, to the legal systems review. The Afghani government cannot do it by itself. There are still major issues on security--outside of Kabal certainly--changes needed in the legal system and educational problems that need to be addressed culturally.

Is Amnesty International working in all these areas?

We're doing our best to monitor and to be in touch with human rights defenders in Afghanistan. Most of the work is done out of our International Secretariat in London.

What are ZINA crimes and why are so many women in prison for them?

These are personal behavior crimes--accusations of adultery, running away from home, defying the male family members, sex outside of marriage, etc. The interesting thing is that the majority of women in prison today are not in prison for committing crimes against other people, like burglary and murder, they are in prison for transgressing mores. The fact that this act is still prosecuted, and women are targeted--men are not prosecuted for sex outside of marriage--and the majority of women in prison have been convicted of these crimes, is reflective of the prejudices of the judicial system and that the system has not come to standards of equity. Afghanistan is still far from meeting international standards for women. This discourages women from using the criminal justice system for rape or assault. If a woman reports rape, she is often in danger of being charged with a ZINA crime, even if she was the victim of the assault.

It seems like so little has been accomplished. Sure these women have the right to vote legally, but have their daily lives improved at all in reality?

The situation is far better than the Taliban. No one who knows anything about social change expects these things to happen overnight. As the country is pushed to meet international standards, naturally, there is a lag, a process and a time that has to be at work here. At the same time, it is the job of the monitors, like Amnesty, to hold these standards up and say this is what we expect of every country.

Wasn't the U.S. like this 100 years ago? Is there anyway to speed up the march to equality?

There is one important difference between the U.S. 200 years ago and the world today. 200 years ago, there were no generally accepted standards at the international level of civil and political rights. So, while it is certainly true that cultures take time to make these changes, it's not a legitimate analogy to say that Britain and the U.S. took a long time to adapt to these changes.

What do you say to the argument that we are imposing Western standards on a country that is perfectly happy with its social mores. Should the international community really be butting in?

The norms always begin at the national level. Take slavery, for example. Britain abolished slavery in 1830; the U.S. in 1865. The British decision to abolish slavery, and the gradual addition of other countries, established an international norm. That meant that after the Civil War, when more countries abolished slavery, it became harder in 1880 for a country to defend itself. The emerging international consensus was and is that slavery is a violation of civilized behavior. Today it's even simpler, the examples and norms of the international community are laid out in international treaty, and it is a matter of international law.

The U.S. courts were key in taking equality off of the pages of the Constitution and into the enforcement of civil rights. Are Afghani men being prosecuted when they beat, burn, imprison or rape women, so that others understand that there are consequences for those previously overlooked crimes?

I just don't know.

How well are the Afghani men educated about the international law? Do they clearly understand that a new standard now supercedes the social mores they were raised on?

Four years ago, this country was under the control of the Taliban. Before that, it was years of warfare. This is not a country that has a long history of abiding by international standards. I'm sure that the answer is that these men are very poorly educated. That is presumably what the international community is committed to helping this new Afghani government to do.

Is there anything that American women and men can do now, easily, to help?

Women can insist to the Bush Administration that they finish the job in Afghanistan. The job is not yet finished. While women's conditions have improved, women are still subject to sexual assault and rape without recourse. There are enormous inequities that remain in Afghanistan. The U.S. has poured enormous resources and human lives into Afghanistan. It has great investment in the government of Karzai, which will not be successful if half the population of Afghanistan is denied rights. No country flourishes if half of the nation is underutilized. There is a direct correlation with the opportunity for women and the economic success of an emerging nation. We need to do everything we can to put this BACK on the radar of Congress, and to support organizations that are offering support to the indigenous groups of Afghanistan.

If equal rights are to go beyond lip service to reality, history teaches us that Dr. Zeenat Karzai will have to come out of hiding, and set an example to the women of Afghanistan. It worked in Turkey. It worked in the U.S., after Rosa Parks asserted her equal rights. Otherwise, while the laws are there on paper to protect women, the customs and abuses remain the same.

With two clicks and a email signature, you can ACT NOW to Stop Violence Against Women and improve the lives of women in Afghanistan, who are still cowering behind burqas and being burned, executed, imprisoned, raped and beaten if they dare to try to change their lives. This petition is being circulated by NataliePace.com (a company that does not share or sell email addresses). We are calling on all of our members, readers and all of your friends to help us achieve our goal of collecting ONE MILLION signatures, which will be passed on, to President Bush, President Karzai and the United Nations. Less than five minutes of your time could save someone's life.

ACT NOW:

1. Cut and paste the following petition into an email.
2. Add your name and city to the bottom of the list.
3. Email it to at least 10 of your Friends.
4. Once there are 1,000 names on the petition, forward it to info@NataliePace.com. Then start a new list and send it to at least 10 of your friends.

STOP VIOLENCE AGAINST AFGHAN WOMEN NOW PETITION

We the undersigned, condemn the atrocities committed by fundamentalists in Afghanistan. We condemn the violations of human rights, especially women's rights, in Afghanistan. We encourage the United Nations, the US Congress, President Bush and President Karzai to encourage a democratic movement in Afghanistan and to actively promote the liberation of women by setting an example in the public eye. We urge the United Nations, the Afghan government and the international community to enforce sanctions against anyone who violates international law, particularly in regard to women's rights.

GET MORE INFO: You can get more information on this important issue by reading the NataliePace.com article "Women: Burned, Beaten and still in Burqas in Afghanistan. An Interview with Dr. William Schulz, the Executive Director of Amnesty International" at www.NataliePace.com, issue 55. Use the following passwords: USER ID: Free PASSWORD: Women

1. Natalie Pace, Santa Monica, CA

ACT NOW:

1. Cut and Paste the following petition into an email.

2. Add your name and city to the bottom of the list.

3. Email the Petition to at least 10 of your friends and family members.

4. Once there are 1,000 names on the petition, forward it to info@NataliePace.com.

5. Start a new list and email it to at least 10 of your friends and family members.

NOTE: Our goal is to get at least one million names before December 15, 2004, that will be forwarded to President Bush, key congressional leaders, United Nations' diplomats and key leaders in the fight for freedom in Afghanistan. That goal is just five clicks away, as this missive will be sent out to 10,0000 people. We can easily do this. If you want to ensure that you continue to receive important information on the social and economic empowerment of women worldwide, email NataliePace.com at info@NataliePace.com, with ADD ME TO YOUR EMAIL LIST in the Subject.

Resources:

1. United Nations Development Fund for Women
   http://www.unifem.org/index.php?f_page_pid=144
2. Rawa.org and Rawasb.org
3. See the NataliePace.com calendar at www.NataliePace.com for the December 4, 2004 Holiday Bazaar of Afghan Handicrafts in Santa Barbara, California. 9 a.m. to 4 p.m.
4. Renee Bergan Renegade Pictures, filmmaker and Advisory Board member. Voices of Women. www.renegadepix.net. Filmed in 2002, this film documents the voices ofseveral women living in Kabal, Afghanistan and Pakistan. 2003 Winner of the Social Justice Documentary Award at the Santa Barbara International Film Festival.
5. Amnesty International http://web.amnesty.org/actforwomen/index-eng

Dr. Beauty:

by Steven S. Carp, MD. Carp Cosmetic Surgery Center, Inc.

Your Guide to Botox, Restalyne and Other Tricks of Science.

Steven S. Carp, MD., FASC Carp Cosmetic Surgery Center, Inc.

As we enter 2005 the world of facial rejuvenation continues to evolve. Facial lines and wrinkles are one the most frequent signs of aging that both men and women seek to eliminate. Soft tissue fillers, which are injected into the skin and underlying tissues to help reduce these lines, wrinkles and folds, have become some of the most common cosmetic procedures performed today. The use of injectable products has and is continuing to change. From collagen to Botox® , there are more options available today then ever before. I am going to review the most common injectables used in the United States today.

Lets start with collagen. First available for use in the 1980's, collagen had until recently been the predominant injectable soft tissue filler. Collagen is a protein that exits in nearly all tissues of your body. In the skin, collagen begins to break down and become disorganized helping to create wrinkles, smile lines, crows feet, frown lines and so on. (Muscle movement also contributes to the formation of facial lines). Injecting collagen helps plump up these lines and reduce their appearance. Two basic forms of collagen are on the market; animal and human derived. The first of these, Zyplast and Zyderm, have been available since about 1991. These are made from purified bovine (cow) skin. Because they are not human derived allergic reactions may occur. Therefore, patients are required to have a skin test at least 30 days before receiving treatment. The results following collagen are immediate, and may last on average 3 months.

There are two products derived from human collagen. First is Cymetra, which is made from human cadaver tissue that has been screened for transmittable diseases. Skin testing is not necessary. Treatment effects last about 2 months. The second is CosmoDerm/CosmoPlast. Also made from human tissue, these are grown in a laboratory. Once again skin testing is not necessary, with results lasting from 2 to 4 months.

Collagen injections are usually performed with a topical anesthetic, or in possibly a local injected anesthetic in the doctor's office or at the time of another procedure. The American Society of Plastic Surgeons (ASPS) reports that more than 575,000 patients had collagen injections in 2004.

An alternative is the patient's own tissue. Far and away the most common source is fat. Fat injections or fat transfer is used to add volume to areas such as the lips, cheeks, and around the eyes. It may also be used to plump up wrinkles and lines. The procedure is performed with local anesthesia. Fat is taken from an area such as the buttock or abdomen and injected below the skin. Because it is the patient's own tissue, allergic reactions cannot occur. The results vary from 3 months or longer, with many patients noting long-lasting results. Over 61,000 patients had fat injections in 2003, according to ASPS.

Other products available but less common are Fascian (human tissue), Autologen (prepared from the patient's own skin), and Plasmagel (derived from patients own blood and a Vitamin C complex).

In 2004, the excitement has been centered on hyaluronic acid products. Hyaluronic acid is a naturally occurring substance in skin, as well as many other tissues. Early this year, the FDA approved Restylane for use. This product is derived from non-animal technology. Allergic reactions are rare, and patients can expect results to last from 4 to 6 months. Restylane Fine Line and Perlane are modified forms of Restylane, however, neither is currently approved for use in the United States by the FDA. The second hyaluronic acid product approved for use is Hylaform, which is derived from rooster combs. Because it is made from rooster combs, people with allergies or sensitivities to avian products could have an allergic reaction. It too may last up to 6 months.

All of the previously described products are temporary, with the perhaps the exception of fat injections. There are 2 additional injectables that have received a lot of attention recently. Radiesse (previously called Radiance) and Artecoll. These products have much longer lasting effects then the others. However, Artecoll has limited availability as the FDA advisory panel has recommended approval on conditions. This may change in the near future. Radiesse is FDA approved, but only for vocal cord paralysis and urinary incontinence. Use of Radiesse for facial lines is considered off-label, but is growing in popularity. Radiesse is made from calcium hydroxylapatite, which is also found in bone and teeth. Results will usually last longer than 18 months and allergic reactions are rare. Aretcoll is derived from a mix of bovine collagen and polymethylmethacrylate (used for many years as a bone replacement material).

Expect to hear of another filler very soon, Sculptra. This is made from a synthetic polylactic acid. It has been used successfully in HIV patients to replace facial volume loss and may shortly be available for cosmetic use.

The final injectable soft tissue I will mention is silicone. I do so only to raise awareness that is not approved for cosmetic use and was banned by the FDA in 1991.

Injectable soft tissue fillers can do a wonderful job reducing facial lines. In most cases the side effects are minimal and temporary. This includes bruising, redness, or lumpiness. Recovery or down time is brief with immediate results.

Any discussion about injectable products to treat facial lines must include botulinum toxin. To date, the FDA has only approved Botox® for cosmetic use. Botox® has been in use for many years to treat muscle spasms of the neck and around the eyes. Its use expanded to the treatment of facial lines in the past 10 to 15 years. Botulinum toxin effectively blocks the signal from nerves to muscle resulting in paralysis of the muscle. This is a temporary effect. The dose injected will only work on muscles directly at the site of injection. It has been shown to be extremely safe, with rare side effects. Some patients may develop immunity (resistance), which will reduce and eliminate its effectiveness. It is important to understand that Botox® does not act directly on the wrinkle, but rather on the muscle activity that contributes to wrinkle formation. The FDA has approved use on the frown lines between the eyebrows. However, it is commonly used off-label on the forehead, crow's feet, around the mouth, chin, and neck. Its effect will not be evident for about 1 week, and will last from 4 to 6 months for most patients. The ASPS reports more than 2.8 million Botox® injections in 2003.

Two other forms of botulinum toxin are in production. Myobloc is approved for non-cosmetic use, and Dysport that is not FDA approved for use in the United States.

So what does this all mean? First, what are your goals? Second, in many cases you may have several options. Treatment of facial aging has become more complex, but also more effective. This includes safer and more predictable results. Many patients are now treated with multiple products, multiple procedures, and multiple treatment sessions. A patient may receive Restylane and Botox. Or perhaps Restylane, Botox, laser treatments, and a facelift. It is important to understand that each patient has different goals and equally important, different needs. For example, non-surgical treatment with injectable fillers may not be the best option. Surgery may be more effective even with the other options. Therefore, you should consult with a qualified board certified Plastic Surgeon. As with any healthcare decision educate yourself, understand what is possible for you and what are the risks. In this way you are likely to have a great experience and be pleased with your results.

Steven S Carp, MD
Board Certified Plastic Surgeon
Canton, OH
877-518-7620

Beauty Biotech Stock Report Card:

by Natalie Pace.

Botox sales are ballooning, as are breast implants. Are the company share prices as well?

Botox, collagen, Restylane, hyaluronic acid. When medical terms like these pepper the conversations during Girls' Night Out, you know the world is changing, and it is. With over 26% of the US population nearing retirement (Baby Boomers), anti-aging is all the rage. Many of the companies involved in post-prime beauty are also manufacturers of the most popular plastic surgery in the teen crowdÑbreast implants.

Since 1992, when silicone breast implants were banned for most women, the number of women opting for an increased bust line has exploded. The American Society for Aesthetic Plastic Surgery reports that in 2003, there were 247,000 women who received breast implants, compared to just 32,000 in 1992. Of those 247,000, 11,326 were girls 18 and younger. Silicone breast implants are still banned for most women, but Inamed and Mentor Corp. are both working with the FDA to get them approved for all women. The silicone gel implants feel more natural, but concerns over ruptures and the possible link of silicone to many autoimmune disorders has consumer groups up in arms about an approval. (For more information on breast implants, including complications, risks and other things to consider before the surgery, go to the FDA web-site at: http://www.fda.gov/cdrh/breastimplants/indexbip.html)

Medicis is leading the market in eliminating wrinkles with their dermal fillers so far (notably Restalyne), but Inamed has an approved product and Mentor is seeking approval for what they consider to be an improved dermal filler product. Even with the 5-75% run up in share price for the companies featured in this month's stock report card, that has occurred since November 2003 (when Restalyne and Hylaform were first approved by the FDA), it's easy to imagine that the popularity of the biotechnology industry, combined with the solid growth in sales for dermal fillers and breast implants will keep the share price of these companies moving in the profit direction. LifeCell, makers of various surgical and reconstructive products, has been the top performer of the last twelve months, with share price soaring 75%+.

What it may come down to is your value system. Do you want to invest in a company that makes breast implants? If so, Inamed and Mentor may be your choice. Do you want to invest in the company that reduces wrinkles with a product that is naturally absorbed by the skin and has been in use in Europe for years (Restalyne)? If so, try Medicis. (Note that both Inamed and Mentor have Restalyne-like products. Inamed's Hylaform is available and Mentor's product has been submitted to the FDA for a Pre-Market Application.) Do you prefer a company that not only has a product for lip augmentation, but also helps burn victims and makes tissue for reconstructive, urogynecologic and orthopedic surgical procedures? Then LifeCell may be your all-star beauty biotech company. Do you think Botox parties are the coolest things since pajama parties? Allergan has seen strong sales of Botox, since the FDA approval in 2002.

Revenues for Life Cell outpaced all other growth in this report card, at 48% revenue growth for 3Q2004, while operating margins also improved by 100%, to 12%, from 6% a year ago. The company raised guidance for full-year 2004 on October 21, 2004. Doctors like the product. As Dr. Steven Carp says, "Alloderm is a nice product.  Used not only for lip augmentation, but also for reconstruction.  The reconstructive uses include nasal, face, abdominal hernias." With the lowest P/E, the lowest insider trading, the most impressive growth and testimonials as pretty as Dr. Carp's, LifeCell is the NataliePace.com pick this month. Check out the numbers in the NataliePace.com Beauty Biotech Report Card

Give me a Break!

In this month's Living Wealthy Money Makeover, four seasoned financial consultants help a stockbroker find his heartÉ and more happiness.

The Living Wealthy financial consultants: Carista Luminare-Rosen, Ph.D., Educational Director of Inner Securities and Holistic Wealth Consultant, Stu Zimmerman, Chairman & CEO, Inner Securities and Holistic Wealth Advisor, Gregory Wendt, CFPÒ Money Manager and Certified Financial Planner, and Judith Green, Mortgage and Real Estate Financial Advisor.

Profile of this month's LIVING WEALTHY Candidate:
Name- Seymour Bucks ( not a real name)
Age - 42
Single/divorced- married
Children - two kids 8 and 5
Profession - stockbroker
Annual Income - $200,000
Net Worth - $400,000, $220,000 equity in home, $550,000 market value, $150,000 IRA
Asset Allocation -, $70% mutual funds, 10% bonds, 20% cash
One Year Life Goal - To find more meaning in his work
Five Year Life Goal - To be making $500,000 a year with a strong sense of purpose
Ten Year Life Goal - To have flexibility to work part-time and generate $250,000 annual income
Deepest Heart's Desires - To love my life
Greatest Fear/Insecurity about Money - That I have to do things I do not want to do to make money

Seymour seeks help, in his own words:
"I enjoy having money which is why I went into becoming a stockbroker. I feel a lot of pressure to perform each month and it stresses me out big time. Also, there are times when I just feel like a salesman needing to sell a product to make my monthly numbers. The pay is pretty good and I have grown accustomed to a lifestyle that is comfortable for my family and me. I must admit that I do not always find a lot of meaning in this job. It often feels like pushing papers and numbers around. I feel like I am just a number, and a replaceable part at my brokerage firm.

How can I make the kind of money I want to make, find more meaning in my work and not feel so dispensable?

CARISTA'S RESPONSE:
Dear Seymour,

Did you know that The Gallup Management Journal's semi-annual Employee Engagement Index puts the current percentage of truly "engaged" employees who feel passionate about their work at 29%? A slim majority of 54%, falls into the "not engaged" category who have a tendency to be "checked out" at work, while 17% of employees are "actively disengaged" with a propensity of undermining other colleagues work.

Considering these distinctions, it seems like your sense of fulfillment with work has been based on strengthening financial security and professional performance leaving you feeling emotionally discontent and disengaged. I wonder if your personal life is also lacking more significance because so much value is placed on making money. You mentioned how you enjoy having money and it might be beneficial to clarify for yourself what else gives you a direct sense of enjoyment and passion in your life.

I invite you to consider a holistic perspective, which embraces equal regard for your physical, emotional, mental and spiritual well being. Consider answering the following questions:

1. What do I enjoy that optimizes my physical health? Be specific.
2. What do I enjoy that enhances my emotional security?
3. What do I enjoy that supports greater peace of mind?
4. What do I enjoy that inspires my spiritual being?

Then clarify:

1. What specific actions can I take to improve my physical fitness?
2. What specific actions can I take to strengthen my emotional life?
3. What specific actions can I take to create greater peace of mind?
4. What specific actions can I take to expand my spiritual life?

These activities can be fulfilled today or nurtured over time. You may want to specify how and when you are going to accomplish these actions. After you have answered some or all of these inquiries, then go back to your original question posed to the Living Wealthy Team and write down what new awareness you have about your considerations and concerns. We would love to hear about the changes you may make now that you have expanded your sense of what gives your life greater meaning. Remember to include the needs of your body, mind and spiritÉ. and however you make the money will be more engaging, and hopefully a lot more fun.

Carista Luminare-Rosen, Ph.D., Director of Education, Inner Securities, Inc. To contact Carista directly to share comments or for a consultation, she can be reached at Carista@Innersecurities.com or visit the website www.innersecurities.com.

STU'S RESPONSE:
Dear Seymour:

As a former stockbroker and money manager for many years myself, I understand your concerns and have directly experienced the pressures to perform each month as you have described. The securities industry is well known for its intensely competitive nature and the high stress levels of its participants. And, as you have pointed out, the financial reward can be lucrative in this field.

You mention that you became a stockbroker to make money. Is this your only motive for staying there? If it is, I strongly suggest that you consider a move to another firm or another line of work altogether. First of all, it doesn't sound like your efforts are appreciated by your current firm, so you are working in an environment that may not support the financial success that means so much to you. Another shop may provide a more positive setting for you to thrive.

It may be that being a stockbroker just isn't your true calling, no matter how alluring the compensation. There are so many other ways to make money without subjecting yourself to the level of stress that can adversely impact your physical health and the quality of your personal relationships. Being a broker just for the money will just about guarantee that you will not attain your deepest heart's desire: to love your life.

Maybe it is simply a matter of shifting your perspective on your career. Ask yourself this: "How can I find meaning in my work as a stockbroker?" It may come down to whether or not you find purpose in being of service to people.

Consider how much you value your relationships with your clients. If you truly have a passion and purpose for caring for people and helping them with their financial security and retirement needs, you can find so much more meaning in what you are already doing! You will also attract so much more business because passion and purpose for what you do is the most effective selling tool.

Whatever you choose, don't settle for anything less than finding meaning in your work and loving your life. Because you can and you deserve it! Best of luck!

Stu Zimmerman, Chairman & CEO, Inner Securities. To contact Stu directly for a consultation, he can be reached at Stu@innersecurities.com or visit the website www.innersecurities.com

JUDITH'S RESPONSE:
Dear Seymour:

We've been taught to go for the big paycheck to secure a good financial future, but your inner voice is telling you there's got to be more.

In fact, although you have a comfortable living in many people's eyes, you rely on your paycheck as the primary source of money to support you and your family. Although your financial safety margins are better than many, you are still stuck in the paycheck-to-paycheck mentality. What happens to that income if you suffer burnout or some crisis occurs that takes your time away from the job? Even a bigger paycheck won't resolve this issue. And, as you are feeling, a bigger paycheck won't bring you a deeper sense of fulfillment in your life.

Robert Kiyosaki, author of the Rich Dad, Poor Dad series, highlights the importance of building passive income if you hope to achieve financial independence--and the freedom to work at a job you choose on the basis of what is meaningful to you, rather than on the size of the paycheck.

Although you already play in the arena of stock investment, and you are probably familiar with the power of real estate investment, I encourage you to open your mind to other avenues of creating money.

As you explore what is meaningful to you, stay open to the possibility of money opportunities showing up alongside those more meaningful activities. And be open to finding more meaning in your present occupation. For example, would you "make your monthly numbers" just as effectively if you applied more time and care to fewer clients? Would a different brokerage firm have a style that would let your spirit flourish? Or is this an unmet need, and are you the person to open a different type of investment firm, and make more money in that way?

While you explore, you can also create more financial freedom for yourself by using today's climate of cheap money to re-organize your monthly overhead. Examine your house payment. If you have a 30-year fixed-rate mortgage at 6% on your $330,000 mortgage, you pay $1969 per month in principal and interest. Using a newer type of mortgage, you could refinance, put another $70,000 in the bank (or in new investment strategies), and pay only $1422 per month. (Based on a $412,500 mortgage, payment calculated at 1.5%, with deferred interest.) By creatively re-thinking your use of money, you may find you can live well on less, or that you can liberate non-working assets such as equity to help you bridge into a more rewarding future.

I encourage you to open your eyes and your heart, to see more ways to welcome money into your life.

Judith Green, a mortgage and real estate financial advisor, specializes in problem solving for clients with more complex or non-traditional lending and credit issues. She can be reached for comments or to request a consultation at createmoney123@netzero.com.

GREG'S RESPONSE:
Dear Mr. Bucks!

The first question that comes to mind for me is that the general sense I gather from your comments is that your focus is about money first, and "purpose and meaning" second. I am sure that Stu and Carista would concur with what I tell my clients all the time that "Wealth has little to do with money." I would encourage you to look a little deeper about what your goals would include as far as experiences, relationships and events first.

The next step is to estimate the various ways that you can pay for your vision. The point of my suggestion is to encourage you to quantify in financial terms what a fulfilling life would actually cost. At that point you can evaluate if your income goals are actually what you truly need to be fulfilled. Maybe you don't need to make $500,000 per year in five years to have what you want.

Furthermore, once you have a vision of what you want to do in the near term, you should also begin thinking about how much you would like to live on in retirement, and at which point in time you wish to retire. I suspect your brokerage firm has a financial planning department where you can create an illustration for your own retirement savings schedule. Again, this exercise will help you in re-evaluating your income goals to determine how much you actually need to save.

I can identify with the stress and concern that you have regarding your job, as I spent 12 years in Wall Street brokerage firms. Even so, I know from experience that there is a way to work in stressful fields as our own and at the same time maintain fulfilling relationships with our clients and employers.

Good luck, Seymour!

Gregory Wendt, CFP®
www.gregwendt.com <http://www.gregwendt.com>
Premier Financial Management, LLC
Investment Portfolio Management, Comprehensive Financial Planning, Socially and Environmentally Responsible Investing

If you want to be considered as a candidate for this Living Wealthy column, email your questions to wealth@innersecurities.com. Be sure to include your name, email address and phone number.

For more information on the Living Wealthy team, visit www.innersecurities.com or call 707-425-2360.

Top 9 Signs That it is Time to Take Your Profits:

1. CEO and/or CFO gets his/her walking papers. This is especially true if the event is "hidden." When there is no press release, but all of the sudden you see a different name with that credential in the news, that is a warning sign that the executive got his/her walking papers fast, in a dodge ball maneuver. Example: Bennett Environmental.
   
   
2. Consensus Insider Selling: Insiders find it very difficult to avoid capitalizing upon information that they have. You may not know why they are selling, but if you see everyone jumping ship, don't be the last one hanging out with the rats. You can see this activity at MoneyCentral by entering in the symbol of your company, and clicking on Insider Selling.
   
   
3. Better investments. So.. you've been watching a dog lie there half-dead on your brokerage statement for a year now. Could the money be put to better use? Is that distressed company really going to jump up and dance? Take the loss and move on. (Note: If this occurs in October, you might want to wait for the seasonal year-end rally, to see if the price improves a bit before selling.)
   
   
4. Declining Revenues. "It's harder to lie about revenues than earnings, but Enron and WorldCom proved it can be done," according to Paul Woods. Odyssey Advisors have 2800 companies on a spreadsheet, and look at the most recent quarterly increase in revenues versus year ago, then do the same thing for the previous quarter. You can hire a money manager (if you've got the portfolio) to do this for you, or you can go to a very user-friendly web site: www.MoneyCentral.MSN.com. Enter in the company name, click on Financials, and you'll get the information you need there.
   
   
5. Eroding Profitability. Look at net profit margins for the most recent quarter and a year ago. It's pretty easy to spot changes that way.
   
   
6. Increased earnings on declining revenues and profit margin. When the numbers don't quite add up, that's a warning sign, and here consumer experience may be your best asset. The telecommunications sector circa 2000 is a prime example of long distance costs plummeting like the Titanic, while many corporations still reported earnings growth. In 2001, a record 77 telecommunications companies sought bankruptcy protection, according to Thomas K. Crowe of the STC Regulatory Counsel, including Global Crossing, MCI and Williams Communications. AT&T and Quest are still struggling. Companies are able to report earnings on one-time events, in divisions other than their core business and have other legal "tricks" to smooth out earnings when profitability and revenues are in decline. Wal-Mart is a current example. With rising costs in transportation, health care, utilities and accidents, lowered profit margins and slim margins in the grocery segment of their Super Centers, Wal-Mart recently reported 12.7% in 3Q 2004 earnings growth. The truth is that same store sales increased by a mere 1.7% in the Wal-Mart US division, however. The big retailers and etailers are going to experience profit margin pressure in transportation, with rising fuel costs. Other sectors to watch out for: auto manufacturers, Freddie Mac, Fannie Mae, mortgage brokers, utilities.
   
   
7. You can't believe how much the stock has run up! If your share price is in dreamland, it's not a bad idea to make it at least partially real. (Oh, if only dream mates and dream dates were so easily converted into reality!!) You can keep some invested, if you believe the company will see more of a run-up, without keeping all of your bet on the table.
   
   
8. Your portfolio is out of proportion. If you are over 50, as a general rule, you do not want more than 50% of your money in stocks. In a stellar stock market year, you need to make sure that your investments are still in line with your diversification strategy.
   
   
9. It's January and everyone is predicting a rough year in the markets. Remember this one in January. Most everyone we've spoken to is predicting a volatile, though flat, year in the stock markets. Historical trends on market performance in the first year of a presidency support this prediction, as well. We're in the Santa Rally now, so, with good fortune, you'll have a great reason to cash some profits in for the New Year.
   

Where do you put the money? Paul Woods, the CEO of Odyssey Advisors, likes "companies growing faster than expected." He spots these companies by looking at "accelerating revenues and improving profitability," which usually produce better than expected earnings per share. We like our stock picks, which are still outperforming the indices.

.

Rich Thinking:

by Rev Dr Audrey Reed , D.S.S., CEA.

Yes! I am now a wealthy and successful business woman, author, spiritual being and money expert. This wasn't always the case. If you had told me when I was younger that I would be writing books, giving seminars and speaking on television about the soul of money and your relationship with money, I would have said, "This is not my forte." The question of our spiritual relationship with the temporal caused me to peer into my soul and question, "How does the healing happen?"

Once upon a time, I struggled to pay the bills, waited until the last moment to pay some small amount to each vendor and "robbed Peter to pay Paul". I drove an old Ford Mustang that couldn't pass inspection - took the back roads and surface streets everywhere to avoid the police, since I couldn't afford the registration fee. (At least I did have insurance since my then three-year-old daughter regularly rode in this vehicle.)

I was driving down a back alley to get home one Saturday afternoon, when to my horror, there in the alley was a police car waving cars past a small accident. I was petrified. I began to say a small silent prayer. "Please help me get through this, please."

The policeman stopped me and looked at the long passed due red sticker in my window; I began to cry. I had to get to work. I couldn't be late. I had to have a car to pick my daughter up at day care. I couldn't couldn't couldn'tÉ É

This gruff policeman must have had a moment of pity as grace shown down upon me; he said, " Get that piece of junk outta here." And with that, he let me go. Sure I was upset to be driving a piece of junk, but it was the best I could do. Determined to have life and money go better, I began to focus on what we had.

• I started to pay the bills on time.
• I opened them when they came in and said thank you for the electric, for the gas and for the water.
• I got a better job.
• I was grateful.

The fallacy - safe in our abundance!
In 2001, as I snuggled deeply in my security of wealth, I listened to my broker and not my intuition. The stock market tumbled, and I discovered no matter how rich, when the cellular memory of past poverty lurks around the corner, the body's response mechanism kicks in. I found myself, once again not opening bills. As soon as I got a hold of my shock, I took action:

1. Pick up mail each day.
2. Open the bills . Say a little prayer over the bill.
3. Pay my vendors. They are my partners for the services they provide--the hard times that helped me through the now times.
4. I said grateful little prayers over each check I wrote.
5. Thankful for the blessing.

We've all had times in our lives when we have wanted to avoid paying bills; we either didn't have the money or wanted to hold onto it a little longer. Financially, money is our safety valve. It is the soft warm fuzzy blanket that says, "You are safe - no one can get you."

Too many people have come into my office with stacks of unpaid bills they just couldn't face opening. One client said, "I don't pay them until the pink bill comes, then I know it's serious, and I have to pay or the vendor will turn off the service." Another client doesn't answer her phone - it's only the bill collectors!

People with lots of moneyÉmillions of dollars have the FEAR; you are not alone.

One of my very wealthy clients advised me she couldn't touch bills. It was as though they burned her hands. She would avoid looking at them or throw them away, thinking "I'm Mrs.----------. I'm rich, very rich. Why would the electric company shut off my service?" They did, because they didn't know who she was nor did they care, they just knew she hadn't returned any of the calls, and she hadn't paid the bills.

One step at a time - one realization at a time.
Rich thinking people know they have agreements with their vendors, and they honor them.

1. If you cannot pay the entire bill, pay some of it.
2. Take a percentage from each paycheck to pay every owed vendor.
3. Adjust your thinking from "I am bill paying machine" to "I am paying my vendor; someone who has supplied me with the service I applied for and received. A blessing!"
4. I agreed to pay for the service when they agreed to sign me up for the service.

Domino Effect - What Happens when we don't pay our vendors?
Let's ask the doctor who just saw you on an emergency basis one Friday evening. She stayed in her office after the nurse had left, because you couldn't get there during normal office hours. Now three months later, you still haven't paid her. If even 30% of her patients did this, don't you think the doctor might have a hard time paying her bills? It is a domino effect!

Call, talk to the vendor, your partner - let them know your situation, and act in partnership with them to get the amount of money you owe paid.

Rich thinking people want to be able to go to the same vendor again and again. So they take good care of the people and service providers that take care of them.

Rich thinking people see everything in their world as an asset and can see the way to use that asset to move them into further abundance.

Jessica and William Nixon were thinking poverty and bankruptcy. They had stopped thinking richly and saw only the debt. Jessica agreed to be on a television money makeover with me on Fox 4 in Dallas. Family Credit Card Debt - $30,000. Three months later they were out of credit card debt and back on the road to financially rich thinking instead of bankruptcy.

1. We shifted their thinking about home money into a business.
2. We examined their assets.
3. Used their banking relationship.
4. Secured a 3-year loan with low interest.
5. Reduced their monthly overhead.
6. The family is talking about money and money issues.
7. The entire family all have individual savings accounts.

The Light and the loving of this abundant world blesses us all. Our souls are nurtured by the way we perceive our selves and our world. Thankfulness and focused actions manifest the riches of life.

Be Grateful! Be Blessed.

Dr. Audrey Reed has 30 years of masterful corporate and entrepreneurial experience. Sold her business in 1994 at 45. Two years later founded Works In Progress, Inc. Dr. Audrey's blend of business savvy and spirituality is sought after by organizations, private clients and for her workshops. Prized speaker, radio, and television guest; she is the Money Fitness expert/columnist for MS Fitness Magazine, Direct Selling Women and Money Doctor for Fox 4 Morning TV. E-zine @www.draudreyreed.com. Author - Money ToolBox for Women and Verbal Magik - Simple Practices - Increase Sales.

This chapter is from the book, Inspiration to Realization, compiled by Christine Kloser. Women are the creators in the world - the wisdom keepers,  Inspiration to Realization reveals the process behind how 41 women have become successful and dynamic on the engine of soul-valued manifestation.  Rev. Dr Audrey Reed , D.S.S., CEA. To order your copy of the book, contact Dr. Audrey Reed at www.draudreyreed.com.

Seven Reasons Why Investing is More Fun Than Buying Shoes:

by Natalie Pace.

1. You Should be Dancing, yeah!! You'll need those shoes to dance on the ceiling when your stock pick doubles, but it is the money you make that inspires the dancing.
   
   
2. Ever try sleeping in a shoe? The Little Old Lady Who Lived in the Shoe wouldn't recommend it. Did you know that women are far more likely than men to live in poverty when they retire or if they end up as a single parent? Are you listed on the deed to your home?
   
   
3. Smart is Sexy. Girl's Night Out Shoe Conversation: "Great shoes, where did you get them?" "I love your top." Girl's Night Out Investment Club conversation: "How much money did we make? What company should we invest in next? How about a girl's getaway?"
   
   
4. Shoes wear out and get thrown away. Stocks may dip, but over the long term, provided the company is not an Enron, a great company and their share price increase in value. FYI: less than 5% of the publicly traded stocks had to restate their earnings in 2002. There are a lot of great companies run by ethical men and women, and many safeguards in place to protect the investor.
   
   
5. Ever try to launch a business with the profits you made from shoes? Statistics show that most new businesses are launched with an entrepreneur's own personal resources (not through SBA loans or venture capital). Put your money to work, reap some benefits and you'll have the freedom to vacation, retire and/or start your own business!
   
   
6. Money is Very Sexy. Demi Moore is hot and shoes sure show off her toned and tanned legs, but her package becomes hard to beat when you throw in the private jet, the homes across America and the freedom to never have to work again. So, if you want your own 27-year-old hottie, it may just be a stock pick away! (It's not illegal to dream!)
   
   
7. Shoes stink and I've yet to find an odor eater that really works (have you?). Stocks stink when the markets go down, and rally with such a delicious aroma when the bulls run. Is everyone enjoying the Santa Rally? It's predicted to continue through January (when you should look to realign your portfolio into a well-diversified plan).

Companies and Financial NewsÉ

Important highlights from the New York Times, Money Central, Reuters, Bloomberg, CNBC and more.

Fannie Mae and Freddie Mac. "They [Fannie Mae and Freddie Mac] have not met their obligationsÉ They have taken advantage of the taxpayers' subsidiesÉ The accounting now appears to be faulty and at worse more than that. This comes in a low-interest rate of environment while housing is strong. Particularly Fannie is an amazing enterprise. They can have a house on fire and call it a house-warming partyÉ" Congressman Richard Baker, speaking on CNBC 11.18.04

Inflation:
"The economy is slowing and the government is lying about the inflation rate because they want to minimize the increase in Social Security.  Have you bought gas, health insurance, or anything else lately?  The 2% inflation number is a joke."   Paul Woods, CEO, Odyssey Advisors

"A low CORE number allows us to pretend that American productivity is the best in the world, that the dollar should be strong, and that the markets, by golly are going up. No matter that a gallon of gasoline is over 2 bucks or that a half gallon of milk will set you back $3.69." Bill Gross, PIMCO BONDS, on the "con job perpetually foisted on the American public about the low level of inflation," from his October 2004 Investment Outlook

"With underlying inflation expected to be relatively low, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability." Statement from the Federal Reserve Board on November 10, 2004

Pension Plans:
David Zion, an accounting expert with Credit Suisse First Boston estimates that 32 companies in the S&P 500 will be required to contribute more than $200 million to their pension plans in 2004 or in 2005. Outside of the airline group, predicts Zion, some of the biggest amounts will be forked over next year by Ford Motor (NYSE: F), $1.3 billion; Exxon Mobil (NYSE: XOM), $1 billion; Hewlett-Packard (NYSE: HPQ), $472 million; ChevronTexaco (NYSE: CVX), $450 million; and Altria Group (NYSE: MO), $392 million.

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