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Vol.6 Issue 4 April1st, 2009
Send comments and suggestions or get more information at info@NataliePace.com

Quote of the Month:
"An economy built on reckless speculation, inflated home prices and maxed-out credit cards does not create lasting wealth. It creates the illusion of prosperity, and it has endangered us all.”

President Barack Obama,
In his News Conference on March 24, 2009

Life Begins with Li (Lithium). By Natalie Pace. Includes a Lithium Ion Battery Stock Report Card.

Clean Energy: Powering EVs and the Grid. By Paul Woods, President and CEO, Odyssey Advisors. Storing electricity in a gigantic, nationwide battery.

The Cure for the Financial Crisis: Common $ense Economics. By Natalie Pace, author of Put Your Money Where Your Heart Is and featured teacher in Spiritual Liberation (DVD).

Finally! Relief for Distressed Home Owners: The Obama Refinance/ Modification Program. By Shawn Harris.

Borrowing from Your 401(k): Is It Ever a Good Idea? By Carrie Schwab Pomerantz, Chief Strategist, Consumer Education, Charles Schwab & Co.

Top 10 Signs a Company Is Imploding. By Natalie Pace.

Avoiding Investment Scams. A FINRA.org Investor Alert.

Gains of 360 Percent on U.S. Gold and Strong Performance By More Than a Dozen Other Stocks. By Natalie Pace.

Stockerblog.com Exclusive: Interview with Natalie Pace – Part 2. By Fred Fuld.

Comeback. By Gary Kobat. The incredible Lance Armstrong, who dropped out of his first two Tour de Frances.

Buy and Hold Doesn’t Work. By Natalie Pace. Includes my Hot News on Cool Stocks List.

NataliePace.com Calendar: Kirtan, Meditation and Money. Elevate Films presents an evening of revisioning your life in their LA Temple Loft this Sunday evening, April 5, 2009.

Life Begins with Li (Lithium).

by Natalie Pace.

Includes a Lithium Ion Battery Stock Report Card.

Photo: The 100% electric Tesla Roadster TeslaMotors.com

Well, if you’ve listened to any of President Obama’s speeches or press conferences or read the American Reinvestment Recovery Act, you should be clear by now that President Obama is a clean energy fiend and he’s willing to back up those beliefs with some mean green. According to President Obama, his budget "leads to broad economic growth by moving from an era of borrow-and-spend to one where we save and invest." The President believes that an investment in clean energy, in education and in healthcare will fuel sustainable prosperity for Americans and that over the last eight years, a boom/bust cycle of inflated home prices and maxed-out credit cards created the "illusion of prosperity."

President Obama’s American Reinvestment Recovery Act (ARRA) includes $39 billion in energy investments at the Department of Energy and $20 billion in tax incentives for clean energy. According to the White House Clean Energy Fact Sheet of March 23, 2009, The Obama Administration wants to fund an advanced research agency for energy (modeled after the agency that created the Internet) that will discover breakthroughs in energy storage, super-efficient engines and solar cells as cheap as paint. The plan also calls for supporting "U.S. manufacturing of advanced batteries needed for plug-in hybrids, renewable energy backup, and other applications."

In other words, a cleaner/greener American Life in 2009 begins with Li (Lithium) because the "advanced batteries" used to store power on the grid as well as in our electric cars and hybrids are all conducted by this basic element.

Some forward-thinking firms have already put plans in play to clean up the auto industry quickly on the federal dime. A group called the National Alliance for Advanced Transportation Battery Cell Manufacturers is already working under the advisory guidance of The U.S. Department of Energy’s Argonne National Laboratory. The Alliance seeks to develop one or more manufacturing and prototype development centers in the United States, which will be shared by Alliance members, jumpstarted by an investment of $1 to 2 billion over five years from the U.S. government. The founding members of the Alliance include 3M, ActaCell, All Cell Technologies, Altair Nanotechnologies, Dontech Global, EaglePicher Corporation, EnerSys, Envia Systems, FMC Lithium, Johnson Controls-Saft, MicroSun Technologies, Mobius Power, SiLyte, Superior Graphite and Townsend Advanced Energy.

Now before you take this list to the bank (err brokerage), it’s a good idea to review my Lithium Ion Battery Stock Report Card. Though it is expected that President Obama and his team will begin deploying funds for a green auto industry quickly, and the founding members of NAATBCM are in line to benefit from all that check-writing, the underlying health of the company receiving the aid will be a key factor into how well the investment pays off. After all, General Motors has quietly received $13.4 billion from the Treasury Department since December 29, 2008, but GM continues to trade lower than it was half a century ago, with a market cap of just $2 billion. Government dough isn’t enough yeast by itself to make the company’s share price rise.

You’ll see that I’ve highlighted many of the companies listed on the Stock Report Card, namely FMC Corporation (FMC), Altair Nanotechnologies (ALTI), Ener-1 (HEV), Maxwell Technologies (MXWL) and Sociedad Quimica y Minera (SQM). Johnson Controls is the only company on the report card that will not be on my Hot News on Cool Stocks list, and that decision flies in the face of the headlines of other financial media, who are writing that this company is the leader of the pack. (Please note: I did not research all of the companies in the Alliance, and I’ve added a few lithium plays that are not in the Alliance, at least yet.)

Johnson Controls and French battery developer Saft are touted as the strongest play in the lithium ion battery field for a few reasons. On February 3, 2009, Johnson Controls inked a deal with Ford to supply lithium ion batteries for a new hybrid car beginning in 2012. (GM inked a deal with LG Chem, based out of China, to supply the lithium ion batteries for their Volt.) Johnson Controls Saft batteries will also power BMW and Mercedes Benz cars. Clearly this company is respected as a leading battery maker and that respect and those relationships have given Johnson Controls an early lead in the game.

However, the same issues that plagued the airline industry and the auto manufacturing industry are present in Johnson – namely pension and other Post Employment Benefit obligations, which contribute to $5.2 billion owed in long-term liabilities, in a company with just $7.45 billion market value. Additionally, the profit margins at Johnson are less than 1%, sales were down 23% last quarter and the company announced on Friday, March 27, 2009 that they would be laying off workers and closing 10 manufacturing plants. The goal is to save $200-$215 million annually.

While Johnson is downsizing, new companies, like Ener1 (symbol: HEV) and the privately held company A123, have plans to ramp-up lithium-ion battery manufacturing facilities on U.S. soil, using the government’s Reinvestment Act money to do so. Ener1 wants to build a lithium-ion battery manufacturing plant in Indiana, and A123 has asked for $1.8 billion to build a plant in Detroit.

Ener1 has a $70 million supply contract with Think Global (an electric car company based out of Oslo, Norway) and a $34 million purchase order from Think, which could certainly catch the attention of the check writers at the Treasury Department. Of course every great story has a few twists and turns, and Think is in the process of "restructuring" its agreements with creditors in the Norway legal system (bankruptcy protection). Ener1’s majority shareholder (parent company), Ener1 Group, has given Think almost $4 million in bridge funding to help the process move forward more quickly.

Altair Nanotechnology is already making lithium ion batteries for the Department of Defense, was the battery supplier for Phoenix Motor Cars (before the relationship was terminated by Altair) and recently had a successful test for a 2 megawatt grid capacity battery system for AES Energy (a leading power company, with operations in 28 countries on five continents and the capacity to service up to 100 million people). Altair has 10 U.S. and 29 International patents protecting their lithium-ion battery technology, and they have applied for government money to expand as well. Since Altair is already partnered with the Department of Energy, the U.S. Air Force, the National Science Foundation and the Department of Defense, it is in a great position to expand operations on the Federal dime.

Maxwell Technologies is run by CEO David Schramm, who had a long career (over three decades) with General Motors and Delphi Automotive Systems. Maxwell supplies ultracapacitors, which recuperate energy from the braking system. Maxwell currently has over ten times the sales of Altair and Ener1, at $82 million last year. Maxwell’s products are used by hybrid manufacturers, by China in their hybrid buses, by European wind energy producers and even in aerospace applications. The company has also applied for government money.

Perhaps the easiest call of all, however, is lithium itself. Lithium is the basic material involved in batteries that fuel almost everything in life – from computers to hybrids to cell phones and even flashlights. Good luck finding lithium mining companies on your own. I’ve scoured the Internet and only found two companies that are publicly traded – FMC Corporation (FMC), based out of Philadelphia, PA, and Sociedad Quimica y Minera, (SQM) based out of Chile. If money is poured into the advancement of lithium ion batteries and electric cars, then these two companies are poised to reap the rewards because the manufacturing of lithium is still a developing field. Demand for lithium should ramp up quickly with a rapid inflow of funding.

So L-I-ve and invest in lithium in 2009, as one of the few thriving, hot spots in an otherwise dark and deadly bear marketplace.

I added the following companies to the Hot News on Cool Stocks list this month: Ener1, FMC Corporation and Maxwell Technologies.

Altair Nanotechnology and Sociedad Quimica y Minera were added previously to the list and remain there. Read this month’s Hot News on Cool Stocks list for additional information on all of these companies.

Full Disclosure: I do not own stock in any of the companies mentioned in this article.

About Natalie Pace:
Natalie Pace, is the author of Put Your Money Where Your Heart Is, a featured teacher in the movie, Spiritual Liberation, and CEO of one of the most respected, independently owned financial news corporations in the U.S. She has been ranked as a #1 stock picker from TipsTraders.com and has partnered content with Forbes.com, Sohu.com, Kiplinger’s Personal Finance and more. She has appeared on Fox News, Good Morning America, CNBC, Time Magazine, More Magazine, USA Today, NPR and national radio shows. For more information please visit, http://www.nataliepace.com.

Please note: NataliePace.com does not act or operate like a broker. We report on financial news, and are one of the most trusted independently owned and operated financial news corporations in the U.S. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.

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

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

Clean Energy: Powering EVs and the Grid.

by Paul Woods, President and CEO, Odyssey Advisors.

Storing electricity in a gigantic, nationwide battery.

For investors in solar and wind technologies, the Holy Grail is finding a way to store the electricity that’s produced. Because these only produce electricity when the sun shines or when the wind blows, their potential impact on our overall electricity supply is limited. Unless we can find a way to store the electricity from clean sources, coal and natural gas will always be needed to produce power at nighttime and during cloudy or windless days. Besides cost, this is easily the most challenging problem preventing the widespread adoption of clean technologies.

There is currently a wide range of ideas under consideration for storing electricity or for storing energy and turning it into electricity when needed. Most are cumbersome, expensive, and yet to be proven. However, the solution to a seemingly unrelated problem in the auto industry may also provide a practical way for consumers to store electricity and be paid for sending it back to the grid.

The Perfect Storm for Automakers
In the last year or so, automakers have faced a seemingly endless string of bad news. As the economy tanked because consumers stopped spending, auto sales have evaporated. Two of the big 3 are now facing the real threat of bankruptcy and hoping for a bailout from Washington. The election of Obama compounded their problems as more aggressive mileage standards are likely to be imposed by the EPA in a market where consumers continue to show a preference for roomy SUVs. Under the Bush administration, the EPA gas mileage requirement was set to go from about 25 MPG today to 35 MPG in 2020. However, our new president has asked the EPA to reconsider and mandate that cars average 43 MPG by 2016.

Melting ICE
The only problem is that America isn’t Europe and consumers here haven’t shown much interest in cramped, ugly, underpowered cars. This will probably turn out to be a killer for the internal combustion engine (ICE) because the only way to significantly increase mileage with this technology is to make both the vehicle and the engine smaller.

Automakers have done their best to keep the combustion engine alive because this antiquated technology requires a lot of maintenance and sustains a VERY lucrative parts and service business. They’d love to find another fuel for it, but the alternatives are ethanol and natural gas, and both produce poorer mileage than gasoline and take the auto companies further away from the EPA mileage goals.

What this means is automakers will finally have to find an alternative to the combustion engine. Barring a major technological breakthrough, the only way at present to meet future EPA mileage goals in a vehicle with viable economics is to begin using electricity for at least part of the power source. Electric drives produce more torque (faster acceleration) than a combustion engine and have fewer moving parts that require less maintenance. Most importantly, they allow a vehicle to be built that blows the EPA mileage standards out of the water without sacrificing comfort or performance.

EV or PHEV?
While fully electric vehicles (EVs) are the inevitable last step in the process that started with hybrid technology, the current EVs aren’t yet practical for most consumers. Lithium batteries have extended the range to around 100 miles, but the lack of charging stations and the hours required for a recharge will limit the market for EVs to people that don’t get out much. These will need charging infrastructure and battery breakthroughs that extend the range to gain widespread acceptance.

The next step in the process of changing what we drive is finally winning the grudging support of automakers because it’s the only practical way to meet higher EPA standards while still allowing auto dealers to overcharge for parts and service with a vehicle that includes a combustion engine. Just about every auto company has a plug-in (PHEV) on the drawing board and the first ones will reach the market at the end of 2009. These can be powered by both electricity and a combustion engine. There are several configurations, but the most popular is likely to be a PHEV that will go up to 50 miles powered by the electricity stored in a lithium battery. Once the battery has run out, a combustion engine will power the vehicle until it can be charged again.

Source: U.S. Department of Transportation, Federal Highway Administration, 1990 Nationwide Personal Transportation Survey (NTPS), Volpe National Transportation System Center, Cambridge, MA 1991

The gas mileage will depend upon the percentage of the time batteries are used to power the vehicle, but most assumptions have an average of over 100 MPG for PHEVs. The graph above shows another benefit, approximately 80% of Americans drive 50 miles per day or less. THAT should be enough to give our friends in the Middle East the night sweats, as the widespread adoption of PHEVs would also dramatically reduce our demand for imported oil.

Vehicle to Grid (V2G)
When it comes to electricity storage, there’s already a proven, viable technology that doesn’t require a company to make a huge investment and hope it will work. Batteries have been around a long time and recently introduced lithium batteries are a big step forward when it comes to storing more electricity. For perspective, 100 pounds of lead turned into a battery will store enough electricity to drive a small vehicle 10 miles. The same weight in nickel will increase the range to 15 miles. However, 100 pounds of lithium increases the range to 40 miles.

Source: http://blog.futurelab.net/2007/10/the_renewable_electron_economy_3.html

As PHEVs and eventually EVs become more common and more are plugged into the grid, they would become the equivalent of cloud computing. Just as many PCs can be combined to form a supercomputer, when enough PHEVs and EVs are plugged into the grid, their batteries will become the equivalent of a gigantic, nationwide power storage battery. This isn’t pie in the sky; this approach has already been strongly endorsed by the head of the Federal Energy Regulatory Commission. Once plugged into the grid, the vehicle would be able to send electricity back to the grid if the electricity in the battery exceeds a preset amount dictated by the owner and that owner would be paid for doing so.

The Pick of the Litter
We expect the market for lithium batteries for EVs and PHEVs to be dominated by Asian manufacturers because of their manufacturing expertise and huge economies of scale and doubt that smaller American battery makers will be able to compete on either quality or price. Our approach here is to invest in the raw material needed to produce these batteries. About 70% of the world’s lithium is found in a small part of South America that includes Argentina, Bolivia, and Chile. The annual demand is expected to triple in the next few years as the production of large format batteries for vehicles ramps up, and supplies are likely to become increasingly tight.

Sociedad Quimica y Minera de Chile SA (SQM) is the world’s leading producer of lithium and controls one of the largest reserves. They also have a fertilizer business that is strong at present and SQM even pays a dividend. While neighboring Bolivia has a larger lithium deposit that hasn’t been developed, that country has a history of nationalizing resource companies and will have difficulty finding a sane capitalist willing to build the infrastructure necessary to allow mining to begin. SQM is likely to continue the bulk of the world’s commercially available lithium supplies for the foreseeable future. As in all countries in that part of the world, the major risk is nationalization if SQM becomes too profitable. However, Chile has a far better track record than its neighbors when it comes to keeping its hands off private companies. Overall, this is an investment worth considering for those willing to tolerate risk, but don’t bet the farm. For disclosure purposes, it should be noted that SQM is included in several of the portfolios managed by Odyssey Advisors, LLC.

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

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

The Cure for the Financial Crisis: Common $en$e Economics.

by Natalie Pace, author of Put Your Money Where Your Heart Is and featured teacher in Spiritual Liberation (DVD).

A few weeks ago, I was asked, "Are you Miltonian or Keynesian when it comes to Economics?"

I responded, "I’m a Dr. Seussian."

I’m from the school of common sense economics, and it has served me well through many crazy fads over the last decade, such as the "New Economy" of 2000, which precipitated a bust of NASDAQ. NASDAQ imploded, losing almost 70% from 2000 to October of 2002. By avoiding that trap, I saved all of my money in 2000, and then almost tripled my money in 2001. That began my career in financial news and education because all of my girlfriends came to me begging me to teach them what I know.

What I know is simple: there is wisdom in the shopper. If you can’t get to the shopping cart without the dial-up connection crashing (as happened for most Americans in 2000), the etail companies have to solve the problem of getting broadband in every home before the dream of online shopping becomes real.

Common sense economics means that when no one can afford to buy a home without teaser rates, no down, interest only liar’s loans, you’ve got a housing bubble. Understanding that helped me to determine that homebuilders should be placed on the Cooling Off list as early as May of 2005 (which was the high in those REITs).

Dr. Seuss could have written quite an entertaining book on all of the speculators who were staying up late to watch real estate infomercials on how to buy and flip homes in Florida, Arizona, Nevada and California. The CEOs of the homebuilding REITs knew that halcyon days were near an end, and were cashing out to the tune of hundreds of millions in 2005. You can read more about this in the article, "Rupert Murdoch, Nobel Laureates and Top Real Estate CEOs," from vol. 2, issue 5. In the archived NataliePace.com ezines.

We’re not hearing much from the speculators in the national debate, but secretly, we all know how our own hands are dirty with respect to the housing bubble. Without all of the speculation, there would have been no subprime mortgages to repackage, leverage and sell in the first place. In other words, if there isn’t a customer, there can’t be a product. And if we weren’t involved in subprime loans, then odds are very high that we owned some of the worst offenders of the leveraging process, including AIG, Citigroup, Bank of America and Fannie Mae, which were all Dow Jones Industrial Average components in 2007 and the most popular mutual fund holdings.

The average person has the power to just say no and the wisdom to understand when the logic of something just doesn’t add up. We the people, armed with common sense economics, have the power to create a healthy U.S. economy, and for the first time in history, it’s as easy as a few clicks on the computer. Imagine the power of pointing all of our retirement dollars into the hands of clean energy, natural health cures and education, and actually own the products, goods and services that we actually use (or want to use) in our daily lives. When you don’t know what you own in your retirement plan, you fund the status quo. Main Street owns Wall Street, so if you don’t like what "they" are doing, you need to stop giving them the money to do it – both as an investor and as a taxpayer.

You don’t need a fancy theory to tell you that capitalism works better than cronyism (a Milton thesis). And you don’t need a crystal ball to see that it was the U.S. government that bailed out AIG, GM, Citigroup, Bank of America and Merrill Lynch, instead of letting them go belly-up and be replaced by companies that are run better and offer better products that people actually want to buy. (Keynes argued that the government should exercise greater authority before macroeconomic disasters, such as the one we are experiencing today.)

In common sense economics, rather than immobilize our brains with fear and worry about how the government might better regulate the free markets and which theory is a better one, each one of us instead accepts our role in the insanity. When the system melts down as a result of our own stampede into the boom/bust cycle of paper prosperity, we point the finger back at ourselves and vow to figure out a better strategy. And there is one.

You own Wall Street. All of those little boxes that you check off blindly in your 401(k), annuity, IRA and retirement plan are really you deciding exactly which companies you own. In fact, the Dow still has Citigroup, Bank of America and General Motors as three out of its 30 holdings, transforming the "leading Blue Chip index," into the Bailout Index.

So, if you’d rather profit from solar manufacturers than cigarette companies, or if you’d rather own schools than oil fields, or if you’d rather promote electric cars over gas guzzlers, it’s as easy as Red Fish, Blue Fish, once you understand that you have choices beyond the four or five little boxes on that form your Human Resources person or Certified Financial Planner or insurance specialist hands you.

Below are four easy strategies to a healthy nest egg, based on common sense, that allows you to take ownership of Wall Street again, creating the foundation for a renaissance of the U.S.

Modern Portfolio Theory. Using Modern Portfolio Theory, the average 50-year-old would have kept AT LEAST 50% safe, i.e., not invested in the stock market. This alone would have limited the losses to just 25% (or 40% in only half of the nest egg). If s/he "recession-proofed" the portfolio and put an additional 20% safe (as I recommended back in February of 2008), the maximum losses would be limited to just 14%.
Exchange Traded Funds. ETFs have a few advantages over mutual funds. One: they are more transparent. Two: they target specific industries, allowing you to easily see and capture your gains. Three: they are managed by pre-determined, electronic screens. Four: they are less expensive. Buying and holding mutual funds is a losing strategy. Over the last ten years, the markets have returned less than zero. The Dow is trading lower today than it was in 1998. Using ETFs, MPT and annual rebalancing, you would be much richer today than you were a decade ago, without all the binging and purging of the boom/bust cycles.
Annual rebalancing. Having ETFs and incorporating Modern Portfolio Theory means that you can look at the pie chart blueprint of your holdings once or twice a year, see and capture gains, while always keeping a percent equal to your age safe. In this way, you would have made a lot of money over the last ten years. If you had captured your gains annually, you would be richer from NASDAQ 2000 as well as protected from the 2000-2002 recession. You would be richer when the Dow cracked through 14,000 in 2007, and insulated from the 2008-2009 recession.
What’s an investment? Believe it or not, some of the most common mistakes made by investors include not knowing what a legitimate investment is in the first place! Investing in your niece’s Internet startup or giving a loan to your deadbeat uncle are not investments. If you think of these as gifts or charity or education, and forget about expecting a payback, then you will be in the proper frame of mind to help out. If you are expecting to earn money on these, you could be investing in a daily dose of stomach acid. Your "Buy My Own Island" investments should be money while you sleep, in other words, low risk and low maintenance, not you being the family bank.

Dr. Seussian Economics is at the heart of my book Put Your Money Where Your Heart Is and it helps to explain why a literature major can beat the street for a decade running. Great real estate consultants say you always need to "kick the dirt" before you write a check. Great money managers, like Peter Lynch, believe that if you like the store, you’ll like the stock. In other words, common sense economics is a pretty popular thing with very successful investors.

Common Sense Economics is a great way to approach investing, and when you learn how to Put Your Money Where Your Heart Is, you too can start beating the street the easy way. It’s as easy as a pie chart. And it begins very simply – by reading my book. If you want to jumpstart your education and set up a blueprint that will work for the rest of your life, come to the June Get Rich and Green Retreat in Santa Monica, California. There will be just 14 people in a boardroom setting, taught hands-on, by me for three full days.

Get more info on the book at Amazon.com and on the Retreat on the home page at NataliePace.com.

Every cent you own and every moment you spend is always an investment!

Finally! Relief for Distressed Home Owners:

by Shawn Harris.

The Obama Refinance/ Modification Program.

President Barack Obama reflects on the data presented during a meeting on the budget Thursday, Jan. 29, 2009 in the Roosevelt Room of the White House.
Photo: White House Photo 1/29/09 by Pete Souza

It looks like some legislation has finally been offered that has a little bit of teeth on it and will provide some actual help for homeowners. The programs that were announced a few weeks ago have been flushed out with details as of March 4th. Here is a summary of those programs:

Summary:
A)   Fannie Mae loans under 740k are eligible for refinances if LTV is under 105%.
B)   Lenders/Services are financially motivated to accept more loan modifications. Terms are systematized, with a floor rate of 2% over 5 years IF your bank cooperates.

High LTV Refinancing
First and foremost, they have approved a Fannie Mae program that will allow homeowners to refinance if their first mortgage is less than 105% of the current value of their home. For homeowners with good credit and who are current on their mortgage, many now have the opportunity to participate in the low interest rate environment we’re currently in.

These new refinances are "streamlined", meaning there is limited documentation that is required. For most borrowers, an updated paystub and a verification of employment is all that will be required (self employed are required to show tax returns). A new appraisal is required to be ordered as well.

In order to take advantage of this new program you can go directly to your current lender or (hint, hint) you can work through a different mortgage banker, like myself. Do anticipate that for the next few months, banks will be extremely busy and slow at handling these new requests (and the new loan modification programs, discussed below).

The important wording in the program dictates that LTV calculations are based on the FIRST mortgage. We ignore the 2nd mortgage with respect to calculating the loan to value. For Example:

Mr. Smith bought house for $500,000. He had a $400,000 1st mortgage and a $100,000 2nd mortgage. His house is NOW worth $400,000. He IS eligible for the new streamline refinance because his 1st mortgage is less that 105% of the current house value. The 2nd mortgage will remain unchanged.

These refinance loans are very similar to the ones that we have grown accustomed to, and therefore it looks like they will actually work (unlike past loan modification programs). We use the exact same underwriting guidelines as before, aside for the LTV limitations. Do keep in mind that these are actual refinances, so standard refinance fees will apply (title/escrow/appraisal/notary/etc).

Loan Modifications for Delinquent Homeowners
This program sets forth a specific guideline and parameter that uses the "carrot approach" to motivate investors and services to modify home loans. This program has the potential to be either extraordinarily helpful or completely useless, depending upon how the investors respond to it. Previous attempts to incentivize and standardize loan modifications have failed because banks have decided against participating in them, but this program looks better.

In a nutshell, banks are paid by the government to modify home loans AND borrowers are paid by the government to make sure those loan modifications don’t go in default again.

By incentivizing both the homeowner and the bank with funds, the government hopes to monetarily reward banks to follow its lead and give the banks faith that the borrower will maintain current payments. Currently, homeowners who receive loan modifications re-default within 6 months at a rate at over 60%, costing the banks a tremendous amount of time and money and dis-incentivizing them from working with consumers in the future.

The specifics state that homeowners who get a loan modification will receive support from the government in the form of a principle reduction (of $1,000 per year for up to 5 years) IF they maintain a consistent on time payment schedule with the lender. Banks get $1,000 per year for 3 years from the government, and servicers get a $1,000 up front payment.

The largest potential benefit comes from the write down of interest rate for the homeowner. The homeowner potentially has the ability of their new mortgage rate dropping to a minimum of just 2% for 5 years, then adjusting to Today’s average 30 year mortgage (around 5.25%). This is a huge benefit to the homeowner. The target rate for banks as dictated by the government is to reduce your monthly mortgage payment (including taxes and insurance) to just 31% of your gross income. If the banks get that down to 38%, the government will subsidize the next 7% (to 31%) on a 1:1 ration (so the bank pitches in the next 3.5% and the government will match it).

The caveat, is the bank must play ball, and it may or may not be in their best interest to do so. Dropping a rate by 5% for five years, and 2% for the life of the loan may substantially more expensive than forcing a foreclosure. The new bailout will not meet the bank half way; either they must drop your payment to 31%, or the bank will not offer any assistance.

The last time the government put forward a loan modification program (the HOPE for Homeowners plan) it had literally no effect (the number of people successfully helped by this program, across the nation, were less than two people could count on their fingers and toes). There is definitely more motivation for banks and servicers to act this time around. Financially the government will help subsidize the loss and politically there will be pressure on any bank who accepted TARP funds. We will see the results of this loan modification plan play out over the next 60-90 days.

Where to go for help?
Loan Modifications
With regard to modifying your existing loan (not refinancing) I highly suggest that you go directly to the lender and/or servicer. There has been a new industry of loan modification specialists created over the past nine months, and the vast majority of these companies are after your money and offer limited help. Most of these companies are now attached to attorneys (because attorneys can legally charge up front fees, whereas loan modification companies cannot), but that alone is not an endorsement of their services. A lender/servicer in my experience is just as likely to modify your loan if you do the work as if an attorney does.

Additionally, I am seeing non-profit organizations being created whose sole purpose is to direct business to a particular loan modification center, so also be wary of them. (If the website has a .gov suffix, it is probably legit). There are a lot of unemployed subprime loan officers right now, and the opportunity to make $3,000 - $4,000 per transaction has created an enormous amount of "creative" marketing.

Natalie’s Note: HopeNow.com is a government approved homeowners’ help center.

It is a time consuming project, so if it is worth the $3,000 - $5,000 that most loan modification companies charge to have them do the work for you, than this is the most legitimate reason I see for using a loan modification company. If you have general questions about the process, please feel free to email or call me. I don’t charge for advice or counseling. (I do not process loan modifications, nor am I affiliated with anyone that does).

High Balance Refinancing
When looking for your options for high loan to value refinancing, you have two options. First: you can go to your current lender. I don’t suggest calling the # 800 number, as customer service will be horrible and the process will take forever. If you want to continue business with your current lender, go to your branch to do facilitate process, it will be worth the extra time.

The other option is that you can go to a different lender/bank/broker. It is a Fannie Mae program, so any company that is approved to do business with them can originate those loans. I would be very happy to help you with this aspect (this is how I make my living).

If I can be of any help to you, please feel free to email me or call me. Additionally, if you would like to read any of the source material that the administration has published detailing any of these programs, just send me an email and I will send them over.

Cordially,

Shawn D Harris
Mortgage Banker
Mortgage Planning Specialist

I Appreciate Referrals .... If you know someone who needs expert mortgage advice contact me.

Direct: 800.871.7987 x 702

Borrowing from Your 401(k): Is It Ever a Good Idea?

by Carrie Schwab Pomerantz, Chief Strategist, Consumer Education, Charles Schwab & Co.

March 12, 2009

Dear Carrie,
Does it make sense to borrow against my 401(k) to pay off high-interest credit card debt?

— a Reader

Dear Reader,
While I enthusiastically applaud your goal of paying off your high-interest debt, I have to say that my initial reaction to the idea of using your 401(k) to do so was a resounding "No, don’t you dare!" Your retirement account is a crucial component of your long-term financial plan; indeed, for many people, it is the crucial component. And that makes me very reluctant to recommend using that asset for any other purpose. Nonetheless, in some situations and subject to a lot of caveats, it can make sense. If you understand and follow the stringent rules for 401(k) borrowing and if you are extremely confident you can pay the money back in a timely fashion, this could be a good move. But caution lights abound; think carefully before you leap.

Understand the Terms
Start by making sure you fully understand the terms at which you’re borrowing. Typically, you can borrow up to 50% of your vested 401(k) balance up to a maximum of $50,000 (but note that some plans have different rules). The interest rate you’ll be charged will probably be quite low, perhaps 5%. You’ll most likely have to pay the money back within five years (an aside: if you’re borrowing to buy a home, you have longer to repay the loan—but that’s a different story). You’ll also need to understand the procedures for paying the money back; generally, you do so through an automatic payroll deduction. Of course, you’ll be paying the interest to yourself, which is a good thing.

Understand the Risks
Now if you’ve got a lot of credit card debt at, say, 15% or higher, then paying it off at 5% (with the interest going back to you) can seem pretty compelling. And it is a very attractive proposition, both in a financial sense (lower total interest costs) and a psychological one (having no credit card debt can be a very good feeling).

But there some significant caveats:
* Your monthly payment could actually be higher. Credit card balances can be repaid in such small increments you can take years or decades to repay them. Your 401(k) loan will likely have to be repaid within five years. If you have a lot of debt, you may not see that much monthly relief, despite the lower interest rates.

* When you repay the loan, you’re using after-tax dollars, thereby forfeiting the tax advantage of a 401(k) plan. Then you’ll have to pay tax again when you eventually withdraw the money in retirement, so you’re in effect making yourself subject to double taxation.

* You miss out on the investment potential of the money you borrow. That might not seem too dire in today’s environment, but if the markets start growing while you’re paying the money back, you might miss some real opportunities for growth.

* If you lose your job, you have to repay the loan in full, usually within 90 days, or the loan is treated like a distribution, which means the full amount will be subject to income tax and a 10% withdrawal penalty (assuming you’re under age 59½).

Those are very real risks, and before you embark on this path, make sure you understand them. The last one is particularly important; if you think there’s any chance of losing your job, the consequences could be disastrous.

At the same time, it’s vital that you keep saving for retirement—so you’ll need to be able to afford the 401(k) loan repayment and some level of 401(k) contribution (at the very least, you’ll want to take full advantage of your company’s match). By all means you want to get out of credit card trouble, but you don’t want to create another problem by neglecting to build assets for retirement. Caution: Some plans will not allow you to contribute while you have an outstanding loan, which could mean forfeiting a company match! Check with your plan administrator.

Out of Control?
There’s another issue to consider: Is your credit card burden the result of out-of-control spending? Or is it the result of hard times or unexpected expenses? If you’re in the habit of spending too much or financing your lifestyle using credit, then simply paying off the current balances on your cards may not help you in the long-term (you could easily rack up another substantial debt). But if you’ve had, say, unexpected medical bills or if you needed a costly repair to your home—if this current credit card burden is truly unusual—then the 401(k) loan might give you some relief. (Note that if your situation is really dire—if you’re considering bankruptcy—definitely do not consider a 401(k) loan. Creditors can’t touch your retirement accounts under federal law.)

In other words, taking out a 401(k) loan is not a decision to be made lightly. So my advice would be to consider all your alternatives before you go down that route. For example: If you have a home equity line of credit, use that to pay off your credit card balances (you’ll get a much lower rate). Or consider a balance transfer offer from another card issuer to consolidate your high interest debt onto another lower-rate card (lots of them have extremely low teaser rates—sometimes 0% for as much as 12 months). You can even use a balance transfer offer as a lever with your existing card companies to get a lower rate; just call your company and tell them you’re going to switch. There’s a reasonably good chance you’ll get a lower rate then and there.

Finally—and probably the best alternative if you can swing it—is just to commit yourself to paying the balances down. Make it your mission to eliminate that debt as fast as possible, starting with the highest rate cards first, while continuing to make 401(k) contributions up to the level of your company match. Plan to return to full retirement account contributions as soon as your debts are repaid. If out-of-control spending is an issue, get some help from an accredited credit counselor or financial advisor.

The bottom line? Think of borrowing against your 401(k) account as a viable "last resort." It’s not a decision to be made lightly, for all the reasons cited above and the most important reason of all: to help you finance your retirement. Don’t forget, that’s why these accounts were created in the first place. It’s hard to tap that money, and that’s the way it should be. But if you feel your back is against the wall and the other alternatives are less than ideal, borrowing from your financial future can be done. Just understand the consequences—and make sure it’s the right solution for you.

Good luck!

Carrie Schwab Pomerantz is the Chief Strategist, Consumer Education, Charles Schwab & Co., Inc. and President, Charles Schwab Foundation

Important Disclosures
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The type of strategies mentioned may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation.

Top 10 Signs a Company Is Imploding.

by Natalie Pace

The former Beverly Hills headquarters of Global Crossing.

Over the last decade, since I began reporting on financial news and publicly traded corporations, I’ve had quite a success rate of spotting disasters waiting to occur. I warned investors to recession proof their portfolio in February of 2008, to get Fannie Mae out of their mutual funds and nest eggs in 2003, to steer clear of General Motors in 2004, that housing was a house of cards in 2005 (when the KB Home and Toll Brothers’ insiders were cashing out hundreds of millions of their own stock) and to avoid Lehman Brothers in June of 2006. Bear Stearns was so bad in June of 2006 that it didn’t even make the grade (even though it was #1 in an investment banker friend’s book).

Below are 10 red flags that warn something is not right with the company. These are important to take notice of because quite often when a company hits hard times, you’ll start seeing more headlines on the positive news, perhaps increased sales, when in fact, the company lost a mountain of cash.

Great investors learn to read between the lines and never trade on headlines. Here are some tips to get your nose in shape for sniffing out the problems.

Top 10 Signs a Company Is Imploding

Taking on massive debt relative to competition
Supersized defined-benefit pension plans & Hefty OPEBs
Confusing earnings reports
Chief Marketing Officer or Sales Executive Trotted Out for Q&A (instead of CEO)
Credit Rating Lowered
Exodus in the Executive Suite
CFO retires before annual report to "spend more time with his family"
Trading is more important than core business
The Old Buyback and Increased Dividends Trick
Astonishingly awful store and service experience

Examples:

Taking on massive debt and/or cash negative operations relative to competition.
In December of 2005, when I picked Sunpower Solar as my Company of the Month, Evergreen Solar was the one capturing more headlines in the U.S., having recently installed solar panels on one of the government buildings in Washington, D.C. However, Sunpower was profitable and carrying very little debt at the time, while Evergreen owed as much money as it was worth and was losing money to the tune of $16 million. Evergreen lost their contract to receive silicon wafers from MEMC Electronics in March of 2006, lost another $23 million that year and watched their share price implode from $12/share to $8. Sunpower held steady in 2006 and went on to more than triple in share price, to a high of $150/share by November 2007, from the $26 share price in December 2005.
Supersized defined-benefit pension plans & hefty Other Post Employment Benefits (OPEBs)
Companies that were founded before 1980 have a disadvantage here because in the old days, corporations promised to take care of the health care and pension plans for employees. This promise of "retirement" was designed to kick in at 65, at a time when the average age of death was 64. Now that we live beyond 80, those companies are having a difficult time keeping their promises, and unions are fighting to retain benefits even when the company is on the brink of bankruptcy. This is a big social problem, but it is not one that you, the investor, need to carry on your own. General Motors. Ford Motor Company. The airline industry. The defense industry. Any industry/corporation that is heavily unionized and older than thirty years is at a significant disadvantage to younger, streamlined corporations with 401(k)s.
Confusing earnings reports and/or the story doesn’t make sense
Jeffrey Skilling, the former CEO of Enron, used to tell analysts and reporters that it was too difficult to explain how money went in and out of Enron, or how they were making so much money on broadband in India when most Indians didn’t have a computer. Common sense economics helped me to sniff out long distance telephone companies in 2000, when rates fell from 25 cents a minute to five cents a minute, at a time when legacy corporations, like Global Crossing and Worldcom continued to report strong earnings. (Both companies went belly-up in 2002.) In 2009, there have been a few banks that have taken their non-performing loans off of the earnings statements, or buried them deep in the narrative. When an entire industry is underwater, like long distance was in 2000 and banks are today, be wary of one or two companies’ outrageous claims of health and earnings.
Chief Marketing Officer or Sales Executive Trotted Out for Q&A (instead of CEO)
General Motors. We first began reporting on GM’s woes in July of 2004 (warning investors to avoid the auto industry) and ran another feature on Faded Blue Chips in August of 2006. Both articles had GM at the top of the list of companies to be concerned with. In 2006, GM owed almost $70 billion in pensions and Other Post Employment Benefits, lost $8 billion and was in debt 18 times more than it’s market value. How did investors not know this? Because CEO Rick Wagoner wasn’t making himself available for questions. Instead, the GM sales executive came out and reported on car sales. Over the last four years, GM has lost $82 billion. GM’s woes did not begin with the recession, as the former leadership would have Americans believe. FYI: It was announced on March 29, 2009 that Rick Wagoner, the Chairman and CEO of GM, has resigned, as part of the government’s bailout plan for the company. You want to sniff out this news before you lose 90% of your investment.
Credit Rating Lowered
Sears. On December 4, 2008, Standard and Poor’s lowered their credit rating on Sears from BB to BB minus, with a negative outlook. This affects Sears’ ability to borrow money and means they’ll have to pay a higher price to borrow, at a time when home building, home furnishings and retail are under pressure. Companies can turn themselves around from a low credit rating, but once too many red flags start accumulating, the odds of the turnaround diminish.
Exodus in the Executive Suite
The executive exodus at Enron began in 2000, and by the time Jeffrey Skilling resigned in August of 2001, almost all of his key team had taken the money and run. Kenneth Rice, chairman of Enron Broadband, Lou Pai, chairman of Enron Energy Services, Joe Sutton and Clifford Baxter, Vice Chairman, all resigned before May 2001. Despite this massive executive exodus, Enron won Fortune’s "Most Innovative Company" award for the 6th year in a row in February of 2001. Jeffrey Skilling resigned in August 2001, after only six months as CEO, citing "personal reasons." Clifford Baxter wanted to "spend more time with his family." Anytime you hear those corporate mantras: big red flag.
CFO or CEO retires before annual report to spend more time with his family
Sears announced on October 13, 2008 that Michael D. Collins was replacing Miles Reidy as Sears Holdings' chief financial officer and that the transition would take place before the annual report was issued. Mr. Reidy allegedly needed to step down to attend to a family issue. Having this transition occur right before the annual report is very fishy because the CFO has to certify the accuracy of a year of operations with his signature, and is legally sworn to verify the accuracy of the financials. A new CFO would be at a significant disadvantage to be able to make this certification because he wasn’t even present during most of the year’s operations. This, in and of itself, is not enough to shelve the investment. However, it is worthy of note – a tick in the red flag column -- and more investigation.
Trading is more important than core business
At the time of the Enron collapse, Enron had become essentially a trading firm, far away from its pipes and gas origins. When GM began losing money, it was leaning on its internal pension fund managers to earn stronger gains. Southwest Airlines remained profitable in 2003 and going forward by hedging oil. There is nothing wrong with these strategies in the short term to get a company through tough times, but as a general basis of operations, if the company is relying upon hedging and strong investment returns to keep afloat, there’s usually a time when their luck runs out.
The Old Buyback Trick
There are stock newsletters that follow corporate buybacks as a strategy, meaning that a corporate buyback puts a company on this radar. Corporations are also aware that when boards buy back company stock, investors believe they are doing so because there is good news waiting to be disclosed. US Airways was buying back hundreds of millions of its own stock just a few months before it declared bankruptcy. Sears spent $678 million repurchasing their own stock last year, when their total annual income was only $53 million. Phillip Morris Tobacco Company has long remained popular on Wall Street (even while Main Street was having a field day with law suits) as a result of paying one of the highest dividends to be found. Of course, dividends are not so attractive when the company loses 75% of its value, as Altria (Phillip Morris’ street name) did between March 2007 and March 2009.
Astonishingly awful store experience and service
K-Mart never had the tools my dad wanted just a few months before it declared bankruptcy. A major retail store took six months to deliver a name brand replacement coffee pot to me. That store was trading at almost $200/share two years ago, but has dropped to just $48 per share today. A PC maker was notorious for having the worst customer service in the business. That company has lost over half of its value over the last two years, during a time that Apple, a company with exceptionally high customer service rankings, has been remarkably resilient, and is trading in the same range that it was in March of 2007.

In essence, what all of these warnings boil down to is that you carry great wisdom as a shopper – far more than you do as someone who is trying to figure out economic data and earnings reports. Your nose and your gut, once properly vetted with wisdom, can guide you to greater profits than your eyes and ears (hot tips or analyst recommendations).

So, learn to Put Your Money Where Your Heart Is and profit, starting with reading my new book. If you want to jumpstart your gains, consider coming to my June 11-13, 2009 Get Rich and Green Retreat. Get more info at the home page at NataliePacecom.

Avoiding Investment Scams.

A FINRA.org Investor Alert.

The current financial crisis has not only battered the portfolios of many investors, it has also placed a spotlight on investment fraud. In turbulent economic times, ongoing schemes tend to unravel as wary investors begin demanding their cash. And the opportunity for new fraud can rise, as fraudsters look for any hook to exploit those who hope to recover their losses.

FINRA is issuing this Alert to warn investors about classic types of investment fraud and to help investors spot and avoid the types of persuasion tactics fraudsters use. We also describe key red flags and provide tools to help you avoid fraud. Our Scam Meter can help you assess whether an opportunity is too good to be true, and our Risk Meter reveals whether you share characteristics and behavior traits that have been shown to make some investors vulnerable to investment fraud.

Types of Investment Scams
Investment scams can take many forms—and fraudsters can turn on a dime when it comes to developing new pitches or come-ons for the latest fraud. But while the wrapper or hook might change, the most common securities frauds tend to fall into the following general schemes:

* Pyramid Schemes—where fraudsters claim that they can turn a small investment into large profits within a short period of time—but in reality participants make money solely by recruiting new participants into the program. The fraudsters behind these schemes typically go to great lengths to make their programs appear to be legitimate multi-level marketing schemes. Pyramid schemes eventually fall apart when it becomes impossible to recruit new participants, which can happen quickly as illustrated below.

Stage Participants Notes
Level 1 - 8 Each participant recruits 8 new investors
Level 2 - 64 Level 2 pays off Level 1—and so on
Level 3 - 512
Level 4 - 4,096
Level 5 - 32,768
Level 6 - 262,144
Level 7 - 2,097,152
Level 8 - 16,777,216
Level 9 - 134,217,728
Level 10 - 1,073,741,824 More than triple the US population
Level 11 - 8,589,934,592 More than the world's population

* Ponzi Schemes—in which a central fraudster or "hub" collects money from new investors and uses it to pay purported returns to earlier-stage investors—rather than investing or managing the money as promised. The scam is named after Charles Ponzi, a 1920s-era con criminal who persuaded thousands to invest in a complex price arbitrage scheme involving postage stamps. Like pyramid schemes, Ponzi schemes require a steady stream of incoming cash to stay afloat. But unlike pyramid schemes, investors in a Ponzi scheme typically do not have to recruit new investors to earn a share of "profits." Ponzi schemes tend to collapse when the fraudster at the hub can no longer attract new investors or when too many investors attempt to get their money out—for example, during turbulent economic times.

* Pump-and-Dump—in which a fraudster deliberately buys shares of a very low-priced stock of a small, thinly traded company and then spreads false information to drum up interest in the stock and increase its stock price. Believing they’re getting a good deal on a promising stock, investors create buying demand at increasingly higher prices. The fraudster then dumps his shares at the high price and vanishes, leaving many people caught with worthless shares of stock. Pump-and-dumps traditionally were carried out by cold callers operating out of boiler rooms, or through fax or online newsletters. Now, the most common vehicles are spam emails or text messages.

* Advance Fee Fraud—which plays on an investor’s hope that he or she will be able to reverse a previous investment mistake involving the purchase of a low-priced stock. The scam generally begins with an offer to pay you an enticingly high price for worthless stock in your portfolio. To take the deal, you must send a fee in advance to pay for the service. But if you do so, you never see that money—or any of the money from the deal—again.

* Offshore Scams—which come from another country and target U.S. investors. Offshore scams can take a variety of forms, including those listed above. Many involve "Regulation S," a rule that exempts U.S. companies from registering securities with the Securities and Exchange Commission (SEC) that are sold exclusively outside the U.S. to foreign or "offshore" investors. Fraudsters can manipulate these types of offerings by reselling Reg S stock to U.S. investors in violation of the rule. Whatever form an offshore scam takes, it can be difficult for U.S. law enforcement agencies to investigate fraud or rectify harm to investors when the fraudsters act from outside the U.S.

Psychology of a Scam
The common thread that binds these different types of fraud is the psychology behind the pitch. We've all heard the timeless admonition "If it sounds too good to be true, it probably is"—which is great advice, but the trick is figuring out when "good" becomes "too good." There's no bright line. Investment fraudsters make their living by making sure the deals they tout appear both good and true.

In a 2006 study funded by the FINRA Investor Education Foundation, the Consumer Fraud Research Group examined hundreds of undercover audiotapes of fraudsters pitching investments scam. The tapes revealed that fraudsters are masters of persuasion, tailoring their pitches to match the psychological profiles of their targets. They look for an Achilles heel by asking seemingly benign questions—about your health, family, political views, hobbies or prior employers. Once they know which buttons to push, they'll bombard you with a flurry of influence tactics, which can leave even the savviest person in a haze.

Some of the most common tactics include:
* The "Phantom Riches" Tactic—dangling the prospect of wealth, enticing you with something you want but can't have. "These gas wells are guaranteed to produce $6,800 a month in income."

* The "Source Credibility" Tactic—trying to build credibility by claiming to be with a reputable firm or to have a special credential or experience. "Believe me, as a senior vice president of XYZ Firm, I would never sell an investment that doesn't produce."

* The "Social Consensus" Tactic—leading you to believe that other savvy investors have already invested. "This is how ___ got his start. I know it's a lot of money, but I'm in—and so is my mom and half her church—and it's worth every dime."

* The "Reciprocity" Tactic—offering to do a small favor for you in return for a big favor. "I'll give you a break on my commission if you buy now—half off."

* The "Scarcity" Tactic—creating a false sense of urgency by claiming limited supply. "There are only two units left, so I'd sign today if I were you."

If these tactics look familiar, it's because legitimate marketers use them, too. However, when we are not prepared to resist them, these tactics can work subliminally. Little wonder that victims often say to regulators after they have been scammed, "I don’t know what I was thinking" or "it really caught me off guard." That’s why an important part of resisting these common persuasion tactics is to understand them before encountering them.

Red Flags of Fraud
To stay on guard and avoid becoming drawn into a scam, look for the warning signs of investment fraud:

* Guarantees: Be suspect of anyone who guarantees that an investment will perform a certain way. All investments carry some degree of risk.

* Unregistered products: Many investment scams involve unlicensed individuals selling unregistered securities—ranging from stocks, bonds, notes, hedge funds, oil or gas deals, or fictitious instruments, such as prime bank investments.

* Overly consistent returns: Any investment that consistently goes up month after month—or that provides remarkably steady returns regardless of market conditions—should raise suspicions, especially during turbulent times. Even the most stable investments can experience hiccups once in a while.

* Complex strategies: Avoid anyone who credits a highly complex investing technique for unusual success. Legitimate professionals should be able to explain clearly what they are doing. It is critical that you fully understand any investment you’re seriously considering—including what it is, what the risks are and how the investment makes money.

* Missing documentation: If someone tries to sell you a security with no documentation—that is, no prospectus in the case of a stock or mutual fund, and no offering circular in the case of a bond—he or she may be selling unregistered securities. The same is true of stocks without stock symbols.

* Account discrepancies: Unauthorized trades, missing funds or other problems with your account statements could be the result of a genuine error—or they could indicate churning or fraud. Keep an eye on your account statements to make sure account activity is consistent with your instructions, and be sure you know who holds your assets. For instance, is the investment adviser also the custodian of your assets? Or is there an independent third-party custodian? It can be easier for fraud to occur if an adviser is also the custodian of the assets and keeper of the accounts.

* A pushy salesperson: No reputable investment professional should push you to make an immediate decision about an investment, or tell you that you’ve got to "act now." If someone pressures you to decide on a stock sale or purchase, steer clear. Even if no fraud is taking place, this type of pressuring is inappropriate.

You can also use our Scam Meter to help spot red flags of investment fraud.

Who Gets Victimized?
Almost anyone who invests is a potential fraud target, though you can reduce your vulnerability if you know what to guard against. A 2007 survey by the FINRA Foundation examined how known investment fraud victims differed from non-victims. Among its key findings, the survey identified several investment fraud risk factors, including:

1. Owning high-risk investments, including penny stocks, promissory notes, futures, options or private investments in foreign currency;
2. Relying on friends, family, co-workers for advice (for example, one-third of the national sample—but 70 percent of victims—made an investment based primarily on advice from a relative or friend);
3. Being open to new investment information (for example, three times as many victims went to a free investment seminar than the national sample);
4. Failing to check the background of an investment or broker (for example, one in eight victims failed to check whether an investment professional had a criminal background, and one in seven did not check their licensing or registration); and
5. Inability to spot persuasion tactics used by fraudsters.

You can use our Risk Meter to assess whether you share any characteristics and behavior traits that have been shown to make some investors vulnerable to investment fraud.

How Can I Protect Myself?
In addition to paying attention to the red flags of fraud and learning to spot and avoid the persuasion tactics fraudsters use, it is critical that you ask questions about investments and the people who pitch them—and then verify the answers. Here’s how:

* Check Out Investment Professionals—Always ask whether the promoter of an investment opportunity is licensed to sell you the investment—and confirm which regulator issued that license, and if and when the license has ever been revoked or suspended. A legitimate securities salesperson must be properly licensed, and his or her firm must be registered with FINRA, the SEC or a state securities regulator—depending on the type of business the firm conducts. An insurance agent must be licensed by the state insurance commissioner where he or she does business.

Be sure to independently verify the salesperson’s or promoter’s answers as follows:
o For a broker, use FINRA BrokerCheck or call toll-free (800) 289-9999. BrokerCheck allows you to confirm not only licensing and registration, but also whether an individual or firm has a history of complaints or regulatory problems.

o For an investment adviser, use the SEC's Investment Adviser Public Disclosure Web site.

o For an insurance agent, check with your state insurance department. You'll find contact information through the National Association of Insurance Commissioners (NAIC).

o For all sellers, be sure to call your state securities regulator. You can find that number in the government section of your local phone book or by contacting the North American Securities Administrators Association or (202) 737-0900.

Check Out Investments—Ask whether the investment is registered and, if so, with which regulator. Most investors will want to buy securities products that are registered with the SEC or with state regulators. With very few exceptions, companies must register their securities before they can sell shares to the public. You can find out whether a product is registered with the SEC by using the EDGAR database. You can also use our Scam Meter to help you determine whether an investment you are thinking about might be a scam.

A Word About Registration: Investors should always ask whether a security is registered with the SEC—and if not, why not. Not all securities offerings must be registered with the SEC—such as those issued by municipal, state and federal governments. The SEC also provides exemptions for certain intrastate offerings and small public and private offerings under a rule known as Regulation D.

Keep in mind that registration with the SEC does not guarantee that an investment will be a good one or immune to fraud. Likewise, lack of registration does not mean the investment lacks legitimacy. The critical difference is the extreme level of risk you assume when you invest in a company about which little or no information is publicly available. SEC registration carries a number of advantages for investors, including disclosure of financial and other information that can help investors assess whether to invest in a company's securities.

If a Problem Occurs
If you believe you have been defrauded or treated unfairly by a securities professional or firm, please send us a written complaint. If you suspect that someone you know has been taken in by a scam, be sure to give us that tip. Here's how:

Online:
File a Complaint (for you)
Send a Tip (for others)

Mail or Fax:
FINRA Complaints and Tips

9509 Key West Avenue
Rockville, MD 20850
Fax: (866) 397-3290

Additional Resources
o Risk Meter
o Scam Meter
o Avoid Investment Fraud

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450 Percent Gains on U.S. Gold

by Natalie Pace.

and Strong Performance By Than a Dozen Other Stocks.

While some investors are wondering if their nest egg will ever recover, others are already reaping amazing gains. U.S. Gold is up 456% in just a few months. Even more incredible, Altair Nanotechnology (+48%), American Superconductor (+51%), GE (+40%), Hoku Scientific (+38%), LDK Solar (+46%), MEMC Electronics (+44%), PowerShares Wilderhill Clean Energy Portfolio (+35%), Satcon (+42%), Sociedad Quimica y Minera (+76%), Suntech (+211%), Trina Solar (+211%) and even Westpac Bank in Australia (+25%) were all sporting gains on the Hot News on Cool Stocks list on Friday, March 27, 2009. Almost 80% of the companies listed on the Hot News list have delivered impressive gains over the past two years, even while the Dow Jones Industrial Average is down almost -50%.

If you review some of the articles over the last few months, you’ll notice that we’ve been reporting on green, on gold mining, on biotechnology and on Australia/New Zealand as the bright spots in the world economy. These are the places were investors are already seeing amazing gains.

So are you still listening to someone who explains to you how much better off you will be if you stay where you are and don’t "lock in your losses?" You wouldn’t go to a diet specialist who told you that getting obese was healthy and not to worry about all of the weight you’ve gained, so why are you listening to a financial planner who extols on the beauty of losses? Losses in your nest egg are not beautiful!

Imagine going to a nutritionist who advises you to eat bacon, cheeseburgers and Haagen Daas, after which you gain tons of weight and can’t move around any more. It is very unlikely that you’d sit and listen if s/he told you that, despite appearances, you are in good shape. Like most investors today, chances are that you are not in good shape and the last person you should be listening to is the "specialist" who gave you the losing game plan. And if you are one of those specialists and your company forced you to sell the mutual funds that cracked your client’s nest eggs (and likely your own to boot), you are right to consider that you should be learning (and selling) better products.

The rules of successful investing have changed completely over the last ten years. If you believed in "buy and hold," over the last decade, you lost money. The Dow Jones Industrial Average is trading lower this month than it did in 1999. If you believed in blue chips, over the last two years, you’ve been invested in the Bailout Index, as former blue chip after blue chip has bitten the dust or begged for a government handout. As President Obama says, "We know that an economy built on reckless speculation, inflated home prices and maxed-out credit cards does not create lasting wealth. It creates the illusion of prosperity, and it’s endangered us all."

So, what does work?
Commission-free brokers
Modern Portfolio Theory
Semi-Annual Rebalancing
Exchange Traded Funds (instead of mutual funds)
Diversification

All of these strategies are outlined in my new book, Put Your Money Where Your Heart Is, which is why my publisher advertises that it is a book every person with a 401(k) should own. Even if you’ve read books on investing before, you need to understand these basic strategies in order to earn gains while you sleep. That is why Nobel Prize winning economist Dr. Gary Becker, a professor at the University of Chicago, enthusiastically recommends my book and wrote the Preface to it.

That is also why and how Bill and Nilo Bolden saved their nest egg in February of 2008 using a pie chart that I drew up on a napkin (which is included the book). The Green Goddess Investment Club (a group of novice investors) are scoring 40% and 150% gains last year and this year using my Stocks on Steroids strategies.

And if you wish to jumpstart your wisdom, consider attending one of my Get Rich and Green Retreats. My new book, Put Your Money Where Your Heart Is, can be found anywhere books are sold.

It’s as easy as a pie chart and a few clicks on your computer, but you must know the strategies in order to implement them. If you are insisting upon using an old strategy that doesn’t work, that is akin to a surgeon refusing to learn how to operate using laser. All levels of investors, from novices to hedge fund managers, benefit from learning the new fundamentals of a successful nest egg.

Here’s to your fiscal health!

Natalie

Stockerblog.com Exclusive: Interview with Natalie Pace – Part 2.

by Fred Fuld.

Photo by: Stacie Isabella Turk, Ribbonhead.com ©2008.
Stylist: Arlene Hylton-Campbell.

Stockerblog.com’s Fred Fuld had the pleasure of interviewing Natalie Pace, head of her own financial publishing and media company, and author of the book Put Your Money Where Your Heart Is: Investment Strategies for Lifetime Wealth from a #1 Wall Street Stock Picker. She has been a repeat guest on Fox News, Forbes on Fox, Good Morning America, Time Magazine, USA Today, Kiplinger's Personal Finance, and other financial news media. If you missed Part 1 of the interview, you can check it out here.

Stockerblog.com: What was your biggest investment mistake and what did you learn from it?

Pace: I tend to do well in investments because I take a long-term view of investing. So for instance, my home did go under water. When I bought it, I bought in 1991, experiencing earthquakes, fires, floods, riots, and mudslides, so I was really waiting for the locusts to come. I believed in my home, I had bought it for a good price, I believed in my neighborhood. It was a condo in Santa Monica, it was a good long-term investment. So in the short term, it was underwater. People were coming in and buying one of the condos for half of what I had purchased mine for. I didn't get fazed by it and I held on for the long term, and it didn't even have to be that long. I had pride of ownership, I still lived there, and I made a good ROI when I did sell.

If I had freaked out, and you have earthquakes, fires, floods, riots, and all those other things in a two year period, you can really freak out, if I had been the kind of person who had been ruled by stomach acids, I would have lost money if I had gotten out and sold at that time. The big lesson was to do your research up front, make sure you really believe in it, and be able to get through any storms that might arise between you and your ROI.

Stockerblog.com: Since you've written your book, have you come up with any new bits of advice?

Pace: Yes, because the book was written over a year ago. We were in the galley stage before the crisis hit. The strategies in the book are exceedingly helpful. The book says to diversify into ETFs because mutual funds are too big, they are not real diversification, and rebalance your portfolio twice a year. That strategy is amazing. If people just did that, they would be so protected, because one of the themes is always keep a percentage of your age safe.

Now the important thing to remember also, is to get a really great source for ongoing investment information. In February 2008, I had a huge article, "Recession Proof Your Nest Egg" Now, and that article had a key recommendation, take an additional 20% safe. I talked to one couple where I drew a pie chart on a napkin, using the pie charts from the book, and keeping an additional 20% safe during the recession, and they have lost nothing. So it's really key to have ongoing sources.

In two years, we will probably be coming out of this recession, and you will want to make sure you are not over-weighted safe, and you will probably want to be over-weighted in another industry. So it's really important to have ongoing news and a basic great strategy. Clean energy is still going to be a great industry to invest in. Each year, the hot industry changes.

Stockerblog.com: Do you think that we are close to a stock market bottom?

Pace: No, not at all. I do believe that 2009 is going to be another rough year. I think it’s really important to make sure you have a game plan that is both offensive and defensive. People should be aware of the fact that no matter what anybody says, you should have the ability to overweight and underweight. So you can be safe this year: not losing is winning. People are starting to worry about inflation, that is probably on the horizon, but I don't think it happens yet. I think people should be concerned about getting safe. I think they should be concerned about properly diversifying. And they should have some game plan on the four industries that I think are going to be hot this year, and that would be gold mining, clean energy, Australia & New Zealand, and biotechnology.

Natalie’s Note: Please note that this interview took place in January 2009 at a time when the Dow Jones Industrial Average was trading 15% higher than it is today.

Dow Jones Industrial Average Index Performance January 1, 2009 through March 31, 2009

End of Part 2 of the Interview. Part 1 can be found here.

Natalie’s latest book, Put Your Money Where Your Heart Is: Investment Strategies for Lifetime Wealth from a #1 Wall Street Stock Picker is available at Amazon. You can also check out Stockerblog's review of the book.

Interview by Fred Fuld at Stockerblog.com.

Comeback.

by Gary Kobat.

The incredible Lance Armstrong, who dropped out of his first two Tour de Frances.

Gary "on the wheel" of 7-time Tour de France winner Lance Armstrong

Lance Armstrong:
1971: Lance Armstrong is born in Plano, Texas.
1985: Lance wins Iron Kids’ Triathlon.
1988: Lance receives Olympic development invitation.
1991: Lance wins National Amateur Championship.
1992: Lance turns pro and finishes LAST in his first race.
1993: Lance enters first Tour de France, drops out.
1994: Lance enters second Tour de France, drops out again.
1995: Lance finishes first Tour de France in 36th place.
1996: Lance enters fourth Tour de France, drops out. He is diagnosed with testicular cancer.
1997: Lance joins Postal Service cycling team.
1998: Lance returns to pro cycling, wins Tour of Luxembourg.
1999: Lance wins first Tour de France.
2000: Lance wins second Tour de France.
2001: Lance wins third Tour de France.
2002: Lance wins fourth Tour de France.
2003: Lance wins fifth Tour de France.
2004: Lance wins sixth Tour de France.
2005: Lance wins unprecedented seventh Tour de France.
2009: lance returns to pro cycling, finishes Tour Down Under. …

...if you have ever dropped out, lance did.
…if you have ever finished last, lance did.
…if you have ever finished 36th, lance did.
…if you have ever had major surgery, lance did.
...if you have ever had major financial issues, lance did.
…if you have ever taken 10 years to develop, lance did.
…if you have ever made a comeback, lance is.

Don’t give up.

Don’t ever give up.

...create your own comeback.

Gary.

Gary Kobat is a passionate life and fitness coach, world-class athlete, author, and keynote speaker. Gary works one-on-one with select individuals, customized mastermind groups, and larger goal oriented teams for lasting personal and professional change. If interested in joining a group or for a private consultation, email him directly at: gary@e-coach.com or visit one of his spinning classes at Revolution Fitness in Santa Monica, California.

Buy and Hold Doesn’t Work.

by Natalie Pace.

Includes my Hot News on Cool Stocks List.

March 27, 2009

General Stock Market Performance

Wednesday, 1.3.2007	Monday, 1.2.2008	Monday, 1.2.2009	Friday, 3.27.09	Gains 2-yr, 1-yr & 2 mo.
Dow: 12,474.52	Dow: 13,044.12	Dow: 9,034.69	Dow: 7,776.18	-38% & -40% & -14%
Nasdaq: 2,423.16	Nasdaq: 2,609.63	Nasdaq: 1,632.21	Nasdaq: 1,545.20	-36% & -41% & -5%
S&P: 1,416.60	S&P: 1,447.16	S&P: 931.80	S&P: 815.94	-42% & -44% & -12%

Hot News on Cool Stocks Highlights!
456% gains on U.S. Gold
74% of the companies listed below are earning profits
Massive gains on the Cooling Off List, where 100% are in the money

Personal Note to Investors from Natalie Pace:
Buy and hold doesn’t work and hasn’t worked for the last ten years. The leading Blue Chip Index has become the Bailout Index. Our capitalist free market system has become nationalized cronyism economics, with bailout funds going for bonuses instead of creating great products for the customer.

That is where most of Americans are stuck. Holding a bag of debt, with a severely shrunken nest egg and experts telling them not to do anything because they’ll only be "locking in their losses." Please. Think of this logic for a minute. Doing nothing means that others get to do something with your money. And those people have been losing a lot of it, not just this year, but for the last decade.

Returns of Stocks, Real Estate, Gold, Bonds and T-Bills Over the Last 10 Years

You felt rich in 2000 with NASDAQ and Internet stocks. By October of 2002, after 9.11, you were sitting on two years of losses in NASDAQ totaling almost 70% from the March 2000 high. You felt rich in real estate in 2005, and now you might be underwater on your mortgage. You felt rich in the Dow Jones Industrial Average when it barreled through 14,000 in October of 2007. Your nest egg has been on a binge and purge diet for the last decade that has left your soul wrinkled and weary from all of the stress. Your fiscal health could be a lot more beautiful.

Whether you are a CFP, a MD, a Ph.D., a Mommy and Me or a pool boy, by now you should be wondering if there isn’t a better way. Why is it that Lehman Brothers, Merrill Lynch, Smith Barney, Bear Stearns are all belly-up or bailed out and TD AMERITRADE and Schwab are still profitable? What separates the online discount brokers from the legacy firms? What did they get right?

The same things that saved TD AMERITRADE and Schwab are the same things that would have made you rich while you sleep. Modern Portfolio Theory, ETFs, commission-free brokers, annual rebalancing strategies and diversification.

Buy and hold doesn’t work. MPT, ETFs and pie charts do. The binge and purge diet is as bad for you fiscally as it is physically. You can have your pie, if you eat it, too (at least once a year to capture your gains and re-diversify). Imagine a diet where gobbling up your sweets once a year is actually great for you.

Get started on the new, easy, time-proven strategy for investing that countless NataliePace.com subscribers and retreat attendees have been enjoying since we first launched our business a decade ago. These strategies have been around for half a century and the economist who wrote Modern Portfolio Theory won the Nobel Prize in 1990. ETFs, which are the strategy that make targeted diversification possible (not mutual funds), are a fairly new product, however, and one that legacy brokerages weren’t quick to adopt because the commission and fees are lower than mutual funds.

That is why those professionals who are still invested in the old, losing strategy are still hanging on to their old, worn out lines, like "Don’t lock in your losses." Not because it is good for you, but because it is the only strategy they know and the way that they keep making their own mortgage payments. That is if their firm is still around. Typewriter makers that were slow to switch to computer manufacturing were as recalcitrant to innovation in the 90s.

If you didn’t get the wakeup call the first time your nest egg cracked, between 2000 and 2002, please hear it this time. It’s worth a $17 investment in my book to get started and $1595 investment and three days to set up your nest egg for the rest of your life. That small amount of time and money will add massive gains to your nest egg, smiles to your face and longevity to your life span, both fiscal and physical (from all of the stomach acid that you don’t have to swallow).

Join us.

Market Update:
Wall Street Lows on March 9, 2009:
Dow Jones Industrial Average: 6547
NASDAQ Composite Index: 1269
S&P 500 Index: 677

As I indicated in my Hot News report on March 2, 2009, I expected volatility to be the name of the game, writing, "Though 2009 could still see further fallout, the trend over the past year and a half is that a bounce occurs after such a severe decline, providing investors with some recovery opportunity, in a very short window, before the down-trend continues." Since the low of March 9, 2009, the major indices have gained 19% (Dow), 22% (NASDAQ) and 21% (S&P 500) respectively. Woo Hoo!

It is important to note that NASDAQ has been outperforming the Dow and S&P all year. In the ongoing race to the bottom in 2009, the Dow Jones Industrial Average (aka the Bailout Index) has lost 14%, the S&P500 has lost 12%, while NASDAQ is only down 5% since January.

So, is this Spring rally a good sign of better times to come or merely a dead cat bounce? Alan Greenspan, the former Federal Reserve Board Chairman, said in a speech before the Economic Club of New York, on February 17, 2009, that these are "perilous times" and that this recession "will surely be the longest and deepest global economic contraction since the 1930s."

Dr. Marc Miles, a global strategist and the former senior economist for the Heritage Foundation, believes that the worst might be over and that we could be close to a bottom. (As a disclaimer, Dr. Miles said that last year this time as well and the markets went on to tank dismally, wiping out nest eggs in the bargain.)

You can view Alan Greenspan’s comments online by clicking on his name.

You can listen to Dr. Miles teleconference with NataliePace.com subscribers also. Simply go to the Sharing Wisdom bulletin board for the call-in and listen-back instructions.

So, which economist is right? The good news is that a sound investing strategy is not reliant on playing heads and tails with financial commentary. There are fundamental investing strategies that would have protected your nest egg over the last two years, limiting your losses to less than 14% if you are 50 or older. If you don’t know about them or if you lost more than that, you need to get an education right now because your nest egg strategies were cracked to begin with. Read "Resurrecting Your Nest Egg" as a start, from the archived ezines, Vol. 5, issue 11. Buy and read Put Your Money Where Your Heart Is, if you haven’t already, and forward this information and links to all of your friends who lost money as well.

Additionally, there are diversification, rebalancing and emerging markets strategies, which would have made you rich over the last ten years. Just think how rich you would be if you had actually had an easy strategy for capturing gains once or twice a year! You would be rich on NASDAQ 2000, rich on real estate 2005 and rich on clean energy 2007 (which was the top performing industry, earning sixty cents on the dollar).

What you need more than a crystal ball or daily headlines is a strategy that works. You need to learn about Modern Portfolio Theory, but not JUST THAT. You must also understand about proper diversification, avoiding dying industries, how to get the Bailout Index out of your nest egg, semi-annual rebalancing and just when/where/why and how you can or cannot trade individual companies. That sounds like a lot of work, but all of these things are outlined in my book, Put Your Money Where Your Heart Is. If you want to implement all of these now, in three days that sets you up for the rest of your life, come to one of my retreats. The May Retreat is sold out, but I am hosting one in June as well. Go to the NataliePace.com home page and click on the banner ad that reads, "Get Rich and Green," for more details.

Those who thought "not locking in your losses" was a good plan in 2009, after losing over 40% in 2008, have seen another 14% implosion in your nest egg since the beginning of this year alone, whereas those investors who came to my retreat and employed a recession-proofed Modern Portfolio Theory based ETF plan have stopped the losses and started the gains.

Buying and holding mutual funds doesn’t work. It’s time to lay down a new set of rules of how Wall Street can behave with your hard-earned 401(k) dollars. Odds are that your pension is still invested in the Bailout Fund (formerly known as the leading Blue Chip Index, aka the Dow Jones Industrial Average), cigarette companies, retarded financial services companies and oil field services.

You’ve lost thousands, if not hundreds of thousands or even millions of dollars. Now’s the time to spend three days and a small fraction of that getting invested in a cleaner, greener world, with a new plan that will work for the rest of your life.

You can have a healthy nest egg, rock star returns and make gains while you sleep – once you have set up the parameters of a sober investment plan. It’s time for you to sober up, take charge and create a healthier nest egg strategy.

Testimonials:
"I have made enough money my first week to pay for my trip, Thanks!" Randall, November 2008 Natalie Pace Retreat Attendee

"Natalie Pace's sound strategies helped me avert a huge loss on my 401k plan. Moving my money to a safe place saved me thousands when the market plummeted." - Nilo Bolden, Law Firm Administrator

"When I first met Natalie Pace I was desperately trying to stay afloat with my financial situation. My nest egg was half of what I had previously invested, I was in a negative cash-flow real estate investment, clueless about how to truly purchase stocks correctly, and my budget was as whimsical as a musical. She truly has been a blessing in my life to not only help teach me how to shift my financial situation but to also inspire me to create an investment club in order to help my friends and family. I'm still astonished that what I once viewed as hieroglyphics is now something others ask me to mentor them on. Natalie is truly a financial angel." Brianna

Track Record of our Reporting
While the markets have fallen in 2008, the Hot News and Cooling Off lists below have a winning track record – in bear and bull market years. 67 positions listed below – 74% -- have delivered impressive gains over the past two years, even while the Dow Jones Industrial Average is trading lower than it was ten years ago! Only twenty-three of our listings went in the opposite direction of the reporting, which is quite impressive given the horrible market drop of this fall. Additionally, in 2008, nineteen out of 27 companies that were featured in our monthly articles and stock report cards posted strong gains. That is also a 77% winning track record! (We are really coming up with the winning 7s this year.)

See the article, "New Year. New You. New Nest Egg," in Vol. 6, issue 1, for the chart and more details.

Yes, the majority, but not all, of our top performers in 2008 and 2009 were shorts, which is why we added options training to the retreat. Remember that the trading portfolio should be equal to your experience, and should not be part of your nest egg. (The nest egg is money you earn while you sleep, not while you day-trade.) If you’re new, you should be using education or fun money, not your nest egg, to learn on. Take your profits early and often in this volatile, down-trending year.

3 out of 6 Company of the Year selections more than doubled. My 2003, 2004 and 2007 Companies of the Year have posted up to 9000% gains (Taser), up to 690% gains (Opsware) and up to 215% gains (Suntech Power Holdings), respectively. MySpace, my 2006 Company of the Year, was a large part of News Corp’s success with shareholders that year. OSI Pharmaceuticals, my 2005 Company of the Year is back on track for gains and we still believe that Suntech Power Holdings, which is the market leader in solar panels and our 2008 Company of the Year (for the 2^nd year in a row), will be a big winner going forward! (Sometimes it takes a few months for the news to get out to the rest of the world.) So three out of six are superperformers, one performed well above the market and two are down (in a recession). Meanwhile, the general stock marketplace over that same period has lost money! That’s the kind of record that puts you on top on Wall Street. (I launched my first publication on 11.15.02, and featured the first Company of the Year on 1.1.03.)

TipsTraders.com continues to list me as a Highly Recommended Stock Picker, with their independent ranking system, where I’ve repeatedly occupied the #1 position. Some of our best picks include: Bioteq Environmental (BQE) +144%, Blockbuster Video (BBI) +82.5%, Genentech (DNA) +415%, Google (GOOG) +545%, Las Vegas Sands (LVS) +139%, LifeCell (LIFC) +180%, Macerich (MAC) +150%, Opsware (OPSW) +690%, Rio Tinto (RTP) +145%, Sohu (SOHU) +150%, Suntech Power Holdings (STP) +107%, Taser (TASR) up to 9000% gains. (Some of the best picks in 2008 were put options – on the Cooling Off list. Look there for details on the incredible gains options investors enjoyed on Wells Fargo, Fortress Investment Group, Sears Holding, Fannie Mae, Toll Brothers, KB Home, Novastar Financial and more there.)

Market Movers:
The Federal Open Market Committee and Monetary Policy
The Fed funds rate continues to be "0 to ¼ percent." In the 3.18.09 press release, the Federal Reserve Board further elaborated on the reasoning behind the rock bottom rates, writing: "Although the near-term economic outlook is weak, the Committee anticipates that policy actions to stabilize financial markets and institutions, together with fiscal and monetary stimulus, will contribute to a gradual resumption of sustainable economic growth. In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term." That is Fed-speak for "We are experiencing deflation now as retailers try to stay afloat by selling everything and the kitchen sink at rock-bottom prices, but inflation could be a problem once we get everything back on track."

Additionally, the Federal Open Market Committee decided "to increase the size of the Federal Reserve’s balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion. Moreover, to help improve conditions in private credit markets, the Committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months."

The next meeting takes place on April 28-29, 2009.

Final GDP growth rates for 4Q 2008 were revised sharply downward on February 28, 2009, down to -6.3%, from the advance estimates of -3.8%.

Advance GDP growth estimates for 1Q 2009 will be released on April 29, 2009 at 8:30 a.m. ET. These release days tend to be very active on Wall Street. For more BEA release dates, go to the BEA.gov website and be sure to visit the NataliePace.com calendar section often.

EDUCATIONAL OPPORTUNITES AND INFORMATION:
1. FOMC Information: Interested in reading the press release of the March 17-18, 2009 FOMC meeting for yourself? You can. The official Federal Reserve document is available online. Click on FOMC, or go to FederalReserve.gov to read!

The tentative FOMC meeting schedule for the 2009 calendar is: April 28-29, 2009 (Tuesday-Wednesday), June 23-24, 2009 (Tuesday-Wednesday), August 11-12, 2009 (Tuesday-Wednesday), September 22-23, 2009 (Tuesday-Wednesday), November 3-4, 2009 (Tuesday-Wednesday), December 15-16, 2009 (Tuesday-Wednesday), January 26-27, 2010 (Tuesday-Wednesday).

2. Calendar Section: Conferences, Online Chats and more: Check out the Calendar section of NataliePace.com regularly. There are many wonderful opportunities to chat one-on-one with millionaire money managers, life coaches, economists, respected money gurus, real estate veterans and CEOs! Be sure to check out the dates of the mid-month Hot News on Cool Stocks Update and the publication date of our next ezine. Get more information on how to best use our articles in the FAQs article, located under the Investor Edu link on the home page of NataliePace.com.

Don’t miss the Premium Subscriber’s teleconference with Natalie Pace on Wednesday, April 15, 2009 at 5:00 p.m. PT (8:00 p.m. ET). Get call-in instructions on the Sharing Wisdom bulletin board.

3. Survey Results: Each month we have three new surveys so that we can stay in touch with your needs and desires. This month, with the upheaval in the auto industry and the outrageous bonuses given by bailed out bosses, we’re asking where you would spend the government dollars. Cast your vote on our survey page!

4. Euro interest rates: ECB rates are at 1.50% (main refinancing), 2.50% (marginal lending) and 0.50% (deposit facility). The next meeting and interest rate announcement is scheduled for March 19, 2009 at 2:30 p.m. CET.

Hot Stocks List
Investors who "never pay retail," note that the BOLD highlighted stocks are trading at their 52-week lows or near the price featured in NataliePace.com’s article. This may be a good buying opportunity. (If the stocks are not highlighted, then in our estimation, this is not a good time to buy. Reasons are explained in the news commentary.) The companies that are listed below which are not highlighted may not be in a good buying range, but they appear to be poised to continue performing well (if you have already purchased them). There are never any guarantees in life, and all stocks are risk-based investments. Consult your certified financial planner before making any changes to your investment strategy. And remember that these "Stocks on Steroids" are not intended to be part of your nest egg strategy at all – not even for "pros." If you’ve never traded individual stocks before, this is your "fun" or "education" money. You should not stake your future on anything that you don’t have mastery over.

Hot News List (highlighted). Be sure that you are buying low.
Ener1 (HEV)
FMC Corporation (FMC)
Maxwell Technologies (MXWL)
Sunpower Solar (SPWRA)

DELETIONS (Take your profits early and often):
Altair (ALTI). Gains of 48% on 3.27.09.
Citigroup (C). 42% gains between 3.1.09 and 3.15.09.
Genentech (DNA). 29% gains. Deleted on 3.15.09.
OSI Pharmaceuticals. 7% gains. Deleted on 3.15.09.

HOT NEWS on COOL STOCKS LIST

Company

NP owns?

Symbol

Price when featured

Price 3.27.09

Year High

Year Low

Gains since original feature

Altair Nanotechnology

RISK: MEDIUM/ HIGH

ALTI

$1.99

$0.67 (3.13.09)

$0.99

$5.45

$.60

-50%

+48%

Read the article on Electric Cars in vol. 4, issue 6.

Take your profits early and often! If you made 48% gains, consider cashing in your profits.

Earnings on 3.11.09: For the year ended December 31, 2008, the Company reported revenues of $5.7 million, down from $9.1 million for 2007. The net loss was $29.1 million, or 34 cents per share, compared to a net loss of $31.5 million, or 45 cents per share, for 2007. The Company disclosed that as a result of the Company not achieving its 2008 financial targets, no bonuses were paid to middle and senior level managers.

"The markets for clean energy storage systems for power-dependent applications within smart-grid, renewable integration, military, and transportation are developing," said Dr. Terry Copeland, president and CEO of Altairnano. "However, there is no question that current economic conditions have delayed purchasing decisions. On a positive note, several sections of the 2009 American Recovery and Reinvestment Act are directed at those very markets and we anticipate those funds will help accelerate the adoption of advanced energy storage systems."

The Company's cash and cash equivalents decreased by $22.1 million, from $50.2 million at December 31, 2007 to $28.1 million at December 31, 2008.

American Superconductor

Yes

AMSC

$25.96

$11.31 (12.1.08)

$17.10

$47.53

$8.22

-34% &

+51%

NOTE: If you made 51% ROI, the mantra this year continues to be TAKE YOUR PROFITS EARLY AND OFTEN.

Read the article "Clean Energy Rolls Out Worldwide," in vol. 4, issue 12. Competitors include GE (NYSE: GE), Siemens (NYSE: SI), Rockwell (NYSE: ROK), and DRS (NYSE: DRS). High Temperature Superconductor (HTS) wire is able to transmit 150 times more energy than a copper wire of the same dimensions. This enables electric utilities to replace multiple conventional copper cables with one HTS-powered cable, leaving valuable underground real estate available for other uses – including future power upgrades. The worldwide cable market represents a multi-billion-dollar annual opportunity, but their power converters are also in the exploding marketplace of wind turbines and fuel cells. American Superconductor’s backlog of orders exceeds $634 million, with growth primarily driven by the wind energy market. AMSC expects the Asia-Pacific marketplace to account for up to 50% of sales in fiscal year 2007.

Revenues for the third quarter of fiscal 2008 (released on 2.4.09) were $41.3 million, a 27 percent increase over $32.6 million in revenues for the third quarter of fiscal 2007. Gross margin for the third quarter of fiscal 2008 was 23.2 percent, which compares with 30.9 percent for the third quarter of fiscal 2007. The company’s net loss for the third quarter of fiscal 2008 was $7.8 million, or $0.18 per share. This compares with a net loss for the third quarter of fiscal 2007 of $7.3 million, or $0.18 per share.

Cash, cash equivalents, marketable securities and restricted cash at December 31, 2008 were $122.6 million. The company reported backlog as of December 31, 2008 of approximately $602 million compared with $597 million as of September 30, 2008 and $168 million as of December 31, 2007.

"Our two core growth drivers – the Chinese wind power market and the U.S. power grid market – remained strong through our third fiscal quarter, a trend we expect to continue for the foreseeable future," said Greg Yurek, AMSC’s founder and chief executive officer. "Wind continues to be our growth engine; however, more than $27 million of our $46 million in third-quarter bookings were for our D-VAR® Smart Grid solutions. With these new orders, we now have more than $175 million out of the total of $602 million in backlog that we expect to recognize as revenue in fiscal 2009. Our backlog position for both fiscal 2009 and the following two fiscal years and the strength of our core markets position us for strong growth in fiscal 2009 and beyond."

"We expect to generate our first GAAP profit in the fourth quarter of fiscal 2008," said David Henry, senior vice president and chief financial officer. "While the investments we intend to make in fiscal 2009 to help achieve our long-term growth plans may limit us to earnings of a few cents per share for full fiscal 2009, profitability is our top priority," Henry concluded.

Conergy

Based out of Germany

RISK: MEDIUM

CEYHF

$22.50

$1.55 (12.1.08)

$.50

$96.14

$.41

-98% &

-68%

See the Wind Power article in vol. 4, issue 11. Has multiple sales agreements with Suntech Power Holdings to utilize STP panels in their global systems integration. Will publish 2008 financial statements on March 27, 2009.

12.18.08 press release: Conergy Deutschland GmbH, one of the leading suppliers of products and solutions in the field of solar electricity generation, completed work in Trier (Rhineland-Palatinate) on what is currently the third largest thin-film solar park in the world. On behalf of Stadtwerke Trier (SWT), the solar concern built the fully equipped photovoltaic park, with a total peak output of 8.4 MW, after only six months of construction. Upon completion of the last segment, the solar power plant was able to be completely installed into the electrical grid. Capital expenditure for the megawatt project amounts to around 30M euros.

eBay

RISK: LOW

eBAY

$14.27

$10.36 (3.2.09)

$12.85

$40.73

$10.91

-10% &

+24%

Take your profits early and often! If you made 24% gains, consider cashing in your profits.

Added back to Hot News list on December 15, 2008. Owns Skype. The growth potential there is huge… What biz does well when everyone is selling off their assets to covers their a**? The online auction site. Expect earnings to be better than expected and if this is the only game in town for money managers to flock in…

MEG WHITMAN RESIGNING. On December 31, 2008, Margaret Whitman, the former CEO, who was largely responsible for eBay’s impressive growth, resigned from all of the boards that she is on, including eBay, DreamWorks and Procter and Gamble. The press releases say it’s for personal reasons, but bloggers are speculating that she wants to enter politics – perhaps even running for governor of California! Any way, certainly she is resigning for personal reasons rather than any reflection upon the corporation, since it was a blanket resignation from all of the boards that she is on. According to Comscore Media Metrix, eBay had the most unique visitors on December 23, 2008 (two days before Xmas), with 85 million unique users. Amazon, Wal-Mart, Target and Apple followed behind eBay with 76 million, 52 million, 47 million and 35 million unique visitors in December 2008, respectively.

4Q and FY 2008 results on 1.21.09: For the full year, eBay Inc. posted $8.54 billion in revenue, net income on a GAAP basis of $1.78 billion or $1.36 per diluted share.

"While the holiday season was tough and competitive, our overall results for 2008 were strong," said eBay Inc. President and CEO John Donahoe. "For 2008, we delivered double-digit revenue and earnings growth; made significant changes in our eBay business; and built a stronger, more diverse portfolio of leading e-commerce businesses. We will build on our strengths in 2009 while managing our business prudently in the continued challenging environment."

The company’s cash and cash equivalents totaled $3.19 billion at December 31, 2008, compared to $4.22 billion at December 31, 2007.

Emcore

EMKR

$11.02

$1.51 (12.1.08)

$.89

$14.98

$0.50

-92% &

-41%

EMCORE Corp (EMCORE) is a provider of compound semiconductor-based components and subsystems for the broadband, fiber optic, satellite and terrestrial solar power markets. The Company operates in two segments: Fiber Optics and Photovoltaics. Was awarded an R&D 100 award by R&D Magazine for the IMM solar cell as one of the most innovative technologies of 2008.

Class action lawsuit was filed on 2.11.09 declaring that Emcore mislead investors about its earnings, backlog, customers, etc.

On June 18, 2008, Emcore announced that IBM used 55 miles of optical fiber EMCORE Connects Cables to build Roadrunner HPC system.

Preliminary 1Q 2009 results (on 2.9.09): Revenue for the first quarter of fiscal 2009 was $54.1 million, an increase of $7.2 million, or 15%, from $46.9 million reported in the same period last year and a decrease of $6.5 million, or 11%, from $60.6 million reported in the immediately preceding quarter. At December 31, 2008, cash, cash equivalents, restricted cash, and available for sale securities totaled approximately $18.8 million, working capital totaled $75.4 million, and outstanding loans under the Company's $25 million secured line of credit with Bank of America totaled $15.4 million. Shortly after the close of the first quarter, the Company sold its remaining interests in Entech Solar, Inc. (formerly named WorldWater and Solar Technologies Corporation) for $11.4 million in cash, which is not reflected in the quarter-end cash balance. During the first quarter, the Company freed up $2.6 million in cash that was previously tied up in auction rate securities. As previously disclosed, the Company has received indications of interest from several investors regarding a minority equity investment directly into the Company's wholly-owned Photovoltaics subsidiary which would serve as an initial step towards a potential spin off of that business. The Company's management is aggressively pursuing these opportunities. Cost Reduction Initiatives: Over the last three months, the Company has implemented a number of cost reduction initiatives including:

* A reduction in personnel totaling approximately 160 people, or 17% of the total workforce, resulting in annualized cost savings of approximately $9 million

* A significant reduction in the FY 2008 employee bonus plan payouts

* The elimination of all FY 2009 employee merit increases

* Significant reductions in capital expenditures

* Restrictions on employee travel and other discretionary expenditures

On a GAAP basis, the consolidated net loss for the first quarter of fiscal 2009 was $53.4 million, an increase of $39.0 million from $14.4 million reported in the same period last year and an increase of $12.2 million from $41.2 million reported in the preceding quarter.

EMCORE Corporation (EMCORE) is a provider of compound semiconductor-based components and subsystems for the broadband, fiber optic, satellite, and terrestrial solar power markets. Sales were up 41% from 2007 to 2008, though the 4^th quarter of 2008 saw a pullback of revenue from $75.5 million to $60.6 million. Raising capital by selling off Shares of World Water and Solar (now called Entech Corp.). Lost -80.86 million last year on sales of $239 million.

Order Backlog: As of December 31, 2008, we had an order backlog of approximately $53.2 million. Our order backlog is defined as purchase orders or supply agreements accepted by the Company with expected product delivery and / or services to be performed within the next twelve months. The December 31, 2008 order backlog is comprised of $30.2 million related to our Photovoltaics segment and $23.0 million related to our Fiber Optics segment.

Ener1

HEV

$6.06

$9.49

$2.35

Read "Life Begins with Lithium" from vol. 6, issue 4.

U.S. Global Investors Eastern European mutual fund

EUROX

$6.33

$4.94

$19.84

$5.27

-22%

Lots of Russian oil and gas. New holdings. Looking for best time to cash out.

FMC Corp.

FMC

$42.99

$80.23

$28.53

Read "Life Begins with Lithium" from vol. 6, issue 4.

General Electric

RISK: LOW

$26.69

$7.70 (3.2.09)

$10.78

$42.15

$10.66

-60% &

+40%

Take your profits early and often! If you made 40% gains, consider cashing in your profits.

GE is a big presence in renewable energy these days. Very green… Should benefit from an Obama Presidency. On the other hand, major pension plan and OPEB obligations. Additionally, GE had investments with Madoff Hedge Fund. Annual report on 2.18.09: Revenues of $182.5 Billion, over $172 in 2007. Net earnings = $17.4 billion. Cash and cash equivalents = $48 billion.

Google

GOOG

$341.43

$347.70

$747.24

$247.30

+2%

4^th quarter and year-end results January 22, 2009: Google reported revenues of $5.70 billion for the quarter ended December 31, 2008, an increase of 18% compared to the fourth quarter of 2007 and an increase of 3% compared to the third quarter of 2008. GAAP net income for the fourth quarter of 2008 was $382 million as compared to $1.29 billion in the third quarter of 2008. As of December 31, 2008, cash, cash equivalents, and short-term marketable securities were $15.85 billion.

On a worldwide basis, Google employed 20,222 full-time employees as of December 31, 2008, up from 20,123 full-time employees as of September 30, 2008.

Google is such a popular stock, and is a New Blue Chip that can help ground and stabilize your nest egg. And now, finally, it is trading at a 4-year low! This marketplace may not be through with its correction, however, even though, if you buy now, you are getting it for over half off what investors were willing to pay in 2007! I have not highlighted Google for a reason, because 2009 is predicted to be a bear of a year. Google is a better bet than the Bailout Index (Dow Jones Industrial Average). Be cautious jumping in too early when prices could be lower across the board in a few months.

Hoku Scientific

Hawaii

RISK: HIGH

Yes

HOKU

$8.03

$2.00

(3.2.09)

$2.76

$14.55

$2.06

-66% &

+38%

Take your profits early and often! If you made 38% gains, consider cashing in your profits.

Read "Solar Giants Tap a Small Hawaiian Company For Silicon," in the Oct. 2007 ezine, vol. 4, issue 10.

Announced 3Q 2009 earnings on January 28, 2009: Revenue for the quarter ended December 31, 2008 $767,000. GAAP Net loss for the quarter was -$863,000, or -$0.04 per diluted share.

"We are proud to have successfully secured PPA financing for the Hawaii State government's first major solar power installation, despite notable turbulence in the finance markets. And, we are pleased with our continued progress in our solar installation business. We have dramatically increased the aggregate amount of PV installed compared to FY 2008, and are beginning to see a backlog of projects in the design phase for future construction," according to Dustin Shindo, Chairman and CEO.

Commenting on the Idaho polysilicon manufacturing facility, ""We continue actively working to mitigate the impact of delayed customer prepayments, but now expect that this may result in a shift of our planned production demonstration from the first quarter of calendar year 2009 to the second quarter of calendar year 2009," Mr. Shindo said. "Looking ahead, this may also cause us to shift our planned first commercial shipment from the first half of 2009 to the second half of 2009. As before, we plan to ramp-up production throughout the second half of calendar year 2009 and into calendar year 2010, when we expect to reach full production capability. We expect this revised schedule will still allow us to meet all delivery obligations to our current customers, and we will continue managing our project to ensure this remains the case."

Contracted to build a polysilicon facility in Idaho capable of producing up to 2,500 metric tons of polysilicon per year in Pocatello, Idaho. The first six of 28 polysilicon reactors were delivered to Pocatello on January 14, 2009, with the next ten scheduled for delivery on March 2009.

Kinetic Concepts, Inc.

KCI

$38.81

$21.05

(12.1.08)

$21.23

$66.77

$18.50

-44% &

flat

Read the article, "Beauty is Skin Deep," in vol. 5, issue 5.

REPORTED EARNINGS ON 1.27.09. Total revenue increased 14% to $492.5 million, including $68.0 million of LifeCell revenue. Net earnings were $52.1 million compared to $66.5 million one year ago.

Net earnings decreased 4% to $56.6 million. Kinetic Concepts, Inc. (NYSE:KCI) announced on 10.22.08 that its Board of Directors has authorized an investment of up to $100 million for the repurchase of its common stock as part of a new share buyback.

At December 31, 2008, total cash was $247.8 million and total long-term debt outstanding was $1.67 billion. Subsequent to December 31, 2008, the Company made voluntary senior credit facility repayments totaling $79.0 million from cash-on-hand.

LDK Solar

GREEN

Yes

LDK

$30.02

$4.94

(3.2.09)

7.19

$76.75

$3.75

-76%

+46%

Read the articles, "Green..." in vol. 6, issue 2 and "Solar Springs Up Again", in vol. 5, issue 4.

Take your profits early and often! If you made 46% gains, consider cashing in your profits.

4Q and FY results on 3.11.09: Fiscal year 2008 revenue of $1.6 billion, up 214% year-over-year. Annualized wafer production capacity expanded by over 1 GW, reaching 1.46 GW at the end of 2008; Signed 14 long-term wafer supply agreements during the year, achieving a sales backlog of over 14 GW through 2018.

Net sales for the fourth quarter of fiscal 2008 were $426.6 million, down 21.3% from $541.8 million for the third quarter of fiscal 2008, and up 121% from $192.8 million for the fourth quarter of fiscal 2007. During the fourth quarter, LDK Solar recorded a write-down of $216.7 million against the cost of inventories for a decline in net realizable value of inventories resulting from the rapid markeldkt price decline for solar wafers.

LDK Solar ended fiscal 2008 with $255.5 million in cash and cash equivalents and $83.4 million in short-term pledged bank deposits. "Despite its challenges, 2008 was a year of impressive and rapid growth for LDK Solar," stated Xiaofeng Peng, Chairman and CEO of LDK Solar.

Maxwell

MXWL

$7.06

$14.75

$4.00

Read "Life Begins with Lithium" from vol. 6, issue 4.

Melco Crown Entertainment Ltd.

MPEL

$6.54

$3.46

$19.09

$2.31

-47%

Check out the article, "(No) Viva Las Vegas" (vol. 5, issue 10). Operates Crown, a 6- star Resort and Casino in Macau, the trendy Mocha slot machine cafes and is developing City of Dreams in Macau, with Hard Rock, Hyatt and Dragone Entertainment. CEO/Chairman Lawrence Ho is the son of Macau gambling billionaire Stanley Ho.

Upgraded to NASDAQ Global Select Market on 1.2.09.

On 11.13.08, the Company recorded a net loss for the third quarter of 2008 of US$21.1 million, or US$0.05 per ADS, compared to a net loss of US$45.2 million, or US$0.11 per ADS, in the third quarter of 2007. Net revenue was US$295.2 million, up from US$113.3 million for the comparable period ending September 30, 2007. Phases I and II of City of Dreams are fully funded, and the project remains on timetable to open Phase I in the first half of next year, according to CEO Lawrence Ho. They report having $886 million cash on hand for the project and will spend $1.1 billion before Phase 1 opens.

MEMC Electronics

GREEN

RISK: MEDIUM

WFR

$28.26

$12.75

$18.38

$96.08

$10.00

-35% &

+44%

NOTE: If you made 44% ROI, the mantra this year continues to be TAKE YOUR PROFITS EARLY AND OFTEN.

MEMC was added to the S&P 500 in August of 2007. Read the "Sun Powers Whole Foods," article in vol. 3, issue 10 and "Green..." in vol. 6, issue 2. Silicon is in high demand, and MEMC has been able to price its product and pick its customers accordingly. Volatile marketplace. Great company. With more silicon manufacturing companies coming online this year and next (like HOKU Scientific), MEMC’s operating margins (currently at 33%) could suffer. Look for this to start impacting the top line and profit margins in the coming quarters.

1.22.09 reported 4Q and FY earnings: For the full year ended December 31, 2008, the company's net sales increased by 4.3% to $2.00 billion, compared to $1.92 billion in 2007. Cash and investment balances grew by $92.3 million to over $1.4 billion. Net income was $390 million, compared to $826 million a year ago.

Worse was the interim CEO’s announcement that "Our current view of the markets we serve indicates that first quarter 2009 revenue could decline by as much as 50% from the fourth quarter of 2008." 1Q 2009 results should be released the first week in May of 2009.

It was announced on 10.31.08 that Nabeel Gareeb, the former President and CEO of MEMC Electronics, was resigning effective November 12, 2008 and that Board member Marshall Turner would serve as interim CEO. Based upon the comments and timing (right before the year-end results reported a significantly reduced profit margin), however, it looks like Gareeb was forced out so that MEMC could find a CEO to "lead the company into the future." Ahmad Chatila was tapped as the new CEO and president on 2.5.09. He previously worked as an executive vice president for Cypress Semiconductor Corp.'s memory and imaging division and as the company's head of global manufacturing. Wall Street liked the appointment and shares soared on the news.

Microsoft

MSFT

$15.91

$18.13

$32.10

$14.87

+14%

Great Blue Chip for your Long Term Portfolio. Waiting for lowest buy-in point. MSFT is laying off 5000 employees. 1.22.09 2Q earnings: Microsoft Corp. announced revenue of $16.63 billion for the second quarter ended Dec. 31, 2008, a 2% increase over the same period of the prior year. $4.17 billion in net income.

New Zealand Dollar currency ETF by WisdomTree

BNZ

$25.17

$18.49

(12.1.08)

$19.83

$25.31

$16.67

-21% &

+7%

Read the article, "Foreign Investing: From BRICs to Barbeys," in vol. 5, issue 7, for more information on why New Zealand is the new attraction on the world currency markets.

PowerShares CleanTech Portfolio

PZD

$33.22

$16.67

$36.93

$12.84

-50%

The PowerShares Cleantech Portfolio (Fund) tracks the Cleantech Index™ (ticker: CTIUS), which is designed to track the leading cleantech companies, from a broad range of industry sectors, that offer the best investment returns. 'Cleantech' companies derive the majority of their business from knowledge-based products or services that improve productivity and/or product performance while reducing total costs, energy and resource consumption, pollution, toxicity, etc. Top holdings as of 2.13.09 include: First Solar, Siemens, Vestas, Auto Desk, Corning.

See Green Your Portfolio article in vol. 5, issue 9 and "Green..." in vol. 6, issue 2.

PowerShares Wilderhill Clean Energy Portfolio

PBW

$19.92

$6.02

(3.2.09)

$8.11

$28.84

$6.02

-60% &

+35%

Exchange Traded Fund in the green, clean, renewable energy space. See Green Your Portfolio article in vol. 5, issue 9 and "Green..." in vol. 6, issue 2.

Take your profits early and often! If you made 35% gains, consider cashing in your profits.

Top holdings as of 2.13.09 include: JA Solar, Trina Solar, Yingli, Zoltek, Suntech, Evergreen…

Satcon

VERY HIGH RISK

Micro Cap

SATC

$1.62

$1.15

(3.2.09)

$1.63

$3.14

$1.30

FLAT &

+42%

Clean Tech. Satcon is a developer and supplier of power management and system architecture solutions for the alternative energy and distributed power markets.

Take your profits early and often! If you made 42% gains, consider cashing in your profits. This is a company, however, that could stand to benefit greatly from Obama’s Clean Energy Cash Infusion.

Announced 4Q and FY earnings on 3.5.09. Satcon reported revenue for the fourth quarter of $19.3 million, up from $12.2 million in the fourth quarter of fiscal 2007. For the full year 2008, revenue grew 49% to $62.5 million from $42.0 million in the twelve months ended 2007. Fourth-quarter 2008 gross margin was 24%, compared with -3% in the same period of 2007.

Net loss from continuing operations for the fourth quarter was approximately $0.6 million, compared with $7.8 million for the fourth quarter of 2007. Fourth-quarter 2008 net loss included restructuring costs of $0.3 million, offset by approximately $1.1 million related to the valuation of the company’s warrant liabilities. For the twelve months ended December 31, 2008, net loss from continuing operations was $12.3 million, compared with a net loss from continuing operations of $16.6 million for the full year of 2007.

Cash and cash equivalents at December 31, 2008 were $10.0 million, compared with $10.5 million at September 27, 2008.

The company reported an ending backlog on December 31, 2008 of approximately $23 million, compared with backlog of $37 million on September 27, 2008. The decrease in backlog for the December quarter was due to the impact of the challenging macroeconomic environment.

SatCon commercial grade inverters are an integral part of Google's corporate headquarters in Mountain View, California. The 1.6MW system is the largest commercial photovoltaic system in the United States. On 12.9.08 announced that Suntech had selected Satcon to help power a 1 megawatt (MW) solar energy installation hosted at The North Face West Coast Distribution Center in Visalia, California for Recurrent Energy.

Smith & Nephew

London, England

RISK: MEDIUM

Yes

SNN

$55.78

$34.92

(12.1.08)

$31.04

$69.20

$30.27

-44% &

-11%

Announced full year earnings on February 12, 2009: $3.8 billion in earnings. Read the article in vol. 4, issue 7. The company is based out of London, England. Additionally, SNN has a piece of an exploding marketplace in the hip resurfacing business with its premiere product, called the BIRMINGHAM HIP* Resurfacing System. Hip resurfacing is far less invasive than the total hip replacement and even has athletes like Floyd Landis and Gary Kobat back competing in running and biking within a year of surgery!

On 1.30.09, Smith & Nephew, Inc. (NYSE: SNN, LSE: SN) announced that its Orthopaedics Reconstruction Division has entered into a grant administration agreement with the Orthopaedic Research and Education Foundation (OREF). This should help training and adoption of the innovative orthopaedic products that SNN has been pioneering.

Sociedad Minera y Quimica de Chile

SQM

$25.21

$21.51

(12.1.08)

$28.33

$59.41

$12.98

+12%

+76%

Read the article, Treasure Hunting, in vol. 5, issue 10 and the article "Life Begins with Li," from vol. 6, issue 4.

Take your profits early and often! If you made 76% gains, consider cashing in your profits.

4Q & FY 2008 earnings on 2.24.09: Sociedad Quimica y Minera de Chile S.A. (SQM) (NYSE: SQM; Santiago Stock Exchange: SQM-B, SQM-A) reported Revenues for 2008 totaled US$1,774.1 million, representing growth of 49.4% over the US$1,187.5 million reported in 2007.

SQM's Chief Executive Officer, Patricio Contesse, stated, "SQM is pleased to announce yet another record year of growth in our financial results in spite of global economic uncertainty. Since 2000, our consolidated revenues have grown at a CAGR of 20% while our bottom line has expanded at a CAGR of 50% due in large part to our strategic position in our core markets and our continued commitment to efficiency," commented Patricio Contesse, the Company's Chief Executive Officer. He added, "In general, SQM benefited substantially this year from favorable pricing conditions in Specialty Plant Nutrition and from higher sales volumes in Iodine and Derivatives. Looking forward, the unprecedented turmoil in global markets seen during the last part of the year will likely pose new challenges for the Company in 2009. We believe, however, that the underlying fundamentals in our core business lines remain solid and will allow us to face potential challenges."

Sunpower

Yes

SPWRA

$25.38

$25.30

$107.00

$18.50

Flat

Read this month’s "The Sunny Side" in vol. 6, issue 3.

Suntech Power Holdings

Yes

STP

$40.07

$5.50

(3.2.09)

$11.65

$90.00

$5.36

-71% &

+211%

2007 and 2008 Company of the Year! Read "Green..." in vol. 6, issue 2, "2008 Company of the Year," in vol. 5, issue 8 and "Solar Springs Up Again," in vol. 5, issue 4. Suntech was the official solar sponsor of the Beijing Olympics, our 2007 Company of the Year, as well as our featured Company of the Month in October of 2006. Go to vol 4, issue 1 and vol. 3 issue 10 to access those articles.

NOTE: The mantra this year continues to be TAKE YOUR PROFITS EARLY AND OFTEN. If you’ve doubled your money, consider taking your profits.

4Q and FY 2008 results call on February 18, 2009 at 8:00 a.m. ET. Total net revenues grew 42.7% year-over-year to $1,923.5 million. GAAP net income for the full year was $111.0 million or $0.66 per ADS. Achieved 1GW solar cell and module production capacity.

"We believe that we are now in a position to service all avenues of solar demand globally, including residential roof-top, commercial roof-top, ground mounted and utility scale. In particular, our continued investment in the U.S. should position us for strong growth in that key market and its burgeoning utility-scale segment via our systems integration unit, Suntech Energy Solutions, and our project development joint venture, Gemini Solar," said Dr. Zhengrong Shi, Suntech's Chairman and CEO.

Suntech was chosen to design and construct a BIPV system totaling 3MW on the China and Theme Pavilions at the World Expo Shanghai 2010. The project will be the largest BIPV installation in China.

-- Suntech supplied 5MW of Suntech solar panels for the largest solar plant in the Middle East, a 10MW solar electricity system to power Masdar City, the world's first carbon neutral city being built in Abu Dhabi, United Arab Emirates. The solar system is being built and designed by leading Abu Dhabi based solar power system integrator, Enviromena Power Systems.

T. Rowe Price Em Europe & Mediterranean

Mutual Fund

(International)

RISK: LOW

TREMX

$20.07

$7.78

$40.00

$6.55

-61%

Mutual fund holdings have shifted from Eastern Europe emerging markets to Russian oil and gas markets. Looking for best opportunity to cash out. (1.2.09)

Trina Solar Limited

RISK: Medium

Chinese-based ADR

TSL

$38.99

$5.95

(3.2.09)

$12.33

$73.06

$5.61

-68%

+207%

Read the articles, "Green..." in vol. 6, issue 2 and "Solar Springs Up Again," in vol. 5, issue 4.

NOTE: The mantra this year continues to be TAKE YOUR PROFITS EARLY AND OFTEN. If you’ve doubled your money, consider taking your profits.

4Q & FY 2008 earnings on February 19, 2008: Total net revenues were $831.9 million, an increase of 175.6%. Net income for the full year was $61.4 million, an increase of 71.7% from 2007. The Company also announced the planned establishment of the Company's North American operations base in San Francisco in 2009.

U.S. Gold

Colorado USA

RISK: VERY HIGH

Yes

UXG

$5.05

$.50

$2.28

$7.04

$.38

-55% &

+456%

Note: U.S. Gold is not producing gold at this time; is it a gold exploration company, based in Nevada. U.S. Gold is an exploration company, not a mining company, meaning that if they strike gold, the stock should spike and if they don’t, you could lose your investment. Very risky.

NOTE: The mantra this year continues to be TAKE YOUR PROFITS EARLY AND OFTEN. If you’ve quadrupled your money, consider taking your profits.

You’ll want to make sure you have shares of U.S. Gold going forward as well, however. Gold should be a great hedge against inflation in the future. (Right now, the Feds are concerned about deflation, but inflation could be on the 12-18 month horizon.)

The Company's primary objective in Nevada is to discover the next Cortez Hills deposit. Cortez Hills, owned by the world's largest gold producer, is Nevada's largest gold discovery of the past decade and located just 10 miles (16 km) north of U.S. Gold. They also have mines in Mexico that are promising high grade gold and silver ore. This is an exploration company, not a mining company. They don’t produce gold at this time.

Began trading on the AMEX stock exchange on 12.11.06. (Also trades on the Toronto Stock Exchange.) See the feature interview with CEO and Chairman Rob McEwen in vol. 3, issue 2, and click to hear Natalie Pace’s Q&A with Rob McEwen on the Forbes.com Video Network.

A U.S. Gold company spokesperson says that their capital position is secure, and that they have trimmed costs to preserve capital in 2009. Company may need more capital in 2009 (according to the bean counters), however, so make sure that you’re buying near the 52-week low to maximize your upside potential.

Westpac Bank (Australia)

WBK

$95.29

$52.46

(12.1.08)

$65.54

$144.04

$45.16

-31%

+25%

Read the article, "Foreign Investing: From BRICs to Barbeys," in vol. 5, issue 7, for more information on why this Australian bank is the new attraction in the world. Annual General Meeting December 11, 2008. 2008 annual report: $3.9 billion in net income (after tax). Is merging with St. George.

WisdomTree

NYC, USA

RISK: HIGH

Yes

WSDT

$2.95

$.61

$3.50

$.52

-79%

See vol. 4, issue 3, "Money Grows on WisdomTrees," and vol. 5, issue 2, "International Money Grows on WisdomTrees."

Announced 4Q and FY 2008 results on Feb. 5, 2009. The full year net loss was $29.0 million compared to $25.1 million in 2007. WisdomTree CEO Jonathan Steinberg commented, "These are challenging times, but these are also important times of change in the asset management industry as difficult market conditions have highlighted the importance of transparency, liquidity and tax efficiency like never before. Recognition of these structural advantages helped the ETF industry as a whole take in approximately $178 billion in net inflows in 2008 in stark contrast to the net outflows of mutual funds."

As of December 31, 2008, assets under management ("AUM") tied to the WisdomTree Indexes were $3.6 billion, down 21.8% since September 30, 2008. At the end of the fourth quarter, ETF AUM were $3.2 billion, down 22.0% from September 30, 2008. The severe decline in the valuation of global equity markets contributed to $925 million of net market depreciation of the WisdomTree ETFs in the fourth quarter. Despite domestic markets declining nearly 22% and international markets nearly 20%, net inflows into WisdomTree ETFs were $29.5 million in the fourth quarter. For the full year, ETF AUM declined 30.2% primarily due to $2.3 billion in market declines despite almost $900 million in net inflows.

Launched New Zealand and South African currency ETFs on June 26, 2008, with the symbols BNZ and SZR respectively.

Jarrett Lilien, former E*TRADE FINANCIAL Acting CEO, President and Chief Operating Officer, joined the Board of Directors on November 14, 2008.

Recently Deleted Companies 2008/2009:
Echelon +20%, GE, +13% and +18%, Google, +15% and +31%, Johnson & Johnson +10%, LDK Solar +18%, Microsoft +12%, Satcon +13%, Suntech +35%, Trina Solar +22%, World Water & Solar +22%. Genentech (8.1.08) +40%. Altair (deleted on 8.7.08) posted gains of +3% and +57%. Zoltek (deleted on 8.18.08) lost 30% before being removed. LDK Solar was deleted on 9.2.08 with 46% and 29% profits. U.S. Gold profit taking on 11.6.08 amounted to 72% gains. Conergy gains of 51% were taken on 11.7.08. American Superconductor posted 50% gains between 12.1 and 1.14.09. MEMC Electronics (WFR) had 21% gains between 12.1 and 12.15.08. STP had gains of 69% between 12.1.08 and 1.2.09. SQM profits 20% on 1.14.09. WWAT was deleted on 2.1.09 with -62% losses. On 2.15.09, AMSC had gains of 65%, MEMC Electronics 26%, Sociedad de Quimica y Minera 48% and U.S. Gold 432%. Citigroup gains of 42% on 3.15.09. Genentech was deleted on 3.15.09 with gains of 29%. OSI Pharmaceuticals was deleted on 3.15.09 with 7% gains. Rio Tinto was deleted on 3.27.09 with gains of 67%. On 3.27.09, the following companies were in the money: ALTI (+48%), AMSC (+51%), eBay (+24%), GE (+40%), HOKU (+38%), LDK (+46%), MEMC (+44%), PBW (+35%), SATC (+42%), SQM (+76%), STP (+211%), TSL (+207%), U.S. Gold (+456%) and WBK (+25%).

Recently Deleted from the Hot News list:
Short term gains on AMSC, MEMC, SQM and UXG on 2.15.09
World Water & Solar (now known as Entech Solar) on 2.1.09
Citigroup (C) on 3.15.09
Genentech on 3.15.09
OSI Pharmaceuticals on 3.15.09
Rio Tinto on 4.1.09

Citigroup DIVIDENDS 4.31%! RISK: LOW	No			C	$1.25	$2.33 (3.16.09)		$27.35 $.97	+86%
Bailed out by the Feds November 2008. Financial markets are under duress. Avoid most banks for now. However, believe there will be a bounce on Citi since the Feds aren’t going to let it go under… Forward P/E is 2.
Genentech			No	DNA	$73.00	$94.20 (3.13.09)	$99.14 $65.35		+29%
Roche is buying Genentech for $95/share. Cool to take your profits now. Companies issued a press release on 3.12.09. (btw: This is a premium on the hostile bid of $86.50 per share.)
OSI Pharmaceuticals RISK: HIGH (U.S.) 2005 Company of the Year		No		OSIP	$35.95	$38.54 (3.13.09)		$53.71 $31.33	+7%
NataliePace.com’s 2005 Company of the Year. Read vol. 1, issue 56. OSI Pharmaceuticals was added to the NASDAQ Q-50 Index(sm) (Nasdaq:NXTQ) on September 22, 2008. Tarceva is the genetic based "cancer pill," and sales have been exploding. Teva Pharma filed an application with the FDA to launch a generic version of Tarceva, which OSIP has challenged. If Teva prevails in court, the original patent period could be reduced to November 18, 2009. There is a lot is at stake here, which overshadows the tremendous Full Year earnings report that OSIP released on 2.27.09. Now that Genentech (OSIP’s partner on Tarceva) has been bought by Roche, the upside on this might have been realized, given the vulnerability of a one-drug company in a harsh economic climate with Goliath pharmaceutical companies dying to sell the generic. 4Q and FY 2008 earnings on 2.27.09: Revenue was $379 million, over $341 million in 2007. Net income was $467 million compared with net income of $103 for 2007.
Rio Tinto (UK based mining company)			No	RTP	$138.69 $84.68 (12.1.08)	$141.14	$558.65 $59.20		+2% & +67%
If you made 67% gains, take your profits early and often is the theme in 2009! See "Gold is a 4-Letter Word," vol. 5, issue 11. $22.3 billion EBITDA and net earnings of $3.7 billion announced on 2.12.09. Signed deal with Chinese company same day. The major strategic partnership with Chinalco provides additional flexibility in addressing the Group's commitment to reduce net debt by a further $10 billion by end of 2009. Net debt reduced by $6.5 billion to $38.7 billion at 31 December 2008. The transaction is subject to approval by the shareholders of Rio Tinto, governments and other regulators. Australia deferred its approval of the deal for 90 days on 3.15.09.

Stocks to Watch
Some of these are great companies that we’re thinking of adding to the Hot List and some are stinkers we’re thinking of adding to the Cooling Off List. Read carefully to identify which is which!

Note that right now most of our favorite companies are on the Watch List, anticipating continued weakening of the stock market, and share prices.

Recent Additions:
Citigroup (4.1.09)

Recent Deletions:
Baidu (moved to Cooling Off List on 3.27.09)

Company	NP owns?	Symbol		Price when featured		Price 3.27.09	Year High Year Low		Gains since original feature
Apple Computer	Yes	AAPL		$113.66 (9.30.08)		$106.85	$202.96 $79.14
See archived ezine Vol. 4, issue 2, for the feature article, "Apple Chips." Jobs is taking a medical leave of absence until the end of June to focus on his health while Tim Cook, COO runs things. Jobs will remain CEO and will be involved in major strategic decisions. 1Q 2009 results on 1.21.09: The Company posted record revenue of $10.17 billion and record net quarterly profit of $1.61 billion, or $1.78 per diluted share. These results compare to revenue of $9.6 billion and net quarterly profit of $1.58 billion, or $1.76 per diluted share, in the year-ago quarter. Apple sold 2,524,000 Macintosh® computers during the quarter, representing nine percent unit growth over the year-ago quarter. The Company sold a record 22,727,000 iPods during the quarter, representing three percent unit growth over the year-ago quarter. Quarterly iPhone units sold were 4,363,000, representing 88 percent unit growth over the year-ago quarter. $25.6 billion in cash and short-term securities.
Applied Materials	No	AMAT		$9.51		$11.23		$21.75 $7.17
Nanomanufacturing Technology solutions for the global semiconductor, flat panel display, solar and related industries, with a portfolio of equipment, service and software products. The Company’s customers include manufacturers of semiconductor wafers and chips, flat panel liquid crystal displays (LCDs), solar photovoltaic (PV) cells and modules, and other electronic devices. It operates in four segments: Silicon, Applied Global Services, Display, and Energy and Environmental Solutions. On January 31, 2008, Applied acquired Baccini S.p.A. (Baccini), a supplier of automated metallization and test systems for crystalline silicon (c-Si) solar PV cells. Sales were down 36% in the 1^st quarter 2009. Switching emphasis from chips to solar energy… GAAP net loss was $133 million, GAAP net loss per share was $0.10. New orders were $903 million. "We acted early and decisively to reduce costs in line with economic conditions that have resulted in an unprecedented decline in demand," said Mike Splinter, president and CEO. "With our leading technology and strong balance sheet, Applied is positioned to weather this recession and invest in new products and services."
Big Lots	No	BIG		$30.28		$21.62		$34.88 $12.40
Read "Discount Designer Stores," from vol. 5, issue 6.
Canadian Imperial Bank RISK: Medium	No	CM		$65.88		$37.73		$108.79 $30.64
Refer to the "Banking on Iraqi Dinars" article in Vol. 5, issue 2 for details. Financial markets are under duress. Avoid most banks for now.
Citigroup RISK: MEDIUM	No	C		$2.26		$2.62		$27.35 $.97
Financial markets are under duress. Avoid most banks for now. Bailed out by the Feds November 2008.
First Solar	No	FSLR		$188.91		$147.36	$317.00 $95.32
See "Solar Springs Up Again," article in vol. 5, issue 4. Deleted from Cooling Off List on 9.30.08. First Solar uses cadmium telluride instead of silicon to transfer sunlight into useable energy. This was a huge competitive advantage when silicon was hard to get at a reasonable price. Thus First Solar’s operating margins were the highest in the industry – at 31.42%. That is shifting, however, for two reasons. Silicon manufacturing is heating up and cadmium telluride isn’t as abundant or as efficient a power source as silicon. Read the article for more details.
Intel RISK: LOW	No	INTC		$20.27	$15.42		$27.99 $12.06
Intel is a great blue chip. However, the chip business is highly competitive and the business spending is expected to moderate during the next year. Wait and see what happens to the share price! Green: Intel and Google launched ClimateSaversComputing.org in 2007, with a goal of achieving a 50% power consumption reduction by 2010. They have convinced all kinds of partners to come on board, including competitors: Advanced Micro Devices and Microsoft!
NetGear Silicon Valley, CA RISK: MEDIUM	No	NTGR	$26.38		$11.99		$41.33 $8.21
With the financial crisis and the crush it has put on the consumer’s wallet, I would be wary about NetGear’s earnings reports in the coming quarters, since so many of the company’s many products are reliant upon the consumer electronics industry. Share price is getting hammered. I don’t think this trend is over yet. Watch Natalie Pace’s Exclusive Forbes.com Video Network Q&A with Patrick Lo (from August 2006). Award Heaven! Patrick Lo, CEO, won the Ernst & Young’s Entrepreneur of the Year Award (on 6.16.06), NetGear was on Business Week’s Hot 100 list (for the 2^nd year), NetGear was awarded Best Buy’s Bravo Award for Business Excellence and POPULAR MECHANICS gave NetGear’s Skype phone its Breakthrough Award.
Ross Stores	No	ROST	$35.90		$36.68		$39.23 $21.23
Read "Discount Designer Stores," from vol. 5, issue 6.
Sohu (Chinese Co. ADR) Beijing, China Small Cap RISK: MEDIUM	No	SOHU		$46.54		$41.72		$91.50 $34.10
See NataliePace.com ezines, vol. 3, issue 4 and vol. 2, issue 9 for feature articles on Sohu. Dr. Charles Zhang, the Chairman and CEO of Sohu.com, is one of our CEOs of the year in 2007. Read the articles in vol. 4, issue 1. You can watch a Q&A with Dr. Charles Zhang in an exclusive interview I did on the Forbes.com Video Network.
Wells Fargo	No	WFC	$25.84		$15.59		$44.69 $7.80
See Wells Fargo’s Incredible Exploding Earnings in vol, 5, issue 9, and Wells Fargo’s Great Depression, in vol. 4, issue 12. Announces 4Q earnings on January 28, 2009. Should have complete annual report available at the end of February 2009. 1.28.09: WELLS FARGO REPORTS FULL YEAR NET INCOME OF $2.84 BILLION, $0.75 PER SHARE, FOURTH QUARTER NET LOSS OF $2.55 BILLION. Record revenue of $42.23 billion, up 7 percent from prior year Full year 2008 net charge-offs were $7.84 billion (1.97 percent of average total loans) compared with $3.54 billion (1.03 percent) during 2007. Total wholesale charge-offs (excluding business direct) increased $864 million from the prior year, including the previously referenced $294 million of Madoff-related losses, residential real estate construction and industries related to home building. Home Equity charge-offs totaled $2.16 billion (2.57 percent of average Home Equity loans) in 2008 compared with $596 million (0.73 percent) in 2007. Auto charge-offs totaled $1.23 billion (4.50 percent of average auto loans) in 2008 compared with $1.02 billion (3.45 percent) in 2007. Business Direct charge-offs totaled $819 million (6.96 percent of average business direct loans) in 2008 compared with $433 million (3.97 percent) in 2007. Nonperforming assets totaled $9 billion and loans that are 90 days past due and still accruing totaled $12.65 billion. At $21+ billion, that is half of their "record revenue" for 2008. Be advised.
Wisdom Tree Chinese Yuan ETF	No	CYB		$24.85		$25.47		$25.72 $22.41
Read the article, "Banking on Iraqi Dinars," from vol. 5, issue 2.
Wisdom Tree Emerging Markets Hi-Yield ETF	No	DEM		$53.08		$31.90		$58.78 $27.10
Read the article, "Banking on Iraqi Dinars," from vol. 5, issue 2.
Wisdom Tree Emerging Markets ETF	No	DGS		$44.66		$24.94		$52.71 $0.21
Read the article, "Banking on Iraqi Dinars," from vol. 5, issue 2. Hold off.
Wisdom Tree Indian Rupee currency ETF	No	ICN		$24.28		$22.52		$25.71 $20.42
Read the article, "Banking on Iraqi Dinars," from vol. 5, issue 2.
Wisdom Tree International Financial ETF	No	DRF		$23.25		$9.40		$31.49 $6.65
Add to Hot News in October 2009? Read the articles, "International Investing," and "Banking on Iraqi Dinars," from vol. 5, issue 2. Most holdings are in international finance, with a big focus on Australia.

Cooling Off Stocks List (may be Poised for a Decline in Share Price).
Note: The companies listed in bold have recently been added to this cooling off list and/or may be currently poised for a decline in value. Investors who have them in their portfolio should read the recent news and consider whether it is time to sell and take profits, dump losses, short the position and/or simply weather the storms, while keeping the company in their long-term portfolio. At any rate, always consult your certified financial partner before making adjustments to your portfolio. (Again, note that the stocks on this chart are expected to go DOWN in price.)

Highlighted Companies (Cooling Off List):
Baidu (BIDU)

DELETIONS:
American Express. Short term gains on AXP of 35% on 3.2.09. (I’m not removing from the list because continued losses in share price are likely.)

Company	NP owns?	Symbol	Price when added to Cooling Off List	Price 3.27.09		52-week High 52-week Low	Gains/Loss
American Express	No	AXP	$16.98	$14.45		$52.63 $14.72	-15%
This year’s mantra is take your profits early and often. AXP earned 35% gain in February. It remains on the list because we believe the downside potential still exists. Read the article "American Express," from vol. 6, issue 2.
Baidu	No	BIDU	$183.15	$183.15		$397.70 $100.50	--
Leading Chinese website for search (similar to Google). Expecting share price to continue to get battered. 25.12 P/E is high for a declining marketplace. (Advertising revenue models tend to suffer greatly in recessions and Google’s P/E is only 16 right now.)
Fortress Investment Group	No	FIG	$3.57	$2.63		$19.50 $0.77	-26%
Read the articles, "Cherry Picking the Cherry Bombs" (vol. 5, issue 12) and "Money Grows on Wisdom Trees," from vol. 4, issue 3. Reported earnings on 11.12.08. 3Q 2008 GAAP net loss of $57 million. Net loss for the first 9 months of 2008 equals $182 million.
KB Home RISK: HIGH	No	KBH	$59.00	$15.05		$48.67 $6.90	-74%
Read the article, "Rupert Murdoch, Nobel Laureates and Top Real Estate CEOs. Find Out Where They Are Investing," from vol. 2, issue 5. In May 2005, we called REITs a burnout sector, and the fallout should continue, with high home prices, rising interest rates, people backing out of contracts and rising inventory. Housing is not expected to recover until the 2^nd half of 2009 or even 2010, and while housing is in the toilet, so are housing REITs, like KB Home and Toll Brothers. McMansions are going the way of Hummers (extinct) in the new cleaner, greener, fuel-efficient world. Who can afford to heat these huge homes? Who is buying new real estate these days at prices that KB can make a profit on (considering their cost to carry the land, etc.)?
MGM Mirage	No	MGM	$26.79	$2.85		$100.50 $5.10	-89%
Get more information in vol. 5, issue 10 in the (No) Viva Las Vegas article. The City Center project looms as exceedingly problematic in today's vast downturn of real estate in the Las Vegas area. Anticipating very bad news on this project in the near future. MGM has a new CEO and Chairman effective December 1, 2008. James J. Murren became the Company's Chairman and Chief Executive Officer, effective December 1, 2008. Former Chairman and CEO J. Terrence Lanni will continue as a member of the Board and will join the Diversity Committee. majority shareholder Kirk Kerkorian was pleased and issued a statement applauding Lanni’s leadership and succession plan. (Sounds like Murren might have been Kerkorian’s succession plan…) Any way, can anyone resurrect Vegas in these turbulent times? MGM raised $688 million in a private offering of senior secured debt notes, which the company is using to pay down debt and continue operations.
Sears Holding	No	SHLD	$52.93	$48.88	$127.32 $26.80		-8%
Read the articles, "Cherry Picking the Cherry Bombs" (vol. 5, issue 12) and the "Discount..." article (vol. 5, issue 6). Sears is one of the largest, oldest retail chains in the U.S, and formerly, was as American as baseball and apple pie. These days, however, Sears is more of a hedge fund, which might help to explain why you’ve been trying to get that appliance repaired (under warranty) for months or been waiting for a replacement for your coffee pot for so long that you’ve taken up drinking tea. Almost all of the board directors at Sears are in the investment business, not the retail business. In fact, board director Emily Scott, a TV station founder, is the only person on the board without significant investment experience. No one on the Sears board has any experience at all in retail. 4Q earnings on 2.26.09: Net income for the 4^th quarter was $190 million as compared to net income of $426 million in the fourth quarter of 2007. Cash balances of $1.3 billion on 1.31.09. Spent $678 million on share repurchases in 2008. Total debt as of January 31, 2009 was $2.9 billion, down from $3.0 billion as of February 2, 2008. Annual report is due on or before April 1, 2009. Annual Shareholder’s Meeting will be on Monday, May 4, 2009 in Hoffman Estates, IL. You can read the shareholders letter from Chairman Eddie Lampert on the SearsHoldings.com website.
Toll Brothers RISK: MEDIUM HIGH	No	TOL	$37.82	$19.48		$28.00 $15.49	-56%
Read the article, "Rupert Murdoch, Nobel Laureates and Top Real Estate CEOs. Find Out Where They Are Investing," from vol. 2, issue 5 in 2005, when we first reported on REITs as a burned out sector. McMansions are going the way of Hummers (extinct) in the new cleaner, greener, fuel-efficient world. Who can afford to heat these huge homes? Who is buying new real estate these days at the prices that TOLL needs to earn a profit? Real estate is expected to continue to decline through 2009, at minimum. (Toll Brothers cashed out hundreds of millions beginning as early as 2005.)
Wynn Resorts	No	WYNN	$95.42	$21.37		$176.14 $18.06	-78%
Check out the article, "(No) Viva Las Vegas" in vol. 5, issue 10.

Recently Deleted in 2008/2009:
Fannie Mae was deleted on 2.11.08 after losing -50% and -56% of its share price value, and then again on 7.1.08, after losing another -40%. (Both puts more than doubled.) Novastar Financial (NFI) was deleted on 6.2.08 with -95% share price implosion. Sears Holding Corp. was deleted on 7.1.08 with 64% gains on the put option. Wells Fargo was deleted on 7.1.08 with 83% gains on the put. Apple was deleted on 8.1.08 with 35% gains on the put. The Google put, deleted on 8.1.08, was another great performer, with over 50% gains. First Solar had gains of over 32-34%. Mentor was deleted on 9.30.08 with 75% gains on the put option (-17% on the share price); Medicis was deleted with gains of over 37% on the share price (down direction). Boston Properties, Las Vegas Sands and Macerich were deleted on 10.9.08 with gains of 16-30%, 66% and 28-42% respectively. Wells Fargo was deleted on 11.6.08 with 35-50% gains on the put and again on 12.1.08 for 50-70% gains. American Express posted 35% gains in just 30 days, between 2.1.09 and 3.2.09.

IMPORTANT DISCLAIMER (PLEASE READ):
Please note: NataliePace.com does not act or operate like a broker. We report on financial news, and are one of the most trusted independently owned and operated financial news corporations in the U.S. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.

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

NataliePace.com Calendar.

Kirtan, Meditation and Money. Elevate Films presents an evening of revisioning your life in their LA Temple Loft this Sunday evening, April 5, 2009.

The NataliePace.com Calendar section features conferences, teleconferences, retreats, educational opportunities, cultural events, galas, market events and online chats with executives and VIPs. Stay plugged in! We add online chats, article updates, teleconferences, etc. as they are booked, so be sure to visit the calendar section early and often. Below is only a partial listing of what’s happening this month.

See below for just a few of the amazing educational and networking opportunities that world-class organizations are offering for you. To access links to the event website and registration, go to the Calendar section at NataliePace.com.

Listen Back to Natalie Pace on BlogTalkRadio

From Wednesday, March 25, 2009

What does the new housing data really mean? Listen to Shaun Daily and I discuss this and more on the Natalie Beats The Markets Show on BlogTalkRadio. Don’t miss our next Natalie Beats the Street Show on April 22, 2009.

LA Opera: Die Walkure by Richard Wagner
Saturday, April 4th, 2009
6:30PM through 11:00PM
"You really must beg, borrow, steal, or preferably buy a ticket to see Plácido Domingo as Siegmund," according to The London Times. his compelling love story between the doomed hero and his soulmate features some of Wagner's most memorable music.

Elevate Films Presents an Evening of Kirtan Meditation and Money! LA, CA
Sunday, April 5th, 2009
7:00PM through 10:00PM
Step into Your Dream Life for an Evening of Visioning with Natalie Pace and kirtan artist Cooper Madison. We will play, sing, meditate and laugh our way to our own bank. Getting rich, while enriching the planet. Located at the Elevate Films Temple LA.

Chat with Natalie Pace Live on BlogTalkRadio
Wednesday, April 8th, 2009
9:00AM through 9:30AM PT
Recession proof and resurrect your nest egg. Avoid the Bailout Index (that's what killed your nest egg) and invest in the Obama Reinvestment Act (think clean energy, health and infrastructure)!

L.A. Opera: The Birds by Walter Braunfels
Saturday, April 11th, 2009
7:30PM through 11:00PM
Walter Braunfels freely adapted the ancient Greek comic-dramatist Aristophanes’ play The Birds to compose what he described as an "airy play of imagination...everything here is a game, a metaphor." Soprano Désirée Rancatore, makes her Company debut.

Spring Meditation Retreat, LA, CA
April 16-18, 2009
Join Michael Bernard Beckwith and Dr. Rickie Byars Beckwith for a weekend in silence. Consciously commit and surrender your life to the highest possibility and usher in your new future.

Alternative Fuels & Vehicles Conference 2009
Sunday, April 19th, 2009
8:00AM through 5:00PM
This 4-day fuel and technology neutral Conference brings 2,000 people from around the world to experience first-hand the pace of product development and policy advancements in alternative fuels, vehicles and technologies.

Natalie Beats the Street Show on BlogTalkRadio.com
Wednesday, April 22nd, 2009
9:00AM through 9:30AM PT
Host Shaun Daily interviews Natalie Pace on how to make money in these crazy times! Learn how you own Wall Street and have the power to stop the bailout and start the resurrection of a new world.

The Milken Global Conference, Beverly Hills
Monday, April 27th, 2009
8:00AM through 8:00PM
This 3-day conference brings together some of the most extraordinary people in the world – business executives, institutional investors, asset managers, government leaders, academics and Nobel laureates. Network, share & learn.

FOMC Meeting
Tuesday, April 28^th and 29th, 2009
The Federal Reserve Board governors meet to determine how to fix the recession in this two-day meeting on the 28th and 29th of April.

GDP 1Q 2009 (Advance)
Wednesday, April 29th, 2009
8:30AM through 8:45AM ET
The U.S. Dept. of Commerce, Bureau of Economic Analysis (BEA.gov) releases its advance report on GDP growth in the 1st quarter of 2009. Final numbers for 4Q GDP growth came in at -6.3%.

Professional Biz Women's Conf., San Francisco
Wednesday, May 6th, 2009
Workshops, lunch and keynotes from some of the most successful business leaders, providing you with the tools you need to succeed in the business world. Your company might pay for you to attend! Ask them!

Memorial Day Get Rich and EnRich Retreat. SOLD OUT.
Thursday-Saturday, May 21-23, 2009.
In the sunny beach town of Santa Monica, California.

Get Rich and Green Retreat. Only 6 seats remain.
June 11-13, 2009
Santa Monica, CA

3-day Get Rich and Enrich Retreat with Natalie Pace. Resurrect Your Portfolio, while keeping it recession-proofed. Learn how to get the Bailout Index out of your 401 (k). (This is why you have lost so much money.) Buying and holding mutual funds has lost money over the last decade. The Dow Jones Industrial Average is trading lower today than it was ten years ago. Yet, there have been plenty of opportunities to realize gains. Instead, your nest egg has been binging and purging in the boom/bust cycles of the last decade. Learn simple strategies for employing ETFs, Modern Portfolio Theory, semi-annual rebalancing and making your successful nest egg strategy as easy as a pie chart.

Only six seats (of 14) are available in this intimate, boardroom setting with Natalie Pace teaching personally all three days. Early bird registrants save $400 and receive a FREE 12-month premium subscription valued at over $2000 if you sign up and pay before April 15, 2009. CALL 866.476.7442 or email Heather@NataliePace.com NOW to set up your Buy My Own Island Plan for life! Remember that the seats are given out on a first paid; first registered basis. Act now, if you wish to come, because the past retreats have all sold out.

Put Your Money Where Your Heart Is by Natalie Pace.

VISION: To build a global community of investors through a worldwide website, seminars, radio, television and print partners.
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PHILOSOPHY: Member Mosaic. Piecing together a more complete picture of the publicly traded company, one tile at a time, by valuing firsthand consumer experience, conducting evaluations of the executive team and lining up the numbers of the publicly-traded company with its competitors in a Stock Report Card.
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