Are Diamonds or Scrapbooking a Girl’s Best Friend?

by Natalie Pace.

Includes a Photo Stock Report Card.

Pass a magazine stand, and you might think diamonds are a girl’s best friend. And, in most cases, you’re right. "Someone" (The media? Hollywood? The diamond industry?) has done a spectacular job of marrying the idea of "love" with "precious" stones. And chances are high that if your special girl opens a gift and sees a diamond, she’ll gasp and her eyes will light up as she breaks into a grin.

But there are women who claim they’d rather have stock than rocks as a gift. In past surveys, stocks, cash and vacations ranked higher than diamonds as the gift most desired by women! Which brings me to the point of mentioning gifts this early in the holiday season – before Thanksgiving. One of the top gainers on Wall Street this Halloween was a little company that started out targeting scrapbookers, but recently expanded into home décor.

Shutterfly, an online photo storage and photo product company, saw its share price soar 17% on October 28, 2010, after announcing that earnings had increased 21% in the 3^rd quarter. What’s all the fuss about? Shutterfly, Snapfish and Kodak have created a whole new marketplace for all those adoring yuppie parents who want wall art of their little devils. Now, you can turn your J-Pegs into holiday cards, photo albums, scrapbooks and even posters. Entrepreneurs are also using these online services to create low-cost, high quality marketing materials.

Other recent major announcements for Shutterfly include:

1. New Home Décor options for photos of your family, including canvas art, desktop plaques, wall decals and more.
2. Partnership with AYSO to create free Shutterfly websites for new soccer teams.
3. Named to the Top 25 Companies (medium sized) to work for in America by Entrepreneur.com™.
4. New Shutterfly iPad application
5. Retail partnership with CVS and Walgreen’s expanded
6. New partnership with Best Buy

Shutterfly is moving into the retail space where Kodak used to be the only player in town, and online, users turn to Shutterfly more often than Snapfish or Kodak for their photo books and photo sharing. According to Alexa.com’s ranking system, Shutterfly is the 445^th most popular site in the United States, with Snapfish at 750 and KodakGallery at 1,089.

Shutterfly is not in Google territory in terms of traffic, but Shutterfly’s revenue growth is. Revenue growth of 21% is a noteworthy trend for a small cap publicly traded company, especially during a time when most stores are slashing their prices to attract buyers and deflation is a national concern. By comparison, Kodak is losing market share, with sales down 11% in the 2^nd quarter of this year. Snapfish, which is owned by Hewlett-Packard, posted 9% increase in earnings for its division in the 3^rd quarter.

Shutterfly is on track to post more than $300 million in sales for 2010. Sales and growth like that could put Shutterfly on the acquisitions list for any one of a number of retail, social networking and/or technology companies that have seen sales stall during the last few years. And, fortunately, Shutterfly’s executive team is experienced enough to translate the company’s momentum into a great exit strategy for investors.

Shutterfly’s board and executives were instrumental in creating some of the biggest success stories on Wall Street. Shutterfly’s President and CEO Jeffrey Housenbold hails from eBay, where he was Vice President of Business Development and Internet Marketing Acquisition. Housenbold was awarded the 2006 Ernst & Young Entrepreneur of the Year in the Retail and Consumer Products category for the Northern California region. Chief Technology Officer Neil Day was part of the founding team of WalMart.com. Shutterfly’s non-executive board chairman is Philip Marineau, the former President and CEO of Levi Strauss. Before Levi Strauss, while Mr. Marineau was at Quaker Oats, he built the Gatorade franchise into a billion dollar brand.

So, Shutterfly is definitely shaping up as the diamond of the scrapbooking industry, but is the company stock a real sparkler? Actually, after the run-up at the end of October, Shutterfly stock is the more expensive, from a price to earnings ratio perspective, than Tiffany. Tiffany’s forward P/E is 17, while Shutterfly’s is 58. Shutterfly’s share price just set a new 52-week high, up to $30/share from the low earlier this year of $13.76.

So, what should you get that special girl this holiday season – stock (Shutterfly) or a rock? I’m the kind of girl who likes it all. How about a diamond choker AND some Shutterfly stock (as soon as it goes on sale)?

Shutterfly was added to the Watch List on 10.28.10. Looks like a great addition to a rockin’ stock portfolio, when purchased at a lower price. Click to review a Photo Stock Report Card.

About Natalie Pace:
Natalie Pace is the author of You Vs. Wall Street and host of the Pace and Prosperity radio show on BlogTalkRadio.com/NataliePace. She is a repeat guest on Fox News, CNBC, ABC-TV and has contributed to Forbes.com, Sohu.com and BestEverYou.com and Magazine. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on http://www.facebook.com/pages/NWPace, on BlogTalkRadio.com/NataliePace and on YouTube.com/NataliePaceDOTCOM. 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 all in on any asset class or individual stocks. 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.  

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.

Will the Earnings of Women Overtake Those of Men?

by Dr. Gary S. Becker.

During the past two decades the education of women has been booming in practically all countries. Larger fractions of young women than young men are enrolled in universities in countries as culturally and economically diverse as Brazil, China, and Iran. In the United States, about 57% of the current graduates of four year colleges are women, while women receive 60% of all the master’s degrees. Note the radical change since 1970 when women received only 40 % of the degrees from four-year colleges. A recent report shows that American women are now even getting more PHD degrees than men, although the proportion varies a lot by field. Women receive only about one fifth of all engineering doctorates, and one quarter of all doctorates in computer science and mathematics, but they are getting a majority of the doctorates even in health sciences and biology.

Since earnings are on average strongly related to education levels, a natural issue to consider is the current and future effects of these trends in college enrollment and graduation rates on the earnings of women compared to men. In particular, will the average earnings of women begin, before long, to exceed that of men -- after being so far behind in the past?

In fact, most countries have experienced sharp reductions in the gender gap in hourly earnings during the past several decades. Again, to use the United States as an example, in 1980 the median weekly earnings of women who worked full time was a little over 60% of the median weekly earnings of full-time men. By 2009, that ratio was just slightly below 80 percent. For younger women, the trends are larger and more dramatic. The ratio of the weekly earnings of fulltime women aged 25-34 to that of men of the same age was only 69% in 1980, but this ratio rose to almost 89% in 2009. The change in the gender earnings gap was also quite large for men and women aged 35-44 years old. The gender gap in earnings at ages 25-44 are relevant for predicting future trends in this gap, since these ages incorporate the effects on earnings of the growth in recent years in the education of women relative to men. These age groups also incorporate the effects of the greater education of women on their commitment to working. 

Some simple, although rough, calculations provide an indication of the possible magnitude of the effect of the growth in the education of women on the gender gap in earnings. Assume that men and women are only either college graduates or high school graduates, and that the average college graduate who is working full time earns on average about 60 percent more than the average full time high school graduate of the same sex. To incorporate the gender gap in education, I assume that about 40% of women graduate a four-year college compared to only 26% of men.

If men and women of the same education received the same earnings, the assumed greater propensity of women to receive a college education would imply that the average earnings of women would exceed the average earnings of men by about 8%. This is a sizable reversal of the usual gender gap in earnings. Of course, a more realistic calculation would recognize that even full time working women of a given number of years of schooling typically earn less than that of full time working men with the same years of schooling. If the gender gap in earnings of men and women with the same schooling years were 15%, than the average woman would earn about 11% less than the average man; on the other hand, if this earnings gender gap were 10%, than the gender gap in average earnings would only be 4%.

Of course, many other factors in addition to years of schooling affect the earnings of women and men. Some women do not work in order to stay home to take care of their children, although the fraction of women who are full time homemakers has sharply declined during the past several decades, and college educated women are more likely to work than are less educated women. In addition, even full time women work fewer hours per week and fewer weeks per year than full time men, again mainly because women typically try to combine work with spending time caring for their children. These considerations help explain why the average earnings of women are below the average earnings of men with the same years of schooling.

On the other side of the ledger, teen age girls are less likely to drop out of high school than are teen age boys, and the earnings of high school dropouts are quite low. Moreover, as I showed at the beginning of this discussion, American women are also more likely to receive post-graduate degrees, and persons with advanced degrees tend to earn a lot more than persons with just four years of college.

Although the average earnings of full time women have not yet overtaken that of full time men, as we have shown, the gender earnings gap has narrowed substantially. Indeed, in about 30% of all American households with two earners, wives are already earning more than their husbands. Moreover, if the gender gap in education continues to widen, it may not be long before the average earnings of fulltime women does exceed that of men. This would mark a culmination of a remarkable reversal of the gender gap not only in education but also in earnings.

About Gary Becker:
Dr. Gary Becker is a University Professor, Department of Economics, and Sociology Professor, Graduate School of Business, The University of Chicago. He won the Nobel Prize in Economics in 1992 for his groundbreaking work in "human capital." President George W. Bush awarded him the Presidential Medal of Freedom in 2007.

To keep track of Dr. Becker's continuing research and commentary, visit his website and blog.

The Right Way to Lay People Off.

by Ben Horowitz, partner Andreessen Horowitz.

"I’m tryin’ to right my wrongs,
But it’s funny them same wrongs helped me write this song"
—Kanye West

Ben Horowitz.

Shortly after we sold Opsware to Hewlett-Packard, I had a conversation with the legendary venture capitalist Doug Leone of Sequoia Capital. He wanted to hear the story of how we went from doomed in the eyes of the world to a $1.6B outcome with no recapitalization. After I took him through the details including several near bankruptcies, a stock price of $0.35/share, unlimited bad press and 3 separate layoffs where we lost a total 400 employees, he was most amazed by the layoffs. He said that during his over 20 years in the venture capital business, he’d never seen a company recover from consecutive layoffs and achieve a billion dollar plus outcome. He said that he’d bet against that every time and wanted to know how I did it.

Since my only experience was the great exception, I needed more information. I asked him why all the other startups failed. He replied that the layoffs inevitably broke the company’s culture. After seeing their friends laid off, employees were no longer willing to make the requisite sacrifices needed to build a company. He said that although it was possible to survive an isolated layoff, it was hugely unlikely that a company would experience great success. He added that building a highly valuable business after 3 consecutive giant lay offs accompanied by horrible prominent press coverage (we got taken apart with cover stories in both the Wall Street Journal and Business Week) was a complete violation of the laws of venture capital physics. Naturally, he wanted to know how we did it. After thinking about it for the last couple of years, here’s my answer Doug.

In retrospect, we were able to keep cultural continuity and retain our best employees despite multiple massive layoffs, because we laid people off the right way. This may sound nutty—how can you do something that’s fundamentally wrong in "the right way?" Here’s how.

Step 1: Get your head right
When a company fails to hit its financial plan so severely that it must fire the employees that it went to great time and expense to hire, it weighs heavily on the chief executive. During the first layoff at our company, I remember being forwarded an email exchange amongst a group of employees. In the exchange one of our smarter employees wrote: "Ben is either lying or stupid or both." I remember reading that and thinking: "definitely stupid." During a time like this, it is difficult to focus on the future, because the past overwhelms you—but that’s exactly what you must do.

Step 2: Don’t delay
Once you decide that you will have to lay people off, the time elapsed between making that decision and executing that decision should be as short as possible. If word leaks (which it will inevitably do if you delay), then you will be faced with an additional set of issues. Employees will question managers and ask whether or not a layoff is coming. If the managers don’t know, they will look stupid. If the managers do know, they will either have to lie to their employees, contribute to the leak, or remain silent, which will create additional agitation. At Loudcloud/Opsware, we badly mismanaged this on our first layoff, but sharply corrected things on the next two.

Step 3: Be clear in your own mind about why you are laying people off
Going into a layoff, board members will sometimes try to make you feel better by putting a positive spin on things. They might say: "This gives us a great opportunity to deal with some performance issues and simplify the business." That may be true, but do not let that cloud your thinking or your message to the company. You are laying people off because the company failed to hit its plan. If individual performance were the only thing at issue, then you’d be taking a different measure. Company performance failed. This distinction is critical, because the message to the company and the laid off individuals should not be: "This is great, we are cleaning up performance." The message must be: "The company failed and in order to move forward, we will have to lose some excellent people." Admitting to the failure may not seem like a big deal, but trust me, it is.

"Trust me." That’s what a CEO says every day to her employees. Trust me, this will be a good company. Trust me, this will be good for your career. Trust me, this will be good for your life. A layoff breaks that trust. In order to rebuild trust, you have to come clean.

Step 4: Train your managers
The most important step in the whole exercise is training the management team. If you send managers into this super uncomfortable situation with no training, most of them will fail.

Training starts with a golden rule: managers must lay off their own people. They cannot pass the task to Human Resources or a more sadistic peer. You cannot hire an outsourcing firm like the one in the movie Up in the Air. Every manager must layoff his own people.

Why so strict? Why can’t the more confrontational managers just handle this task for everyone? Because people won’t remember every day that they worked for your company, but they will surely remember the day that you laid them off. They will remember every last detail about that day and the details will matter greatly. The reputations of your company and your managers depend on you standing tall, facing the employees who trusted you and worked hard for you. If you hired me and I busted my ass working for you, I expect you to have the courage to lay me off yourself.

Once you make it clear that managers must layoff their own people, be sure to prepare them for the task:

1. They should explain briefly what happened and that it is a company rather than a personal failure.
2. They should be clear that the employee is impacted and that the decision is non-negotiable.
3. They should be fully prepared with all of the details of the benefits and support that the company plans to provide.

Step 5: Address the entire company
Prior to executing the lay off, the CEO must address the company. The CEO must deliver the overall message that provides the proper context and air cover for the managers. If you do your job right, the managers will have a much easier time doing their jobs. When you do this, keep in mind what Intuit founder Bill Campbell told me—the message is for the people who are staying. The people who stay will care deeply about how you treat their colleagues. Many of the people that you lay off will have closer relationships with the people who stay than you do, so treat them with the appropriate level of respect. Still, the company must move forward, so be careful not to apologize too much.

Step 6: Be visible, be present
After you make the speech telling your company that you will be letting go of many them, you will not feel like hanging out and talking to people. You will probably feel like going to a bar and drinking a fifth of tequila. Do not do this. Be present. Be visible. Be engaging. People want to see you. They want to see whether or not you care. The people who you laid off will want to know if they still have a relationship with you and the company. Talk to people. Help them carry their things to their car. Let them know that you appreciate their efforts.

Acknowledgements
I would like to say that I came up with all of this on my own, but in truth there is no way that I could have done it without the help of my dear friend Bill Campbell. Bill’s help during these times saved the company. Finally, I again thank all of the wonderful and dedicated people who worked for Loudcloud that we laid off or transferred to EDS. I am sure that I speak for everyone who ever worked at Opsware, when I say, "Thank you for saving our butts."

About Ben Horowitz
Ben Horowitz is the cofounder and General Partner (along with Marc Andreessen) of the venture capital firm Andreessen Horowitz based in Menlo Park, California. Ben was CEO of LoudCloud (a cloud service provider), which became Opsware, and then sold to Hewlett-Packard for $1.6 billion.

Editor’s Note: Opsware was the 2004 Company of the Year in our ezine. Here’s a link to that original article.

Get Out Of Debt.

by Natalie Pace.

6 tricks to outwit that 28% interest rate.

Photo by: Doug Mazell.

Yes! There is a way to get out of debt, even when it’s ballooning by 28% every month. And it’s more beautiful and fun than you think – though it will require dramatic changes. (Cutting out café lattes doesn’t really thin out your waste line when interest on your debt is heftier than your car payment.) Below are six quick tips that will change your life forever, so that you can go from living hand to mouth to a pocket full of dreams – and the means to make them real.

1. Open up a 401K, IRA, etc. NOW and put 10% of your income on auto-deposit into that plan. You might think you have to pay down debt first and then start building up your assets, but the opposite is the case. In order to get out of debt, you must develop the habit of earning and saving and increasing your asset/debt ratio. This helps to negotiate better terms for your debt and pay it off sooner, at a much lower price. Also, your retirement plans cannot be attached by your creditors – even if you declare bankruptcy. And unlike insurance plans and annuities, the retirement money is yours to keep, even if you have to change the amount you are depositing each month. Additionally, unlike insurance plans and annuities, you can invest in any fund or publicly traded company you desire, or you can keep it all safe in an FDIC-insured money market, if that is what you need to feel safe for now, while you educate yourself on investing. (Annuities and insurance plans are not FDIC-insured, and are really investing in one company – the insurance company.)
   
   
2. Health Savings Accounts. Are you paying astronomically high monthly premiums for your health insurance? If you’re healthy, opting for a higher deductible health insurance plan, combined with a health savings account (to cover the deductible and co-pay costs in the event of a catastrophe) might be a better choice. Health savings accounts work like retirement accounts. The money you save each year by being healthy and not needing medical care becomes yours to keep. The HSA is tax-deductible. The money can be invested in stocks, bonds and money markets. And the gains/interest you earn from the investments in the HSA are not taxed. To learn more about HSAs, visit IRS.gov.
   
   
3. Earn More Income. Believe it or not, points one and two are two great ways to earn more income. Instead of spending/wasting that dough, you are 1) saving it, and 2) it has a chance to grow when you invest it using sound investing strategies. Also, is it time to ask for that raise, or to put the feelers out for a better job/position? Do you need to downsize by leasing out your oversized home for extra income, and buying something more suitable and efficient? Get creative. With more assets and more income, you can negotiate better terms and/or pay off your debt altogether.
   
   
4. The Thrive Budget. Have you been on the struggling to survive budget? The trying to squeeze life into the dregs left over after all my bills are paid budget? If so, you’re probably bankrupt in fun, in addition to being in debt. The right answer is to get your basic needs expenses down to 50% of your income. Yes. You’ll need to get creative. And yes, you’ll need to make big changes. You cannot cut out café lattes and expect to get out of debt. It hasn’t worked up until now, has it?
   
   
5. Put Your Debt on a Payment Plan. If your debt is out of control and escalating with the outlandish 28% interest rates that credit card companies are charging, then call the credit card company and set up a payment plan that works for your current budget. Tell them you’ll call again in six months to discuss a new plan. If you have done steps 1-4, then you are already on a course that will get you out of debt, though it will take some time to correct a lifestyle that was previously out of control. The only way out of debt is to increase your income and put in a budget that is consistent with thriving and within the parameters of what you are earning.
   
   
6. Reduce Expenses. How you can get creative about reducing your expenses? Single moms have been using CoAbode.org to find one another. By teaming up, they can get a bigger home in a better neighborhood, carpool, share home expenses, including child care and generally get twice as much value for their time and money. The beauty about this is that when you get the big-ticket items (like housing, car, insurance) under control, you are naturally creating more money for fun, for family and for charity – all the things that make life worth living. Depriving yourself to the brink of breakdown and then overspending in a retail therapy session only makes the problem worse – as you now know!

Join me on my BlogTalkRadio.com show to discuss this further and get real answers to your questions on just how to start thriving when your interest payments are burying you alive! The Get Out of Debt Show is scheduled for Tuesday, November 9, 2010 at 6:00 p.m. PT. Call-in Number: (347) 215-7305. Log on to: http://www.blogtalkradio.com/nataliepace. If you miss the show, it is available for playback on demand 24/7 and you can also download it as a FREE pod cast.

About Natalie Pace:
Natalie Pace is the author of You Vs. Wall Street and host of the Pace and Prosperity radio show on BlogTalkRadio.com/NataliePace. She is a repeat guest on Fox News, CNBC, ABC-TV and has contributed to Forbes.com, Sohu.com and BestEverYou.com and Magazine. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on http://www.facebook.com/pages/NWPace, on BlogTalkRadio.com/NataliePace and on YouTube.com/NataliePaceDOTCOM. For more information please visit, http://www.nataliepace.com.

Building Trust and Providing Unconditional Love:

by Karen Kendrick.

a Mentor’s Journey.

When I first started mentoring Truphena, she was going through many behavioral challenges at high school, and had received disciplinary action.   She had lost both parents by the time she was 11 years old.  She was a C student who was struggling in most of her courses. 

Our initial letters were focused on introducing ourselves in terms of our families, interests, routines, and information about our respective countries and communities.  I feel that the most important turning point was when I turned the "conversation" to a much more vulnerable, personal level. I talked about some of my own feelings about what was happening in my daily life, to build trust and serve as a role model about how to share more deeply.

I also started providing a lot of unconditional love, support, and inspiration to her for her accomplishments, her efforts at working hard, and her sharing with me.  It soon became apparent to me that she was absolutely thriving on the compliments and support that she was getting, and that her self-confidence was improving rapidly.  I really believe that her primary growth has come from hearing from someone regularly that she was loved, that she was worthy, and that she could succeed. 

I had underestimated that the unconditional encouragement many of us get from our parents was missing in her life. She needed to hear consistently how beautiful, loving, and courageous she was.  Using phrases like "I love you", "my dear girl", "my sweet Truphena" were huge boosts that seemed to play a huge part in her opening up to me and talking much more authentically about her concerns, her fears, her dreams, her challenges. Her behavioral issues at school disappeared quickly and she soon seemed much more focused on doing her best in school, sharing her grades, talking about her family concerns, etc.     

As Truphena prepares to leave St. Martin’s school to start her new life in college, her biggest fears are around the transition out of her familiar surroundings and adapting to the academic challenges of her new school. Much like any college freshman, the change is exciting, but also daunting. Unlike most of us, who have had our parents go with us to the school, help us get settled in our "dorm", walk through our schedule of classes, etc., Truphena will not have that same support in the normal way. That is why I feel a special need to talk with her more frequently (about once every week) as she makes this important transition. We are beginning to talk about what to expect, and I am reinforcing to her that she has made it this far, throughout all the obstacles she’s had, and how strong she is.

I expect that as she gets settled, our conversations will focus much more on ways to succeed in school, and eventually on entering the job market.

I am hopeful that the biggest behaviors/skills that Truphena has learned through the mentoring experience are to: 1) remember she is loved and worthy, 2) remember/ cherish her uniqueness, 3) know that she is strong and courageous enough to handle life’s situations and accomplish her dreams.

Mentoring Truphena has been an extraordinary, life changing experience for me. Seeing her growth and triumphs, sharing her sorrows and fears, giving her love and support, and feeling the incredible love coming back from her, has made me a better person. Seeing how someone who has had so many challenges and a lack of resources and support thrive when knowing that someone cares and listens and guides, has taught me the age-old lesson that love heals and inspires. As you continue your mentoring journey, I encourage you to take risks, show more of your deepest self, be creative, and watch as your relationship blossoms.

Karen Kendrick is an EVP, Chief Learning Officer, at Allianz Global Investors in Los Angeles.  She started mentoring Truphena Wambui, a student at St. Martin’s School in Kenya, during her second year of high school.  Today, Truphena is completing her 9-month Microsoft ICT Course and she recently learned that she is part of a MasterCard Foundation Scholarship Grant that will enable her to attend Visions College to study accounting.

Karen Kendrick is a mentor with the Global Give Back Circle, a nonprofit organization founded by Managing Director Linda Lockhart. The Global Give Back Circle (GGBC) is an Empowerment and Enablement Process whereby disadvantaged girls are guided, inspired, encouraged and motivated through a Mentoring Model and Methodology that facilitates Gratitude, Goals and Giving Back. Kenya's GGBC connects over 300 disadvantaged girls to mentors from nine different countries, including Kenya. Through a structured Five-Phase Mentoring Process, that includes Workshops, Journalizing, Letter Writing and Personal Visits, the girls are guided to articulate their goals and dreams and supported to make them realities.

Visit the GlobalGiveBackCircle.org website to sponsor and/or mentor a young woman in Kenya to become financially and socially independent.

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How to Make $20,000 While You’re On Vacation.

by Natalie Pace.

Photo by: Stacie Isabella Turk. (c) 2008. Ribbonhead.com. Stylist: Melody White. Art Direction: Arlene Hylton-Campbell

Woo hoo! The stock market is on fire! Even better, one of our subscribers (who has attended two Get Rich and Enrich retreats) is positioned to make $20,000 while she is on vacation this month. How? I’ll get to that in just a moment. But before I do, let’s examine whether or not you should get too excited about the Fall bull run in the stock market. There’s a saying on Wall Street, "Don’t confuse a bull market with wisdom." Everyone looks like a genius when the markets go up. You want to be the genius who does well in any marketplace – bull or bear -- without having an IV hooked up to financial television 24/7.

Macro Trends: Stop and consider the U.S. economy. In the 2^nd quarter we had 1.6% GDP growth (anemic). The advance report on 3^rd quarter GDP growth is 2% (still barely breathing), according to the Bureau of Economic Analysis. But is that level of growth enough to push down unemployment and stimulate business and consumer spending? Not likely. In a speech on Friday, October 15, 2010, Federal Reserve Chairman Ben Bernanke stated, "Overall economic growth has been proceeding at a pace that is less vigorous than we would like." He also noted, "The pace of recovery has slowed in recent months and is likely to continue to be fairly modest in the near term."

Remember: On October 9, 2007, the Dow Jones Industrial Average closed at an all-time of 14,164. By the end of the year, the Dow had dropped over 1000 points and kept dropping through March 9, 2009, when it hit a low of 6,547. We’ve seen a rally since then that has created a sense of complacency with investors, but there are economists and money managers who still believe we can retest that March 2009 low.

Seasonal Trends: The Santa Rally used to be a predictable seasonal trend, but that has not been the case in the past decade. On average, over the past five years, October has posted the worst results of the year, followed by tepid performance in November and December and then miserable downtrends in January and February. (For a detailed analysis of this, read "Spring Rally" from the April 2010 ezine, volume 7, issue 4.)

Source: Standard and Poor’s and NataliePace.com. © 2010

Who killed the Santa Rally? Hedge funds are the new trillion dollar drivers on Wall Street, bringing the gifts of volatility and coal in the stocking of less sophisticated investors during the holiday season. I’d be cautious, defensive and well diversified for the remainder of this year, and slightly more optimistic next year – after Valentine’s Day 2011 – due to a phenomenon known as the Pre-Election Year Rally.

Election Year Trends: The second year after an election is historically one of the worst-performers of the election cycle – which is what 2010 is. However, the pre-election year is historically the strongest year of the four-year cycle. So, 2011 might be a fun year for savvy investors.

Source: Standard and Poor’s and NataliePace.com. © 2010

Bottom Line: With hedge funds driving, who knows how reckless the markets can get during the holiday party season. Better to protect yourself, enjoy your gains and take profits early. Your best bet is a safe/diversified nest egg, quarterly rebalancing, avoiding the bailouts and companies with high debt, adding in the hot industries and learning what’s safe in an environment where bonds, bond funds and Treasury Bills are the next disaster waiting to happen. Sound complicated? Read You Vs. Wall Street and attend the February 2011 Get Rich and Enrich Retreat to discover that it is easy-as-a-pie chart!

And that, my friends, is the way to make $20,000 while you’re on vacation.

True Story:
Earlier this year, a woman attended my retreat. She’d inherited money and that money was her sole income. At the rate she was going through it, she’d be broke in just three years! She wanted to start learning how to protect the principal and grow the nut. So, she came to the retreat and over the course of three days, researched and selected which ten funds she was most interested in investing in, while also learning how much to keep safe and where "safety" can be found these days. (Don’t think it’s in bonds, bond funds and Treasury bills!)

Next, she took a look at what she was currently invested in, and realized that she was way over-invested in gold and Australian currency. When you have too much of any one asset class you are vulnerable to the boom/bust cycles, whereas when you have a diversified plan, you can rebalance in order to maximize your profit taking and purchasing at the best prices.

In order to implement the new diversified strategy, which included gold and Australia but wasn’t over-concentrated there, she needed to trim back on what she had and start adding some safety and variety. She didn’t want to be watching her portfolio every day, so she picked her funds and safe assets, and then set up her purchases with limit orders (the price she was willing to pay for each asset). This was pretty simple. For the funds she wanted to purchase, she looked at the five year trend and set her buy orders at or near the 52-week low. Yes, it would take awhile for the orders to kick in, but in the meantime her money was at a brokerage that offered an FDIC insured money market account. So, she would be safe, while she set up the diversified plan.

At the time, her gold fund, GLD, was trading at about $103.50/share. She wanted to keep some of the fund and capture some great gains, so she set the sell order at 30% gains, which was $135/share. This felt a little foreign and out of reach to her because she’d never made gains before and wasn’t this a little too high? Maybe it should be $120 or $115? But, in truth, she wanted a big win on this stock and she was pretty confident that it would continue to perform for her (which was also why she wanted to keep a slice of her nest egg pie invested in the fund -- even after she took some profits).

In the meantime, this woman set up a vacation and was set to leave the country for most of the month of October. The day she boarded the plane for Australia, the gold fund was still about $10 below her limit order of $135, but it was starting to trend upward. Last week, while she was on vacation, the fund topped out at $134.85, just 15 cents shy of the mark, and it appears almost certain (nothing is certain on Wall Street) that this order will fulfill before Thanksgiving, providing a whole new, deeper appreciation for holidays!

How to Make $20,000 While You’re On Vacation.

1. Refer to page 92 of You Vs. Wall Street to see the general outline of a diversified nest egg.
2. Read You Vs. Wall Street to discover how to avoid the bailouts and add in hot industries.
3. Attend a Get Rich and Enrich Retreat with Natalie Pace to learn how to evaluate funds and select the funds for your nest egg.
4. Purchase your funds at or near the 52-week low.
5. Set your sell prices at pre-determined profit-taking positions.
6. Follow your plan and rebalance quarterly or annually, making sure that your nest egg pie chart always looks safe and diversified.
7. Go on vacation.
8. The news works in your favor, as your buy low/sell high orders kick in.

VOILA! $20,000 profit while you’re on holiday!

Please note that the Nov. 2010 Get Rich Retreat sold out in 24 hours. If you’re interested in attending the February 2011 Retreat, please call 866-476-7442 NOW to ensure that you receive the lowest price and are guaranteed a seat.

Switching from blind faith to wisdom
It’s not that hard to switch your thinking from fear that you’re going to lose everything to faith that you can become wise and rich. It’s not more time spent. If you think of all the time you spend worrying about money, you know that getting smart about investing is actually going to take less time. And then, you’ll be in a position to earn money while you sleep… and vacation…

About Natalie Pace:
Natalie Pace is the author of You Vs. Wall Street and host of the Pace and Prosperity radio show on BlogTalkRadio.com/NataliePace. She is a repeat guest on Fox News, CNBC, ABC-TV and has contributed to Forbes.com, Sohu.com and BestEverYou.com and Magazine. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on http://www.facebook.com/pages/NWPace, on BlogTalkRadio.com/NataliePace and on YouTube.com/NataliePaceDOTCOM. 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 all in on any asset class or individual stocks. 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.  

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.

How to Overcome Fear.

by Alvin Tam.

Alvin Tam.

Fear grows like an insidious virus, first scratching the surface of the polished veneer of your confidence like an innocent itch, then nestling deeper and deeper into your well of courage, until finally, it violently throttles your entire being, restlessly taunting you with nightmares of train wrecks, snakes, and ghosts.

Or not.

Stopping the spread of fear happens in minute, small increments. Occasionally, you might be able to crack the glass ceiling by hurdling yourself upwards through adversity in one Herculean leap of faith – but more commonly, you’ll take it one step at a time. The changes will be small, barely noticeable, but will create long-lasting results.

The trick to stopping the spread of fear is to recognize the subtle masks that fear wears. Fear in our daily lives does not usually manifest itself as hooded terrorists with machine guns, rapists wielding machetes, or killer viruses that annihilate entire cities in a day. Fear makes its stealthy appearance through the back door with comments disguised as cynicism, sarcasm, and anger.


Perhaps you’ve been told on your birthday that "You’re only a few years from being over the hill." Or the day after you were married, you were warned that, "The honeymoon is now over." Maybe you have kids now and recall your friends predicting the demise of your romantic life. The tone of cynicism and sarcasm is thick and pervading, and you probably waived off their nauseous comments with a polite smile or even a forced laugh.

Don’t let their heedless jeers sink in though. The moment you are bombarded with petty cynicism and sarcasm, you have a choice: accept the profanity or reject it. Societal standards make it permissible to be victims of thoughtless jokes without realizing that the actual force behind this low-level commentary is fear. It could be fear about growing old, losing physical capabilities, or never being able to experience again the glory days of youth. It could be fear about not being able to sustain a long-term relationship, ending in divorce, or defiling your commitment with your wanderlust ways of bachelorhood. Regardless of what the fear is about, recognize that others may attempt to project their unspoken shadows unto you, subtly taking you down with their sinking ship. Misery likes company.

You can stop fear when you are able to recognize the mask. Cynicism and sarcasm almost always reflect a deeper, hidden anxiety that spews out in random, uncontrolled bursts, like a scalding geyser blowing out of a narrow fissure. The dramatic eruptions on the surface distract us from the mounting friction below.

Your course of action is non-action. To not react, respond, or partake in the game of cynicism and sarcasm is to effectively reject it and reinforce your ability to safeguard your beliefs, your intentions, and your dreams. You become stronger, more confident, and courageous. These qualities do not call forth massive effort, but require you to develop greater awareness so that you can be non-reactive.

Where do you encounter cynicism and sarcasm? Perhaps your workplace has a self-appointed comedian whose mission is to slay his colleagues with senseless verbal jabs. The media is also inundated with false alarms, phony pundits, and bogus claims. Look around you with your radar set for cynicism and sarcasm, and you’ll see that this seemingly benign and normal behavior is everywhere.

Anger is a step up in intensity from sarcasm and cynicism but still functions most of the time to hide a deeper fear. This is not the kind of anger that spontaneously erupts in self-preservation – a car swerving toward you, a threatening gesture made against your children, or a stalking figure following you in dark, deserted alley. This is the brewing, simmering kind, the type of anger that maliciously oozes out to incinerate happiness, optimism, and well-being.

Anger begets anger, and the angered becomes the perpetrator. The vengeful cycle is closed and the flames of battle spark while both parties completely miss the point. What is the point? Neither one has realized that the fuel for their anger is fear.

When you recognize that your anger, or another’s anger draws its strength from fear, you diminish the intensity of your rage. Sometimes your anger even  completely disappears. The key to transforming anger is understanding the underlying source of its fiery façade. Beneath the tantrum lies a smaller, frightened, and humbled inner kid, one who might have been picked last in gym class to be on the team, or saw the agonizing collapse of her parents’ marriage.

Maybe it was the time she was told that she would amount to nothing, or her first kiss that ended in stony rejection.
Anger is a mask that fear wears. The next time you are faced with a belligerent imbecile, indignant and lewd, stop to wonder what he might be afraid of, not what he’s angry about. Wonder if he was hurt in some way, if his partner left him, if he just lost his job. Wonder if he had alcoholic parents, if he was abused as a child, if he grew up in a tough neighborhood. It doesn’t matter if you are right or wrong in your hunches; what matters is that you wonder. The more you wonder, the more you develop compassion. The more you embody compassion, the easier it is to accept fear. As you begin to accept fear, it transmutes all by itself and becomes courage. The transmutation of fear begins with understanding, and finishes with courage.

When you are able to do this with someone else, try it on yourself. While it is easy to point fingers, the conclusive test is whether or not you can see your own fear through your anger.
 So stopping the spread of fear is not really about stopping anything. It’s about developing awareness of the different masks that fear wears, and then choosing non-action or compassion. Either way both paths are more efficient, use less energy, and transmute fear.

Bio
Alvin Tam is the founder of Soul Acrobats®, an inspirational products company and Acrofit™, an acrobatic fitness system. He has over 15 years of experience as a circus artist, stuntman, dancer, actor, and coach and has performed for Cirque du Soleil, Notre Dame de Paris, and appeared on CSI. Alvin’s passion is to inspire you to achieve your impossible.

Products
Visit: http://www.soulacrobats.com/products-page/

BOOK: The Art of Impossible

DVD: The Acrofit System Level 1, Expressive Yoga for the Soul

Budget Like a Rock Star (to Become One).

by Natalie Pace, author of You Vs. Wall Street.

Photo by: M-M Stratton. (c) 2010. Megorama.com

How do rock stars have it all – the hottest dates, coolest clothes and a globetrotting, jet set lifestyle? It’s not because they are the wealthiest people on the planet. In the beginning for every night at the Plaza, there are 364 nights on someone’s couch. Many have one or two signature clothing pieces – leather pants or sneakers – with little else hanging in their closet. They are investing in their future, not their basic needs and doing a lot of other things that you can model to create dream come true living in your own world.

I’ve known millionaire investment bankers who felt broke all the time and poets without any income or trust fund who lived full, rich lives. More than anything, being a rock star means enjoying your life and feeling optimistic about your future, no matter how much you earn.

Where are you investing your time and money? Spending, spending, spending has a low pay-off for the long term, whereas education has a high return. Paying off expensive cars, mega homes and credit cards can keep you so cash poor that you can’t even really enjoy your possessions.

Do you take vacations? Give to charity? Have fun on a regular basis? How you invest your time and money determines how rich your experience of life is, and also how much value that you can give back to the world (which is directly correlated with your income and your happiness). Being buried in bills and "surviving" until the end of the month isn’t the dream come true life anyone would consciously create. So, get real and get a better plan.

When it gets right down to it, there are two fundamental rules of the flow of prosperity that rock stars inherently get – give and receive. Rock stars give it all onstage and take it all off stage. I’m exaggerating somewhat, but if you’re treating a rock star to dinner, chances are: you’re paying. After dinner by the fire, chances are the rock star is singing.

Many of us are either too stingy or too giving. The below "rules" simply help us to achieve more balance.

Another truth of prosperity and abundance is that every cent you own and every moment you spend is always an investment. Invest more time in the bar stool than on the kids’ soccer field and your family might leave you. Invest more money in looking rich rather than being valuable and your credit card companies might repossess you. Invest more time thrashing your guitar into the hotel room wall and driving intoxicated than you do writing great songs and exercising your vocals, and your 15 minutes of fame could look more like 15 days of jail time.

10 Rules of Becoming Rich
My Thrive Budget™, upon which these rules are based, is outlined in greater detail in my book You Vs. Wall Street.

1. Give yourself a raise. 10% of your net income should go on auto-deposit into your 401(k), IRA, health savings account, etc. First. Period. It’s tax deductible. Pay yourself now, or pay the IRS later.
   
   
2. Be charitable. Tithe 10% to charity. Fuel your favorite cause with your cash, take the tax write-off and reap the benefits of helping your community and networking with others who have like-minded goals! Pay your favorite charity now, or pay the IRS later. Every rock star, from Chris Martin to Michael Jackson and Mary J. Blige, knows the value of this!
   
   
3. Educate yourself, your family and others. Education is the single highest correlating factor with income. Surgeons make more money than dishwashers, and surgeons who have educated themselves about investing make greater gains than those who invest blindly (or not at all). According to the Bureau of Labor Statistics, full-time workers without a high school diploma earned $465/week on average in June of 2009, compared to $1,140 for a Bachelor’s Degree, and $3,434/week (for male) professionals with a master’s or higher. Rock stars (and college students) often sleep on a couch for years, in order to earn double the income for life!
   
   
4. Have fun. Health is wealth. You can’t earn a great living if you can’t get out of bed. And pleasure is a free endorphin that releases anti-oxidants that keep you healthy and sexy. What a beautiful reason to have some fun today!
   
   
5. Double your pleasure. Double your fun budget! Make sure that you are taking 20% of your income for FUN. You are worth it! I take 10% out in cash and spend it until it’s gone. The other 10% I save up for a year to do something really adventurous that I can enjoy with my family and friends. (In 2009, I spent a month in Italy!)
   
   
6. Stop complaining. Some people say, "I spend my fun money on my home." That’s cool, but then stop complaining that you don’t take vacations and start enjoying your home more. Can you have artist salons, or a front porch bayou Bluegrass party where someone blows on a jug and another plays spoons? A barbecue and three-legged race? A monthly yoga potluck dinner? If you’re not having fun, your retail therapy isn’t working!
   
   
7. Basic needs must be under 50%, including taxes. Ha! Think this is impossible? Guess which ethnic group was the highest income earner in the U.S. in 2009. Before I reveal the answer, I want to point out that this group was one of the lowest wage earners in the U.S. at the turn of the last century. How did one ethnic group soar from the gutter to the palace so quickly? By focusing on education and dramatically reducing basic needs expenditures. If two families had to live in a two-bedroom apartment so that the kids could go to medical school, they did that. And now, American Asians make a weekly income that is 21% higher than whites and almost double the weekly income of blacks and Hispanics in the U.S.. (source: Bureau of Labor Statistics, July 16, 2009)
   
   
8. Think partner, not competitor. Remember back in the 1970s when malls were created! By teaming up to put everything you need in one place, all of the retail stores benefitted. Coachella (and Woodstock before it) puts all of the greatest bands in one spot for an entire weekend. What can you do to partner up with your competitors and create a win-win for everyone?
   
   
9. Dream bigger. When John D. Rockefeller went into the oil business, in 1863, no one dreamed of freeways. When Google founders Sergey Brin and Larry Page began perfecting online search in nanoseconds, most people were still on dial-up. When President John F. Kennedy promised to walk on the moon, it still took a week to mail a letter from New York to San Francisco. Before John Lennon imagined peace with Yoko, he imagined taking America by storm with the Beatles. What great dream do you have? What can you do now to start on the path of creating it and who can help you with it?
   
   
10. 21 days off the grid. Stuck in a rut? 21 days is all you need to create new possibilities. If you have never been on a 21-day sabbatical, there is no greater way to expand your possibilities and your thinking. Whether it is an Eat. Pray. Love. journey, or an ashram experience, or a trek to Mt. Everest or training to be the first rock star to perform on the moon, commit to creating something new and exciting in your life.

Success stories
Steve Jobs, the rock star of Apple Computer and iTunes, slept on the floor of his friend’s dorm room to crash college calligraphy courses before founding Apple. The chairman of an $11 billion company once slept on his parent’s couch while educating himself to make the transition from football coach to CEO. And one of the richest women in the world, J.K. Rowling, received public assistance while she created one of the most beloved stories of all time – Harry Potter.

Bottom Line
So, sing your song… loudly. Dance as if everyone is watching. They are … (on Facebook. And Twitter. And YouTube. And BlogTalkRadio…) And become the rock star of your own dream life.

Take-Away Suggestions

1. Strike a balance between giving and receiving.
2. Take a 21-day vacation from the status quo. Try the Eternal City (Rome)! You could use it.
3. Dream bigger. Not everyone writes a #1 song or stars in an Academy-Award winning film. But everyone does have something unique to give to the world.
4. 50% to survive and 50% to Thrive!

About Natalie Pace:
Natalie Pace is the author of You Vs. Wall Street and host of the Pace and Prosperity radio show on BlogTalkRadio.com/NataliePace. She is a repeat guest on Fox News, CNBC, ABC-TV and has contributed to Forbes.com, Sohu.com and BestEverYou.com and Magazine. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on http://www.facebook.com/pages/NWPace, on BlogTalkRadio.com/NataliePace and on YouTube.com/NataliePaceDOTCOM. For more information please visit, http://www.nataliepace.com.

Dirty (Paper) Work: Foreclosure Mess Gets Messier.

by Liz Ann Sonders, Senior Vice President, Chief Investment Strategist, Charles Schwab & Co., Inc.

October 18, 2010

Key points

• Moratoriums on foreclosures, and the reasons behind them, bring back fears of 2008 all over again.
• The fears likely cement another round of quantitative easing by the Federal Reserve.
• Even if "Foreclosure Gate" blows over, investors shouldn't make too little of a potentially big problem.

Liz-Ann Sonders.

Having been optimistic about the economy and the market during the past 18 months or so, I'm often asked if there's anything that keeps me up at night. Being a chronic insomniac, the real answer is that nothing and everything keep me up at night. But, recently, a very large elephant entered the room: Some are calling it "Foreclosure Gate."

Back in 2006, I had high-confidence conviction that the subprime mortgage mess would become a broader economic mess. I have less confidence that today's foreclosure mess will morph into a broader economic calamity, but we should all be careful about making too little of it.

A recent report by David Kotok of Cumberland Advisors has been making the rounds in investment blogs and newsletters, notably in John Mauldin's latest missive. It cites details from an anonymous source and is a thorough, and troubling, summary of what may ail us here.

The topic is the buzz of the blogosphere. Before I get to that part of the story, though, let's review the recent chain of events. (A shout-out to my friend Ed Yardeni for some of these details.)

Audio: Liz Ann on the foreclosure mess

Foreclosure Gate
Last month, the former GMAC, now Ally Bank, announced an investigation into how its foreclosure paperwork was being processed, and initially stopped foreclosure proceedings in 23 states. Soon after, other banks instituted the same moratorium, including Bank of America and JPMorgan Chase. (As I write this, Bank of America just announced it was reopening 100,000 foreclosure actions, having found no significant problems in its procedures, while GMAC is also pushing ahead with a number of foreclosures.)

Then two weeks ago, President Obama pocket-vetoed a congressional bill (the Interstate Recognition of Notarizations Act), which would have regulated notarizations on financial documents, and would have been helpful to the banks' cause.

His reasoning was that if the bill were made law, banks and mortgage companies could more easily initiate foreclosure proceedings because the bill required courts to accept out-of-state notarizations. This would make it more difficult for homeowners to challenge the authenticity of mortgage documents. The day after the veto, JPMorgan Chase halted all foreclosures.

Finally, last week, all 50 state attorneys general launched an investigation into the mortgage-servicing industry. What we're witnessing is the collision of the banks' attention to efficiency, speed and profitability and the justice system's attention to due process.

In sum, lending standards were abysmally low, mortgage paperwork was filed too quickly, and regulatory bodies were asleep at the switch. When the housing bubble burst, a massive number of foreclosures hit simultaneously and exposed the system's glaring defects.

MERS mess
The Mortgage Electronic Registry Systems (MERS) was set up in the late-1990s to monitor a home loan every time it changed parties, with the purpose of lessening paperwork. The company was formed and is owned by some of the banking and mortgage biggies, including Fannie Mae, Freddie Mac, Bank of America, JPMorgan Chase, Ally Bank and Wells Fargo.

As detailed in a recent Bloomberg BusinessWeek article, "Mortgages Lost in the Cloud," historically, titles and mortgages on property were officially recorded in county clerks' offices the old-fashioned way, with paper trails. But this slow process collided with the era of rapid-fire refinancing and securitization. At the height of the housing bubble, more than eight million homes were sold, with most of these loans packaged into securities.

The industry responded to the scale and speed of the market by creating an electronic overlay—MERS. But, importantly, it lacks the thoroughness, not to mention legal standing, of the old paper system. And now, judges are rejecting MERS foreclosures when the company claiming to hold the mortgage can't produce the note proving it was the creditor.

MERS recently exposed its website to the public and regulators in order to show the owners of mortgages. However, in many instances, the mortgage investors weren't disclosed. This muddies the paper trail and puts in doubt a large percentage of recent foreclosures.

Chain of fools
If you don't know who owns your mortgage, you don't know who has the right to ask you to leave your house if you stop paying the mortgage.

Here's the gist of the Kotok report: When a homebuyer signs a mortgage, the key document is the note, which is the actual IOU. In order for the mortgage note to be sold or transferred to someone else (turning it into a mortgage-backed security), the document has to be endorsed (signed) to the next person. All of these signatures on the note are called the "chain of title."

If any of these signatures are missing, then the chain of title is said to be broken. As such, the mortgage note is no longer legally valid. In other words, the person who took out the mortgage loan to pay for the house no longer owes the money if he doesn't officially know the payee.

Alarm bells really started going off when title insurance companies started to refuse to insure titles. In every sale, a title insurance company insures that the title is free and clear, that the prospective buyer is in fact buying a properly vetted house, with its title in order. This is what prompted the attorneys general to investigate.

Strategic defaults
One serious risk, of course, is that the major title companies back away from insuring sales of foreclosed properties that involve MERS.

Another risk is that "strategic defaults" heat up. These are when individuals stop making mortgage payments even though they can afford to. More individuals may be encouraged to strategically default if they perceive a reduced likelihood of being forced out of their homes. In fact, some companies and websites actually promote strategic defaults.

Needless to say, a rise in strategic defaults would weigh on the already-beleaguered housing market because it discourages not only buyers of homes in foreclosure, but even traditional transactions. This issue needs some clarity and a solution in short order.

Elephant or mosquito?
No one knows for sure whether the foreclosure mess will morph into a larger economic calamity akin to what we experienced in 2008 and 2009.

But there are some bright minds that have a sanguine outlook, including Stan Humphries, the chief economist of Zillow.com. In his blog, he concludes: "My hunch is that the MERS approach will stand up to scrutiny and that this current situation will end up being more of a sloppy record-keeping scandal that should and will be cleaned up. This will result in a slowdown of foreclosures over the next 30 to 90 days."

But he's realistic, too, going on to say, "If the MERS approach doesn't survive, I'd be gravely concerned for the near-term stabilization of the housing market and for the long-term viability of mortgage securitization."

Another measured perspective comes from someone I know and respect a lot, Barry Ritholtz, of The Big Picture blog. He's a writer, money manager and attorney, and believes that there is a legal cure and that we don't need massive new legislation. Although costly to the banks, he says that trained people (lawyers and paralegals) need to look at each mortgage and figure it out, and that it can get resolved.

He writes,

That doesn't mean litigation won't ensue or that there won't be significant costs to the financial sector. Many believe the stock market can't continue its bullish streak without leadership from financials, but I'd remind investors that for much of the post-tech bubble period, the stock market fared quite well without the benefit of tech leadership. Yesterday's leaders tend not to be tomorrow's leaders.

Cementing QE2?
What the broader market has going for it is the elevated likelihood of another round of quantitative easing (QE2) by the Federal Reserve (printing money to buy Treasuries, thereby pushing yields lower and pushing investors out of Treasuries and into riskier asset classes). Foreclosure Gate may, in fact, seal the deal that QE2 is coming.

As I noted in a recent report, I have my qualms about the unintended consequences of QE2 in the long-term, including the Fed's eventual exit strategy and heightened inflation risks. But I've also conceded that it's likely to continue to boost riskier asset classes in the near-term, including stocks (both domestic and global).

The market is also behaving quite resiliently in the face of the foreclosure mess. Is it apathy or a signal that this doesn't represent what the subprime debacle did in 2008? I lean toward the latter explanation. That said, I do think the market is overbought, and a consolidation would be refreshing. But momentum remains on the side of the bulls, as do I.

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 investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.

Examples provided are for illustrative (or "informational") purposes only and not intended to be reflective of results you can expect to achieve.

The Three-Ingredient Recipe for Cooking Up Profits.

by Natalie Pace.

Excepted from You Vs. Wall Street, published by the Vanguard Press, January 2010.

There are lots of gurus out there (with mixed credibility) who offer all kinds of tips and expensive software to evaluate investments. I offer, instead, a simple, easy-to-use, easy-to-understand recipe that works for any asset – real estate, stocks, bonds, Beanie Babies, postage stamps, classic cars and more.

Learning the formula takes as long as it takes to read my book, You Vs. Wall Street. Completing a Stock Report Card™ requires less time than reading one article. Plus you’ll be making your decision with 10 times the amount of information! That’s the beauty of wisdom. Same amount of time and money = with better results.

My Three-Ingredient Investment Recipe for cooking up profits works every time for any individual investment. (For nest egg investing, the recipe is different, but just as easy, and is also outlined in You Vs. Wall Street.)

Be disciplined about following the recipe. You need all of the ingredients, and you must follow the steps in order. Since we all want to vacation on Cloud 9 before we’re ninety, let’s sharpen your skills and start cooking.

The Three-Ingredient Recipe for Cooking Up Profits.

1. Start with what you know and love
2. Pick the Leader
3. Buy low; sell high (easy to say; hard to do)

Step One: Start With What You Know and Love
The first ingredient is easy enough. If you want to invest in infrastructure in India, and you’ve never been there, you have to commit to visiting India and doing a lot of research before you leap into an investment.

What few people realize is that trading individual stocks is a tennis match. One person wins (buys low; sells high) and the other loses (buys high; sells low). A novice is a sitting pigeon for the master. Imagine stepping out on the tennis court with Roger Federer and expect to even see a ball coming at you. Very unlikely. If you don’t know the first thing about a company or its product and you’re not excited enough to get savvy, why step on the court and humiliate yourself with a devastating loss to the pro? This includes investing in gold, which has become the investment du jour.

Over the years, I’ve come across a lot of people who say that they don’t know anything about anything, which is completely untrue. My police officer cousin found Taser International, my 2003 Company of the Year, which went on to earn up to 9000 percent gains over the next three years. Whatever you do for a living gives you an insider’s view of something.

Of course, just loving the product or the store doesn’t prove the stock is a good deal or that the company will continue to beat out the competition.

Step Two: Pick the Leader
Picking the leader requires lining up the key revenue/debt/profitability data alongside two chief competitors in a Stock Report Card (see chapter 6 of You Vs. Wall Street) and then asking yourself Four Questions (Chapter 5).

The key point here is that even if you like a designer brand of coffee, that particular company may not be your taste choice in the future. People could decide $3 is too much for a cup of coffee. Or a better tasting brand might show up at a lower price.

Picking the leader means that you have to take a devil’s advocate approach to the product that you know and love. There were people who were buying stock in Worldcom the year that Skype began giving away free long distance over the Internet. You have to determine whether or not the product, company, or real estate will be valuable to buyers in the future. And believe it or not, the Stock Report Card and Four Questions can do just that, by disciplining you to evaluate real world data in the context of delivering outstanding product at a competitive price, which is the best crystal ball on any company’s prospects – far more effective than trend charts.

Every month, I go through the exact same research and analysis on a different sector, employ this exact recipe, ask my four questions, and inevitably there’s one company that’s leading the pack. And that company is usually pretty easy to identify because it shines in more than one category. Better yet: none of these strategies require earning a Ph.D. in economics or sitting at your computer watching the markets every day at the crack of dawn. You’ll start mastering this second step, once you read those chapters in You Vs. Wall Street.

Once you pick the leader in a sector, the final determination is simply whether or not you’re buying for a good price or paying through the nose. Never pay retail!

Step Three: Buy Low, Sell High
Buying low and selling high is completely against human nature. Buying low means that when everyone is crying Apocalypse, you’re seeing Opportunity. Selling high means that you’re leaving the party at midnight (sober), while all the punch drunks are screaming that the party is going till dawn, and you’re going to "Miss out, man. If you just hang out a little while longer, imagine how much more fun you’ll have."

No one has a crystal ball on when the low and high of an investment will occur, but there are a number of factors you need to consider before you make a buying or selling decision.

Calendar Trends
Seasonal Rallies (Spring and Santa Rallies)
Back-to-School and/or Valentine’s Day Stock Sales
Summer Doldrums
Pre-election Year Rally

Other Considerations
Natural Disasters
Small Caps for Performance
Large Caps for Stability
Exchange Traded Funds versus Mutual Funds
Diversification and Asset Allocation
Happy People Make Better Products Faster Cheaper
The Economics of Freedom
Emerging Markets
Historical Performance

These factors are all discussed in detail in You Vs. Wall Street. If you already have some market experience, you might be stunned to notice that I haven’t included P/E—price-to-earnings ratio—on this list. Yes, price-to-earnings ratio counts, but the above factors are far more important to determining the optimum buy/sell time. When you read the P/E discussion in You Vs. Wall Street, you’ll start understanding why.

If you don’t know price-to-earnings ratio from hieroglyphics, don’t worry. It’s not difficult to understand "Never Pay Retail" and "Buy Low, Sell High." It’s pretty easy to find out what the 52-week high and low prices are or even what the five- and ten-year highs and lows are, to use as a gauge. Start now with what you do understand, and accept that you will continue to gain knowledge as you keep reading and practicing.

Mastering This Three-Part Recipe—Water Your Money Tree: Your Brain
Write out the Three-Ingredient Recipe on an index card and stick it up in your office—or wherever you do your investments—until thinking about investing this way becomes second nature.

The Bottom Line
You already have all of the tools that you need to become successful in investing. The reason you might have lost money in the past is that you didn’t pick a winning company, or you didn’t have a disciplined approach to profit-taking (like the recipe offers), or you didn’t ask enough questions before jumping in (like the four questions force you to do), or you simply didn’t have enough information to step out on the court in the first place.

Investments are like a mosaic. The more tiles you uncover, the clearer the picture. If you plunge your head in the sand and rely solely on the plan of a broker you hardly know, or on a single hot tip, or any other single piece of the puzzle, don’t be surprised if the picture never adds up to a winning investment.

If your potential investment passes all three criteria of the investment recipe, odds are in your favor to start getting rich the easy way—by following your wisdom instead of being ruled by hot tips and stomach acid.

Natalie’s Three Takeaway Tips
1. The path to investing wisdom is like learning a foreign language. The words sound like gobbledygook in the beginning, but as you keep talking, you start understanding more and more words, and soon enough you can master the language. There’s no shortcut. Just start talking.

2. Investments are like a mosaic. The more tiles you turn over, the clearer picture you’ll have of the health of the investment.

3. Picking the leader in the sector is the most difficult task. It pays to fill out a Stock Report Card and ask the four basic questions, which are outlined in Chapters 5 and 6 of You Vs. Wall Street.

About Natalie Pace:
Natalie Pace is the author of You Vs. Wall Street and host of the Pace and Prosperity radio show on BlogTalkRadio.com/NataliePace. She is a repeat guest on Fox News, CNBC, ABC-TV and has contributed to Forbes.com, Sohu.com and BestEverYou.com and Magazine. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on http://www.facebook.com/pages/NWPace, on BlogTalkRadio.com/NataliePace and on YouTube.com/NataliePaceDOTCOM. 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 all in on any asset class or individual stocks. 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.

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.

Understanding Mutual Fund Classes.

Investor Alert by FINRA.org.

As an investor, you may have read about Class A, Class B, Class C or other classes of mutual fund shares. If you are thinking about choosing one of these classes, it is important for you to understand the differences between them.

FINRA regulates broker-dealers and their registered representatives, and we provide investors with information about securities products and services. We hope that this communication will answer many of your important questions about mutual fund classes. If you have more questions, please consult with your financial adviser.

What Are Mutual Fund Classes?
A single mutual fund, with one portfolio and one investment adviser, may offer more than one "class" of its shares to investors. Each class represents a similar interest in the mutual fund's portfolio. The principal difference between the classes is that the mutual fund will charge you different fees and expenses depending on the class you choose.

You'll find a glossary of terms at the end of this document and links to some of these terms within the document's text .

What Types of Fees and Expenses Will I Pay?
Like most investments, all mutual funds charge fees and expenses that are paid by investors. These fees and expenses can vary widely from fund to fund or fund class to fund class. Because even small differences in expenses can make a big difference in your return over time, we've developed a Fund Analyzer to help you compare how sales loads, fees and other mutual fund expenses can impact your return. You can also check the fee table in the mutual fund's prospectus to find out about its fees and expenses.

If You Buy Class A Shares:
Class A shares typically charge a front-end sales charge. When you buy Class A shares with a front-end sales charge, a portion of your dollars is not invested. Class A shares may impose an asset-based sales charge (often 0.25 percent per year), but it generally is lower than the charge imposed by the other classes (often 1 percent per year for B and C shares).

A mutual fund may offer you discounts, called breakpoints discounts, on the front-end sales charge if you:

• Make a large purchase.
• Already hold other mutual funds offered by the same fund family.
• Commit to regularly purchasing the mutual fund's shares.

You should ask your financial adviser whether any breakpoint discounts are available to you. For more information, read our Investor Alert Mutual Fund Breakpoints: A Break Worth Taking.

If You Buy Class B Shares:
Class B shares typically do not charge a front-end sales charge, but they do impose asset-based sales charges that may be higher than those that you would pay if you purchased Class A shares. Class B shares also normally impose a contingent deferred sales charge (CDSC), which you would pay if you sell your shares within a certain period, often six years. For this reason, these shares should not be referred to as "no-load" shares. The CDSC normally declines the longer your hold your shares and, eventually, is eliminated. Within two years after the CDSC is eliminated, Class B shares often "convert" into lower-cost Class A shares. When they convert, they begin to charge the same fees as Class A shares.

Class B shares do not impose a sales charge at the time of purchase. So unlike Class A purchases, all of your dollars are immediately invested. But your annual expenses, as measured by the expense ratio, may be higher. You also may pay a sales charge when you sell your Class B shares.

If you intend to purchase a large amount of Class B shares (over $50,000 or $100,000, for example), you may want to discuss with your financial adviser whether Class A shares would be preferable. The expense ratio charged on Class A shares is generally lower than for Class B or C shares. The mutual fund also may offer large-purchase breakpoint discounts from the front-end sales charge for Class A shares.

To determine if Class A shares are more advantageous, refer to the mutual fund's prospectus, which may describe the purchase amounts that qualify for a breakpoint discount.

If You Buy Class C Shares:
Class C shares do not impose a front-end sales charge on the purchase, so the full dollar amount that you pay is invested. Often Class C shares impose a small charge (often 1 percent) if you sell your shares within a short time, usually one year. They typically impose higher asset-based sales charges than Class A shares and, since they generally do not convert into Class A shares, those fees will not be reduced over time.

Additionally, in most cases, your total cost would be higher than with Class A shares, and even Class B shares, if you hold for a long time.

Glossary of Terms: Fees and Expenses
Contingent Deferred Sales Charge (CDSC)
This fee is charged when you sell your mutual fund shares. For example, if you redeem shares valued at $1,000, and the mutual fund imposes a CDSC of 1 percent, you would be charged $10 and receive $990. For B shares, CDSCs normally decline over time and, eventually, are eliminated after six years from the purchase of those shares.

Expense Ratio
A measure of the fund's total annual expenses expressed as a percentage of the fund's net assets. For example, an expense ratio of 1 percent represents an annual charge to the fund's assets—including your proportional interest in those assets—of 1 percent every year.

The expense ratio includes management fees, marketing and distribution fees (often called 12b-1 fees) and other ongoing fees that are deducted from a mutual fund's assets. These fees pay for the services of the mutual fund's investment adviser, the selling advisor or broker, transfer agent, and for other expenses. Front-end sales charges and CDSCs are not included in the expense ratio because they are charged once, and directly to the investor.

The fee table in the front of a mutual fund's prospectus shows the expense ratio, front-end sales charges, and CDSCs.

Front-End Sales Charge
This fee is charged when you purchase mutual fund shares. For example, you spend $1,000 to purchase Class A shares and the fund imposes a front-end sales charge of 5 percent. You are charged $50 on your purchase and receive shares with a market value of $950. Depending on the size of your purchase, a breakpoint discount can lower this sales charge.

Breakpoint Discounts
A mutual fund may offer you discounts, called breakpoint discounts, on the front-end sales charge if you:

• Make a large purchase.
• Already hold other mutual funds offered by the same fund family.
• Commit to regularly purchasing the mutual fund's shares.

Asset-Based Sales Charges
These are fees you would not pay directly, but which are taken out of a mutual fund's assets to pay to market and distribute its shares. For example, asset-based sales charges can be used to compensate a broker for the sale of mutual fund shares, for advertisements and to print copies of the prospectus. Asset-based sales charges include Rule 12b-1 fees, which are dedicated to these types of distribution costs.

Additional Resources

• Notice to Members 02-85 Requiring Immediate Member Firm Action Regarding Mutual Fund Purchases and Breakpoint Schedules
• FINRA Fund Analyzer
• Investor Alert—Mutual Fund Breakpoints: A Break Worth Taking
• News Release: Release Findings of Breakpoint Examination Sweep; Broker-Dealers to Review Transactions
• Investor Alert - Class B Mutual Fund Shares: Do They Make the Grade?

About FINRA:
The Financial Industry Regulatory Authority (FINRA), is the largest independent regulator for all securities firms doing business in the United States. All told, FINRA oversees nearly 4,800 brokerage firms, about 170,400 branch offices and approximately 643,000 registered securities representatives.

FINRA believes investor protection begins with education. Using the Internet, the media and public forums, we help investors build their financial knowledge and provide them with essential tools to better understand the markets and basic principles of saving and investing.

"Welcome to life." Inspiring Quotes.

by Staff.

Here are just a few of the most loved quotes on our Facebook page (Facebook.com/NWPace). We hope they inspire you to live a rich life, while enriching our world, with the value that only you can bring.

1. The Joy of Breathing Fresh Air (and Teamwork, Leadership and Never Giving Up) "Welcome to life." Chilean President Sebastian Pinera, on greeting each of 33 miners as they were brought to the surface on October 12-13, 2010, after 69 days underground. President Pinera brought together NASA, Oakley sunglasses, BHP Billiton engineers and more from around the world to rescue the miners and each and every one was in great health (considering their horrible ordeal) as they rejoined the living.

2. The Gifts of the Gods. "Luscious half moon hanging low in the sky. Close enough to take a bite." Natalie Pace, evening of October 27, 2010, when the harvest moon was hanging so large and low in the sky… Our greatest gifts, including life itself, are part of the great unknown, and completely ours for free.

3. The Gift of Friendship. "A true friend stabs you in the front." Oscar Wilde.

4. Creating Your Own Luck. "I find the harder I work, the more luck I seem to have." Thomas Jefferson

5. Making $#*! Happen. "My dreams inspire my direction. But my footsteps power me there." Natalie Pace

6. Ask and You Shall Receive. "And so I tell you, keep on asking, and you will receive what you ask for. Keep on seeking, and you will find. Keep on knocking, and the door will be opened to you. For everyone who asks, receives. Everyone who seeks, finds. And to everyone who knocks, the door will be opened." Luke 11:9-10

7. God Helps Those Who Help Themselves. "How often are we expecting our prayers to be fervently answered, when we are only half-committed to our own salvation? Today, my prayer is my road map. Whatever I ask of the Gods, I ask of myself, too." Natalie Pace

8. Trust, Truth and Communication. "If I trust you completely, then I require no explanation or communication
of your actions whatsoever, because I know that whatever you are doing is in my best interest. On the other hand, if I don’t trust you at all, then no amount of talking, explaining or reasoning will have any effect on me, because I do not trust that you are telling me the truth."- Ben Horowitz, partner, Andreessen Horowitz.

9. Call In Miracles. "Just make a decision that you will look for what you want to see. It is not a difficult decision to make, but it can make a big difference in what you bring into your experience." Jerry & Esther Hicks, from their Ask And It Is Given Perpetual Flip Calendar.

10. Yes, You Can! "I was a million to one shot, the least likely to succeed. I wasn't low man on the totem pole, I was under the totem pole, in a sewer, tied to a rock." Tony Curtis, actor, artist, father, stallion savior, Academy Award nominee and legend of film. Read more of Tony’s candid quotes in my exclusive interview with him, from the October 2010 NataliePace.com ezine (volume 7, issue 10).

2009 Company of the Year Posts Up to 10X Gains.

by Natalie Pace.

Includes my Hot News on Cool Stocks Report.

November 1, 2010

General Stock Market Performance

Wall Street Highs/Lows in the New Millennium:

Compare those returns to the returns of stocks, real estate, bonds, Treasury bills and gold over the last 30 years.

Market Update:
The most delicious dessert this holiday season is found in the Thanksgiving horn of plenty, even if it’s not edible. As of Halloween, my 2009 Company of the Year, U.S. Gold, has posted more than 10X gains for investors who bought in at 50 cents/share, earlier in 2009 when I highlighted that price as a steal. That means a $1,000 investment becomes $10,000 and $1,000,000 becomes $10,000,000! U.S. Gold’s rise to prominence could just be beginning, since the company begins trading on the New York Stock Exchange on November 2, 2010 and the Chairman and CEO, Rob McEwen, has a goal of qualifying for the S&P500 by 2015!

The question is: should you keep hanging on, or should you capture your gains? What happens if the stock market corrects? Will U.S. Gold fall with it, or will it run against the tide? When will this exploration company begin mining and how long will it take to become cash positive?

On October 26, 2010, Rob McEwen issued a statement saying, "With an aggressive exploration program, two projects moving towards production in Nevada and Mexico and good trading liquidity, US Gold is well positioned to take advantage of rising precious metal prices." All of this is true, however, there is more uncertainty in those statements than you might think.

Last November when McEwen joined me on my BlogTalkRadio.com show, he warned that when companies enter production, their share price can languish and/or sag for a few years, while additional capital is raised, permits are filed and governments slow down the company’s push toward profitability. Also, although McEwen believes gold can break through $5000/ounce before it begins its pullback, no one really knows how high gold can go. The International Monetary Fund has already sold over 200 tons of gold, with plans to sell a total of over 412 tons. The developed nations, including those with heavy debt and slow economic growth, like the U.S., the European Central Bank and Italy, are the biggest horders of gold, and will have pressure to sell some off at these delightful high prices to help fill in the gaps of unbalanced budgets. Review the articles listed below for additional considerations.

Gold Will Hit $5,000 an Ounce, According to 20-year Veteran Gold CEO Rob McEwen. by Natalie Pace.

The Gold Crash of 1980. By Natalie Pace. A Brief History of Gold.

Of course, those facts are not being touted in the 24/7 gold ads on television. Gold funds have become the most prolific advertisers on cable television these days, and that typically fuels the boom market. (Remember all those Make a Million in Real Estate programs and ads from 2005?) It definitely feels like gold fever these days!

I don’t believe the gold party is over yet. Gold continues to attract investors who are road weary of the U.S. economy. But it will pay to remain sober while you celebrate the glisten of gold in your investment portfolio. Make sure that you have a profit-taking and sales strategy that is designed to capture gains – before this latest boomtown commodity sinks. For now, U.S. Gold remains on my Hot News on Cool Stocks list, and I’m holding it in my personal portfolio as well. The list is updated twice a month, so keep an eye out for news as it develops.

Banks Are Still Failing
There have been 139 bank failures so far in 2010 (as of November 1, 2010), 140 bank failures in 2009 and 25 in 2008. Don’t be seduced by the banks reporting record earnings! Most of them are fairy tales.

Are We in a Recovery?
The National Bureau of Economic Research (NBER.org) has declared that the 2007 recession ended on June 2009, however, that doesn’t mean that the economy is racing to recovery. In the statement issued by NBER, the Committee reported, "The committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity." On September 21, 2010, the Federal Open Market Committee released a press release advising, "Information received since the Federal Open Market Committee met in August indicates that the pace of recovery in output and employment has slowed in recent months."

Interested in Educating Yourself on Investing?
Come to the February 5-7, 2011 Get Rich and Enrich Retreat in Santa Monica, California. Get more information on the home page at NataliePace.com under the Get Rich and Enrich Retreat banner ad.

Track Record of our Reporting
While the markets are still down significantly since their high in October of 2007, the Hot News and Cooling Off lists below have a winning track record before, during and after the Great Recession – in bear and bull market years. 93 positions listed below – 81% -- have delivered impressive gains over the past two years, even while the Dow Jones Industrial Average is still trading lower than it was in 2007 (when it cracked through 14,000)! Only twenty-two of our listings went in the opposite direction of the reporting, which is quite impressive given the market gyrations of more than 7000 point swings since 2008. FYI: If 2010 tracks the most recent trend, there may not be a Santa Rally this year.

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 trading profits early and often in these volatile, whip-sawing years. (Your nest egg is better off just rebalancing once or twice a year, not trying to market time.)

4 out of 7 Company of the Year selections more than doubled.  My 2003, 2004, 2006, 2007 and 2009 Companies of the Year posted up to 9000% gains (Taser), up to 690% gains (Opsware), up to 215% gains (Suntech Power Holdings), and up to 10X ROI for U.S. Gold, respectively. MySpace, my 2006 Company of the Year, was a large part of News Corp’s success with shareholders that year.   So five out of seven Company of the Year selections were superperformers. 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, Taser International, on 1.1.03.)

Some of my best picks include: U.S. Gold (UXG) 10X return on investment, Google (GOOG) +585%, 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 and 2009 were put options – on the Cooling Off list -- which is why I added options training to my 3-day Get Rich and Green Investing Retreat. Look on the Cooling Off list for details on the incredible gains options investors enjoyed (and the losses that average investors avoided as a result of being alerted to the problem) on Wells Fargo, Fannie Mae, Toll Brothers, KB Home, Novastar Financial and more.

The NataliePace.com ezine was the first to list the following 911 alerts:

1. 2008 Recession (Get Safe)
2. Trim back on Faded Blue Chips in 2006
3. Get out of Dodge (real estate) in 2005
4. Google at the IPO! (May 2004)
5. To get Fannie Mae and Freddie Mac out of your 401(k) in 2003

Market Movers:
The Federal Open Market Committee and Monetary Policy
The Fed funds rate continues to be "0 to ¼ percent." The next FOMC meeting takes place on November 2nd and 3rd, 2010. On October 15, 2010, Federal Reserve Board Chairman Ben Bernanke said, "The FOMC is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation over time to levels consistent with our mandate." Since interest rates are at zero, it is likely to be more long-term security purchases, further increasing the Fed’s balance sheet, above levels that are consistent with prudence!

Final Estimate GDP growth rates for 1Q 2010 were 1.7% (down from advance results of 2.4%), according to the Bureau of Economic Analysis. 1Q 2010 GDP growth was 3.7%.
Advance GDP growth rates for 3Q 2010 will be released on October 29, 2010 at 8:30 a.m. ET. These release days tend to be very active on Wall Street, and the second half of 2010 is expected to be much slower growth than the first half. Ergo, this could be an ugly day. 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 minutes of the September 21, 2010 FOMC meeting for yourself? You can. The official Federal Reserve document is available online. Click on FOMC, or go to FederalReserve.gov to read! According to the Committee, "The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period. The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings." In other words, the Feds are buying up U.S. Treasury bills (which otherwise are losing favor on the world marketplace).

The tentative FOMC meeting schedule for the 2010-2011 calendar is: November 2-3 (Tuesday-Wednesday), December 14 (Tuesday), January 25-26, 2011 (Tuesday-Wednesday), March 15, 2011 (Tuesday), April 26-27, 2011 (Tues.-Wed.), June 21-22, 2011 (Tues.-Wed.), August 9, 2011 (Tuesday), September 20, 2011 (Tuesday), Nov. 1-2, 2011 (Tues.-Wed.), December 13, 2011 (Tuesday), January 24-25, 2012 (Tues.-Wed.).

2. Calendar Section: Conferences, Online Chats and more: Check out the Calendar section of NataliePace.com regularly. You will find great opportunities to attend the most exclusive business and Green Conferences, learn about upcoming TV and radio shows and other educational opportunities – many are FREE! 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 Pace and Prosperity Show with Natalie Pace on BlogTalkRadio.com. Check BlogTalkRadio.com/NataliePace for upcoming shows and call-in and log-on instructions and to listen back to any shows that you might have missed. These shows are pod casts and are FREE!

BlogTalkRadio offers a Q&A format, where you can call in with your most pressing questions. Be sure to keep a list of your questions as they come up, and join our ongoing dialog on peace and prosperity, getting rich and enriching, green investing, the Thrive Budget and more on Facebook at http://www.facebook.com/NWPace.

3. Survey Results: Each month we have three new surveys so that we can stay in touch with your needs and desires. This month, we want to get the holiday gift giving right! Cast your vote on our survey page.

4. Euro interest rates: ECB rates are at 1.00% (main refinancing), 1.75% (marginal lending) and 0.25% (deposit facility). The next meeting and interest rate announcement is scheduled for November 4, 2010 at 2:30 p.m. CET. (November 18, 2010 after that.)

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) 11.1.10
Federated Prudent Bear Fund (BEARX)

Profit-Taking:
Hoku Corp. (HOKU) +38%
LDK Solar (LDK) +226%
U.S. Gold (UXG) 10X ROI

DELETIONS (Take your profits early and often):
Blockbuster (BLOKA) 10.1.10
ENER1 (HEV) 10.15.10
KLA Tencor (KLAC) 10.1.10

HOT NEWS on COOL STOCKS LIST

Recently Deleted from the Hot News list:
Blockbuster on 10.1.10
ENER1 on 10.15.10
KLA Tencor on 10.1.10

Please note that it was reported on 10.1.10 that the Suntech share price was back above $14. It appears that this financial data (which was supplied from a news site) was inaccurate. Therefore, I am adding Suntech back to the Hot News list.

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. Getting the price right is as important as picking the right company. Never pay retail!

Recent Additions:
ENER1 (HEV) added 10.15.10
KLA Tencor (KLAC) added 10.1.10
Shutterfly (SFLY) added 11.1.10

Recent Deletions:
ENER1 (HEV) (moved to Hot list on 11.1.10)
eBay (EBAY) (moved to Cooling Off list on 11.1.10)
Google (GOOG) (moved to Cooling Off list on 10.15.10)

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) on 10.1.10
Ford Motor Company (F) on 11.1.10
eBay (EBAY) on 11.1.10
Google (GOOG) on 10.15.10
Netflix (NFLX) on 9.13.10
Priceline (PCLN) on 10.1.10
Taubman Centers (TCO) on 9.13.10
Wynn Resorts (WYNN) on 10.15.10
Yahoo (YHOO) on 10.15.10

DELETIONS:
None

Deleted in 2008/2009/2010:
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. First Solar was deleted on 8.13.09 with 33% gains. KB Home with 74% gains and Toll Brothers with 51% gains on 10.01.09. Deleted AMAT on 8.1.10 with gains of 12.5% & 7% (put gains would be double or more). 8.30.10: Deleted FIG (-10% & -40%), MXWL (-37%), MDT (-4% & -24%), MSFT (-20%) -- all for gains. Deleted MGM 9.13.10 for 61% gains.

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.

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

NataliePace.com Calendar:

Interested in Getting Out of Debt? Join us for a Free Tuesday Night Teleconference on Nov. 9, 2010 at 6:00 p.m. PT.

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.

To access links to the event website and registration, go to the Calendar section at NataliePace.com.

FOMC Meeting
Tuesday & Wednesday, November 2-3, 2010
The Federal Open Market Committee meets to determine Federal Reserve policy in the U.S. Two-day meeting November 2-3, 2010.

The Merry Wives of Windsor. NYC
NOW through Sunday, November 7th, 2010
This is one of the best productions of Shakespeare that I've ever seen. A hilarious comedy starring one of the immortal characters of all-time -- Falstaff. Don't miss it!

NC Gov's Conference for Women. Raleigh, NC
Tuesday, November 9th, 2010
Gov. Beverly Eaves Perdue, NC's first woman governor, will speak, as will Jean Chatzky and Sapphire, the author of Push (the book upon which the film Precious was made).

Get Out of Debt Radio Show with Natalie Pace
Tuesday, November 9th, 2010
6:00PM through 6:30PM PT
Learn the 5 Easy Ways to Get Out of Debt and start living the life of your dreams. Join Natalie Pace on BlogTalkRadio.com/NataliePace. Call-in Number: (347) 215-7305

Green Business Conference, SF, CA
Thursday, November 11th, 2010
Whether you are an established green business visionary or just starting your journey to sustainability, you'll find the Green Business Conference an exceptional opportunity to partner with business leaders who share your values, your challenges, and your commitment to sustainable living.

Veterans Day
Thursday, November 11th, 2010

Get Rich and Enrich Retreat, Santa Monica, CA
November 12-14, 2010
You spend hundreds of thousands learning how to earn money. Why not spend a fraction of that learning how to invest? 3 days in a board room setting, learning investing directly from Natalie Pace, sets you up for life. Nov. 12-14, 2010.

GreenBuild Conference, Chicago, IL
Wednesday, November 17th, 2010
Together, we will define what the future looks like in cities and towns around the world.

Clean Tech Open, Bay Area, CA
Wednesday, November 17th, 2010
view the hundreds of technology exhibits, vote for your favorite Ideas Competition finalist, watch the Business Competition finalist demos, hear the nationally-recognized speakers, and BE THERE for the National Winner announcement.

GDP 3Q 2010 report (second estimate)
Tuesday, November 23rd, 2010
8:30AM through 8:45AM ET
The U.S. Dept. of Commerce, Bureau of Economic Analysis (BEA.gov) releases its second report on GDP growth in the 3rd quarter of 2010. Advance numbers show 2% GDP growth. Final results for the 1st and 2nd quarters of 2010 came in at 3.7% and 1.7%, respectively.

Special Economic Report
Wednesday, December 1st, 2010
The National Due date of the special report from the Commission on Fiscal Responsibility and Reform.

Living off the Grid. Radio Show
Tuesday, December 7th, 2010
9:00AM through 9:30AM PT.
Renewable energy author and educator Dan Fink has lived off the grid since 1991, 11 miles from the nearest power pole or telephone line. Learn how to go green in your life! Call-in Number: (347) 215-7305

Natalie Pace: Budget Like a Rock Star
Tuesday, December 7th, 2010
10:00AM through 10:30AM PT.
Join BestEverYou Elizabeth Hamilton-Guarino as she interviews Wall Street's rock star, Natalie Pace. Hard assets and a beautiful bottom line are just what every girl needs!

OPEC meeting in Quito, Ecuador
Saturday, December 11th, 2010
OPEC meets. They will also release details on their new Long Term Strategy, which was approved for adoption at the Oct 14, 2010 meeting. If they adopt a basket of currencies, this could be a problem for the U.S.

FOMC Meeting
Tuesday, December 14th, 2010
The Federal Open Market Committee meets to determine Federal Reserve policy in the U.S.

Winter Solstice
Tuesday, December 21st, 2010
Celebrate the winter season, when the Earth is tipped farthest away from the Sun. Ski! Sled! Snowboard! Snow angels!

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