Wow! Dow! Or NASDAQ Now?

by Natalie Pace.

A Contrast in Cash and Debt.

Including a Nasdaq vs. Dow Stock Report Card.

Natalie Pace, NataliePace.com CEO and founder

Microsoft, a NASDAQ listed company, is also one of the 30 components of the Dow Jones Industrial Average, but it is very different from many of the large-cap legacy corporations listed on the DJIA index. Microsoft has almost double the cash of any other Dow company -- at $31 billion - along with no debt, and no pension or Other Post Employment Benefit obligations (OPEBs). Conversely, 21 of the 30 Dow companies have pension and OPEBs that exceed $1 billion, and many are carrying notably high long-term debt.

30 Companies of the Dow Jones Industrial Average Index
11 Highlighted companies have over $5 billion in Pension and OPEBs.
21 have pension and OPEBs that exceed $1 billion.

(source: Standard and Poor's)

*Multiply the debt/equity ratio by the market capitalization to view the total debt. When the debt nears or exceeds the total market value of the company, it means the company has been aggressive about financing and has likely experienced huge losses.

General Motors owes over $50 billion in pension and OPEBs, and almost $74 billion in long-term debt. When combined, the debt, pension and other post employment benefit obligations exceed the market value of General Motors by six times. In their last earnings report, GM included employee assets -- Voluntary Employees' Beneficiary Association (VEBA) trust -- as part of their "$20.4 billion" in readily available cash. While headlines speak of a turnaround at General Motors, it is easy to see from the details that this is a company with serious fiscal issues, and it that will require diligent, long-term care to bring the corporation back to health.

So if cash-rich Microsoft is included in both the NASDAQ Composite (which has 3,158 listings) and the Dow Jones Industrial Average indices, why is the debt-laden DOW setting new highs, while the NASDAQ is still down over 60% off the high set in March 2000?

Part of the mystery is explained by Generally Accepted Accounting Principles (GAAP), which, incidentally, are about to change. Prior to December 15, 2006, companies were not required to list their pension and OPEBs on earnings reports, so most investors simply aren't aware of the significant debt owed by some of the Blue Chip corporations that are listed in the Dow Jones Industrial Average.

Howard Silverblatt, the Senior Index Analyst at Standard and Poor's, postulates that when companies begin including their pension and OPEBs on the quarterly earnings reports this December, shareholders' equity could reduce by 8-9%. When pension and OPEBs make headlines, investors will surely be taken aback, but there is no guarantee that reporters will read the fine print of the earnings report to uncover the obligations. The latest "preliminary" General Motor's earnings report of October 25th was proactive about including the pension and OPEBs in the expenses line item, but there were no explosive headlines highlighting the massive debt, and General Motors certainly didn't issue a press release to draw attention to it.

Experienced executives are adept at attracting investors (and headlines) through dividends, corporate buybacks and even increased operating margins, even while the fiscal fitness of their corporations is in serious trouble. It is the corporate equivalent to airbrushing 20 years and 40 pounds off an actor's face and beer belly. It's the same person/company that once was smoking hot, with all of the warts, wrinkles and aging touched up.

Prior to its bankruptcy, U.S. Airways contributed only $47 million to its underfunded pension and health plan, but spent $1.9 billion buying back stock. Dupont (DD) has played up their stock buyback, repurchasing $100 million of a $5 billion share buyback program, while their pension plan and OPEBs remain underfunded by $7 billion and their total liabilities are $23.7 billion - totaling over half of the $42 billion market value of the company.

In similar fashion, General Motors is hosting a conference call on November 1, 2006 and December 1, 2006 to discuss "sales." This call will be hosted by a GM Executive Director, not CEO Rick Wagoner, which means that the host can slough off serious questions about the pervasive fiscal problems within the company. Would Wall Street be so invested in the GM "turnaround," if more people were aware that a quarter of every dollar General Motors takes in for selling a car has been promised (but not funded) to labor and retirees? This "sales call" comes less than a month after General Motors cut off talks with Renault-Nissan because Renault-Nissan wanted a "substantial equity stake in GM at no premium," (source: General Motors press release of October 6, 2006). This should give you an idea of the worth of GM in the general marketplace.

Executive exodus is another red flag of an ailing organization that rarely makes headlines (until the company implodes). This was seen in Delta Airlines prior to its bankruptcy, as well as Enron. Jerome B. York, Kirk Kerkorian's representative, resigned from the GM Board of Directors on October 6, 2006, two days after the GM/Renault-Nissan talks were terminated. (Mr. York had been with the board only eight months.) In August 2006, two of the top guys in GM's corporate finance suite -- Paul W. Schmidt (controller) and the chief accounting officer, Peter Bible - also "retired." Executive exodus in the finance department is an exploding rocket, not merely a red flag. (Some ailing corporations, like American Airlines, manage to survive for a long time, despite the challenging environment and executive exodus, so don't bank on a GM bankruptcy -- yet.)

Another Dow component with $7 billion owed to retirees relies on dividends and a pretty name to attract investors. Even though indoor smoking is being banned in many states, Altria, the owner of Phillip Morris (Marlboro) and Kraft Foods, smoked up more sales than computers did last year, making Altria one of the brightest stars on Wall Street. Both Dell and Microsoft each had roughly the annual sales of Phillip Morris (traded as "Altria: NYSE: MO"), ringing up just $57.4 billion and $45.35 billion in sales respectively, while Altria raked in $100.50 billion in annual sales. Altria (NYSE: MO) is one of the top holdings in 60% of the top 10 most popular mutual funds on the Street, including 5 out of 6 American Funds mutual funds and the Vanguard 500 Index.

Pension plans and other post retirement benefit obligations are so pervasive in the Dow because these "defined-benefit" obligations are concentrated in legacy "Blue Chip" corporations that were around pre-1980. In the 1980s, 401 (k)s started to become popular, and the burden for retirement planning began shifting from the corporation to the individual. In some corporations, like General Motors, Ford Motor Company and Goodyear Tire, the corporate obligations to retiree pension and health care EXCEED the market capitalization (or the market value) of the company.

Source: Standard and Poor's and GM 3Q earnings report

Companies that are losing market share, while experiencing a spike in expenses, like the automakers, telecommunications and airlines industries, are more vulnerable than companies which are enjoying increased sales and profit margins, like Exxon Mobil, the largest corporation in the world. With the spike in commodity prices, the automakers are paying much more to put the car together, and with escalated oil prices, they are also being hit with higher delivery costs as well. Airlines are getting killed with the price of oil these days. Southwest is one of the few airlines that is flying profitably, and it is primarily due to oil hedges. Telecommunications is an old, cumbersome industry with tight margins, cutthroat competition, rapid innovation and heavy financial burdens that is trying to win a war with cable (and VOIP) for broadband and long distance customers.

The NASDAQ Composite Index, where many listed companies have little or no pension and OPEBs, is not your Y2K nightmare anymore. There are real earnings in explosive new businesses on that index. Downloads destroyed Tower Records and other retail music stores, but launched a new iPod generation. Apple went from $8.3 billion in revenue in 2004 to over $19 billion in fiscal year 2006. Google's sales tripled from 2003 to 2004, going from $1 billion to $3 billion. The company doubled revenue again in 2005, jumping to $6.1 billion, and revenue at Google is on track to surpass $10 billion this year.

"Looking forward, 2007 is likely to be one of the most exciting new product years in Apple's history," according to Steve Jobs. We agree, but first Apple Computer has to file a late third quarter earnings report, and restate results for prior years because of 15 cases of backdating stock options. This could be startling for investors, that is, if the story that gets any ink. The nation's most reliable news sources have been light on Apple missing its 3^rd Quarter earnings report (which has to be filed before December 29 to avoid NASDAQ delisting), preferring to focus on the sweet side of Apple -- the Halo effect.

As a result of the popularity of the iPod, more than half of the computer purchases at Apple's retail stores this past quarter were made by consumers buying a Mac for the first time. Apple shipped 1,610,000 Macintosh(R) computers and 8,729,000 iPods during the last quarter, representing 30 percent growth in Macs and 35 percent growth in iPods over the year-ago quarter.

Another emerging NASDAQ Blue Chip is eBay. eBay, with $5.58 billion in sales, comes nowhere near the juggernaut sales of Wal-Mart ($331.48 billion in sales), but the eBay growth trend is notable, while Wal-Mart sales continues to slip. eBay is on track to earn $5.6 billion in revenue this year, up from $3.2 billion two years ago. Wal-Mart's fiscal year 2006 was off 11.2%, down to $313 billion, from $353 billion in 2005.

eBay is buying back shares, a great way to attract and reward investors, but the company is not doing this buyback in order to mask warts and wrinkles in other areas. eBay is still young and beautiful. eBay repurchased approximately 24 million shares of its common stock at a total cost of $667 million during the third quarter, completing one-third of its previously announced stock repurchase program.

Meg Whitman, President and CEO of eBay Inc, has plans to "individually and collectively deliver greater value to our community of users and to our shareholders" through the eBay marketplace, Shopping.com, PayPal and Skype, all companies that are owned by eBay. Skype had 136 million registered users at the end of the third quarter 2006, up 20% from the 113 million users at the end of previous quarter, while the total number of registered users on the entire eBay platform is 212 million. That is a huge customer base, amounting to more than half of the population of the United States! (Roughly half of eBay's business comes from the United States. Its international business grew 38 percent over last year.)

Most Americans don't realize that Skype is actually growing faster than MySpace, which has 124 million registered users (as of 10.28.06). eBay boasts almost twice the number of registered users as MySpace! Based on MySpace's traffic and popularity, News Corporation (MySpace's parent company) just struck a deal with Google valued at more than $900 million. With a customer base that is 212 million strong, eBay's bright CEO Meg Whitman may yet have a few strategic alliances of her own up her sleeve. According to CEO Eric Schmidt, ÒWe continue to forge significant partnerships with companies such as eBay, Fox Interactive Media, and Intuit that will be of great value to all involved.Ó In the meantime, there is a new product coming out in time for the holiday season - the Skype Wi-Fi phone (made by Belkin and NetGear). Skype net revenues totaled $50 million in the third quarter of 2006, representing a 13% increase from the $44 million reported in the second quarter of this year. If the new Wi-Fi phone is a popular purchase, look for a much higher total in the 4^th quarter.

There is one drawback to these NASDAQ stars. Unfortunately, Apple Computer, eBay and Microsoft are not bargains. Their price to earnings ratios, at 36.20, 44.30 and 22.60 respectively, don't leave a lot of room for bad news. Value investors won't be attracted to the Apple and eBay growth story until the P/E becomes attractive. Mutual fund investors could stick with the Dow components (without knowing about all of the debt) for months to come.

This report on the pension and OPEBs may leave you somewhat shocked and perhaps in disbelief. Any search you might conduct for supporting reports could turn up relatively lean. (Once this explodes onto the headlines, however, it'll be too late to make your adjustments.) In December 1999, I was the least popular person at Christmas parties when I made a similar assessment of the NASDAQ, and warned that the economy was in for a serious correction. In May of 2005, few people believed in the Google IPO or, in April of 2005, that MySpace would be one of the most trafficked websites in the world. It is common for the NataliePace.com ezine to be the first to sound the alarms - both for great new companies, as well as for uncovering serious, under-reported problems.

There is a shift away from company-managed benefit plans to employee-controlled retirement and health care. There is a strong trend away from landlines to Wi-Fi, away from TV versus Internet to TV AND Internet, away from owning your own CDs and DVDs to accessing unlimited music and movies anywhere in the world anytime, away from low-cost long distance to free long distance. As sales drain from the old businesses into the new, savvy investors and employees will follow the money (and yes, that could mean a migration of money from the Dow into the NASDAQ). Don't be seduced by low P/Es, high dividends and buyback programs by companies that are carrying serious debt and pension obligations and are touting, "Turnarounds!" when they are in fact lagging their industry, in a hostile, competitive business environment, where other companies are reaping the returns of new technological innovations, better choices and investments. Don't be stuck investing in the horse and buggy, when everyone is queuing up to buy an automobile.

We'll keep reporting on Microsoft, eBay and Apple on the Hot News List, and will notify our readers of news that might make these companies more or less attractive to investors.

Socially Conscious Investing Tips:
If you want to promote a cure for cancer (instead of cancer), why not put replace your Altria (NYSE: MO) holdings with Genentech (NYSE: DNA)? If you support renewable energy instead of a reliance upon oil, why not buy the Wilderhill Clean Energy Portfolio (AMEX: PBW: a solar energy ETF) or Toyota (NYSE: TM), instead of General Motors (NYSE: GM)? (One of the most serious fumbles of GM was continuing to invest in gas-guzzling SUVs and big trucks, while Toyota turned Green.)

If you really want to change the world, put your money where your heart is. In today's climate, that may also be best for your wallet.

Investing Education:
How do you know which companies you are invested in, when you own mutual funds and/or Exchange Traded Funds in your retirement plan? Find out what the Top 25 Holdings of your mutual funds and ETFs are. (It's easy! Directions are listed below.)

The following Large Cap Companies and funds are Listed on the Hot News List, and might be a stabilizing presence for your long-term portfolio.

There are many Small Cap Companies that are Listed on the Hot News List, with high growth potential for your trading portfolio. Below are just a few.

How to Find Out the Top Holdings of Your Mutual Fund:

1. Go to NataliePace.com
2. Scroll down on the home page until you see the Company Research search box.
3. Enter in the symbol or the name of your mutual fund. (Mutual funds have 5 characters in their symbol.)
4. Click Research Now.
5. You will find yourself on a MoneyCentral.msn.com Stock Quote page.
6. Click Top Holdings (found on the left-hand navigation bar)

How to Select New Exchange Traded Funds and/or Mutual Funds:

1. Go to NataliePace.com
2. Scroll down on the home page until you see the Company Research search box.
3. Enter in the symbol EUROX or the name or symbol of your mutual fund. (Mutual funds have 5 characters in their symbol.)
4. Click Research Now.
5. You will find yourself on a MoneyCentral.msn.com Stock Quote page.
6. Click on Top Holdings (found on the left-hand navigation bar)
7. The Top 10 Holdings will appear on the Investment Profile Page
8. Click on ETFs (on the top navigation bar) to view other ETFs and their holdings.
9. Click on Top Performers
10. Select Sectors (or another choice) in the Category Search Box
11. Click on any blue-highlighted Exchange Traded Funds or ETFs
12. Click on Sector/Industry (or another selection of your choice)
13. Click on an interesting ETF
14. Once you get to the quote page, click on Top Holdings (found on the left-hand navigation bar)
15. The Top 10 Holdings will appear on the Investment Profile Page

Other Articles of Interest
"Faded Blue Chips." by Natalie Pace.
eBay's Skype Outpaces News Corp's MySpace.
Gold and IT Gold. Exclusive interviews with U.S. Gold's Chairman and CEO Rob McEwen and NetGear's Chairman and CEO Patrick Lo.
Solar Powers Whole Foods, But Not the Whole World.

Please note: NataliePace.com does not act or operate like a broker. We are a media and information center. 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/or consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.

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

Cobra Starship band members: From Left to Right. Alex Suarez (Bass), Gabe Saporta (Vocals), Elisa Schwartz (Keytar), Ryland Blackinton (Guitar). Not Pictured: Nate Novarro (Drums) Photo Credit: Alan Ferguson

Fallout Boy, Panic! At the Disco and Cobra Starship Manager, Jonathan Daniel on The New Kings of Media: Apple and MySpace

Article by Jessica Mkitarian. Featuring a Q&A with Jonathan Daniel, partner, Crush Management, and Natalie Pace, CEO, NataliePace.com

Myspace-Discovered Singer Cassie is topping the Charts and just signed with NextSelection/Bad Boy Entertainment, while I've Got 3,000 Songs and Season 1 of Grey's Anatomy in My Pocket. Apple and MySpace are the clear leaders in the new Music economy, but how long will they reign, with Microsoft waiting in the wings? Find out in an exclusive Q&A with Jonathan Daniel, Crush Management-partner. Crush manages Fallout Boy, Panic! At the Disco and Cobra Starship.

"I don't have an iPod.  I think a phone is a nice portable device to have one's music on, and I think some other people may do that in the future."  Bill Gates, speaking to Donny Deutsch on 5.29.06 on The Big Idea.

Years ago, a friend of my parents told them songs were going to be on TV, in the form of "music videos." They scoffed at the idea. Who would watch music on TV? Apparently every teenager in the country would. Today music videos are so second nature that MTV had to create two new channels (MTV2 and MTVU) just to be able to play music videos and regular shows. But music videos are old news; now everything is online and in your pocket in the form of an iPod.

Music is a staple in every generation, but with the iPod, music has become uniquely personal. Welcome to the iPod generation. I go to college in urban Boston and have never walked to class without seeing at least ten people with those little white iPod headphones in their ears. Anyone without an iPod is a minority on campus.

The problem with these magical, incredibly popular devices? Teens admit that one out of about 200 people are actually paying for their music downloads. Certainly a large percentage of teens, and probably even adults, are still getting music for free. What does this mean for the future of the newly monetized music industry and Apple in particular? Read the interview with Jonathan Daniel, Crush Management partner, and get the inside scoop on this constantly evolving industry. (Crush developed and manages the breakout bands Fallout Boy, Panic! At the Disco and Cobra Starship.)

Natalie -- You envisioned the collapse of music retail before Napster was born. Are you surprised that Apple was the first to monetize a new model, centered around downloads and worldwide access to an endless play list on a teeny tiny handheld portable device?

Jonathan -- Not really. Apple has always been the first choice in computers for musicians so it makes sense that they'd develop a popular consumer music device as well.

Are there any other companies that you believe are poised to take market share from Apple?

Panic! At the Disco Ryan Ross, Brendon Urie, Jon Walker, Spencer Smith Photo: Pamela Littky

At this point, no one's even close. That being said, technology changes so fast, it's hard to predict what'll be next. It wasn't so long ago that Palm Pilot was THE PDA and the Rio was THE mp3 player.

What about Bill Gates's bet that music will shift to the phone, and the iPod will become obsolete?

I'd like a phone that actually has clear reception more than an all in one device, but that's just me I guess. It seems possible, particularly if it's a Blackberry or Sidekick style phone. I don't know if that'd be any great advancement though. It seems kinda like when they built the turntables on top of the TV sets in the sixties.

I just wish the battery charge on my cell phone lasted longer. I don't think my phone can handle another drain on the battery! What, if any, services, products and/or distribution do you use from the former big 5 record companies?

I think it's the big 4 now after the Sony-BMG merger. We like to partner with the big record companies once an artist has sold enough records and created enough momentum that the big label is able to play to its strengths. For the most part, they are very good at mass marketing something that has momentum. They have a harder time starting things from scratch. It's tough for them to go from zero to 100,000 albums. We've had good experiences going from 250,000 to a million plus with them.

How does your approach, and your success, redefine the business plan for music? Who will be the players and nouveau riche of the next great music generation? Will artists fare better in the current environment than they have in the past?

It's funny, our approach is almost so old it's new again. It's basically about letting artists developÑtouring them, putting out more than one album, making sure the music is as great as it can be, The only difference to our strategy and one from fifty years ago is that we get to use the Internet to market the bands very inexpensively.

I think there may be more opportunity for a middle class artist community, though since practically none exists now, that's not too big a stretch. I think it's an interesting time to make truly original, great music. The challenge for artists with technology lowering recording costs and the web lowering marketing costs is that the barrier to entry becomes extremely low. There are so many more artists than ever before, that the music business has the potential to become more of a niche business like books.

Any advice for investors on the tricky aspects of banking on the music business plan of Apple, Microsoft, WB Records or any of the other giant companies?

Proceed with caution. Music is still a business of "hits". Hit businesses are sexier but far more risky than other businesses. We've gone by the philosophy that music is alive and well. While record sales may be on the decline, music is arguably more popular than ever. We feel that if we can create popular, successful artists, the money will come. So far that has worked very well for us. We have three divisions: artist management, media (which runs bigchampagne.com and friendsorenemies.com), and fashion (Clandestine Industries). Each vertical is driven by the success of our artists.

Advise for young artists seeking to get picked up by the amazing team at Crush?

Be unique, write great songs, be willing to listen and be a music lifer. If you agree with all that, get your songs to Pete from Fall Out Boy and hope he likes them.

The Cross-promotion between Fallout Boy, Panic! At the Disco and Cobra is unbelievable. How have you created such a "family" between your bands, and how does that work toward increased sales? (This community reminds me of the CBGB days of the 80s -- Talking Heads, Blondie, B-52s -- or the Woodstock collaborative of the 60sÉ)

Thank you for noticing! It's something we're personally proud of. It is very much the Crush family -our bands are so important to us as people. They're very bright and their opinions are taken very seriously. We never cross-promote or do a tour package that the bands don't agree with. I think that's what makes the cross-promotions work so well.

Third Quarter Review & Outlook.

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

Is it time to climb out of the bunker and smell the flowers?

Paul Woods, President & CEO, Odyssey Advisors LLC.

In the third quarter of 2006, the Federal Reserve finally got the message and one of the longest cycles of interest rate increases came to an end. Yes, the Fed is still pretending they might raise rates again if inflation doesn't go away. However, with an election approaching, inflation behaving, and the housing market slumping, no one believes them.

Another reason the next move in interest rates will probably be down is that oil prices finally dropped. There was an outbreak of sanity in the Middle East that undoubtedly won't last, but the easing of tensions helped to calm the oil market. In addition, there was good news in the Gulf of Mexico. A huge new discovery coupled with a hurricane season that was a non-event also helped to push oil prices lower. Finally, people reacted to higher gasoline prices by driving less. The result was that oil prices approached $60 per barrel at the end of the quarter, which should help take some pressure off inflation.

In spite of expectations of a slowdown, economic growth remains stubbornly strong. The housing market may have cooled, but the Goldilocks economy keeps chugging along as industrial production and real GDP growth showed few signs of a slowdown in the third quarter. Among investors, the betting seems to be that, with oil prices declining, consumers will have more money to spend on discretionary items. However, a look at industry and sector performance in the third quarter shows that investors are also still concerned about future prospects for the economy.

Real Estate Investment Trusts (REITs) have had one of the most extraordinary multi-year runs ever, and that streak continued in the third quarter as even a slowing housing cycle hasn't had much impact. We've given up trying to predict when REITs will roll over and are pretty much watching in amazement at this point. In the quarter, large companies finally got some attention as investors clearly preferred big companies over small. Value outperformed growth, and stable industries and those tied to consumer spending generally did better than resource companies or anything else tied to the economy. For reference, here's the equity market segment scorecard for the second quarter of 2006:

Source: Thomson One Financial

In addition, here's the stock market index and industry group scorecard for the same period:

Source: Thomson One Financial

In the fixed income market, yields finally dropped across the board and produced a rally in bond prices. The inflation rate came down during the quarter. The Fed finally decided that overshooting the mark on short-term interest rates by nearly 1% was enough, and bond investors also appeared to buy into the idea that the economy was likely to slow. The result was a strong rally on longer maturity bonds and a more modest rally in shorter bonds.

Source: Bloomberg LP

As you can see, we currently have a yield curve that's a tribute to bureaucratic meddling as the short end is clearly out of line with everything else.

Source: Bloomberg LP

We expect the next move in interest rates by the Federal Reserve to be down, but don't expect that until 2007. In the meantime, concern over the strength of the economy and better inflation news should create a favorable environment for bonds. Corporate and Government Agency bonds remain our sectors of choice at present and we did lengthen bond maturities during the quarter in anticipation of a Fed pause. Now that municipal bonds are yielding more that 80% of Treasuries for shorter maturities, they are also becoming more attractive.

As you know, we've been cautious on the outlook for stocks for the last two years. However, we now feel it's time to climb out of the bunker and smell the flowers. At present, stocks are significantly undervalued relative to current interest rates, earnings growth is likely to continue, and lower bond yields should lead to higher equity market valuations. The combination of rising earnings and rising valuations should make investing in the equity market a more rewarding experience in the next two years.

For investors, seasonal and cyclical factors are also lining up. We're approaching a seasonal period (November-January) that typically produces about half the return in stocks over time. In addition, next year will be the year before a Presidential election when double-digit returns in stocks are the norm. By overshooting the mark on short-term interest rates, the Federal Reserve has left itself plenty of room to cut them. As it typically takes about a year for a drop in interest rates to stimulate the economy, we expect the Federal Reserve to find an excuse to begin cutting interest rates in the first half of 2007 to produce the usual improving economy and higher stock prices that are typical of election years.

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

Paul Woods is President and CEO of Odyssey Advisors LLC, an independent investment advisory firm specializing in equity and fixed income management for individuals, entrepreneurs, families, endowments, and non-profit institutions. He can be contacted at pwoods@odysseyadvisors.com

Copyright © 2006 by Odyssey Advisors LLC

Top 11 Signs the Company is Airbrushing Their Earnings.

Shoe-Gasm to You-Gasm.

by Natalie Pace

From Shopping Addiction to the Path of Enlightened Prosperity.

Quotes, exercises and information designed to help you breathe a new you into existence, by incorporating the success secrets of those women who are living the rich life, in the most enlightened sense of the term.  

Every profession has its secrets, and any veteran who makes it into the elite ranks has those secrets imbedded into her bag of tricks by the time her peers acknowledge her. The world-boxing champion may naturally have a mean jab, but along the way, he learned how to dance, how to survive ten rounds of pummeling, and to protect his face and body from deadly punches. The concert pianist may have skill and technique, but before she can fill the Hollywood Bowl, she must infuse soul into the notes and play off of and with the musicians in the orchestra.

Business is no different. There are tried and true secrets that you can learn by trial and error, or you can learn from rising through the ranks, or you can post on your bedroom mirror as the Bible of Business and incorporate/implant into your brain day and night. Either way, it is unlikely that you will be successful until you have mastered the following success secrets of CEOs (Chief Everything Officers).

What is just as valuable, however, are the life enhancing/beauty tips - as in a soul shining beauty - that these women embody. Be prepared to be surprised with their candor. Be challenged. Becoming the most beautiful You imaginable is not really more difficult than the life you currently lead. (As a modern woman, whether you are a stay-at home mom with a thousand different titles or a chief executive officer with a thousand different responsibilities, life is full, rich and challenging!) It is simply different. It is, as Gandhi says, merely becoming "the change you wish to see."

"A "wish" is desire without energy. After a wish may come "intention" - the plan to do a thing, to fulfill a wish or desire. But "will" means: "I act until I get my wish." Paramahansa Yogananda, from The Law of Success

Shine!

Click here to start slideshow.

Websites and Articles of Interest:
Maria Shriver Throws a Great Party for over 11,000 Girl Friends (and one Supreme Court Justice). By Natalie Pace, founder and CEO, NataliePace.com.
Debbie "the Liar" Allen Explains the Ant Dance
Peace on Earth: Weaving a Tapestry of Understanding. By Her Majesty Queen Noor, of Jordan.
DreamWorks Animation Rewrites the Fairy Tale, Putting Three Women In Charge. Q&A with Kris Leslie, DreamWorks Animation CFO. By Natalie Pace.
Let Your Life Speak. by Marilyn Tam, Author of How to Use What You've Got to Get What You Want.
Water: the film. There Are 33 Million Untouchables Living in India Today. One Noble Man Dared to Touch One. One Brave Woman Tells the Story. By Maya Patel. Don't miss one of the best movies of the year!
Inspiring Quotes from 10 Powerful Leaders.
Oprah, First Lady Maria Shriver and Queen Noor. The Enlightened Road to Royalty. By Natalie Pace, CEO, NataliePace.com.
The Million-Dollar Smile and 11 Other Qualities of the Rich and Successful. by Natalie Pace, CEO and founder, NataliePace.com & trade;

Websites:
Anne Sweeney.
California First Lady Maria Shriver.
Ann Fudge.
Debbie Allen.
Her Majesty Queen Noor of Jordan.
Kris Leslie.
Barbara Walters.
Carleton S. Fiorina.
Marilyn Tam.
Isabel Allende.
Deepa Mehta.
Natalie Pace.
Jane Fonda.
Sandra Day O'Connor.
Mahatma Gandhi.
Oprah.

Peace Zones: His Holiness, the Dalai Lama, on the Role of Women

...in the Military, in Business and Raising Peacemakers at Home.

His Holiness, the Dalai Lama, with California First Lady Maria Shriver At the 2006 California Governor and First Lady's Conference On Women © CaliforniaWomen.org

In her third conference as First Lady of California, Maria Shriver outdid herself. She again attracted royalty (this time, The Duchess of York, Sarah Ferguson). She honored some of the most inspiring and successful women in California with Minerva Awards for their roles as "architects for change." Over 13,000 women attended keynotes and breakout sessions on money, career and work/family balance, lead by over 60 inspiring women (and a few brave men), including His Holiness the Dalai Lama, Martha Stewart, the Duchess of York Sarah Ferguson, Tyra Banks, Tim Russert, Governor Schwarzenegger, Maureen Dowd, Anna Quindlen, Suze Orman and Elle Macpherson. The only thing missing was Kleenex during the award ceremony, when the Minerva honorees shared their stories of triumph over adversity - three women who provide shelter for abused women, one woman who invents speedy wheelchairs for the active, vibrant disabled, the first American woman in space - Sally Ride and a relentless warrior for justice, Jane Alexander.

Ed's Note: The Minerva Award honorees are listed by name below.

"All Minerva Award recipients stand as towering examples of determination, true leadership and selfless service," said Maria Shriver. "When these women faced profound obstacles or personal crises in their lives, they dared to envision a better world. By striving to make a difference, these bold architects of change have given us all a stronger, more hopeful California."

Usually, after a day of intense education, Maria proves she is a true Kennedy; she turns the convention center into a party! In 2004, Sheryl Crow rocked the house, singing over an hour of hit songs. In 2005, Mary J. Blige put the groove on. Who could possibly follow an interview with His Holiness the Dali Lama? It was a mystery, and no one, not even my friends who were planning the event, were talking.

It turns out that the only thing that can truly follow a spiritual leader as engaging and delightful as His Holiness is -- silence. During an hour interview between Maria and His Holiness, His Holiness, the Dalai Lama proposed fresh, insightful and unique NEW pathways for peace, alongside giggles and jokes. Then he asked the room of over 16,000 attendees to become silent for three solid minutes of inward reflection.

Would three minutes of silence have the same pizzazz as a rock concert? In fact, it elicited the same giddy, orgasmic smiles from the women exiting the building, as dancing had the two years prior. His Holiness is a rock star, stirring songs of the soul. And many of the lucky women in attendance were still humming his tune over the water cooler the next morning.

To hear His Holiness for yourself, you can simply go to the Conference website. Free downloadable pod casts are available at www. CaliforniaWomen.org.

"I was particularly moved by his belief that women are the caretakers and educators of our future citizens and society," Maria said about her first meeting with His Holiness, when she went to Dharamsala, India to convince him to speak at her conference.

Socially Conscious and Green Conference
This conference is one of those events where everywhere you turn, everything you desire has been handled, and done well. There was a Volunteer Village with over 100 nonprofit organizations represented there. Conference organizers even went to great lengths to limit the conference's environmental impact and promote environmental responsibility. In partnership with the California Integrated Waste Management Board and Greenhome.com, the lunch served to the 11,000 general attendees produced "zero waste," meaning that approximately 10 tons of solid waste from the event will be recycled and reused, rather than being dumped in California's landfills.

More than once during this day of networking and inspiration I overhead, "I wish she were running for office!" So, Maria, if you haven't heard it before, we want Mrs. Schwarzenegger for President! At minimum, we hope you remain the California First Lady next year, if only because you know how to throw one great party for girlfriends!

His Holiness, the Dalai Lama, with Elle Macpherson and the Duchess of York Sarah Ferguson At the 2006 California Governor and First Lady's Conference On Women © CaliforniaWomen.org

His Holiness, the Dalai Lama onÉ
Peace Zones, Not Time Out
"Create a Peace Zone, where children sit and think about how they can make the world a more peaceful place."

Forgiveness:
"Create a distinction between the action and the person. Don't accept the action. Have respect and compassion for the person. That creates the possibility for friendship in the future. If circumstances change, then that person can be a good friend."

On Women in the Military:
"In society, women are by nature more compassionate, more sensitive and should be more successful, in politics, in business and in the military. I feel if women, [who are] by nature more compassionate, more sensitive, take responsibility in the military, obviously, there [will be] more peace."

The 2006 Minerva Awards were presented to:

• Jane Alexander, Co-founder of Citizens Against Homicide
• Sandra Orozco Stapleton, Ramona Delgado and Jennie Hernandez Gin, who founded Women Escaping A Violent Environment (WEAVE)
• Marilyn Hamilton, Designer of the "Quickie" wheelchair and founder of "Winners on Wheels" youth program

The 2006 Lifetime Achievement Minerva was given to:

• Dr. Sally Ride, Astronaut, Scientist and Writer

The Minerva Awards are sponsored by Target. In addition to sponsoring the awards for the third year, Target is also the sponsor of the Minervas of Tomorrow, a group of 500 young women, currently attending high school, college or a university in Southern California, who have been invited to attend the conference by area non-profit organizations.

Health -- Breast Milk: Your Investment in Healthier Children.

Pediatrician Doctor Jay Gordon Speaks Candidly About Breastfeeding, Asthma and Antibiotics.

Dr. Gordon saved my son's ears. When other pediatricians were on a collision course toward ear surgery, and subjecting my four-year-old son to multiple rounds of antibiotics, Dr. Gordon gave me three nutritional tips that laid the groundwork for my son having the strongest immune system of ALL of his friends. The ear infections disappeared, and since then, over the past decade, Davis has only been to see Dr. Gordon for routine check-ups, bumps and bruises and chicken pox! Dr. Gordon always jokes that he does his job too well! Imagine how you will enjoy and invest all of the money you save by having a healthy (and happy) child!

-Natalie Pace

Dr. Jay Gordon is one of the most respected pediatricians in the U.S. Dr. Gordon has long been a proponent of breastfeeding and treatments that promote strong immune systems in your baby and child, so that their doctor visits can be well child checkups, instead of worrisome illnesses. The immune-building techniques of Dr. Jay have saved the ears of children prone to chronic ear infections, saved the lungs of children prone to asthma and saved the smiles of two generations of happier children! (Dr. Gordon was one of the first doctors to give out toys instead of candy to his young patients!)

In July, NataliePace.com subscribers were invited into the chat room for an exclusive chat one on one with the Doc!

Question - Dr. Gordon, what is the single most important thing every parent should know when they leave the delivery room?

Dr. Gordon -- Parents should know that they can leave directly from the delivery room and don't have to submit to hospital routines and long stays. Healthy babies don't need to be "stabilized" or bathed right away. They don't need eye drops routinely. Even when there are no problems, they are mandating the tests for blood sugar, ignoring the fact that breastfeeding-babies utilize mom's milk as a very different kind of fuel. We still use the lab values for formula-fed babies as the standard. This leads to unnecessary intervention. The blood sugar level for a breastfeeding baby can be much lower than that expected for a formula feeding baby and be quite safe and normal. No sugar water, formula or IVs are needed for most of the babies who get these potentially harmful fluids.

Isn't formula an important option for working mothers?

Flex schedules and respect for mothers in the work force is a far more important "option." Formula is not good for babies and creates increased illnesses and hospitalizations.

What's optimal for a career woman trying to balance the benefits of breast milk to her baby? One year of breastfeeding? A few months? Let's say I have a job where I must get back to work within 6 weeksÉ

A year of breastfeeding prevents ear infections, pneumonia, decreases the chance of maternal breast cancer and thyroid cancer, leads to fewer missed work days, and increases job enjoyment, when the breastfeeding is accommodated by the employer or the CEO's mindset. Mothers who breastfeed for a shorter period of time (or not at all) have sicker babies and less satisfying experiences. In spite of the specious reasoning that this is a feminist issue, there is no cause more important to people who support women's equality than promoting and protecting the right to be a mother to the fullest and healthiest extent.

I've heard that a recent study indicates that the bonding, which accompanies breastfeeding helps psychologically.

Yes, a stronger bond can be formed because of breastfeeding -- a hormonal and psychological bond. Certainly mothers who artificially feed can be wonderful mothers. But there should be business and government protection for moms who choose to nurse. We are the ONLY civilized nation without this protection. Financial support for fulltime mothering exists in every other country. Western Europe has paid maternity leave for all mothers, full pay in almost every single country for 6-12 months.

I received formula samples, but I was really clueless on how to begin breastfeeding. I didn't really even know if it was working the first time I nursedÉ

Yes, it's very easy to get formula samples and information, and nowhere near as easy to facilitate breastfeeding information and assistance.

Can we do something to get this important information out to new moms in the hospital?

The AAP is pretty reticent about emphasizing this because they are quite dependent on money from the formula and pharmaceutical industry. They fund our conferences.

What about circumcision? I've heard of more and more people opting not to circumcise these days, and I'm really not sure which way I'll go when the time comes to make the decision.

Circumcision can be an easy choice for most parents because the medical benefits really don't make much sense. The latest report from Africa claiming that circumcision will decrease the transmission of AIDS is not very logical. The downside to the surgery in the Third World could be huge. Condom use and education will prevent AIDS.

There's not really a downside to the surgery here in North America, is there?

In America and most other countries, the surgery is painful and of no benefit to the boy. The AA of Pediatrics has recommended against routine circumcision.

You're kidding! Things have changed since I gave birth to my son! Can you talk about problems like ear infections and doctor-prescribed year-round antibiotics?!

A poorly informed doctor! Antibiotics lead to tubes and surgery! That's actually fairly simple reading and knowledge for a doctor and should be the same for a parent. It's not though.

Antibiotics are not the best option for most sick kids. Formula-feeding dramatically increases the chance of ear infections and all other infectious illness in infancy and in toddlers too. The nutritional paradigm of placing cow's milk formula and then whole cow's milk at the top of a child's diet creates illness. We have known this for years, but the economic issue and nutritional ignorance dominate the discussion and practice.

Calcium requirements have been grossly over-estimated for decades and decades to promote the food industry's agenda. Think about it: We have virtually ZERO calcium shortage in American's diets and yet we have a very high rate of osteoporosis. And this relationship between high-dairy diets and osteoporosis persists in the study of most countries' diets. Salt in the diet leads to calcium excretion in great amounts. NaCl in, CaCl out. A high protein diet also increases calcium excretion as the body has to deal with the phosphate and sulfate ions from protein. The truth does not get trumpeted well because media is dependent on ad dollars from the food industry. Doctors get bought off so cheaply it's almost unbelievable; pens, doughnuts, notepads. Used to be airline tickets and cashÉ Damn!

Actually, I could still fly to a conference anywhere if I asked a pharmaceutical representative for an honorarium. I have personal knowledge of this. Doctors are often smart and helpful and yes, we are also "on the take."

What about asthma?

Asthma is increasing because we have bad air and a lot of toxins in everything from our mattresses and pillow to our food. Anti-allergy measures will mitigate the impact of this airway disease. But sometimes medicine is needed to get through the worst days, months or years. Most kids outgrow asthma.

What do you recommend to parents who have children with asthma?

I use diet and natural remedies whenever I can but I also rely on allergists and medication to bail me out with tougher kids. The first things to do are to minimize food allergens like dairy, eggs, peanuts, wheat, and to control dust, to filter air and to move stuffed toys out of the bedroom. Herbal remedies work, just not every time. I've seen kids who seemed to get better almost overnight when parents took the relatively simple steps above.

How do you suggest treating MRSA?

MRSA [methicillin resistant Staphylococcus aureus ] still responds to a couple of antibiotics even though it keeps getting harder to treat. A doctor needs to send her patient to an infectious diseases expert right away if she is puzzled by this illness. For MRSA, I will go right to the drugs! Nasal sprays and washes will prevent colonization and infection. Topical fresh aloe vera treats infections too. But MRSA is an urgent situation.

Any last words for our readers?

Nobody will ever know your child was well as you do. Don't accept treatment without questions. And don't be dissuaded from getting treatment when you think your child needs it.

Jay Gordon, MD, FAAP, IBCLC - In the middle of his residency training, pediatrician Jay Gordon took an unusual step. Deciding that he needed greater knowledge about nutrition, vitamins, and alternative medicine in order to practice medicine the way he wanted to, Dr. Gordon took a Senior Fellowship in Pediatric Nutrition at Sloan-Kettering Institute in New York City. After his residency at Children's Hospital of Los Angeles, Dr. Gordon joined the teaching-attending faculty at UCLA Medical Center and Cedars-Sinai Medical Center.

Intensely interested in infant nutrition and breastfeeding, Dr. Gordon is the first male physician to sit for and pass the International Board of Lactation Certification Exam. He has served on the Professional Advisory Board of La Leche League for twenty years. Dr. Gordon treats patients at Santa Monica, California. In addition, he finds time to participate in the training of medical students and residents, lecture all over the world, write books, and contribute to AOL with the Ask The Pediatrician weekly chat. He writes a monthly column for "Fit Pregnancy" magazine and has recently contributed to "New York Parent," "Parenting" magazine and has been quoted in the L.A. Times, New York Times, London Times . . . and many other times.

Busy as he is, Dr. Gordon finds that his most challenging job is "being a good husband and the best possible parent to my 16-year-old daughter.

Books:
Good Night! The Parents' Guide to the Family Bed
Listening To Your Baby: A New Approach to Parenting Your Newborn.
Good Food Today, Great Kids Tomorrow

Other Articles of Interest:
"Mother's Milk: It Does a Baby Good." By Doctor Jay Gordon.

Goldman Sachs' Executive Retires to Mommyhood: Colic Hell.

Excerpt from the book, More Than 85 Broads.

by Janet Hanson, founder of 85 Broads, a Global Women's Network.

Continued from last Volume 3, issue 11, from the chapter ÒA View From a Broad.Ó

February 19, 1991

April 20, 1991

July 9, 1991

July 18, 1991

August 18, 1991

October 16. 1991

October 3, 1992

July 29, 1993

September 13, 1993

Not long after, I left Goldman Sachs for the last time. I had "outgrown" the firm and had never been able to resurrect my career. I had many wonderful friends there but I just couldn't make a go of it. Jeff and I decided we'd try our hand at consulting so we formed Hanson Consulting Group. Jeff did consulting work for Lehman Brothers and I worked for Citibank on a project in their Fixed Income Division. One day, I got a call from our accountant, Phil Strassler, who thought I should meet one of his clients in Greenwich, an interesting guy by the name of Dort Cameron. Jeff and I had been thinking about launching an asset management company called Learning Assets. Our plan was to launch a money market mutual fund and give part of the fees to educational causes. Dort liked the idea and being one of the legendary "deal guys," he agreed to help us get our fund off the ground.

It turned out that linking fees to charity wasn't going to fly so instead we named our new firm Milestone Capital Management. One of the dictionary definitions for milestone is "turning point." After six very tough years, it certainly was exactly that. As a business partner, Dort was tough, brilliant, and one of the most decent, generous, and honest people I'd ever met in all my years in the business.

Milestone grew steadily thanks to a strategic partnership we formed with Bear Stearns to market our fund. They were great partners and once again, it was thanks to a friend that we were lucky enough to forge that relationship. Phylis Esposito had left Goldman and ended up at Bear as a senior managing director. It was at her request that we come in to see the management team at Bear Stearns. Jeff and I gave a one-hour presentation and the strategic partnership was essentially forged by the end of the meeting. For the next few years, we had an amazing relationship with the folks at BearÑ primarily through Mike Minikes, the firm's treasurer, who was just as tough, as brilliant, and as fair as Dort had been.

On November 17, 1997, I sent an invitation out to 30 of my closest former female Goldman colleagues to join me for dinner at the Water Club in New York City for the "first GS women's reunion." None of the invited women knew that 85 Broads was about to be unveiled. My sister, Mary, had designed the T-shirt, which showed a woman standing on a ladder, nailing up an "s" on a signpost that read "85 Broad." I had come up with the name for the network one afternoon when I was out walking our dogs. 85 Broads was now a reality, and Goldman's headquarter address, 85 Broad Street, would never again be thought of in quite the same way.

Thirty women came to the dinner, many of who tell their unique stories in this book. A few weeks after we held our mini-reunion, I sent a thank-you note to all the attendees. I included an article written by Darla Moore, president of Rainwater Inc., which had just appeared in the December issue of Worth magazine. She was responding to criticism from women after being referred to as a "babe" in an article in Fortune magazine titled "The Toughest Babe in Business." In the Worth article she stated:

I laughingly suggested to the new members of 85 Broads that we send a one-liner to Darla that said:

HEY BABE! GOOD LUCK FINDING ANOTHER BABE TO HAVE LUNCH WITH!

To be continued next monthÉ

In her new book, More than 85 Broads, trailblazing superstar Janet Hanson introduces us to some of the most remarkable, courageous, and successful members of 85 Broads, a global women's network she founded in 1999. Women--and men--will want to discover "the power of the network" at every stage of their careers and lives.

 

The Prosperity Game.

An excerpt from the book Ask and It Is Given: Learning to Manifest Your Desires, by Jerry and Esther Hicks.

Play the Game of Millionaires to Become One.

In this process, you will begin by establishing an imaginary checking account. In other words, there will be no actual bank involved, but you will make deposit entries and check withdrawals just as if it were an actual account. You could use an old checkbook system that is no longer in use, an accounting program in your computer, or you could even manufacture a complete system by using a notebook as your checkbook register and blank pieces of papers for your deposit slips and checks. It is of value to make this process feel as real to you as possible.

On the first day, deposit $1,000. And spend it. In other words, make a $1,000 deposit entry into your checkbook register, then write out checks to spend those dollars. You could spend your money all in one place, using one check, or you could spend it for several different things, using several different checks. The point of the game is to have fun thinking about what you would like to purchase, and to enjoy the process of actually writing out the checks.

Be descriptive on the memo portion of the check. For example: For a beautiful writing pen or Great running shoes or Membership at Gordon's Health Spa. You can spend it all today, or save some of it for another day. However, we encourage you to do your best to spend it today, because tomorrow you will be making another wonderful deposit.

On the second day, deposit $2,000.
On the third day, deposit $3,000.
On the fourth day, deposit $4,000.

When you reach day 50, deposit $50,000. When you reach day 300, deposit $300,000. If you play this game every day for one year, you will have deposited and spent more than $66 million.

You will be benefiting by increasing your ability to imagine. In other words, you will discover, as you play the game for a few weeks, that it will begin to take real concentration to spend that much money. And so, your ability to imagine will expand tremendously.

Most of our physical friends really do not exercise their imagination very much. Most people offer their vibrations almost exclusively in response to what they are observing, but by playing this game, you will find yourself reaching for new ideas, and in time, you will feel the expansion of your own desire and expectation. In doing so, you will benefit by shifting your point of attraction.

You see, the Universe is responding to your vibrational offering, not to your current state of being. So, if you are giving your attention only to your current state of being, then your future evolves much the same. But if you are giving focused attention to these wonderful expanding ideas that this game evokes from you, the Universe now responds to the vibrations of those thoughts.

The Universe makes no distinction between the vibration you offer in response to what you are living and the vibration that you offer in response to what you are imagining, so this Prosperity Game Process is a powerful tool for shifting your vibrational point of attraction.

You can play the game for a short time, or you can play it for an entire year or more. Whatever you choose is appropriate. It may feel awkward in the beginning, but the longer you play the game, the more expansive your imagination will become. And as your imagination expands and you focus on the spirit of fun and expansion, your point of attraction will shift.

By writing the checks, using your imagination, writing the memos, focusing as you write, and feeling no resistance as you write the checks because there is no fear of overspending, you will achieve what is necessary in the achievement of anything: You will have made a statement of desire while you are in the state of non-resistance, or better said, in the state of allowing.

So, not only will you have the benefit of an expanded imagination, but your point of attraction will shift, and your life experience will then shift as well. Not only will your financial situation improve, but all manner of things that you have focused on with pleasure will begin to flow into your experience.

You can start the game or stop it, and you can play it in any way you like. There are no rules; there is nothing that you should or should not do. In other words, pick it up and play with it. Spend as much as you want. But the important thing is: Do your best to exercise your imagination.

If you were a sculptor on your first day of sculpting, you would not take your big clump of clay and throw it down on the table and say, "Oh, it didn't turn out right." You would mold it. You would get better at it. You would get more clay. You would get different-colored clay. You would find a way to continue to evolve in your creative endeavor. And yet, when it comes to the creation that you mold with the clay of the Energy that creates worlds, most of you make no conscious effort to direct your thought. In other words, it is as if somebody else took the clay and threw it down there, and now you spend your life just talking about how it looks.

"Well, that didn't turn out very good. My parents should have done something different about that," or "The economy should be doing something different than that," or "There is injustice or unfairness," or "I don't like the way somebody else dealt with that." We say, "Get your hands in your own clay! Summon the Energy through the power of your desire, and mold it through the power of your imagination."

A friend said to us recently, "Abraham, I don't think you care if my lover ever comes to me. I think you want me to get so good at imagining him that I don't notice that he's not here." And we said, "That is exactly right, because when you are imagining that he is here, then, in your joy, in that moment, you vibrate in a place where you summon and allow GOD ForceÑLife ForceÑto flow through you. And there is nothing more wonderful than that."

And then we said, "Oh, and by the way, when you get there, he cannot not come. But as long as your desire for him to come is more about your awareness that he has not come, not only can he not come, but the misery that you are feeling in that moment is because you are choosing a vibration that does not allow the Energy that your desire is summoning."

Joyously playing this Prosperity Game will not only improve your financial state of being, but every aspect of your life will improve as well. It will not only help you activate more vibrations around things that you want, but it will assist you in focusing, more of the time, in a way that allows the things that you want to flow into your experience.

Playing this game will cause you to offer a more expansive, expectant vibration. And it is our promise to you that manifestations will begin to arrive in response to your changed vibration.

The Prosperity Game is taken from the book Ask and It Is Given: Learning to Manifest Your Desires, by Jerry and Esther Hicks. Look for the authors' other book, The Amazing Power of Deliberate Intent, which was released in January 2006. Both books are published by Hay House and available at all bookstores or online at: www.hayhouse.com.

Call It Your "Buy My Own Island" Plan.

by Natalie Pace.

Including 6 Easy Tips for a Fiscally Fit 401 (k).

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

Retirement plan. Who picked a name that sounds about as inviting as a root canal for your most important budget line item? How about my "Buy My Own Island" plan? Wouldn't you get a little more excited opening up one of those?

Did you know that the stock markets, on average, have returned over 10% annually for the past 37 years, which is higher than real estate (6.7%), bonds (8%) and even gold (7%)? Your "retirement" plan is really your ticket to financial freedom - whether you choose to do nothing, to build your dream home or even to launch a new business.

If the thought of managing your own 401 (k) makes you postal, relax and take a deep breath! This is the beginning of having more fun with money. You've always wanted to win the lottery, and this is your chance to earn while you sleep. It's not as hard as you think, and you are not going to lose it all, provided you follow a few basic rules of thumb. Besides, most employers will match at least a portion of the money you put into your 401 (k), which is like an instant raise!

Freedom Plan Starting Point:

1. Tithe to Yourself. Take 10% of your gross income and allocate that to your new Freedom Plan, aka 401 (k), Roth IRA, etc.. Ask if your employer will match at least a portion of your contribution. If you are self-employed, your tithe to your Freedom Plan should be the FIRST check you write each month. (You can set up your own Individual Retirement Account through any online or brick-and-mortar brokerage.)
2. Play it Safe: Take a percentage that is equal to your age and assign that to the Money Market account. Money Markets are very low risk, and are no risk at all, if they are backed by the FDIC. If you are ultra-nervous about investing, add 5-10% to the money market. 20-year-olds keep 20% safe because they still have another 45 years to get it right before retirement. 60-year-olds keep 60% or more safe because they are retiring in 5-10 years and need to be sure that they've got enough in their Freedom Fund to live the great life!
3. Diversify: Diversify the remaining money into different exchange-traded funds. You can weight into higher-performing assets, like small cap stocks, and assign less into lower-performing asset classes, like gold or real estate, as you desire, but make sure that you are not over-concentrated in any one sector. Pick at least four different types of funds, so that you can watch how each one performs.
4. Bi-annual Beauty Treatments: Plan on looking at your Freedom Plan at least twice a year to make adjustments as needed. For instance, in October 2002, with savings accounts and money markets returning less than 2% and the stock markets at a 4-year low, it was a good time to shift money into the stock market and out of the money market fund. (Buy low; sell high works every time.) September, which is historically the worst-performing month of the year, and January, the strongest performing month, are good times to review your freedom plan - January to see where you might take some profits (or sell), and September for the Back to School stock sales (for good buys)!
5. Enron-proof your Freedom Plan: invest no more than 10% of your Freedom Plan in your own company stock. The biggest mistake employees at Enron made wasn't working for Kenneth Lay and Jeffrey Skilling, it was investing (and losing) 57.3% of their nest eggs in the company!
6. Choose Exchange Traded Funds or Index Funds over Mutual Funds. Check with your broker and/or brokerage, for a list of funds, or browse the offerings at American Stock Exchange (www.amex.com) for the most comprehensive listing of ETFs. If your company's choices are too limited, check into the possibility of rolling over the company 401 (k) to an online discount brokerage (or a full-service brokerage) where the choices tend to be more flexible. There are qualifying events that enable you to rollover without any penalty or fees at all.

You can do this. You have what it takes. The more you learn, the more you'll gain. It all starts with the first monthly deposit, and a new attitude of calm, faith and confidence, instead of fear and loathing. May your freedom plan yield as luscious a future for you and your loved ones, as mine has for me.

Other articles of interest:
From Flipping Burgers to Owning Your Own Island. By Natalie Pace, NataliePace.com CEO and founder. How tithing 10% to Your Nest Egg will make you a millionaire, even if you're only bringing home $30,000.
Investing is Not Surgery. Brokers are Not Surgeons. Why wise, informed, personal, daily, healthy choices keep you fiscally fit. By Natalie Pace, NataliePace.com CEO and founder.
Want a Raise Now? It Could Be a Check Mark Away. by Maya Patel.
Leave Your Job, Not Your 401(k) By Maya Patel. Discount Brokerages Make Rollover IRAs Easy.
NASD Investor Alert: Putting Too Much Stock in Your Company - A 401(k) Problem
What the Mutual Fund Salesman Forgot to Mention. by Paul Woods, President & CEO of Odyssey Advisors, LLC.

How to Use Health Savings Accounts (HSAs) as a Strategic Investment Vehicle.

Many people don't know that Health Savings Accounts  (HSAs), in addition to serving as a deposit account for the payment of  medical expenses, can also function as a strategic investment vehicle in  addition to traditional 401(k) plans. For those people who max out annual 401(k) contributions, either due to government or company contribution limits, HSAs can actually serve as a supplementary retirement savings tool.

According to Brad Arends of Alliance Benefit Group, a third party administrator of these accounts, any given workforce generally contains two distinct groups of HSA users.

1.   "Spenders" are what Arends refers to as the traditional investors.   They comprise approximately 60 percent of the HSA user population.  These participants use the account to cover current out-of-pocket medical expenses and take advantage of the lack of a "use-it-or-lose-it" provision so that the money they put into the account rolls over each year.   These Spenders put high value on HSAs that include an interest bearing account and have convenient distribution options (e.g., debit card) and reasonable fees.

2.  "Savers" comprise the remaining 40 percent of HSA users.  They use their HSA as a strategic savings vehicle and expect an investment menu similar to a 401(k) plan with high quality funds from multiple fund families. According to 2005 research from Alliance Benefit Group, Savers contribute 58 percent more money to their HSAs than Spenders do in a given year.

Currently, most HSAs are offered by banks catering primarily to the Spenders. The investment offerings are generally limited to four or five proprietary mutual funds and usually require maintenance of a minimum balance in the bank's deposit account (usually between $1,000 and $2,000) to access the funds.

If you are a company that is interested in HSAs for your employees, please call Charles Schwab at 1-800-435-4000 and ask for a referral to Brad Arends at Alliance Benefit Group. Mr. Arends is available to discuss how companies can successfully implement and manage HSAs; how HSAs differ from traditional flexible spending accounts; and how HSAs are evolving to provide more strategic investment tools for participants.

When considering any investment, investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges and expenses. You can request a prospectus by calling Schwab at 1-800-435-4000. Please read the prospectus carefully before investing. Past performance is not a guarantee of future results.

Is it Too Late to Get in on Gold?

Will Prices Surpass the Old High of $850? Learn from gold mining expert Rob McEwen, CEO and Chairman of U.S. Gold.

On August 22^nd, 2006, I hosted Rob McEwen, CEO and Chairman of U.S. Gold, on the Forbes.com Video Network (click to watch the video). During his 18 years at the helm of Goldcorp, Robert McEwen survived a bitter 46-month labor strike, found new reserves in a tapped out mine, set industry standards and added billions to his company's bottom line.

Rob McEwen, Chairman and CEO, U.S. Gold Photo Credit: Norm Bettis

Welcome Rob. Since you're an expert in the field, let's talk about gold as a hedge against inflation. Obviously the Feds are worried about inflation and so are investors. So how do you use gold to balance your portfolio in days like today?

It depends on your risk orientation, but historically people put 5 to 10 percent of their portfolio into gold. It has been both for a deflationary tool and for inflation.

So it's just a good way to balance and diversifyÑthose are always good things in a portfolio anyway. I would worry about getting in right now. Since 2000, your former company Goldcorp has gone up about 1000 percent. Gold prices are high. Isn't it too late? Do you wait? Do you hang on? Do you sell?

I think it's still a good time. We had a major correction in May/June. That established a bottom. There has been consolidation. The summer is often a quiet period. August to late August is a good time to get in, and historically the markets continue to climb through to the year-end.

So you think there still is a bit of upside? I mean isn't $600 too expensive for gold?

Oh no, not at all. If you think of the audiences from 2001 to 2004, we watched the dollar drop against the price of gold, or gold climb in dollar terms. So the audience was 300 million people. In the beginning of 2005, we saw problems in the foreign currency market, when France and the Netherlands rejected parts of the European Union Constitution, and gold started going up against the major trading currencies. So now your audience went from 300 million, basically the population of America, to the world, which is 6 billion. So there was a twenty-fold increase in the audience looking at gold. So we are at the beginning of this move. I would say that we're going to see prices well above the old high of $850, and we have three to four years to go.

You can't just think "Whoo Hoo! It's a boom in gold!" You also have to ask, "Well who's going to mine it? Who's going to manage the mines? How is the cost of production going go up?" What do you say to that?

Well you are going to have specific risks with each company. Geopolitical [concerns] are probably the big ones right now. There has been nationalization taking place in a number of countriesÉ

In which countries?

Venezuela, Bolivia. Tax rates have been raised in Mongolia, and some of the former Soviet Union. So you may have an investment in a specific country, but you have to be really wary of the political risk. You have to be wary of the currency because if the currency happens to be appreciating against the dollar, your costs are going up to operate in that country.

Now we do know you do have a new company. Where are you based out of and what made that particular area attractive to you? I mean you have one of the best reputations in the business, are you still the single largest independent shareholder in Goldcorp?

Yep.

So you don't need the money, you've got a reputation to protect and you've gone and are prospecting down where now?

Nevada.

Nevada. What made that attractive? What gold bug drew you down there?

There's been a major discovery in 2003 that is right next door to the property that I bought. Nevada is probably the most mining-friendly state. If you treated it like a country, it would be the 3^rd largest gold producer in the world, and a lot of people don't know that. So you have the infrastructure there, you have the labor there, and you have a mindset to encourage it because well, next to gambling, gold is the largest employer.

Rob McEwen is the Chairman and CEO of U.S. Gold and one of the most respected and successful CEOs in the gold business. He was formerly the Chairman and CEO and of Goldcorp for 18 years.

Dow 12,000! Do You Sell, Wait or Buy?

by Natalie Pace.

Includes our Hot News on Cool Stocks List.

Featuring 28 great companies earning almost 50 cents on the dollar every year, according to TipsTraders.com, versus just seven that have gone slightly south.

Natalie Pace, NataliePace.com CEO and founder

There are a few important considerations that spell NASDAQ over DJIA, in my view. First, with corporations hiring and spending money (after six years of reining in their costs), computers and software are on the top of the shopping list at major corporations. Corporations need to invest in new technology to keep productivity high and their products and profit margins competitive. In today's world of video on demand and video-rich content, yesterday's computers and software can't power you. Check the Price to Earnings ratio, however, to make sure that you are not overpaying for your IT company.

Corporations have the money to invest in technology these days. According to Tobias Levkovich, the Chief Analyst at Citigroup, cash levels in Wall Street companies are high. In the first quarter of this year, publicly traded companies, excluding the financials sector, boasted 21% cash compared to market capitalization. During the boom/bust period of 1999/2000, cash levels were just 11% of market cap. (Cash levels were at 24% at the market low of Oct. 2002.)

Another big (and largely overlooked) drain on the Dow is the defined pension and health plan obligation. These debts are concentrated in legacy corporations. In some corporations, like General Motors, Ford Motor Company and Goodyear Tire, the obligations the corporation has to its retirees for pension and health care EXCEED the market capitalization (or the market value) of the company.

Source: Standard and Poor's

Currently, pension obligations are not listed on earnings reports, however, the Financial Accounting Standards Board (FASB) has changed that. The FASB has issued a new accounting standard that requires publicly-traded companies to recognize the amount owed to their pension and OPEB obligations on their earnings reports effective December 15, 2006.

It is unclear just what will occur on Wall Street when Blue Chips, like GM, Ford, AT&T, Exxon Mobil, Boeing, IBM, Du Pont, Altria, Lockheed Martin, Caterpillar, Goodyear Tire, Alcoa, Pfizer and Chevron, all reveal that they owe between $5 and $69 billion a piece to retirees. Standard & Poor's believes that "the FASB phase 1 implementation will be a wake-up call to investors when they get their 2006 reports," and that shareholders will experience, on average, equity reduction in the 8-9% range.

With the Dow Jones Industrial Average trading near all-time highs, the beaten-down NASDAQ, which hosts a large percentage of information technology companies with no pension obligations (most have 401(k)s, not defined benefit plans), may be a safer haven for investors trying to pick up a few presents during the annual Santa rally.

For more information and for a line item listing of the companies in the Dow Jones Industrial Average and their debt and pension obligations, read the articles, "Wow Dow" in this ezine, and "Faded Blue Chips," in volume 3, issue 8.

EDUCATIONAL OPPORTUNITES AND INFORMATION:

1. Higher Interest Rates? The Federal Open Market Committee paused in September, August and October, after raising interest rates 17 consecutive times in previous meetings. The federal funds rate remains at 5-Å%. "Readings on core inflation have been elevated, and the high level of resource utilization has the potential to sustain inflation pressures. However, inflation pressures seem likely to moderate over time," according to the Federal Open Market Committee press release. The next FOMC meeting is scheduled for December 12, 2006.
   
   
2. Interested in reading the minutes of the August meeting for yourself? You can. They are available online. Click on FOMC Press Release to read! The tentative meeting schedule for the rest of 2006 is: December 12, 2006. The 2007 calendar is: January 30-31, 2007, March 20-21 (Tuesday-Wednesday), May 9 (Wednesday), June 27-28 (Wednesday-Thursday), August 7 (Tuesday), September 18 (Tuesday), October 30-31 (Tuesday-Wednesday), December 11 (Tuesday), January 29-30, 2008 (Tuesday-Wednesday). The fact that the Federal Open Market Committee has decided to increase the number of 2-day sessions from two to four is an indicator that there is double the concern over managing the economy in the coming months and years.
   
   
3. Chat with Natalie Pace on November 15^th, 2006, at 8:45 a.m. PST. Subscribers Only! Are you interested in diversifying through international investing? In figuring out what to do with the Dow at an all-time high! Want to capitalize on this year's Santa Rally? Should you sell or buy? Ask one of the most successful stock pickers on Wall Street.

Bottom Line: NataliePace.com is providing you with news and important information, but you need to consult your financial planner to determine your best strategy for using the information. That will depend upon your age, your retirement plan, and your risk tolerance and portfolio diversification. The stock portion of your portfolio is a higher risk classification, where you ideally seek to gain higher returns. As the NASD said in a recent investor alert, don't bet the farm on the stock market. NataliePace.com is NOT a brokerage and doesn't operate or act like one. We are an online media service with a mission of providing the news and information you need to make better choices in business, investing and personal prosperity. Always consult a trusted financial professional before buying or selling any security.

Full disclosure: I have listed the companies that I own under the column "NP OWNS?"

Hot Stocks
Investors who "never pay retail," note that highlighted stocks are trading at their 52-week lows or near the price featured in NataliePace.com's article. This may be a good buying opportunity. The companies that are listed below which are not highlighted may not be in a good buying range, but they appear to be poised to continue performing well. 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.

Highlighted Companies (Hot List):
Citigroup (C)
Genentech (DNA)
MEMC Electronics (WFR)
Sirius Satellite Radio (SIRI)
Suntech Holdings (STP), a Chinese-based company, ADR
U.S. Gold (USGL), trading off the boards in the US and on the TSX.

Highlighted Companies (Cooling Off List):
American Airlines
General Motors

DELETIONS:
Bioteq Environmental. (Microcaps are extremely vulnerable to changes in the weather. With builders and real estate falling off, so could demand for commodities, which could mean less money spent on environmental clean-up.) 144% gains are good enough for us.

Sony (NYSE: SNE) and Sunoco (NYSE: SUN) both had great runs for the list! LifeCell (NASDAQ: LIFC) posted over 180% gains before being added to the Watch list. Bioteq Environmental (TSE: BQE) had 144% gains.

Stocks to Watch
Great Companies. The companies that are listed are worthy of watching and might be worth buying in on opportunity (i.e. at a better price), if you believe the news on future potential. 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.

Cooling Off Stocks (that may be in Profit-Taking Range).
Note: We may look to add some of these companies to our Hot News list again, if the price point should become attractive and if the outlook for the company improves. The companies listed in bold have recently been added to this cooling off list and/or may be currently poised for a continued 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. (The stocks on this chart are expected to go down in price.)

HIGHLIGHTED COMPANIES:
General Motors

DELETIONS:
IMClone, Verisign and Yahoo.

The following companies were taken off of the Cooling Off list effective 10.16.06. Verisign (+15%). IMClone (-11%). Yahoo (-28%). (The cooling off list anticipates that a company will lose share price value.)

Please note: NataliePace.com does not act or operate like a broker. We are a media and information center. 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/or consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.

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

NataliePace.com Calendar.

Below are just a few highlights of conferences, chats, film festivals and other opportunities this month!

Carleton Fiorina Former Chairman and CEO, Hewlett-Packard	1. Monday, November 6th, 2006 NYC Women's Conference: Featuring Carly Fiorina! The Women's Leadership Exchange is hosting a day-long conference with inspiring leaders and motivated women. Your chance to network, get informed and inspired and learn from some great business leaders (including the founding CFO of iVillage, Beth Polish)! Keynote: Carly Fiorina, former Chairman and CEO, Hewlett-Packard.
The 2004 Artivist Awards Reception in at the Egyptian theater.	2. Thursday, November 9th, 2006 the Artivist Film Festival & Awards Where: at the Egyptian Theatre in Hollywood, California, from Nov. 9-12, 2006. The Artivist Film Festival & Awards seeks to address the importance of art & activism in our global community. They will be honoring celebrity activists Joaquin Phoenix, Daryl Hannah, and Matthew McConaughey, and screening 65 International Films.
Natalie Pace,NataliePace.com CEO and founder.	3. Wednesday, November 15th, 2006 8:45AM through 9:30AM PT Ask Natalie Online Chat: The Dow is at an all-time high! The Santa Rally appears to be in full swing! Should you sell or buy? Ask one of the most successful stock pickers on Wall Street. (Subscribers Only.)

Check the Calendar section of NataliePace.com frequently for a listing of Important Events like these, including Chats, Galas, Conferences and more.

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