Bill and Nilo Bolden’s Very Healthy Nest Egg (and How You Can Have One, Too!)

by Natalie Pace.

On January 22, 2008, after the Dow Jones Industrial Average had tumbled from its high above 14,000 in October 2007 to below 12,000, Bill Bolden noticed that he and his wife had lost a chunk of money, and came to me to find out a better way to protect his nest egg. We like having breakfast at the same local dive, and while I ate my juevos con chorizo and he had his eggs ranchero style, I outlined a basic strategy on a napkin. Here’s my Golden Nest Egg Formula:

GOLDEN NEST EGG STRATEGIES
NOW IS THE TIME FOR SOUND NEST EGG STRATEGY

1. Always Keep a Percent Equal to Your Age Safe, i.e.: not in the Stock Market, not in Mutual Funds, ETFs.

Safer assets include Treasury Bills, Bonds, Cash, Certificates of Deposit and Money Markets. (Money Markets are not as safe today, but will be in the future and were in the past.)

2. Remainder in Your Nest Egg Should be Diversified Over Eight Areas (See the pie charts below for an illustration of this)

• Small Cap Growth
• Small Cap Value
• Mid Cap Growth
• Mid Cap Value
• Large Cap Growth
• Large Cap Value
• Clean Energy
• International

If you were diversified and rebalancing at least once a year to match the formula outlined in point one and point two, you would have been protected from the Internet bubble and today’s financial crisis. If you did not diversify in the past, now is the time to do it.

3. Don't be Seduced by the Highest Interest Rates. Stability counts! IndyMac , the failed bank, had the most aggressive Certificate of Deposit and savings interest rates before the FDIC seized the bank.

4. There are Treasury Bill ETFS. Check out www.powershares.com, www.ishares.com, www.amex.com to find them. You don’t have to freak out and get too fancy the first time you start employing this formula. ETFs make it easy, and as you learn more over time, you can start adding a bond portfolio into the safe portion of your portfolio.

5. Google is Trading at a 4-Year Low. Now is a great time to invest in the new Blue-chips, like Google and Apple, (General Motors is no longer a great blue-chip for your portfolio.)

You can see what the Top 25 holdings of the Exchange Traded Fund you are interested in are by: 1) Going to NataliePace.com 2) Entering the three or 5-letter symbol of the fund in the Research Now box, 3) This takes you to the Stock Page for that fund, where you can click on the link to the Top 25 Holdings.

Why Clean Energy?
Clean Energy was the top performing industry in 2007, and it is the wave of the future. You didn’t want to be invested in the horse and carriage stocks when the car was invented and you don’t want to be invested in dirty energy when people can now power their electric cars by plugging into a wall socket that is transmitting energy generated by solar and wind.

General Motors and Ford Motor Company banked on SUVs and Hummers at a time – 2004 -- when Toyota won Motor Trend’s Car of the Year for its Prius hybrid. As a result, General Motors and Ford Motor Company shrank from over $27 billion and $29 billion in stock market value (in 2004) to just $5 billion and $10 billion, respectively, today. Ouch! Toyota is now the number one auto company in the world with a $126 billion dollar market value, over $246 billion in sales and $15 billion in income. By comparison, General Motors, formerly number one for most of the last century, brought in $171 billion in sales, with a net income LOSS of -$62.76 billion last year (source: MoneyCentral.msn.com).

Why Exchange Traded Funds Instead of Mutual Funds?
Exchange Traded Funds tend to be more targeted than Mutual Funds. Mutual funds often cast too large of a net. In other words, the Mutual Fund might include Medium and Large Cap stocks in your Small Cap Value whereas ETFs generally do not.

What are Small, Medium and Large Caps?
As a basic guideline, companies that are worth more than $10 billion on the stock market are considered to be large capitalization stocks and are stabilizers for your portfolio. They provide steady, but not impressive growth, generally, and oftentimes pay dividends.

Mid Caps are between one and $10 billion, and Small Caps are companies that are valued at less than $1 billion. As you can well imagine, small cap companies are typically younger and have the potential for more explosive growth in earnings, which means that they can provide a greater return in share price than the large caps. They are also more vulnerable.

The Internet Bubble and bust was a collection, largely, of small cap growth stocks in a new, innovative industry. That industry spawned new Internet Blue Chip Large Cap stocks, like Google and Apple. It also spit out the online toy retailer, eToys.

Here are a few examples of large, medium and small cap companies that are currently traded. Google at $138 billion is a large cap. General Motors, which used to be a large corporation, is now a mid cap at $6 billion. Hoku Scientific, a new silicon manufacturing company, is a small cap at $128 million in market value.

So, whatever happened with Nilo and Bill’s nest egg? Did they employ my napkin strategy? Here’s what Nilo has to say, in her own words:

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

I had some of my staff make changes as well. So they are very happy. I am also in the process of moving the firm's plan to a better vendor after seeing that our current plan didn't have many of the investment options Natalie had mentioned. I would have been a very unhappy person, if I had not taken Natalie’s advise.

Nilo Bolden

Law Firm Administrator

So, now’s your turn to rely on the napkin strategy to enrich your own golden nest egg! NataliePace.com subscribers have started quite a dialog on the Sharing Wisdom bulletin board, sharing their experiences and different products they have found on their own. Go to NataliePace.com. Click on Sharing Wisdom. Enter in your subscriber passwords. (You can try us for 30 days free at the Join Now link or subscribe there if you wish as well.) Click on the Topic: Nest Egg and the 50%.

Natalie’s Note; Please note that the percentage you keep safe is equal to your age. So for 22 year olds, the appropriate subject line would read Nest Egg and the 22% Safe.

If you have your own success story to share on how employing my strategies helped you, whether it was a nest egg strategy or the 21-day coaching call series, please write Heather@NataliePace.com now! We’d love to hear from you!

Remember: I’m a financial news guru, not a broker. This information is intended to help you find a better certified financial partner and develop a mutually rewarding long-lasting relationship. If you need help determining whether or not you have the perfect partner to construct the Buy My Own Island blueprint of your design (formerly referred to as your retirement plan), read the "How to Find a Broker" article on the home page at NataliePace.com.

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

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

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

The Paulson/Bush FailOut Plan.

Op-Ed by Marc A. Miles, Ph.D., president of Global Economic Solutions.

The Paulson/Bush plan is a very complicated solution to the wrong problem.

There has been intense discussion of this "solution" and very little about exactly what is the problem. The problem is one of capitalization, not liquidity.  Financial institutions have to maintain minimum debt equity ratios.  With the fall in the value of "distressed securities" to unrealistic levels, these institutions had to "mark to market" or value these assets at only these unrealistic levels. The banks therefore have found their debt equity ratios rising towards the limit.  
 
When each of us has only a dollar left in our pockets we are very careful about how we spend it.  When we have $1000 dollars in our wallets, we are much less careful.  It is the same for banks.  Their debt-equity ratios have risen to the equivalent of the dollar in the wallet, so they are reluctant to lend on anything but the safest loans.  No wonder trades in the "distressed securities" market have dried up!
 
Institutions used to continue valuing securities at the purchase price. This was unrealistic.  But unfortunately, in the attempt to create more realistic accounting and transparency, regulators went to the other extreme with "mark to market". While these, say, mortgage backed securities are "distressed," they still have a regular cash flow to the holder.  Some of the mortgages represented have defaulted, but not all.  Those that have not produce these regular payments.  So the securities could easily be valued based on the cash flow.  That would relieve the debt-equity problem.
 
The Republican opposition in the House amazingly realized this was a major part of the problem.  They refused to vote for the "bailout" unless this regulation was changed to a more realistic rule.  The SEC and FASB have just announced that they will produce a clarification of this rule in light of the problem.
 
It is unclear that the "bailout" is even necessary.  The change in accounting rules could ease the "credit crunch" directly.  

One additional step that would go a long way towards solving the capital problem – remove the barriers to foreign ownership of US financial institutions.  There are sovereign wealth funds around the world that find these institutions very attractive investments at current prices. They could come in and recapitalize the institutions. Moreover, just as occurred last spring when the initial capitalization problems appeared, if these foreign entities begin to invest, there are even larger sovereign wealth funds in the US that could follow, i.e. state retirement funds like CALPERS and the State of New Jersey.
 
In the attempt to attract the opposition members, the leaders in Congress have included even more costly, unrelated provisions.  As they say, there are two things you don't want to see: sausage being made, and bills moving through Congress.  As usual, the consensus, focused on the political issues instead of the underlying economic issues, has made this bill even worse.

Marc A. Miles, Ph.D. is a respected economist and global strategist. He is the president of Global Economic Solutions, the former senior economist for the Heritage Foundation and the editor of the 2006 Index of Economic Freedom.

Treasure Hunting When Wall Street Sinks.

by Natalie Pace.

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

When the Dow Jones Industrial Average drops 777 points in a day (or over 1500 points in 60 days), the smart go treasure hunting/bottom fishing!

I always say that buy low; sell high is easy to say and hard to do. The last week of September was certainly proof of that. How many of you felt like buying stocks at the end of that long September day (the 29^th) when Congress rejected the bank bailout plan and the Dow Jones Industrial Average dropped 777.7 points? Who felt like selling in January 2008, when the Dow Jones Industrial Average was still trading above 12,000, when I took most of my featured companies off of the Hot List and put them on the Watch list or the Cooling Off List?

And yet, if you had your stock shopping list handy on September 29, 2008, when the House first rejected Treasury Secretary Hank Paulsen’s $700 billion bank failout (intentionally misspelled) strategy, you could have picked up Google for the lowest price in over three years. In October of 2008, Google traded at an all-time high of $747.24/share. On September 30, 2008, the day after the bailout was rejected, Google closed at $341.43/share.

At that value price, Google can form the basis of your own basket of New Economy Blue Chips as a stabilizing force in your nest egg, with some growth potential. (Traders: Be careful expecting a $107 billion dollar fattened up company like Google to win a dash on Wall Street -- i.e. double in share price in the short term. Large corporations usually provide steady, not explosive, growth and gains in share price.)

So, what other companies came within buying range during the Wall Street fire sale? See below for some ideas, and be sure to read my Hot News and Cool Stocks list (in the second to the last article in this ezine) for even more news and information! Please note: Even though there are a lot of bargains on Wall Street, the current bear market is probably not over yet. If you want to try and time the exact bottom of the market, quite simply, don’t buy in yet. If you are willing to buy a little now (low) and probably a little more even lower (no guarantees either way), that’s a better approach than thinking that the markets have bottomed out.

Apple Computer
If you’ve been itching to buy Apple because you love the innovative, cool new iPhone and all things I – iPod, iBook, etc., Apple’s share price hasn’t been this low since we first featured the company in February of 2007 at $85.38/share. On September 29, 2008, Apple shares sank like a rock all the way back to $100/share…

This is also a reminder to take your profits early and often in this volatile, downtrending marketplace. We took Apple off of the Hot News list on January 30, 2008, with gains of 55% and 57%. Those gains would be severely cut back, to just 17%, if you’d waited to sell until this September.

Lithium: the Source Material for the Fuel of the Future
Our contributing writer, Paul Woods, who has become an expert on the alternative car industry, is convinced that electric cars are driving the future, and if that’s the case, then lithium is what drives the batteries that energize the cars. In addition to being the key ingredient in batteries, lithium is widely used in a number of applications – even in the grease used to lube your car.

No wonder that Sociedad Chemica y Minera de Chile CEO Patricio Contesse reported on Tuesday, September 30, 2008, that "sales volumes of iodine and lithium have exceeded our initial projections." Mr. Contesse went on further to say, "Based on the sales we have accomplished so far, our current projections indicate that we will achieve record results in the third quarter. Furthermore, we believe this trend will continue into the fourth quarter and next year, considering that market fundamentals are expected to be strong in the medium and long terms." Sociedad Chemica y Minera de Chile produces potassium nitrate, iodine and lithium carbonate and trades on the New York Stock Exchange. On September 30, 2008, the share price was almost 60% off of its 52-week high of $59.45, at $25.21.

"Green" Blue Chips and ETFs
General Electric dropped to $22, from $42 in the last 12-month period. The Power Shares Clean Technology ETF dropped to $24/share from $38, while the PowerShares Wilderhill Clean Energy Portfolio sank by half to $14/share, from $28. Solar company Trina Solar (TSL) was trading almost 70% off its 52-week high. Meanwhile Trina’s sales are almost triple this year over last year and the (forward) price to earnings ratio in this high growth company was a rock bottom low 6.70!

There were bargains galore on the Hot News on Cool Stocks list.

You don’t need to wait for me to highlight the company if you see that it’s trading lower than the price that I listed it at. Remember that I’m reporting on the news, not holding your hand! The news and information are intended to make you a wiser investor and a better partner with a great, ethical, visionary Certified Financial Partner. You are the architect of your dream life, and your CFP should be the contractor to help you get there.

So, just as you might select tile over wood for your floors if it was half off, keep an eye out for great building blocks for your retirement plan as well. If you’re buying low when everyone else is selling low, you are in a great position for gains over the long term. Those who sell themselves and the stocks they own short are on a fast track to losses, whereas value buyers who invest in great companies at a great price and take a long term view enjoy gains of at least 11%, on average, every year.

Please remember that it is ill advised to hold individual companies in your nest egg, unless you are creating your own basket of stocks, similar to a mutual fund or Exchange Traded Fund approach. Your trading portfolio should be equal to your experience, wisdom and ability to stomach losses. In other words, if you are not an experienced trader, now is not the time to leap into this volatile marketplace with your eyes closed on a whistle and a prayer!!

Google, Apple Computer, Sociedad Chemica y Minera de Chile, Trina Solar and more were all added to and highlighted on the Hot News on Cool Stocks List on September 30, 2008.

Full Disclosure: Natalie Pace owns positions in Apple Computer.

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.

(No) Viva Las Vegas.

by Natalie Pace.

It’s Eastward Ho to the 6-Star Casino Operator Who Has Ruled Macau since 1927.

Includes a Casino Resort Stock Report Card.

In 2005 and 2006, Vegas was brimming with visitors, selling rooms at peak prices all year round and booming with opportunity. This year, however, the housing downturn has crippled Las Vegas, transforming it into the City of the Quiet Cranes, free rooms and delightful comp packages. (Check out my Viva Las Vegas article from July 2005, vol. 2, iss. 7 for the boom article, and my subsequent warning of a potential downturn in the casino industry in my Company of the Year article, January 2007, vol. 4, issue 1.)

Las Vegas Sands, the owner of The Venetian, Palazzo and Venetian Macau, was last year’s darling of Wall Street, but today, the corporation is unprofitable, potentially over-leveraged, with property values that are slipping dramatically. Las Vegas Sands reported a $9 million loss for the 2nd quarter 2008, on August 11, 2008, compared to a $35 million gain a year ago. The debt/equity ratio has ballooned to 3.87, and all this at a time when real estate values in Las Vegas are evanescing away much like a drunken gambler’s wad of $100 bills.

Dome of the Sea by Cherry Capri. Acrylic with prismacolor and glitter on Panel $1500

When I visited Las Vegas in August, the transformation of the city from thriving to parched was spooky (and yes, I’ve been to Vegas on other sizzling hot summer days, when the city was bustling with people and I had to pay top dollar for my room). From my complimentary room in the tower at Wynn Resort, I could see miles and miles of parched dirt glimmering in the blazing hot sun, spattered with quiet cranes across the horizon. There were no signs of movement on any of the construction sites on the vista – including Encore (Wynn’s newest tower in Las Vegas), which looked almost complete, but still has visible work needed.

Wynn Encore is projected to open in December of 2008, but will the fall-off in Vegas visitors and downfall of Vegas real estate spook Wynn executives into delaying the opening? It costs millions to open a new resort. On July 21, 2008, Wynn Resorts announced 5,300 new job openings, however, that was before Lake Las Vegas declared bankruptcy and Echelon, another premiere Strip destination, suspended construction.

According to Realtytrac.com, in a press release issued on August 14, 2008, Nevada topped the United States in foreclosures per households, with one for every 106 households and over 10,000 properties in foreclosure. California, Florida and Arizona posted the second, third and fourth highest foreclosure rates, respectively. (California had the most foreclosures of any state in July, with 72,285 foreclosure filings.) With one in every 85 households receiving a foreclosure filing, the Las Vegas metro area’s foreclosure rate ranked No. 5 in the nation, behind Cape Coral-Fort Myers, Florida, and Merced, Stockton and Modesto, California, respectively.

Lake Las Vegas, a premiere resort destination in Henderson, Nevada, filed for bankruptcy on July 17, 2008. Boyd Gaming stopped work on its $4.8 billion Echelon Strip resort on August 1, 2008. Airlines at McCarran International Airport have asked Clark County to halt work on the Terminal 3, citing a fall-off in tourist traffic. MGM Mirage and their new 50% partner on City Center -- Dubai World -- are looking to fill the $700 million funding gap needed to finish City Center. But with so many empty houses in Las Vegas Valley and increasing unemployment (already at 6.4% and adding more to the dole each day), who is going to buy the condos? With premiere hotels like Wynn and THEhotel at Mandalay Bay giving away their rooms, who is going to pre-book the rooms and convention space at City Center hotels for a 2010 stay?

The City Center website still boasts that it is "Rising above Las Vegas, in every sense of the phrase," but what is it worth right now to become the landmark of the City of the Quiet Cranes? Indeed, the final leg of the MGM funding has been broken by "a spirited debate over pricing," according to Jim Murren, President and Chief Operating Officer of MGM MIRAGE. Situated in the nation’s leading foreclosure capital, Murren’s company is in the hot seat at the table, and there is little doubt that the longer the debate continues, the further the values in Las Vegas will decline. The median price of homes sold last month in Las Vegas was down to $220,000. That's a decrease of more than 2 percent in just one month, and a fall of more than 25 percent in the past year (source: Greater Las Vegas Association of Realtors).

In the good news department, for the Vegas lover, Vegas has never been a more affordable diversion. The city now sports the highest Michelin rated restaurants, the best spas, the most beloved entertainers, showgirls and spectacles in the world (Cirque du Soleil, Vegas show girls and great rock/pop/rap artists) and even has topless sun-bathing at their adults-only pools. What happens in Vegas has never been more tempting, especially when you combine it with the best room rates we’ve seen in four years. If you do a little digging, chances are you’ll get a free room and a few amenities to boot. (Check out my Best of Vegas article last month for some of the fantastic don’t miss experiences in Vegas, and don’t miss me at Peak Potential’s Extreme Wealth Conference in Las Vegas in October 2008.)

For the investor, however, the gaps in profitability and funding in Vegas casinos are only getting more troubling. Which is how a premiere Macau player caught my attention – Melco Crown Entertainment Limited (MPEL).

Macau has recently become the world’s biggest gambling center, topping Las Vegas in gaming revenue this year, but it has long been China’s gambling destination. From 1968 to 1999, when Macau was owned by Portugal, Billionaire Stanley Ho had a gambling monopoly on the island. When China regained the territory, they opened the building permits to resort casino moguls worldwide, however, the Ho family still maintains a stronghold in Macao.

MGM Grand Macau is a joint venture between Las Vegas casino operator MGM Mirage and Pansy Ho, the daughter of Macau's former casino kingpin, Stanley Ho. Stanley’s son, Lawrence Ho, the Group Chairman and CEO of Melco (NASDAQ: MPEL), opened up the 6-star hotel casino, Crown Macau, in May 2007. The Crown caters to the VIP casino visitor.

According to Melco’s press release of August 28, 2008, VIP rolling chip volume increasing by 3,690% on a year-on-year basis to approximately US $37.9 billion in the first half of 2008. Crown Macau's market share jumped to around 14% in June 2008, making it one of the largest VIP casinos in the world in terms of betting volume. Additionally, Melco is on schedule to complete the City of Dreams by the first half of 2009, which features the Hard Rock, Hyatt and Dragone Entertainment (originator of Cirque du Soleil) in an "integrated urban entertainment" experience. So far, the new generation gamble of the Ho Family appears to be paying off.

While Las Vegas Sands (NYSE: LVS), MGM (NYSE: MGM) and Wynn (NASDAQ: WYNN) are carrying heavy debt loads, Melco has secured all of the financing needed for their City of Dreams project. According to Melco’s press release of August 29, 2008, City of Dreams has its first phase and four hotels topped out and is on schedule for opening in the first half of 2009.

Founded in 1910, Melco was among the first one hundred companies established in Hong Kong, and was listed on the Hong Kong Stock Exchange in 1927. Under the leadership of Chairman and Chief Executive Officer Lawrence Ho, Melco has redefined itself as a "dynamic New Generation Asian Conglomerate focused on leisure and entertainment." Melco Group now has significant interests in six listed entities, including three in Hong Kong, two in the US and one in Canada. Melco was recognized by FinanceAsia magazine as one of Hong Kong's Best Managed Companies for the second year in 2008 (meaning you should be able to give more credence to their earnings reports than you would a neophyte Chinese mainland based company).

The migration of money from West to East and the new middle class created in China over the last two decades positions Macao above Las Vegas in the near term for casino resort growth. The current U.S. financial crisis is certainly not going to help to get more convention traffic to Vegas, when corporations are tightening their belts and trimming down staff. All of the uncompleted projects in the City of the Quiet Cranes, from City Center to Wynn Encore and more, could be rolling toward a bigger crap out than most investors are predicting… And for those reasons and more…

I put Wynn Resorts and Las Vegas Sands Corporation on my Cooling Off List last month. Melco was added to the Hot News List at that time, as well. MGM Mirage was added to the Cooling Off list on October 1, 2008.

Full Disclosure: I don’t own any positions in any of the companies listed in this article.

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.

If a Brokerage Firm Closes Its Doors.

Investor Alert from FINRA.org.

Given the turbulence affecting the financial services industry these days—including recent announcements concerning Lehman Brothers—you may be wondering what would happen to your securities account if your brokerage firm closed its doors.

In virtually all cases, when a brokerage firm ceases to operate, customer assets are safe and typically are transferred in an orderly fashion to another registered brokerage firm. Multiple layers of protection safeguard investor assets. For example, registered brokerage firms must keep their customers' securities and cash segregated from their own so that, even if a firm fails, its customers' assets will be safe. Brokerage firms are also required to meet minimum net capital requirements to reduce the likelihood of insolvency, and to be members of the Securities Investor Protection Corp (SIPC), which insures customer securities accounts up to $500,000. SIPC is used in those rare cases of firm failure where customer assets are missing because of theft or fraud. In other words, SIPC is the last course of action in the unlikely event that the other customer protections have failed.

Concerning Lehman Brothers Holdings Inc., which filed for protection under Chapter 11 of the bankruptcy laws on September 15, the firm's U.S. regulated broker-dealer subsidiaries, Lehman Brothers, Inc. and Neuberger Berman, LLC, are still solvent and functioning. The broker-dealer subsidiaries have not filed for bankruptcy, and are expected to close only after the orderly transfer of customer accounts to another registered and SIPC-insured broker-dealer. If you are a customer of Lehman and have questions about your account or the liquidation and transfer process, you should contact your financial adviser or visit the firm's Web site for updates and additional information.

In light of this situation, this publication explains the role regulators—including FINRA—play when a firm goes out of business unexpectedly, and what you should know and do in the event that your brokerage firm ceases to operate. While the customer safeguards are extensive and the track record of making investors whole in the aftermath of a financial crisis is strong, not all investor assets may be covered, and there are steps and precautions investors can take to help protect their assets—not to mention their peace of mind.

Regulatory Safety Net
Brokerage firms are required to follow certain rules that are designed to minimize the chances of financial failure and, more importantly, to protect customer assets if they do fail. For example, the SEC's Rule 15c3-1—the "Net Capital Rule"—requires brokerage firms to maintain certain levels of their own liquid assets. The minimum net capital a firm must have on hand depends on its size and business.

In addition, the SEC's Rule 15c3-3—the "Customer Protection Rule"—requires brokerage firms that have custody of customer assets to keep those assets separate from their own accounts. In other words, customers' cash must be placed in a special, separate "reserve" account; and fully paid customer securities must be kept separate from firm and customer margin securities.

Carrying and Introducing Firms
To understand how these rules work, it is helpful to understand the difference between "clearing and carrying" firms (or "carrying" firms for short) and "introducing" firms. When you open an account with a brokerage firm that is a carrying firm, the firm not only handles your orders to buy and sell securities, but it also maintains custody of your securities and other assets (like any cash in your account). With an introducing firm, the brokerage firm accepts your orders—but it will have an arrangement with a carrying firm to maintain custody of your securities account. Because they have custody of customer assets, carrying firms must maintain higher levels of net capital than introducing firms—and they are responsible for segregating the customer funds and securities in their custody.

Additional rules require firms that do business with public customers to have their financial statements audited by an independent accounting firm annually. All brokerage firms must file financial statements (on Form X-17A-5) with the SEC—and those that are publicly traded must file quarterly, annual and other periodic reports with the SEC (which investors can view using the SEC's EDGAR database of company filings). We describe how an investor can obtain a firm's financial statements in our Investor Checklist.

What Happens to My Account?
Historically, brokerage firms that have faced financial insolvency—meaning they cannot meet their financial obligations as they come due—have handled the crisis in different ways. Some have been able to find a buyer to stave off insolvency. Bear Stearns, for example, was bought by J.P. Morgan in 2008.

Other firms self-liquidate, as did Drexel Burnham Lambert in 1990. When a brokerage firm self-liquidates, securities regulators, including the SEC and FINRA, work with the firm to make sure that customer accounts are protected. That is what is currently happening in connection with Lehman Brothers, Inc. On September 15, 2008, Lehman's parent company, Lehman Brothers Holdings Inc., announced that it had filed for protection under Chapter 11 of the bankruptcy laws. None of the holding company's broker-dealer subsidiaries—including Lehman Brothers, Inc. or Neuberger Berman LLC—are included in the bankruptcy petition. Nevertheless, the bankruptcy filing will likely lead to the winding down—outside of bankruptcy—of these brokerage firm subsidiaries. SEC and FINRA staff are working on-site at Lehman Brothers to oversee the orderly transfer of customer assets to one or more SIPC-insured brokerage firms. In the meantime, Lehman Brothers Inc. is open for business to facilitate customer orders.

If My Firm Fails, What Do I Do?
The failure of a brokerage firm will understandably cause some anxiety for the firm's customers. The first thing you should do is avoid panic. If you hear your firm is in financial trouble, contact the firm to see what procedures you should follow. For example, there may be a window of time when you cannot trade or transfer your account.

In the specific case of Lehman Brothers, the firm announced on September 15, 2008, that customers may continue to trade or take other actions with respect to their account. If you are a customer of Lehman and have questions about your account or the liquidation and transfer process, you should contact your financial advisor or visit the firm's Web site for updates and additional information. You may also contact FINRA at (301) 590-6500 or send an email to the SEC at help@sec.gov.

What Happens if SIPC Protection Is Invoked
SIPC is a non-profit organization created in 1970 under the Securities Investor Protection Act (SIPA) that provides limited insurance to investors on their brokerage accounts if their brokerage firm becomes insolvent. All brokerage firms that do business with the investing public are required to be members of SIPC. SIPC protection is limited. It covers the replacement of missing stocks and other securities up to $500,000, including $100,000 in cash claims. However, it does so only when a firm shuts down due to financial circumstances in which customer assets are missing—because of theft, conversion, or unauthorized trading—or are otherwise at risk because of the firm's failure.

SIPC does not cover the following:
Ordinary market loss;
Investments in commodity futures, fixed annuities, currency, hedge funds or investment contracts (such as limited partnerships) that are not registered with the SEC; and
Accounts of partners, directors, officers or anyone with a significant beneficial ownership in the failed firm.

SIPC coverage of $500,000 is extended to each "legal customer." For instance, if you have three accounts at a firm—and one is an individually held account in your name only, another is a joint account with your spouse, and a third is an IRA account in your name—each account is considered a separate "legal customer" and each will be eligible for full SIPC coverage.

SIPC Liquidation: Step-by-Step
In almost four decades of operation, SIPC has advanced approximately $508 million to facilitate the return of more than $15.7 billion in cash and securities to an estimated 625,000 customers.

If a SIPC liquidation takes place, you will be notified by letter that your brokerage firm has closed and that SIPC has begun a "Direct Payment Procedure" or a liquidation proceeding in court. If you receive such a letter, SIPC advises in its Investor's Guide to Brokerage Firm Liquidations that you promptly:

Gather key information together, including brokerage account records, monthly or quarterly statements and trade confirmations;

Locate cancelled checks and correspondence with your brokerage firm;

Check your account statements for accuracy and verify that the statements reflect all cash deposits you sent to the brokerage firm. Determine if there are any transactions that you did NOT authorize.

Verify your correct address. If you hear about a liquidation that involves your firm and have not received a letter, go to the SIPC Web site for contact information.

Follow SIPC instructions in filling out necessary forms; and

Pay strict attention to time limits set forth in the notice and claim form. Under federal law, no one—not the trustee, SIPC or the court—has the authority to satisfy claims that are filed late.

Once liquidation is initiated, most customers can expect to receive their assets in one to three months. The speed at which customer funds and securities are returned depends on a number of factors, including the accuracy of brokerage firm records.

Investors should be aware that they may be unable to transfer accounts or execute trades during the liquidation process. Furthermore, if a clearing firm is in financial trouble or in liquidation, this may affect customers of introducing firms that clear through the troubled firm, including their ability to trade, liquidate their securities positions and/or transfer holdings to another firm.

Some firms carry additional insurance over the protection limits currently provided by SIPC. Protections are generally triggered only in the event of the financial failure and liquidation of a participating securities affiliate and if the customers' securities are not returned by the firm or through SIPC. Two prominent names in the excess insurance business are a consortium of brokerage firms that formed the Customer Asset Protection Co (CAPCO) and Lloyds of London. As with all insurance, the ability to pay claims depends on the financial strength of the carrier. In addition, some policies may have caps or other limits on the amount of protection provided to individual customers or to the firm's customers as a group.

SIPC vs. FDIC
While SIPC insures customer assets in brokerage accounts, FDIC insures assets in bank accounts.

Investor Checklist
There are steps investors can take in advance to minimize the chances of being involved with a brokerage firm that ends up in financial distress. For a checklist that can help you steer clear of firms that pose financial and fraud risk to investors click here.

FINRA's Role
FINRA monitors firms for compliance with the Customer Protection Rule, the Net Capital Rule and other financial responsibility rules through its surveillance and examinations programs:

Surveillance—FINRA conducts ongoing surveillance of the financial condition of brokerage firms. This involves monitoring a firm's capital position and material changes in its business-such as a merger, acquisition, divestiture, any change in clearing relationships, or any change in operating systems and changes to its business model. We also review the financial reports that firms must file with both FINRA and the SEC, and we conduct an assessment of all carrying firms to identify potential regulatory risks and the extent to which exposure to those risks could impact a firm's financial stability. Separately, FINRA monitors the customer complaints firms receive concerning both sales practice and operational issues. We also keep a close eye on how firms handle the transfer of customer accounts, including the timeliness of transfers of customer assets from one firm to another.

Examinations—FINRA regularly examines regulated brokerage firms for compliance with a host of SEC and FINRA rules, including financial responsibility and customer protection rules. This involves reviewing financial statements and verifying that carrying firms properly calculate cash reserves, make timely and accurate deposits of customer funds, and follow the rules concerning custody of customer securities. Our examiners review firms' books and records to verify that they are current and accurate and maintained in compliance with SEC and FINRA regulatory requirements. They also look at supervisory systems and controls to assess whether a firm has adequate written policies, procedures, and a practical framework to capture and monitor relevant risks related to its business activity.

If we uncover financial problems at a brokerage firm, we promptly report issues to the SEC and, if it appears that theft or fraud has occurred, to SIPC. These matters are also referred to FINRA's Enforcement Division for further action.

If a failing firm is in compliance with the Customer Protection Rule, the Net Capital Rule, and other financial responsibility rules, it will be able to "self-liquidate"—meaning that it should be in a position to return all customer securities and other assets in an orderly and timely fashion. In the rare circumstance where customer assets appear to be missing—as, for example, in the case of fraud or theft—a SIPC liquidation may be necessary.

For more information on FINRA, the Financial Industry Regulatory Authority, or to read the most recent Investor Alert on Money Market Funds, go to FINRA.org.

The Financial Crisis.

by Dr. Gary Becker.

Dr. Gary S. Becker, University Professor, Dept. of Economics Sociology Professor, Graduate School of Business, the University of Chicago Nobel Laureate, 1992

In considering what needs to be done to improve the functioning of the financial system, it is necessary to distinguish steps to avoid a major depression in the near term from long run reforms of the financial system. The Paulson Plan naturally concentrates on the very real short run emergency. I first discuss this plan and other suggestions, and then briefly consider long-term reforms.

The Treasury's announced insurance of all money market funds carries considerable moral hazard risks, but it has not aroused much controversy. The Paulson Plan goes much further and involves purchases from banks of up to $750 billion of assets that have uncertain worth. I say uncertain worth since there is essentially no market for many of these assets, and hence no market pricing of them. The government hopes to create this market through using reverse auctions. In these auctions, banks would offer their assets at particular prices, and the government would decide whether to buy them. This part of the Plan has been heavily criticized because it gives great discretion to the Treasury Secretary since the total value of the assets that would be purchased at this point is not known. In addition, many are repelled by the intention to bail out companies and their executives who made decisions that got the companies into trouble. There is also much concern about the moral hazard consequences for the future behavior of banks if they are led to expect to get rescued by the government when their investments turn sour.

While I find helping these banks highly distasteful, moral hazard concerns should be put aside temporarily when the whole short term credit system is close to a complete collapse. However, the proposed Plan does indicate, as I suggested in an earlier post (April 28, 2008), that the $29 billion bailout of the bondholders of Bear Stearns in March was a mistake. It probably did have a moral hazard effect by encouraging Lehman brothers and other investment banks to delay in raising more capital because they too expected to be helped if times got much worst.

The agreement apparently just reached between Congress and the White House does allow the government to purchase distressed assets up to about $700 billion- I would have preferred a considerably smaller initial limit. It does have a provision for Congressional oversight of the Treasury's use of the funds, whatever that is worth, and has several other features as well. For example, it includes pay limits for executives whose firms seek government help. That is too much micromanagement of the operations of these banks, even though no one can think much of executives who led their banks into such a mess.

I am also not enamored of the apparent provision that gives the government an equity stake in some banks that they help if these banks should prosper. It is unwise to allow governments in general to have equity interests in private companies, particularly if this equity gives them voting rights on company policies. Perhaps inevitably, this did occur in the AIG bailout. Many examples in recent history, such as the current Alitalia fiasco, show that political interests outweigh economic ones when governments have partial ownership of alleged private companies.

The agreement appears to require the government to use their new ownership of distressed mortgage-backed securities to reduce home foreclosures. Homeowners as well as bankers should have known that the insanely good times in the housing and mortgage markets could not last forever. However, consumers are less well informed about financial matters and housing pricing than are the supposed expert executives at banks. Helping homeowners also uses taxpayers money, but in a way that would generally aid people with modest to moderate incomes. Indirectly, moreover, it would also help banks by increasing the value of the mortgage-backed securities they hold.

One suggested supplement to the Paulson Plan is to require investment banks and other financial institutions to raise additional capital now, so that they have resources to start widespread lending again. Such a requirement would be unwise since banks that can raise capital readily are already doing so, as illustrated by Warren Buffet's investment in Goldman Sachs, and Mitsubishi's purchase of a stake in Morgan Stanley. Were such a requirement imposed, weaker banks might cut their lending even further in the attempt to increase their liquid capital. Milton Friedman and Anna Schwartz argue convincingly in their Monetary History of the United States that the Fed's raising of reserve requirements for commercial banks during the mid-1930s contributed to a prolonging of the Great Depression. For it induced these banks to further contract their lending in order to gain the liquid assets that were removed by higher reserve requirements.

The main problem with the modern financial system based on widespread use of derivatives and securitization is that while financial specialists understand how individual assets function, even they have little understanding of how the whole incredibly complex financial system operates when exposed to various types of stress. In light of such ignorance of the financial system's mode of operation, it is difficult to propose long-term reforms. Still, a few seem reasonably likely to reduce the probability of future financial crises. The capital requirements of banks relative to assets might be increased, so that the highly leveraged ratios of assets to capital in financial institutions during the past several years would become less common. Possibly a minimum ratio of capital to assets should be imposed by the Fed on investment banks and money funds. As much as possible, the measure of capital should be market, not book, value, such as the market value of publicly traded shares of banks. My discussion last week indicated that book value measures badly missed the plight of Japanese banks during their decade-long banking crisis of the 1990s.

The government should as quickly as possible sell Freddie Mac and Fannie Mae to fully private companies that receive no government insurance or other help. These two giants did not cause the housing mess, but in recent years they surely greatly contributed to it, partly through Congressional pressure on them to increase their purchases of sub prime loans. They owned or guaranteed almost half of the $12 trillion in outstanding mortgages with less than $100 million of capital. The housing market already has excessive amounts of government subsidies, such as from the tax exemption of interest on mortgages, and should not have government sponsored enterprises that insure mortgage-backed securities.

Finally, the "too big to fail" approach to banks and other companies should be abandoned as new long-term financial policies are developed. Such an approach is inconsistent with a free market economy. It also has caused dubious company bailouts in the past, such as the large government loan years ago to Chrysler, a company that remained weak and should have been allowed to go into bankruptcy. All the American auto companies are now asking for handouts too since they cannot compete against Japanese, Korean, and German carmakers. They will probably get these subsidies, even though these American companies have been badly managed. A "too many to fail" principle, as in the present financial crisis, may still be necessary on hopefully rare occasions, but failure of badly run big financial and other companies is healthy and indeed necessary for the survival of a robust free enterprise competitive system.

Dr. Becker is a University Professor, Department of Economics, and Sociology Professor, Graduate School of Business, The University of Chicago. He won the Nobel Prize in Economics in 1992 for his groundbreaking work in "human capital."

To keep track of Dr. Becker's continuing research and commentary, visit his web site and blog. To hear more of his recommendations for strengthening the U.S. economy, check out his panels from the 2008 Milken Global Economic Conference.

The Fuel of the Future: Validating Thomas Edison.

by Paul Woods, President, CEO and CIO, Odyssey Advisors.

At the turn of the last century, cars came in steam, electric, and gasoline versions. When Thomas Edison was

Paul Woods, President & CEO, Odyssey Advisors LLC.

asked which he favored, without hesitating, his reply was electric cars. They didn’t have the vibration, noise, and smell associated with gasoline cars or the long start up times and limited range of steam cars. Had someone listened to him at the time, we might not now be stuck with a 19^th century technology that requires us to send huge amounts of money to countries whose chief exports are petroleum and terrorists.

In spite of huge vested interests in the status quo, it’s no longer a question of whether cars with combustion engines will end up in museums, but when. Ultimately, the demise of this technology will come down to economics and consumer satisfaction. The next generation of cars will cost less to drive, will require less maintenance, and won’t require the sacrifice of size or comfort.

The Contenders
If it were possible to harness all the hot air coming out of our politicians on this subject, we could probably power our cars indefinitely. However, until that day comes, the fuels being most widely considered are ethanol/biofuels, hydrogen, and electricity. There’s also a very interesting newcomer to this discussion, compressed natural gas (CNG).

The Bipartisan Choice
At present, subsidies for ethanol dwarf our spending on any other form of alternative fuel. This is the bipartisan choice, supported by both Democrats and Republicans. That alone should be a red flag.

Treating what is basically moonshine as the answer to our dependence on oil from the Middle East is as silly as it sounds. However, the politics behind this idea appear to be more than enough to trump common sense for the time being.

Farmers are the largest contributors to politicians in most states. While they’re generally found in more red states than blue states, they usually have sense enough to shower both parties with contributions and have bought broad support for ethanol subsidies as a result.

Meanwhile, the auto industry is desperately looking for another fuel to keep cars powered by the combustion engine alive because the parts and service business for the next generation of vehicles is likely to be a lot less lucrative. It doesn’t hurt that the auto industry is also one of the last bastions of union labor in the private sector or that Michigan is a swing state. As a result, both parties are inclined to make sure that what the auto industry wants, it gets. This brings to mind the saying "Be careful what you wish for."

Politics aside, ethanol is a train wreck. It costs more than gasoline to use because it reduces mileage. People don’t eat less just because their food is being turned into fuel so it drives up food prices by shrinking the supply of food while the population continues to grow. It requires a huge and very expensive infrastructure. Finally, it can never be produced in enough quantity to satisfy the demand for vehicle fuel in this country. It never has been, and never will be, a serious solution to our energy problem. All it shows is that government solutions to problems invariably involve the politically connected and waste huge amounts of taxpayer dollars.

Renewable, Plentiful & Sooooo Expensive
Hydrogen is the next candidate. It’s everywhere. It’s plentiful. It’s renewable. You can even make the stuff from water. When it comes to alternative fuels, it might also be the only idea that’s makes ethanol look good in comparison.

There is no pure hydrogen anywhere on this planet, so it requires energy to separate hydrogen molecules. Almost all the hydrogen today is produced from natural gas in a conversion process that requires more energy than it produces. By the time this process spits out hydrogen, about 60% of the original energy has been lost. It can also be made by electrolysis but the economics of getting hydrogen from water are even worse, so this accounts for only a small percentage of the hydrogen available commercially.

I recently drove a Toyota powered by a fuel cell that ran on compressed hydrogen during hydrogen day at Exposition Park (Los Angeles) on 8/23/08. Acceleration was a bit sluggish, but the SUV was solid and quiet, had the usual amenities, had enough range to drive from Las Vegas to Los Angeles on a tank of compressed hydrogen, and had enough room for passengers and cargo.

The author going for a test drive

The event was littered with auto company representatives that were pretty vague when it came to costs. I finally found a graduate student involved in hydrogen car research that had access to a hydrogen filling station at his university. According to him, the hydrogen equivalent of a gallon of gasoline costs $5 there and is heavily subsidized. The cost of the fuel cell to turn the hydrogen into electricity to power the car is still in six figures, but is expected to come down if this technology becomes more widely adopted.

To prove the point about this technology still having poor economics, Toyota recently announced plans to begin leasing hydrogen fuel cell vehicles in Japan that are very similar to the one I drove. The cost is $7,700 per month for a 30-month lease, which doesn’t include the cost of hydrogen.

Between the cost as well as nagging safety issues (hydrogen is 10 times more flammable than gasoline and 20 times more explosive) my guess is a better technology will cause the government grants keeping this technology alive to dry up well before the economics of hydrogen ever allow it to be widely adopted as a vehicle fuel. This is a technology in desperate need of several major breakthroughs before it’s even close to becoming viable.

CNG
It’s hard to see much sense in wasting 60% of the energy in natural gas to turn it into hydrogen, which then requires a fuel cell that costs six figures to turn it into electricity, and then requires an electric drive to power the result. Why not just compress the natural gas (CNG), make a few modifications to the car so the combustion engine can burn it, and then save 40% on the cost of vehicle fuel? As CNG burns much cleaner than gasoline, this will also reduce emissions.

Since natural gas is a hydrocarbon that isn’t renewable, we still have the long-term problem of finite supplies. In addition, natural gas produces less energy than a comparable amount of gasoline, so the range of CNG vehicles tends to be less and the storage tank tends to be bigger, which reduces the amount of space available for passengers and cargo. For reference, the only car available designed specifically to run on CNG is the Honda Civic GX. It has a price tag of $24,590 and a range of around 170 miles.

Honda Civic GX

For alternatives to gasoline, building the necessary infrastructure is the biggest challenge and CNG is no exception. There are only about 1100 CNG filling stations in the U.S. and only about half are open to the public. This compares with around 170,000 gasoline stations in the U.S. and leaves us with a familiar Catch 22 when it comes to alternative fuels. The demand for CNG vehicles is limited by the low number of available refueling stations, but these stations may not be built until there are more CNG vehicles on the road.

When compared with ethanol and hydrogen, CNG looks like the pick of the litter. While this idea is finally starting to get some traction, finite supplies mean this is more of a stopgap measure than a long-term solution to our energy problems. The sources of supply are more stable in Canada, U.S. & Mexico, where it is less expensive than gasoline, and existing vehicles can be adapted to use it as a fuel. Developing additional supplies will have to overcome the usual opposition from the environmental movement and it remains to be seen if CNG will still be competitive when the cost of building more infrastructure is added in and increasing demand bumps up against finite supplies.

The Combustion Engine Slayer
It has taken a century, but Thomas Edison’s favorite vehicle fuel is finally poised to begin the process of changing what we drive. Vehicles powered by electricity (EVs) are going to make the internal combustion engine look like a noisy, inefficient, heat-blasting, poison-spewing monster with too many moving parts in comparison.

Unlike combustion engines, electric drives are very efficient, have few moving parts, are very quiet, and can go a lot longer with less maintenance. This is not exactly good news for automakers that have built up a very lucrative parts and service business to support the combustion engine. Toyota in particular has been especially egregious in requiring its customers to have their cars serviced by a dealer every 5,000 miles and pay through the nose for the privilege. Their reaction to this revolution has been to drag their feet as long as possible when it comes to introducing a plug-in (PHEV) Prius and ignore EVs completely in the hope they’ll go away. For companies like General Motors that get it, Toyota’s uncharacteristic lack of vision gives GM an opportunity to recapture lost market share. It’s pretty safe to say that driving costs of a few pennies a mile coupled with extended service intervals and substantial savings on maintenance will make EVs and PHEVs a big hit with consumers.

For Thomas Edison’s vision to be fully realized, a nationwide network of charging stations will still have to be built. Electricity is already widely available, so the infrastructure problems for this technology appear to be less daunting. In addition, several companies have already developed lithium batteries that can fully recharge in the time it takes to fill a gas tank, which will minimize the inconvenience factor. The last nail in the coffin for combustion engines is another battery breakthrough that dramatically increases the range of electric vehicles. Recently, there has been a very promising discover that may solve this problem. Whether this or something else overcomes the final hurdle, the chances are very high that EVs will eliminate the need for the internal combustion engine within a decade.

In the meantime, however, lithium battery technology will allow hybrids to take the next step by turning them into plug-in hybrids. This is now possible because batteries made of lithium are lighter and can store several times more electricity than batteries made of lead or nickel. These add less weight to a vehicle and dramatically increase its range. If you look through the archives of http://www.autobloggreen.com/, you’ll see a flood of recent announcements about lithium batteries for vehicles going into mass production along with almost daily announcements about new hybrid, PHEV, and EV introductions. This time, the genie is out of the bottle for good.

The Fisker Karma plug-in, available in 2009 for about $80k

Initial lithium battery plug-ins will have a range of up to 50 miles on the batteries alone. While that may not sound like much, keep in mind that 80% of the people in this country drive 50 miles a day or less so this can eliminate most of the demand for gasoline and CNG could eliminate the rest. If your PHEV is charged at off peak hours when you’re asleep, the fuel cost will be a few pennies per mile.

Rethinking the AutomobiIe
With about three dozen EVs and PHEVs now on the drawing boards, in production, or for sale, a whole new generation of independent automakers is getting involved. Since most of them don’t come from Detroit, they don’t know that a car should be a boxy, rectangular thing with four wheels that’s made out of steel. New materials and new designs are going to create lighter, more aerodynamic vehicles that also help to increase the range of battery power. Electric drives will also allow designers to produce cars that destroy the stereotypes most people have about EV performance.

The Eliica

EVs also allow an electric drive to be placed on each wheel, which is a far more efficient way of powering a car. If your stereotype of an EV is a pimped out golf cart for environmentalists, think again. Designers in Japan have already doubled the number of wheels to eight, attached an electric drive to each one, and created the Eliica with a top speed of 230 MPH. Watch the YouTube video comparison on how it stacks up against a Porsche.

Aptera

Designers are also going the opposite direction. Currently, there are several three- wheel vehicles now in production or on the drawing boards. These have room for two, but qualify as motorcycles in most states including California, which means that a lone driver has access to the carpool lane on the freeways. The leading company in this area appears to be Aptera.

The founders of Google have invested in the Aptera, now available in fully electric or plug-in versions for under $30,000.

For anyone getting a little bored with his or her automotive choices, the world is about to get a LOT more interesting.

ABOUT PAUL WOODS
Paul is the President, Chief Executive Officer, and Chief Investment Officer of Odyssey Advisors. He has over 35 years of experience in the investment management and research analysis of common stocks. He manages the Odyssey Clean Energy Portfolio, which produced a return of 141.9% before fees in 2007. Paul has done a great deal of independent research on clean energy and has written multiple articles on various segments of this industry. He can be contacted at pwoods@odysseyadvisors.com

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

NataliePace.com Note: Please note that the returns and statistics regarding the Odyssey Clean Energy portfolio were provided by Odyssey Advisors. Since Odyssey is not followed by an independent tracking firm, such as Hulbert's Financial Digest, the results which the company provided have not been verified with an independent source.

When You Believe in People, They Do the Impossible.

by Gary Kobat, life and fitness coach to the stars.

Geoffrey Erickson, Gary Kobat Friend and Client, wins the Ogden, Utah Marathon.

Faith in people is an essential quality when working with others, yet it's a scarce commodity today.
 
Let's take a look at four facts about faith:
 
1) most people don’t have faith in themselves.
2) most people don’t have someone who has faith in them.
3) most people can tell when someone has faith in them.
4) most people will do anything to live up to our faith in them.
 
When we have faith in others we give them an incredible gift. Give money and soon it's spent. Give resources and they may not be used to the best advantage. Give help and they'll be back where they started in a short period of time. But give them our faith and they become confident, energized, and self-reliant.
 
Become a believer in people and even the most tentative and inexperienced people can bloom right before our eyes. Remember: our goal is not to get people to think more highly of us. It's to get them to think more highly of themselves.
 
Difficulties seldom defeat people. Lack of faith in themselves usually does it.
 
Believe in people before they succeed.
 
It's easy to have faith in people who have already proven themselves. It's much tougher to believe in people before they have proven themselves.....but THAT is the key to motivating people to reach their potential.. We have to believe in them first, before their success, and sometimes even before they believe in themselves.
 
Every person has the seeds of greatness within, even though they may be dormant. But when we believe in people, we water the seeds and give them a chance to grow. Every time we put our faith in them, we're giving life-sustaining water, warmth, fuel, and light. And if we continue to give encouragement through our belief in them, they will bloom in no time.
 
Train smart. Live, love, race, recover smarter.
 
See you in the studio,
 
gary.

Gary Kobat is a personal life and fitness coach, based in Los Angeles, California. His clients include Jim Carrey, Will Ferrell, Mariska Hargitay and more. You can view Gary’s ongoing blog at http://e-coach.typepad.com/. Take a spin class with Gary at Revolution Studio in Santa Monica, California!

 

The Soul of Selling is Service.

by Chellie Campbell, author of Zero to Zillionaire.

Chellie Campbell, author of Zero to Zillionaire and The Wealthy Spirit.

"Every time you make a sale, you can sleep well at night, knowing that you have helped another human being improve their life. If you can really improve your client’s life, and you don't at least MAKE THE OFFER, you are performing a DISSERVICE to those people that you COULD help, but don't." –Joe Nicassio.

In last month’s article "Playing the Numbers", I said that the money is in the phone and the more phone calls you made, the more money you would make. I promised this month to share what to say when you make the call. (Hint: it had better not start with "Hi, let me tell you about me and my great stuff.")

Have you ever been to a networking meeting and had a bunch of people call you afterwards to tell you all about themselves and their products in a very obvious "sales call"? Did you love it?

No. No one wants his or her day interrupted to be sold to. So don’t make sales calls. Make service calls. Call to be of service to the person you are calling. Call to give a helping hand, a referral, a networking opportunity, a free gift, a listening ear, a friendship. Get good at asking a lot of questions: Who are you? Where are you from? How did you find out about the (party, church, networking group, etc.) where we met? Tell me about your business, your life, your interests, your needs. What can I do to help you?

How can I be of service to you?

As I made these calls one afternoon sitting in shared office space, a mortgage broker who was making calls in a nearby office, poked his head in and said, "It sounds like all your calls are warm calls."

I said, "Yes, they are."

"How are you able to do that?" he asked.

"Well, I don’t like cold calling out of the blue, so I pay the price by spending time and money going to networking meetings. All the people who attend are looking to meet people and I want to be met, so it’s a good thing!" I answered.

"But," he persisted, "You sound like you really care about these people that you’re calling!"

"Ah," I answered, "There’s a trick to that."

"I thought so!" he crowed. "What’s the trick?" he inquired eagerly.

"I really do care," I answered softly.

The Secret and Soul of Selling is Service. When you call someone to help them and put their needs foremost in your mind, they will feel it. And you will be the person who cares about them – whether or not they need your product or service. This attitude puts you in a beneficent place, a place of giving rather than demanding to be given to. But if you call to "sell" someone your product or service, you are putting your needs above the needs of the other person. From that place, you won’t know if someone needs your product or service or not because you won’t be listening. And believe me, they can tell the difference.

You may desperately need to make a sale today, but it won’t come if you sound desperate. (Say your affirmations – not your desperations!) You have to put yourself aside, and look to serve the other person. Of course, if at some point they ask about you and your product or service—that is an invitation you can RSVP to! But now, rather than give a pitch, you have to ask more questions: What have they heard about it? How would they use it if they had it? What difference would it make in their lives? For my Financial Stress Reduction Workshops, I would always ask, "What would you change about money in your life?" From their responses to these questions, I could tell if my workshop would serve them to get them what they needed and wanted. And if it would truly help them, then and only then could I sell it to them.

Calling to help people is completely different from calling to sell people. People can tell the difference – and so can you.

Chellie Campbell is the author of Zero to Zillionaire and The Wealthy Spirit. She created the Financial Stress Reduction® Workshops, on which her book is based, and is currently teaching other franchisees how to teach these wealth empowering workshops around the world.

If you are stuck in a rut in your business or life and/or having too much "month at the end of your money," Chellie’s workshop might be just what you need to get things on the right track. You can sign up for Chellie's Ezine and workshop at www.chellie.com. If you’re interested in earning hundreds of thousands of dollars teaching Chellie workshops in your city, franchise opportunities are available.

How to Manage and Recover from Mental and Emotional Fatigue and Stress.

by Dr. Rosalia Mariz, ND MPH MH CNHP CBT.

Today’s difficult economy, with all its consequent employment, financial, housing challenges and other stressors, can cause acute mental and emotional fatigue which can affect you down to the cellular level. Even though money is tight you need to take care of your health to enable you to survive and thrive during these trying times. The longer your mind feels stressed, the longer and more severe will the effects be on your physical and emotional health systems. This can lead to serious health issues and premature aging.

The old saying that stress "ages" a person faster than normal was recently verified in a study of women who had spent many years caring for severely ill and disabled children. Because their depleted bodies were no longer able to fully regenerate healthy blood cells, these women were found to be physically a decade older than their chronological age. Extended reactions to stress can alter the body’s immune system in ways that are associated with other "aging" conditions such as frailty, functional decline, cardiovascular disease, osteoporosis, inflammatory arthritis, type 2 diabetes, and certain cancers. Research also suggests that stress impairs the brain’s ability to block certain toxins and other large, potentially harmful molecules. This condition is also common to patients suffering from Alzheimer’s disease.

Although sudden emotional stress has been linked to severe heart dysfunction in otherwise healthy people, scientists are uncertain whether chronic stress alone causes cardiovascular disease. What is clear is that excessive stress can worsen existing risk factors such as hypertension and high cholesterol levels. Studies also show that people who are quick to anger or who display frequent hostility—a behavior common to those under stress—have an increased risk of heart disease and crying fits.

Feelings of despair that accompany stress can easily worsen into chronic depression, a condition that can lead you to neglect good dietary and activity habits. This, in turn, can put you at a greater risk for heart disease, obesity, and kidney dysfunction. Stress can also complicate your ability to recover from a serious illness. A Swedish study found that women who have suffered heart attacks tend to have poorer chances of recovery if they are also experiencing marital stressors such as infidelity, alcohol abuse, and/or a spouse’s physical or psychiatric illness.

On the other hand, stress management training is a proven method for helping speed recovery following a heart attack. HealthWalk can help you in this area with MindSoul Brain Technology, which analyzes and rebalances your brain waves so that you are able to regain mental acuity and recall, moderate mood swings, reduce depression and pain and restore normal sleep patterns.

With the consequences of poorly managed stress ranging from fatigue to heart disease and obesity, it is important to know how to recognize high stress levels and take action to handle it in healthy ways. Being able to control stress is a learned behavior, and stress can be effectively managed by taking small steps toward changing unhealthy behaviors.

10 Ways to Reduce Stress
1. Understand how you experience stress; everyone experiences stress differently. How do you know when you are stressed? How are your thoughts or behaviors different from times when you do not feel stressed?

2. Identify your sources of stress. What events or situations trigger stressful feelings? Are they related to your children, family, health, financial decisions, work, relationships or something else?

3. Learn your own stress signals. People experience stress in different ways. You may have a hard time concentrating or making decisions, feel angry, irritable or out of control, or experience headaches, muscle tension or a lack of energy.

4. Gauge your stress signals. Recognize how you deal with stress. Determine if you are using unhealthy behaviors (such as smoking, drinking alcohol and over/under eating) to cope. Is this a routine behavior, or is it specific to certain events or situations? Do you make unhealthy choices as a result of feeling rushed and overwhelmed?

5. Find healthy ways to manage stress. Consider healthy, stress-reducing activities such as meditation, exercising or talking things out with friends or family. Keep in mind that unhealthy behaviors develop over time and can be difficult to change.

6. Don't take on too much at once. Focus on changing only one behavior at a time.

7. Take care of yourself. Eat right, get enough sleep, drink plenty of water and engage in regular physical activity. Ensure you have a healthy mind and body through activities like yoga, taking a short walk, going to the gym or playing sports that will enhance both your physical and mental health.

8. Take regular vacations or other breaks from work. No matter how hectic life gets, make time for yourself — even if it's just simple things like reading a good book or listening to your favorite music.

9. Hydrate and keep your body alkaline. Drink plenty of water; your cells need proper hydration, an alkaline environment and oxygen to function properly. A simple and convenient way to ensure that your body has an alkaline balance and hydration is to drink Hydromag™ treated water. HealthWalk’s Hydromag water treatment products (coasters, cup holders, pad and water cooler strap) realigns water molecules to their natural Ph neutral - alkaline state.

10. Reach out for support. Accepting help from supportive friends and family can improve your ability to manage stress. If you continue to feel overwhelmed by stress come to Healthwalk so we can help you.

11. Make an appointment for a Vital Hematology live blood analysis at HealthWalk to see just how the stress is affecting the integrity of your cells and the quality of your blood. Seeing is believing!!

When you see the condition of your cells and your blood you will be motivated to take action to regain health so that you can better manage in these tumultuous times. With a clear and simple healthcare plan to help you deal with the severe stress in your life, you will then gain the energy and ability to think strategically on how to improve your life. At Healthwalk we can suggest a regimen to regenerate, repair, revitalize your cells, tissues, and organs and support your brain function, adrenals, balance your hormones to restore and enhance your health and wellbeing. Give your body what it needs to be able to manage your stress or the stress will manage you and your life to unpleasant consequences.

HealthWalk™ offers customized, non-invasive and effective support to enable your body’s own innate powers to regain and enhance health, performance and healing. HealthWalk is dedicated to supporting and empowering you to achieve and maintain vibrant wellness. HealthWalk is a non-invasive, integrative healthcare facility with a global umbrella of leading edge technologies, services, natural supplements and products backed by over 20 years of research. HealthWalk is based in Carlsbad, CA. www.healthwalk.com

www.healthwalk.com. For more information about HealthWalk’s hydromag water treatment products: http://www.healthwalk.com/ProductsStore/HydroMag/tabid/125/Default.aspx.com  

HealthWalk, the leading edge non-invasive healthcare center and products company has specially priced Health and Wellness Services Packages and Discounts on Products and Services for NataliePace.com subscribers. HealthWalk is offering 10% discount for NataliePace.com subscribers on all individual HealthWalk products and services. Please mention the discount code, HWNP upon ordering.

In today’s high stress world, you face a host of special health needs and challenges from work and home demands. Health issues include physical and emotional stress, sleep issues, memory and information retention, weight control, gastro-intestinal distress, hormonal imbalances and emotional and physical health.

Remote Galvanic Skin Response (GSR) analysis - $325 (available to be conducted via phone and Internet). G.S.R. measures through the conductivity of the skin, the autonomic nervous system responses to stress. A stress profile is determined by looking at the body’s meridians, vertebrae, teeth, and organs. G.S.R. can also look at food, environmental, chemical, viral, bacterial, and fungal stressors. G.S.R. provides the means for clearly seeing what is transpiring in your systems so that a thorough analysis of your reactions to energy, foods, supplements, toxins and more can be observed. Then with the G.S.R. we can confirm the compatibility of all potential solutions prior to recommending them.

HealthWalk In Clinic Package. In one full, comprehensive and enlightening day at HealthWalk’s clinic you will learn more about your health and bodily functions (hormonal balance, blood composition, biological activity, diet analysis) than you have ever known. The whole analysis and consultation process is non-invasive, thorough and deeply informative. You will come away with the solutions, supplements and support to guide you on your path to enhancing, regaining and maintaining your vibrant health.

HealthWalk’s special package includes Vital Hematology, Comprehensive Hormone and Adrenal Analysis and Consultation, Digital Infrared Thermal Imaging (breast and lymph screening), Galvanic Skin Response (G. S. R.) and a consultation session with the Health Guide.

Special discount for NataliePace.com subscribers - $995 regularly $1170

HealthWalk’s Remote Program allows you to obtain a comprehensive analysis and support for your health so you can achieve wellness from your own location. HealthWalk has contracted with labs throughout the country to work with you to obtain the blood and saliva samples to do a thorough analysis and consult with you via phone and email on your specific health issues and to offer you appropriate support. This program gives you a comprehensive analysis and solutions on what and how your body is functioning at the adrenal, biological, hormonal, cognitive, mental and metabolic levels. The significant majority of all illnesses and promotion of wellness can be related to the proper functioning and understanding of the endocrine system, the biochemical aspects of the body and the proper functioning and understanding of nutrient uptake, allergies, inflammation, and potential or current toxins in the body. This program will give you the information and support you need to enhance, regain and maintain vibrant health.

The cost of the Remote Program is $1395

Call HealthWalk at 877-255-4703 or email info@healthwalk.com
www.healthwalk.com

HealthWalk, 5825Avenida Encinas suite 111, Carlsbad CA 92008

You can lose everything in life and make it all back
With one exception… Your Health

Please note: This article has not been evaluated by the Food and Drug Administration. The information herein is not intended to diagnose, treat, cure or prevent any disease.

Lucky 777.

by Natalie Pace.

What Would Dr. Eric Schmidt (the Founder of Google) Do?

Includes my Hot News on Cool Stocks Report.

October 3, 2008

General Stock Market Performance

Market Commentary
Lehman Brothers went bust and the Dow Jones Industrial Average dropped 504 points on September 15, 2008. Merrill Lynch was bought out by Bank of America, and Wachovia is looking for a rescue by Wells Fargo. Ouch!

Then the Paulson/Bush $700 Billion Bank Bailout Package was rejected by the House on September 29, 2008, sparking another 777 (actually 778 when you round up) point drop in the Dow Jones Industrial Average. Even after a revised Bailout Package was approved by the Senate and the House on October 1, 2008 and October 3, 2008 respectively, after all of this bad news, combined with higher employment figures, no one could get excited about stocks. The Dow closed at 10,325.38, almost 4,000 points lower than the all-time high of 14,164.5303, set just a year ago, on October 9, 2007.

"I told you so" is a position that a #1 stock picker finds herself in during every crisis, and the current financial and housing downturns are no exception. I first listed housing as topped out (a burnout sector) in May of 2005, incidentally when the chief executives at Toll Brothers and KB Home were cashing out hundreds of millions of dollars. I warned you against investing in Lehman Brothers in June of 2006, when insiders were selling out to the tune of hundreds of millions of dollars. To read these warnings firsthand, go to the archived ezines, vol. 2, issue 5 and vol. 3, issue 6. (The Lehman Brothers warning was in bold print at the top of the Stock Report Card.)

We began warning about Fannie Mae’s massive challenges and the federal regulators’ concerns back in September of 2003 – before former CEO Franklin Raines was ousted for "accounting irregularities." (Mr. Raines "retired" in December of 2004.) In that ezine, I wrote, "If you haven't already checked your mutual funds to dump the ones that include these companies, now's a very good time." You can read our first warning on Fannie Mae and Freddie Mac in the September 15, 2003 ezine (vol. 1, issue 38). (The easiest way to get that warning is to power search on the word Fannie or to scroll down to the Companies in the News article.)

Since this current downtrend began, the Dow has lost 27% of its value. 27%! That is more than was lost during the Dot Com bust (in the Dow -- the NASDAQ lost almost 75% of its value.) Since Fannie Mae was one of the most popular holdings in mutual funds, chances are your portfolio has been hit this hard or harder.

And yet, those investors who have been coming to my retreats and implementing a recession-proof strategy are dancing on the ceiling right now. We’re not happy to see our friends suffer or the lack of confidence in the markets. We’re just happy to be taking a long-term view, and to be investing in the companies, industries and countries that are leading the charge into the future. Having a strong defensive position in your Buy My Own Island Fund -- that is also set up properly to capitalize on run-ups and redeploy gains -- along with a strong, effective scoring strategy in your Stocks on Steroids Portfolio means that even novices, like the Green Goddess Investment Club in Los Angeles, California, can make 40% gains in a market like today – going long!

The Green Goddesses were actually excited because they could buy Apple or Google or Yahoo at prices that haven’t been seen for years!

This is not hard to do. Bill and Nilo Bolden (regular working folks with a 401 (k)) were able to save their nest egg by implementing the pie chart that I drew up on a napkin for them. A napkin! Can you spare at least that amount of time to get your financial house in order? If you can, then you can ensure that you will be one of the crew dancing on the ceiling while everyone else is worried that the end of America is coming. (We have freedom and innovation on our side. It’s a powerful asset. No one I know is leaping over themselves to move to Dubai.) Please read the article Bill and Nilo Bolden’s Very Healthy Nest Egg in this ezine for more details on that simple, but effective, nest egg strategy.

So, what do you do right now to protect yourself from continued tough times? (And yes, this current correction is not over yet, not by a long shot, though we may have a Santa Rally.) Call 866.476.7442 or email Heather@NataliePace.com NOW and attend my retreat in November 20-22, 2008. (You can even celebrate my birthday with me!) I’ve not scheduled a retreat after that because my new book is coming out and I plan to be on book tour promoting it. So you need to make this a top priority.

We are throwing in a FREE premium level subscription (value $2000), so that you’ll continue to get on-going educational opportunities all year, in my quarterly teleconferences and monthly online chats. You will also receive a FREE 21-day Coaching Call Series (value: $595). The coaching call series begins on November 1, 2008, so that you are already stepping into wealth and prosperity mindset even before you come for 3 days to change your investment strategies and change your life.

When you commit to anything for 21 days in your body, mind, spirit, actions and interactions, you transform your life. This 21-day wealth consciousness coaching call series is designed to have you take small, simple steps toward aligning your thoughts, words, actions and aura with prosperity, abundance, generosity, joy, health and other characteristics of winners who enjoy their life and have a positive impact on the lives of others.

Remember, the difference between gold and silver this year was one one- thousandth of a second. Just a little extra effort is needed to win, rather than place.

These three days will be easy, and they will point you in a new direction of life and freedom that makes money something that comes naturally and easy for you.

Track Record of our Reporting
While the markets have fallen in 2008, the Hot News and Cooling Off lists below have a winning track record – in bear and bull market years. 30 companies listed below have delivered impressive gains, even while the Dow Jones Industrial Average is down 21% on the year! Only fifteen of our listings went in the opposite direction of the reporting (for the first time all year). Yes, many, but not all, of our top performers are shorts, so it’s time to brush up on your options strategies, to read the Cooling Off List and/or learn a new game.

Even during the flat year of 2007, our featured companies had outstanding performance between Oct. 2006 and June 2007! 4 out of 9 companies – almost half – doubled or more from the time they were featured to the time they were taken off of the list. 48% of the companies featured in my stock newsletter between 2002 and 2005 – 25 out of 52 companies – DOUBLED as well, and the majority of the remaining 52% well outperformed the marketplace. (See the chart in the article, "25 of Our Companies Have Doubled," from vol. 4, issue 4, the April 2007 ezine, for a listing of companies.)

3 out of 5 Company of the Year selections more than doubled.  My 2003, 2004 and 2007 Companies of the Year have posted up to 9000% gains (Taser), up to 690% gains (Opsware) and up to 215% gains (Suntech Power Holdings), respectively.  MySpace, my 2006 Company of the Year, was a large part of News Corp’s success with shareholders that year.  Even OSI Pharmaceuticals, my 2005 Company of the Year, which was the only company that lost money after being featured, is back on track for gains!  So three out of five are superperformers, one is performing well above the market and one is down. That’s the kind of record that puts you on top on Wall Street.  (I launched my first publication on 11.15.02, and featured the first Company of the Year on 1.1.03.)

TipsTraders.com continues to list me as a Highly Recommended Stock Picker, with their independent ranking system, where I’ve repeatedly occupied the #1 position. Some of our best picks include: Bioteq Environmental (BQE) +144%, Blockbuster Video (BBI) +82.5%, Genentech (DNA) +415%, Google (GOOG) +545%, Las Vegas Sands (LVS) +139%, LifeCell (LIFC) +180%, Macerich (MAC) +150%, Opsware (OPSW) +690%, Rio Tinto (RTP) +145%, Sohu (SOHU) +150%, Suntech Power Holdings (STP) +107%, Taser (TASR) up to 9000% gains and World Water & Solar (WWAT) +181%. (Some of the best picks in 2008 were put options – on the Cooling Off list. Look there for details.)

Market Movers:
The Federal Open Market Committee and Monetary Policy
The Fed funds rate currently stands at two percent. Expect the Federal Reserve Open Market Committee to continue to ease investor worries, while monitoring inflation. The prevailing sentiment is still weak growth, a continued housing slump, more subprime foreclosures, a weak dollar, anemic consumer spending, turmoil in banks and financial services, rising gas and food prices and rising unemployment. (Yikes!)

The Federal Reserve Board wants to raise the Fed Funds rate to stave off future inflation, but with these announcements of more financial institution implosions, it may have to hold off. According to the August 5, 2008 minutes of the Federal Reserve Board Meeting, "A number of participants worried about the possibility that core inflation might fail to moderate next year unless the stance of monetary policy was tightened sooner than currently anticipated by financial markets." While there are Board members who think we need a surprise tightening, I’d be surprised if this happened in the near future. On September 16th, the Board decided to keep the Fed Funds rate at two percent.

Final GDP growth rates for 2Q 2008 were released on September 26, 2008 at 8:30 a.m. ET.  The BEA final estimates were much higher than estimated, at 2.8%. By comparison, the GDP growth rate in 4Q 2007 and 1Q 2008 were anemic GDP growth numbers of .4 and .9%, respectively.   So the second quarter GDP growth numbers are something to be encouraged by – before the current financial meltdown.

The staff at the Federal Open Market Committee meeting had already marked down their GDP growth estimates for the rest of the year at their August 5, 2008 meeting, however (likely anticipating the horrific surprises that we endured in late September and early October, 2008). According to the FOMC August 5, 2008 minutes, the weak GDP growth will remain weak because: "The labor market continued to weaken significantly, financial conditions remained unfavorable, consumer and business confidence was downbeat, and manufacturing activity was contracting. All told, the staff continued to expect that real GDP would rise at less than its potential rate through the first half of next year."

Advance GDP growth estimates for 3Q 2008 will be released on October 30, 2008 at 8:30 a.m. ET. For more BEA release dates, go to the BEA.gov website and be sure to visit the NataliePace.com calendar section often.

GDP Growth Rates (Projected from 3Q 2008 through 2Half 2009)

Source: Bea.gov and Blue Chip Economic Indicators

EDUCATIONAL OPPORTUNITES AND INFORMATION:
1. FOMC Information: Interested in reading the press release of the September 16, 2008 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 FOMC press release, "Tight credit conditions, the ongoing housing contraction, and some slowing in export growth are likely to weigh on economic growth over the next few quarters… The downside risks to growth and the upside risks to inflation are both of significant concern to the Committee." That means the interest rate could go either way at any time, particularly at the October 28-29, 2008 meeting – which is sure to be a lively one.

The tentative FOMC meeting schedule for the 2008-2009 calendar is: October 28-29, 2008 (Tuesday-Wednesday), December 16, 2008 (Tuesday), January 27-28, 2009 (Tuesday-Wednesday), March 17, 2009 (Tuesday), April 28-29, 2009 (Tuesday-Wednesday), June 23-24, 2009 (Tuesday-Wednesday), August 11, 2009 (Tuesday), September 22, 2009 (Tuesday), November 3-4, 2009 (Tuesday-Wednesday), December 15, 2009 (Tuesday).

2. Calendar Section: Conferences, Online Chats and more: Check out the Calendar section of NataliePace.com regularly. There are many wonderful opportunities to chat one-on-one with millionaire money managers, life coaches, economists, respected money gurus, real estate veterans and CEOs! Be sure to check out the dates of the mid-month Hot News on Cool Stocks Update and the publication date of our next ezine. Get more information on how to best use our articles in the FAQs article, located under the Investor Edu link on the home page of NataliePace.com. Don’t miss the Get Rich and Enrich Retreat in Santa Monica, California, from November 20-22, 2008. (The October Retreat is sold out!) More information on the retreat can be found on the home page at NataliePace.com under the Get Rich and Enrich banner ad.

3. Survey Results: Who will be the next President of the U.S.? What is the most important issue facing the world today? Our subscribers are more concerned about the environment than any other issue — but the financial crisis is a close second.   Vote and view on the home page at NataliePace.com. Simply click on the survey that is currently on the home page, and you will be taken to a page with all three of the current surveys. Cast your vote there!

4. Euro interest rates: At the European Governing Council meeting on October 2, 2008, it was announced that the rates of 4.25% (main refinancing), 5.25% (marginal lending) and 3.25% (deposit facility) would remain unchanged. The next meetings and interest rate announcements are scheduled for October 23, November 6, November 20, and December 4, 2008 at 2:30 p.m. CET.

Hot Stocks List
Investors who "never pay retail," note that the BOLD highlighted stocks are trading at their 52-week lows or near the price featured in NataliePace.com’s article. This may be a good buying opportunity. (If the stocks are not highlighted, then in our estimation, this is not a good time to buy. Reasons are explained in the news commentary.) The companies that are listed below which are not highlighted may not be in a good buying range, but they appear to be poised to continue performing well (if you have already purchased them). There are never any guarantees in life, and all stocks are risk-based investments. Consult your certified financial planner before making any changes to your investment strategy.

Hot News List (highlighted). Be sure that you are buying low.
Conergy (CEYHF)
General Electric (GE)
Google (GOOG)
Kinetic Concepts, Inc. (KCI)
LDK Solar (LDK)
Melco Crown Entertainment (MPEL)
MEMC Electronics (WFR)
New Zealand Dollar ETF (WisdomTree ETF symbol: BNZ)
PowerShares CleanTech Portfolio (PZD)
PowerShares Wilderhill Clean Energy Portfolio (PBW)
Smith and Nephew (SNN)
Sociedad Chemica y Minera de Chile (SQD)
Trina Solar (TSL)
TREMX International Mutual Fund (TREMX)
Westpac Bank (WBK) Australia
Wisdom Tree (WSDT)
World Water & Solar (WWAT)

DELETIONS (Remember to take your profits early and often):
LDK Solar (9.2.08)
Zoltek (8.15.08)

HOT NEWS on COOL STOCKS LIST

Recently Deleted/2008 Companies featured:
Echelon +20%, GE, +13% and +18%, Google, +15% and +31%, Johnson & Johnson +10%, LDK Solar +18%, Microsoft +12%, Satcon +13%, Suntech +35%, Trina Solar +22%, World Water & Solar +22%. Genentech (8.1.08) +40%. Altair (deleted on 8.7.08) posted gains of +3% and +57%. Zoltek (deleted on 8.18.08) lost 30% before being removed. LDK Solar was deleted on 9.2.08 with 46% and 29% profits.

Deleted from 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, anticipating continued weakening of the stock market, and share prices.

Recent Additions:
Big Lots (BIG) (added 9.2.08)
First Solar (added 9.30.08)

Recent Deletions:
American Superconductor (moved to the Hot List on 8.18.08)
Fannie Mae (deleted on 9.12.08). Taken over by the Feds.
Google (added back to the Hot News list on 9.30.08)
LDK Solar (added back to the Hot News list on 9.30.08)
MEMC Electronics (added back to the Hot News list on 9.30.08)
TREMX International Mutual Fund (added back to Hot News list on 9.30.08)

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):
MGM Mirage (MGM)

Recent Deletions:
First Solar (deleted on 9.30.08)
Mentor Corporation (deleted on 9.30.08)
Medicis Corporation (deleted on 9.30.08)

Recently Deleted in 2008:
Fannie Mae was deleted on 2.11.08 after losing -50% and -56% of its share price value, and then again on 7.1.08, after losing another -40%. (Both puts more than doubled.) Novastar Financial (NFI) was deleted on 6.2.08 with -95% share price implosion. Sears Holding Corp. was deleted on 7.1.08 with 64% gains on the put option. Wells Fargo was deleted on 7.1.08 with 83% gains on the put. Apple was deleted on 8.1.08 with 35% gains on the put. The Google put, deleted on 8.1.08, was another great performer, with over 50% gains. First Solar, gains of over 32-34%. Mentor was deleted on 9.30. 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).

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.

Register NOW to recession proof your nest egg at Natalie Pace’s November 2008 retreat in Santa Monica, CA.

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! Visit our calendar section often.

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

Put Your Money Where Your Heart Is by Natalie Pace
Natalie Pace's first book is available for pre-order on Amazon.com now! Be the first to own it!

Get Rich and EnRich Retreat
Thursday, November 20-22, 2008
Santa Monica, CA. 3-day retreat with Natalie Pace. Recession Proof Your Portfolio. Learn how to profit in downtrending, turbulent times. Invest in the companies of tomorrow and avoid dying industries. Early bird registration NOW through Oct. 15, 2008 ONLY. The October Retreat SOLD OUT, so be sure to ACT NOW to ensure your seat at this life-changing, transformational, educational retreat.

21-day Get Rich and Enrich Coaching Call Series
Saturday, November 1st, 2008
7:00AM through 7:30AM
How would you live if you had all the money in the world? Wake up to Natalie for 21 days in a coaching call series designed to activate and maximize the creative, abundant potential in your life. Live your dreams starting right now! Sign up for Natalie’s Get Rich and Enrich Retreat November 20-22, 2008 in Santa Monica, CA NOW and receive this extraordinary, life-changing 21-day call series FREE. Call 866.476.7442 to register for the next retreat. Get more details on the Home page at NataliePace.com, under the Get Rich and EnRich Retreat banner ad.

Elevate Film Festival, Nokia Theatre, LA, CA
Sunday, October 5th, 2008
2:00PM through 8:00PM
6 Billion Reasons; 1 Purpose. Films of global and social importance. A delight for all senses. The fastest growing film festival in the world. Hobnob with stars. FREE!!!!

Voices Love Music Gala, Beverly Hills, CA
Sunday, October 12th, 2008
Dinner, live music, dancing, silent auction, celebrity performers and more to benefit and empower victims of domestic violence and abuse.

Solar Conference 2008, San Diego, CA
Monday, October 13th, 2008
Solar Power 2008 features over 210 exhibitors, 125 speakers, networking opportunities galore, and an anticipated 10,000 visitors! Every major solar company in the world, from Suntech Power Holdings, SunPower to GE Solar will be there on display!

Mid-Month Update: Hot News on Cool Stocks
Tuesday, October 14th, 2008
The mid-month update of the hot news on cool stocks report will be published between 9:00 a.m. and 5:00 p.m. PT. Check online in the morning and again at noon PT, just in case we get it out early!

Glow Project Film Screening, Sacramento, CA
Tuesday, October 14th, 2008
How is it that some women are wildly successful, while others with the same education, skills, stumble. Learn what powerful essence can be tapped to put you on top!

Premium Subscriber Online Chat with Natalie Pace
Wednesday, October 15th, 2008
8:45AM through 9:30AM PT
Where do you profit when the markets head south? Put options! Learn a few tricks of the trade from a top Wall Street stock picker. Also, what's up with last year's hot industries, like solar energy? Is it fried? Learn trading tips for turbulent times

Clean Vehicle Tech Expo, Ontario, CA
Thursday, October 16th, 2008
Focusing on alternative/clean fuel vehicle technology, the EXPO brings together Southern California’s fleet operators, infrastructure technology providers, funding agencies, and other industry experts to share information on alternative/clean fuel vehicles.

AltCar Expo & Conference, Austin, TX
Friday, October 17th, 2008
Electric, natural gas, biodiesel, hydrogen, ethanol, propane, hybrid and other vehicles. Join the debate by test-driving your fave new rad car!

CA First Lady's Conference for Women, Long Beach, CA
Wednesday, October 22nd, 2008
First Lady Maria Shriver hosts a day of breakout sessions and keynote speakers like no other conference in the U.S.! Past speakers include Queen Noor, the Dali Lama, Michelle Obama, Laila Ali, Eckhart Tolle and Tony Blair. Prepare to be inspired and wowed.

10th Annual Milken Institute State of the State Conference, LA, CA
Tuesday, October 28th, 2008
Former CA governor Gray Davis, the president of the UC system, the CEO of Williams Morris Agency and more discuss California's future.

Online Chat with Lawrence Yun, National Association of Realtors’ Chief Economist
Wednesday, October 29th, 2008
8:45AM through 9:30AM PT
NataliePace hosts an online chat for subscribers with Lawrence Yun, Nat'l Assoc. of Realtors Chief Economist. Will the housing slide be over soon?

21-day Get Rich and Enrich Coaching Call Series
Saturday, November 1st, 2008
7:00AM through 7:30AM
How would you live if you had all the money in the world? Wake up to Natalie for 21 days in a coaching call series designed to activate and maximize the creative, abundant potential in your life. Live your dreams starting right now! Go to the SharingWisdom bulletin board NOW for information on how to access the pre-recorded calls.

SACC NY Women's Conference, NYC
Thursday, November 6th, 2008
The Swedish American Chamber of Commerce presents Women Leaders in the 21st Century. A day-long conference focused on empowerment, education and networking with some of the most admired VIPs in NYC and Sweden.

Opportunity Green Conference 2008 at UCLA
Saturday, November 8th, 2008
Opportunity Green 2008 is focused on being green + being profitable. Explore Product Innovation & Design for Sustainability, How Fortune 500's are Implementing Sustainability for Growth, Raising Investment Capital, Branding and more…

Teleconference with Natalie Pace
Friday, November 14th, 2008
7:00AM through 7:30AM PT
Participants in the 21-day coaching call series get a free interactive question and answer session with Natalie Pace. 21 days to prosperity and abundance. A complete shift in how you look at and do everything!

LA Opera: Carmen by Bizet
Saturday, November 15th, 2008
7:30PM through 11:00PM ()
One of the sassiest and most entertaining operas of all time! Don’t miss it! Mezzo-soprano Viktoria Vizin, who was hailed as a "ravishing Carmen" by the Chicago Tribune in her appearance at Lyric Opera, makes her Company debut as the sensuous Gypsy diva.

Greenbuild Conference, Boston, MA
Wednesday, November 19th, 2008
Revolutionary Green: Innovations for Global Sustainability, hosted by the Green Building Council. This year, the keynote speaker is Archbishop Desmond Tutu. Experts on the green building movement and green collar jobs.

Transportation Conference and Expo in DC
Tuesday, December 2nd, 2008
An open forum for research and development of electric drive including: battery, plug-in, hybrid, and fuel cell. Researchers, educators, designers, policy makers and end-users brainstorm on how to promote sustainable vehicles.

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