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Vol.7 Issue 7, July 1st, 2010
Send comments and suggestions or get more information at info@NataliePace.com

QUOTE OF THE MONTH:
"The key to the 2011 story is debt. Europe has lots of bad debt. The debt/GDP ratio is growing rapidly in the US. Those countries that have avoided accumulating large quantities of debt relative to GDP will do well. Hong Kong and Singapore certainly have. But there's a lot of questionable debt floating around in China."

Dr. Marc Miles, global strategist and editor,
2006 Index of Economic Freedom.


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Tesla Trades on NASDAQ!

by Natalie Pace.

Includes a Car Stock Report Card.

Tesla Motor Company, the maker of the 100% electric roadster that is the envy of rich and green car lovers around the world, begins trading on NASDAQ, under the symbol TSLA, on Tuesday, June 29, 2010. Prices open at $17/share with a $1.6 billion market value.

The IPO was oversold at a higher price, which is a great sign that there is a big appetite for a great-looking, gas-free car – at least with the Silicon-Valley power elite who bought up the shares before they began trading publicly. 13.3 million shares at $17 each were purchased – up from the planned 11.1 million shares with a price of $14-$16.

Sergey Brin and Larry Page (the Google co-founders) were early investors, but Toyota announced in May that they were buying in, as well. Toyota and Tesla just signed an agreement to partner on electric vehicles, parts, production and engineering support. Toyota will purchase a private placement of Tesla common stock, in the amount of $50 million, in just a few days. Tesla just bought a Toyota factory where their new lower-priced sedans will be built. The Fremont, California factory that Tesla just purchased was still building Corolla and Tacoma vehicles in April 2010, so the goal is that production will ramp up with very little downtime.

It’s a marriage made in … Obama heaven. Tesla already has the roadster, with a price tag of $111,000 but wants to "relentlessly drive down the cost of EVs." Toyota wants to sell EVs by 2012. Toyota has the factory experience and the turnkey ability to ramp up production, but as a foreign-owned company won’t qualify for the Stimulus Support. Tesla claims to have proprietary technology on how to keep the batteries cool enough, the torque hot enough and the investor and government dollars flowing until car sales and technology licensing revenue pick up the slack. Tesla was awarded $465 million in low-interest loans from the US Department of Energy on June 23, 2009 to accelerate the production of affordable, fuel-efficient electric vehicles, and the IPO should bring in $226 million.

The interesting thing about this IPO, in addition to it being hot, hot, hot in a down-trending year, is that Chairman and CEO Elon Musk is trying to sell the company as a Silicon Valley play, more than a Detroit automaker. He emphasizes the significance of having "Silicon Valley engineering talent" and the first mover advantage that Tesla has in innovating the systems that power EVs. "The Tesla Factory effectively leverages an ideal combination of hardcore Silicon Valley engineering talent, traditional automotive engineering talent and the proven Toyota production system," says Tesla CEO Elon Musk. "The new Tesla Factory will give us plenty of room to grow."

No doubt, the turnkey nature of the Toyota factory is a huge advantage and may have played a role in the oversubscribed IPO. After all, Toyota is a $109 billion company that might just want to gobble up Tesla down the road.

So, should you buy now? There will be quite a lot of shares available, up to 80 million or 86% of the total outstanding shares, meaning that even with a hot story and major headlines, and especially considering the current volatile marketplace, there could be downward pressure on the share price. IPO participants have agreed not to dispose of or hedge Tesla for 180 days after Tesla begins trading on NASDAQ, however, be forewarned that if the IPO participants decide to dump for Christmas, when their period of restriction ends, that could be coal in Tesla investors’ stockings. Elon Musk will still own 28-29% of Tesla.

The real question here is, "Is Tesla a technology innovation company or a car manufacturer?" Car guys pooh pooh the growth possibilities, noting the tough auto manufacturing environment that has eaten legacy brands like General Motors alive. However, Toyota makes a pretty penny licensing hybrid technology to Ford, Nissan and Mazda, and if Tesla has the goods on EVs, they could be in a position to license that technology as well.

One bugaboo in electric cars has been the fickle nature of the lithium-ion battery. If Tesla has mastered this, which they say they have, then they do indeed have a first-mover advantage that is more Google-esque than Ford-like – provided electric cars are the wave of the future… (And they better be, if we’re so desperate to find oil that we have to dig a mile beneath the ocean, using untested technology and safety protocols…) That is exactly what Tesla is banking on. Below is the case Musk and his team make in his SEC-registered IPO registration filing:

Harnessing the energy of a large number of lithium-ion battery cells into an electric vehicle required us to develop sophisticated battery cooling, power, safety and management systems. Delivering the instant power and torque of electric technology also required us to develop a proprietary alternating current 3-phase induction motor and its associated power electronics. In addition, we developed extensive software systems to manage the overall efficiency, safety and controls of the Tesla Roadster and our planned future vehicles. These technology innovations have resulted in an extensive intellectual property portfolio.

Tesla is cash negative and will be for awhile, and that is very different from the story when Google entered the market with their IPO in 2005, at a time when their revenue was doubling every year and profit margins were in the 35%+ range. Tesla has generated $147.5 million in revenue since the company began operating. Currently the deficit is $290.2 million.

Another fly in the ointment is nepotism. The Tesla board includes some of the smartest power players in Silicon Valley, with ties to Toyota, Cypress Semiconductors, Audi and eBay. (Elon Musk founded PayPal, which sold to eBay.) Kimbal Musk, Elon’s brother, is also a board member. Among the executives of technology, venture capital and the Silicon Valley patrician elite, Kimbal’s credentials wilt. He’s the CEO of OneRiot, Inc and the owner the The Kitchen. Kimbal graduated from the French Culinary Arts School in New York City.

The Rage Against the Machine side of me loves Kimbal’s appointment to the board. However, we didn’t have Roger Clinton as the Secretary of State, or Jeb Bush as the Vice President (although that might have been a good thing), or Billy Carter (brother of President Jimmy Carter) overseeing the DEA, just because he’d founded Billy Beer. Who gets to put their brother on the board?

The bottom line is this car is impressive and I have yet to find one bad review of it. In October 2008, Motor Trend called it, simply, "a fabulous car." Paul Horrell, the Motor Trend writer, adds details, saying, "The powertrain is now so intuitive that I seldom thought about it. Repeat for emphasis: I've driven a car with performance better than a Corvette Z51, and I hardly thought about the propulsion." As for speed, Horrell was equally impressed, writing, "As fast as you can stretch your foot, this thing delivers. So don't floor it until there's clear air in front of you. Lots of clear air."

Bottom line. This isn’t a clear cut Google rocket ship IPO, but the vertical integration and technology angle is more Silicon Valley than Detroit. By all accounts that I can find, this car is truly amazing, and honestly, I wouldn’t be surprised to see it win Motor Trend’s 2011 Car of the Year. Additionally, given the 24/7 news cycle on the BP Oil Spill, Tesla could just be the bright star networks can’t wait to shine on Tuesday.

If you’re a greenie, and you’re willing to own Tesla through the ups and downs of the volatile Wall Street craziness that we’re in currently, as a vote of support for electric cars and for the promise of proprietary technology that can be licensed around the world, go for it. If you’re in it strictly for the dough, then you have to consider the macro trends, the summer doldrums, hurricane season, the election-year cycle (down) and the fact that this company will not turn a profit in the next quarter, or the quarter after that. When companies enter their production phase, a thousand things can go wrong, even if they are folding themselves neatly into a production powerhouse, like Toyota.

Thus, I have put Tesla on my Watch List for now. I’ll be one of the first buyers of the new sedan. And I’ll likely be a buyer of the stock, once I see how buoyant it can be through hurricane season.

 

About Natalie Pace:
Natalie Pace, is the author of You Vs. Wall Street and host of the Pace and Prosperity radio show on BlogTalkRadio.com/NataliePace. She is a repeat guest on FoxNews, CNBC, ABC TV and has contributed to Forbes.com, Sohu.com and BestEverYou.com and Magazine. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on http://www.facebook.com/pages/Natalie-Pace/416616285568, on BlogTalkRadio.com/NataliePace and on YouTube.com/NataliePaceDOTCOM. For more information please visit, http://www.nataliepace.com.

 

Please note: NataliePace.com does not act or operate like a broker. We report on financial news, and are one of the most trusted independently owned and operated financial news corporations in the U.S. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.   Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a long, safe strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

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


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The High Price of Cheap Goods.

by Natalie Pace.

Includes a Technology Report Card featuring Apple, Cisco, Dell, Hewlett Packard, Microsoft, Intel and Amazon.

Multiple suicides at a Chinese factory that assembles iPhones, Kindles & PCs.

The world’s most popular phones/computers/readers/PCs and more are assembled at a Chinese-based, Taiwanese-owned, factory that has become a hotbed of employee deaths of late. It is widely reported that there have been, 13 suicide attempts and ten resulting deaths at FoxConn Technology. (Source: BBC, the AP, China Daily, Reuters and various other media outlets). Foxconn employs 800,000 workers and is one of the most popular technology factories in Asia. This is where many Apple, Sony, Dell, Nokia, Cisco, Intel, Microsoft, Nintendo, Amazon, Motorola, Nokia and Hewlett-Packard products are assembled by Chinese workers with very little education, and, by some reports, even less freedom.

This isn’t news, really. There is already a Wiki page devoted to the crisis at FoxConn. Working and living conditions at Foxconn came under scrutiny in 2006, after an article by two China Business Daily writers, Wang You and Weng Bao, who reported on (alleged) unsavory factory conditions. Wang and Weng were subsequently sued by FoxConn, had their assets frozen and were fined $3.77 million – a decisive judgment that scared off articles critical of FoxConn for years thereafter. A recent Wall Street Journal (on May 27, 2010) op-ed piece claimed that the article published by Wang and Weng had been "shown to be false." Whether the ultimate truth is that the reporting was shoddy or Foxconn was successful in buying off the judge (both claims have been made), Reporters Without Borders and Steve Jobs, who reportedly intervened, were successful in having the fine reduced to one yuan (12 cents) and the reporters’ assets were released.

After the article was published, Apple conducted an audit of the factory. The Apple audit didn’t turn up any major grievances that employees had with the factory and found "the supplier to be in compliance in the majority of the areas audited." The Apple auditors recommended reducing the workers’ overtime and putting in an employee and manager training protocol that would prevent potentially objectionable disciplinary punishment – mostly long periods of standing -- which two employees had complained of.

With the spate of recent suicides, however, the Foxconn situation has become heightened. There are daily updates on China Daily and other Chinese media. The Chinese government has promised an investigation into the Foxconn crisis and to release the results of this investigation to the public. At the same time, the Chinese government is also assuring Taiwan business owners (like the owners of Foxconn) that the country will continue "favorable policies" for enterprises based on the mainland.

While the tragedies are getting headline coverage and senior government handling in China (a country with censorship policies), the situation has largely flown under the radar in the U.S. Regular updates continue to be provided from Reuters and the Associated Press, but the ink and airtime devoted to this crisis is relatively small, considering the gravity of the situation. The Wall Street Journal covered the suicides on May 27, 2010 (the day after the 13th death), in an online op-ed with the headline, "It's too soon to draw conclusions about a complex issue," which stated, "Indications so far are that conditions in the factory are good and job applicants are eager to work there." Without providing any evidence of the investigative journalism required to make such claims, the Journal’s opinion writer went on to note, "Several of the recent suicides seem to have been related to love affairs gone wrong," and that "suicide clusters" are common among "young people, who are highly suggestible."

Foxconn, which employs 800,000 workers in China, has already begun making changes. The company has, reportedly, hired psychiatrists, increased wages (effective October 1, 2010, for workers who satisfy a probationary period and performance evaluation), installed safety nets on buildings and will have an outside real estate contractor manage at least half of their dorms going forward. (Source: various reputable media outlets, however there was no press release on the Foxconn or Hon Hai websites.) But will that be enough to stem further suicides?

One journalist, JonT, at the Shenzhen Post, who claims to know both workers and management at Foxconn, counsels that the issues run deeper than wages (though the pay raise is certainly a leap in the right direction). None of the below complaints of JonT’s sources were identified in the Apple audit. JonT claims that the comments provided by his sources are not part of the public record because: "You see employees will say one thing to reporters and to investigators under threat of the company’s pendulum and a whole other thing to a friend of a friend over Johnnie Walker."

So, with the forewarning that the following is unsubstantiated, secondhand hearsay, which must be false or to have been deliberately hidden from the view of Apple’s auditors in 2006, I publish this blogger’s comments. There are plenty of U.S. companies and Chinese officials conducting a thorough investigation at Foxconn and now is the time to turn over all rocks and see what crawls out. If these claims are true, they should be addressed head on and corrected immediately. And if these claims are without merit, an in-depth investigation will only give American consumers greater confidence in factory conditions where their favorite products are assembled.

According to JonT, workers are fined for infractions such as arriving late, missing work (even if they are legitimately ill), washing their own clothes, talking while on the job and purchasing clothes and other personal items outside of the designated on-site store. (The Apple audit posted on Hon Hai’s website made no mention of the company fining the workers for any reason whatsoever.) One employee reported that she had to borrow money to pay the negative balance from her salary one month, and that women were at risk of sexual harassment from the onsite managers -- including rape. As for the movies and pools and other recreational facilities on the "campus" of the factory, those perks are limited to upper management, according to JonT’s source, and even if they were extended to the blue collar workers, there was no time left after 18 hours of work to enjoy them.

Ten suicides in a population of 800,000 people are far lower than the U.S. national average (which experienced 13 suicides for every 100,000 people age 20-24 in 2000). However, the fact that all of the suicides are clustered in one central location (Foxconn campuses) is alarming. One well-documented incident is the suicide of Sun Danyong on July 16, 2009, which centered around a missing iPhone (not love gone awry). It is widely reported that FoxConn Security used abusive and illegal measures for interrogating Sun Danyong about the missing phone and that the company later apologized to Sun’s family (sources: Wall Street Journal, Southern Metropolis Daily, Sina Online News and ND Daily). At the time, the security official Gu Qinming, denied any physical abuse, saying, "I was a little angry and I pulled his right shoulder once to get him to tell me what happened. [The beating] couldn't have happened."

Last Monday (on June 20, 2010) social scientist Yang You-ren from Taiwan’s Tunghai University told the Associated Press, "Foxconn's military management model, including scolding and sometimes beating front-line workers, helps drive isolated Chinese workers to kill themselves. If the company does not put an end to that, there will be more suicides in the future."

Cheap labor is the dirty underbelly of low-priced products. No giant U.S. technology company is exempt. Under the world’s increasing scrutiny, however, CEOs with factories in China are being forced to reevaluate the living and working conditions of their labor force.

The major U.S. companies who contract with Foxconn have joined together, led by the Electronic Industry Citizenship Coalition. Steve Jobs has vowed that Apple is "on top of this." Hewlett-Packard launched an investigation of Foxconn earlier this month, and, according to a statement on June 8, 2010, has already identified "a number of areas of improvement and we are actively working with Foxconn to address these concerns." Michelle Mosmeyer, a Dell spokesperson, updated me by email, writing, "Dell is actively investigating this situation. We recognize the magnitude of this situation, and we are concerned and saddened by this terrible loss of life." Ms. Mosmeyer further commented, "Our hope is that in the wake of this tragedy, the EICC task force can drive global improvements that address this difficult issue."

If you own shares in a major technology company and wish to voice your concern over the Foxconn tragedies (or thank them for their commitment to getting to the bottom of this and correcting the situation), simply go to the company website, click on Investor Relations and there you should discover an email or snail mail address for your comments. These technology companies are very popular holdings in mutual funds and Exchange Traded Funds, so it is likely that you own them in your 401K, IRA, etc., and thus have a voice that increases in power with each additional person who joins you.

Click on the Technology Stock Report Card to discover which companies can afford to have their factory costs increase without a substantial hit to the bottom line, and which might already be looking to move their factories to Viet Nam.

Today, I added Amazon to the Cooling Off portion of my Hot News on Cool Stocks List.

 

 

About Natalie Pace:
Natalie Pace, is the author of You Vs. Wall Street and host of the Pace and Prosperity radio show on BlogTalkRadio.com/NataliePace. She is a repeat guest on FoxNews, CNBC, ABC TV and has contributed to Forbes.com, Sohu.com and BestEverYou.com and Magazine. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on http://www.facebook.com/pages/Natalie-Pace/416616285568, on BlogTalkRadio.com/NataliePace and on YouTube.com/NataliePaceDOTCOM. For more information please visit, http://www.nataliepace.com.

 

Please note: NataliePace.com does not act or operate like a broker. We report on financial news, and are one of the most trusted independently owned and operated financial news corporations in the U.S. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.   Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a long, safe strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

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


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Will Africa Finally Take Off?

by Dr. Gary S. Becker.

After many decades of hopelessness, there are finally grounds for believing that sub-Saharan Africa may be close to taking off toward sustained economic growth. Africa has rebounded from the worldwide recession faster than many other nations. The International Monetary Fund estimates that African GDP rose by 4.7 per cent in 2009, and the Fund forecasts that Africa’s growth will increase still further to almost 6 per cent in 2010. The rate of economic progress is not uniform in all the African economies, but these are impressive figures for a continent that has disappointed for so long.

Several factors explain why Africa’s future looks rather bright. Probably number one is the continuing discovery in Africa of minerals and fossil fuels that are demanded by China, India, and other countries as world economic growth picks up. Experts estimate that the recently discovered coal deposits in Mozambique are the largest new coal reserves since the major finds in Australia during the 1960s. Oil reserves in Nigeria, Ghana, and other parts of Africa constitute more than 10% of the world’s reserves of oil, and South Africa has 40% of the world’s gold. Africa also has about one third of the world’s cobalt-- a mineral used to prepare magnetic, wear-resistant, and high-strength alloys-- and many other minerals.

Africa exports natural resources primarily to the rapidly developing countries, like China, and to the US. For example, Africa’s trade with China has multiplied several fold during the past decade to reach more than 12 percent of total African exports, on par with Africa’s trade with the US.  Trade with India, Korea, and Brazil, although much smaller, is also growing at fast rates.

Governments in many African countries generally adopted a socialist approach to direction of their economies when they became independent nations after World War II. At that time, even many economic experts considered socialism and government management of an economy, as practiced very differently in the Soviet Union, China, and India, to be the best approach to economic development. Yet government control led to widespread inefficiency and corruption in Africa (and elsewhere) since these governments had neither the skills nor the incentives to conduct honest and effective public administration of the economy.

However, attitudes of African leaders toward markets and private business began to change a couple of decades ago, in part because the socialist approach failed. Also important was the rapid economic growth experienced by the Asian tigers, China, India, and Chile as these nations shifted toward greater roles for the private sector and smaller economic roles for government. Democracy has also become stronger in some African countries, although strongmen and other undemocratic leaders still are prominent in many African countries.

While some optimism about Africa’s future is warranted, its future is not assured because Africa still faces important problems. Yes, the private sector in mobile phones, natural resources, and elsewhere has grown a lot in many African countries, but the expansion of private companies has often taken the form of crony capitalism rather than competitive capitalism. By crony capitalism, I mean that governments give special protected positions to favored companies in important sectors of the economy rather than allowing competition among companies to determine who are the winners and losers. Crony capitalism is partly the result of a continuing excessive role of the government in the economy.

At the same time it encourages government corruption because companies compete politically to obtain these favored positions, partly by bribing government officials to favor them. Crony capitalism may be better than socialist direction of an economy, but it is far inferior to competitive capitalism.

During the past 30 years, fertility has fallen in all regions of the world, including Africa. But the typical African women still has 5 children over her lifetime; a number that far exceeds that in every other region of the world. Families with many children do not have the resources to invest much in the education, health, and other human capital of their children. As a result, for example, the World Economic Forum’s index ranks South Africa at the very bottom in both math and science education out of over 100 countries considered.

Moreover, high birthrates eat up economic progress and limit the magnitude of increases in per capita incomes. However, if African economies continue to grow at a high rate, parents will begin to reduce rapidly the number of children they have in order to invest more human capital in each child, as has happened in every other country that experienced sustained economic progress.

Most African countries have enormous health problems due to the heavy incidence of malaria, AIDS, and other diseases. For example, life expectancy in South Africa declined from 65 years at 1990 to just about 50 years as the prevalence of AIDS among 15-49 year olds grew to about 20%. Yet great progress is possible in improving health in this region. Foreign assistance can be important in the health field through the provision of medicines, knowledge, and medical personnel, as long as the aid mainly goes to NGOs and other private African organizations rather than through corrupt governments.

Africa still gets too much foreign aid that raises government spending at the expense of the private sector. Net official aid to Africa has risen sharply since 1970, as shares of both government spending and GDP. In 2008, such aid constituted more than 30% of government spending and 4% of African GDP. India discovered during its first 40 years of independence that foreign aid--India used to be the world’s largest recipient of foreign aid--only slowed down the necessary adjustments toward a smaller government sector and a larger competitive private sector. Africa needs to learn the same lesson.

Clearly, for these and other reasons, economic progress in Africa is not assured. Yet the evidence provides grounds for far greater optimism about Africa’s future than at any time during the past 100 years.

 

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

 

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


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Hot FUNds for Summer.

by Natalie Pace.

Think Natural Resources.

2010 Top Funds
Natural resources are the real story behind the top performers in 2009 and these fund categories should lead 2010-2011 as well.  This was the subject of my June 18, 2010 appearance on CNBC. (Click on CNBC to watch video of that segment.)

You’ll see in the chart below that Latin America, emerging markets, Pacific-Asia (excluding Japan), precious metals, natural resources and energy funds earned 44-116% in 2009, topping the street in returns. What these funds all have in common is a natural resources angle. Having these funds as a slice of your nest egg means that you would have supercharged your returns in 2009 by 44-115% per fund! Better yet: the natural resources play is a winning strategy that should continue into 2010 and 2011.

Top Earning Funds of 2009

Fund

Returns

1.

Latin America

116%

2.

Diversified Emerging Markets

74%

3.

Pacific-Asia, excluding Japan (including Australia & New Zealand)

71%

4.

Technology

62%

5.

Precious Metals

53%

6.

Foreign Small/Mid Growth

49%

7.

Natural Resources

48%

8.

Europe

47%

9.

High Yield Bonds

47%

10.

Energy

44%


@2010 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is, not warranted to be accurate, complete or timely. Neither Morningstar or its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

Why?
Natural resources are the building materials of recovery and where companies and countries have to invest to grow, make their products and retool their infrastructure. Natural resources are also the staples of modern life – which is something rather new to the formerly rural, currently burgeoning, countries of India and China.

Commodities and energy are rich resources of Latin America and Australia/New Zealand (Asia-Pacific) – two of the super performers of 2009. Australia and New Zealand have the added benefit of being strategically close to China, which has resulted in so much Chinese acquisition of Australian business that the Australian government has had to rethink their foreign ownership policies.

Attractive Funds
1.  Australia/New Zealand -- rich in copper, gold, lithium and other natural resources and strategically close to China. Lithium is a relatively new resource that is used in lithium ion batteries for everything from powering up computers to electric cars.

Example of an Australian ETF: iShares MSCI Australia Index (EWA)

2.  South America -- rich in wood products, energy products, lithium and other natural resources, with business-friendly governments in Brazil and Chile. 

Example of a South American ETF: S&P Latin America 40 Index Fund (ILF)

3.  Emerging Markets Funds: many of which have substantial holdings of natural resources – in the top performing countries of Asia-Pacific and South America.

Sample Emerging Markets funds: iShares Emerging Markets Index (EEM); JP Morgan Emerging Markets (EMB)

What about price?
January 2009 was a low point in the stock market. (The 14-year low of 6547 in the Dow Jones Industrial Average occurred on March 9, 2009.) The funds mentioned above were trading at prices half of what they are today. Will they go that low again?

While no one has a crystal ball to predict fund prices, there are historical trends that can help to inform decisions. For an in-depth analysis on monthly and election year trends, read my April 2010 article, "Spring Rally! How Long Will It Last?" from Vol. 7, issue 4.

In short, we are entering the summer doldrums, when volume drops (while Wall Street vacations). Following that, there are the two months that typically give investors stomach acid -- September and October. October has been the lowest performing month for the last decade and is the month that has hosted the worst stock market days in history, including the Great Depression and Black Monday of 1987. You might have your favorite funds on a shopping list, with the intention of adding some sizzle potential to your returns, once the price becomes more favorable.

If you had the foresight to own these funds in 2009, then be aware that values have already fallen 3% this year. You might wish to rebalance your portfolio (and take some profits) before we hit the summer doldrums and hurricane season. Whenever you are re-distributing your funds, be sure you are employing a careful plan that is working in today's marketplace; buy and hold is not working anymore and is unlikely to work for the foreseeable future in the slow growth cycle that the U.S. entered more than a decade ago. For more information on what a diversified plan looks like, check out page 92 of You Vs. Wall Street.

If you need help repairing a cracked nest egg, I have a FREE Tuesday Night Teleconference series that you can stream online 24/7 or download onto your iPod. Learn how to get started, how to employ an easy-as-a-pie-chart nest egg strategy that works in bull and bear markets, and earns money while you sleep. Go to BlogTalkRadio.com/NataliePace for call-in, log on and download instructions.

Exclusive Opportunity: If you’d like to take three days in a board room with me, and walk out with a nest egg blueprint that works for the rest of your life, call 866.476.7442 right away to register for the next Get Rich and Enrich Retreat. Get more information on the home page at NataliePace.com, under the Get Rich and Enrich banner ad. Whether you are a MD, CFP, plumber or preacher, this strategy has been a top performer in bull and bear markets and will supercharge your own bottom line, as well as your clients.

 

About Natalie Pace:
Natalie Pace, is the author of You Vs. Wall Street and host of the Pace and Prosperity radio show on BlogTalkRadio.com/NataliePace. She is a repeat guest on FoxNews, CNBC, ABC TV and has contributed to Forbes.com, Sohu.com and BestEverYou.com and Magazine. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on http://www.facebook.com/pages/Natalie-Pace/416616285568, on BlogTalkRadio.com/NataliePace and on YouTube.com/NataliePaceDOTCOM. For more information please visit, http://www.nataliepace.com.

 

Please note: NataliePace.com does not act or operate like a broker. We report on financial news, and are one of the most trusted independently owned and operated financial news corporations in the U.S. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.   Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a long, safe strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

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


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Bonds or Bond Funds for Retirement Income?

by Rob Williams, Director of Income Planning, Schwab Center for Financial Research.

First published on Schwab’s Market Insight page on June 9, 2010.

 

Key points

* Depending on your situation and needs, it's possible to generate retirement income in a number of ways, including bonds and bond mutual funds.

* Here, we'll examine different scenarios to determine whether bonds or bond funds are more appropriate to help meet your fixed-income needs.

* Helpful for retirees looking to generate income, as well as manage other aspects of their bond portfolios.


Depending on your situation and needs, it's possible to generate retirement income in a number of ways. Two common choices are bonds and bond mutual funds. The choice between bonds and bond funds doesn't have to be an all-or-nothing decision, either. You may want a combination of both to meet your retirement needs. Here, we'll look at several different scenarios to help determine when bonds or bond funds might be more appropriate for retirement-income generation.

 

Bonds or bond funds?

If you:

Then consider:

Need a specific level of income

A ladder of individual bonds

Don't want to incur certain capital gains

Individual bonds—to avoid capital gains resulting from fund redemptions

Seek full redemption value at maturity

Individual bonds that you can hold until maturity

Desire liquidity

Bond funds—can redeem fund shares at any time, at the day's closing market value

Seek portfolio stability through diversification

Bond funds—a fund might hold hundreds of different bonds

Want to reinvest income payments automatically

Bond funds—a fund pays interest in the form of dividends, which can be reinvested easily in new fund shares

Want to protect your investments from rising interest rates

Both bonds and bond funds are both good options, though no investment can fully protect you from rising interest rates

Scenario: A retiree in need of a specific level of income
Solution: Individual bonds
Individual bonds can offer regular, fixed payments and targeted maturity values, and building a bond ladder can help create an ongoing income stream. Even if the market value of a given bond fluctuates during its term (depending on changes in interest rates, overall credit quality of the issuer, etc.), it shouldn’t affect your retirement income unless you need to sell prior to maturity, or the bond experiences credit quality issues.

Conversely, bond funds' income payments can vary over time, so retirees more focused on generating a specific level of income might not be as comfortable with the variability of payments from bond funds.

Scenario: A retiree doesn’t want to incur certain capital gains
Solution: Individual bonds
When investing in bond funds, investors pay tax on capital gains realized from a fund's trading or from the redemption of shares. For some investors, a portion of the fund's income could be subject to the alternative minimum tax, as well. With individual bonds, on the other hand, investors are only required to pay capital gains taxes if the bond is sold for a profit prior to the maturity date, or if the bond was purchased at a discount.

Scenario: A retiree seeks full redemption value at maturity
Solution: Individual bonds
Bond funds have no identifiable maturity date because bonds are constantly being bought and sold, meaning there's no way to predict the fund value at any given time. Conversely, individual bonds not only have a set maturity date, but will also repay your principal at maturity (the exception being default). If you're a buy-and-hold investor, the pledge of repayment of a specific principal amount for an individual bond held to maturity makes fluctuation in market price in the interim less relevant, unless you need to sell.

Scenario: A retiree who seeks portfolio protection through diversification
Solution: Bond funds
When investing in individual bonds, we recommend you hold bonds from at least 10 different issuers in order to achieve proper diversification, unless you're only choosing US Treasuries or other bonds with very low credit risk. Bond funds, on the other hand, are very unlikely to hold bonds from 10 or fewer issuers, because of diversification rules. In fact, corporate and municipal bond funds rarely own fewer than 30 issuers, and often own hundreds.

In addition, when investing in individual bonds, you'll generally need a minimum investment amount of $10,000 for a corporate bond portfolio ($1,000 per bond) and $50,000 for an uninsured municipal bond portfolio ($5,000 per bond) to achieve proper diversification. Because bond funds typically hold hundreds of bonds in a single fund, one of their biggest advantages is diversification, regardless of the amount invested.

Many investors who seek to boost their incomes with other, more aggressive types of bond investments (such as high-yield or international bonds) also benefit from the diversification and professional management offered by bond funds. For these types of bonds, we strongly recommend the diversification offered through bond funds, not an individual-bond approach.

Scenario: A retiree desires liquidity
Solution: Bond funds
You can redeem shares of bond funds at any time for the day’s closing market value (net asset value, or NAV) of the fund, minus any applicable redemption fees. Individual bonds can be sold prior to maturity, as well, but the price could be significantly more or less than the original investment. In addition, some bonds are more liquid than others, and during periods of market volatility, those that lack liquidity might experience significant price volatility.


Scenario: A retiree who wants to reinvest income payments automatically
Solution: Bond funds
Retirees still focused on long-term growth and less on income—such as those with pensions or other fixed incomes—might choose to reinvest interest payments/dividends in new mutual fund shares. The ease of reinvestment is one big advantage bond funds have over individual bonds, though it's less of a benefit for retirees focused on income generation.


Scenario: A retiree wants protection should interest rates rise
Solution: Bond or bond funds
Retirees might also worry about the impact to their bond portfolios should interest rates rise. One way to guard against rising interest rates is through bond laddering. With a bond ladder, you invest in several bonds with staggered maturity dates, and benefit from higher rates for bonds with longer maturities while also having money to reinvest from shorter-term bonds when they mature if interest rates rise. With bond funds, you can rely on the fund manager to manage a portfolio of bonds designed to take advantage of changing rates, whereas you'd have to manage the ladder yourself if you choose to invest in individual bonds.

When interest rates rise, bond funds experience a short-term hit to price. Over time, however, income can make up the bulk of bond fund returns, and those returns will generally overcome the short-term hit to price. Furthermore, the income from the same fund in a higher interest-rate environment will be higher, as well, though if interest rates rise steadily over time, it could take awhile for the increased income to offset capital losses.

Bonds and bond funds each have significant advantages and disadvantages when it comes to retirement-income generation. It's likely that retirees will choose a mix of both in order to achieve their various income needs. For help deciding which investment is best for your income needs in retirement, call your Schwab financial consultant, or contact our Fixed Income Specialists at 800-626-4600.

 

Important Disclosures
Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges and expenses. You can request a prospectus by calling Schwab at 800 435-4000. Please read the prospectus carefully before investing.

Investment value and return will fluctuate such that shares, when redeemed, may be worth more or less than original cost.

International investing involves special risks such as currency fluctuation and political instability. Investing in emerging markets may accentuate these risks.

Investing in lower-rated securities ("junk," or high-yield bonds) subjects the investor to greater credit risk, default risk and liquidity risk.

Fixed income investments are subject to various risks, including changes in interest rates, credit quality, market valuations, liquidity, prepayments, corporate events, tax ramifications and other factors. For further details, please contact a Schwab fixed-income specialist.

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

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

Diversification strategies do not assure a profit and do not protect against losses in declining markets.

The Schwab Center for Financial Research is a division of Charles Schwab & Company, Inc.

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How to Get Rich and Stay Rich.

by Natalie Pace.

Photo by: Mary Margaret Stratton. 2010.

Let’s face it. Money can’t buy love, but it definitely buys freedom. Below are tips on how to achieve lasting wealth and break out of the boom/bust cycles that keep would-be millionaires chasing rainbows, without ever finding the pot of gold.

1. Add value. When you are a person who can add value, that is a skill that stays with you for life. Your home can be burned down, your country can enter a period of war, but if you are a physician, your skills will always be needed. So, will the skills of a CEO, a plumber, a builder, a chef, a teacher, et al. What is it that you bring to the world? What is your gift? What are people willing to pay for that talent?

One example: Steve Jobs was fired from his own company – Apple – and went on to become CEO of Pixar, before being re-hired by Apple (and running both companies for a time). That experience led to him becoming the largest individual shareholder of one of Main Street (and Wall Street’s) most beloved companies – Disney – as well as the CEO of one of the most forward-thinking, innovative and richest technology companies in the world. Apple is currently worth $243 billion.

2. Rich, not Nouveau Riche. Rich people invest for the long term and expect to achieve average returns of 10% annually (or less). Nouveau Riche are vulnerable to get rich quick schemes and boom and bust cycles. Rich people focus on embodying wealth (setting up trusts and foundations to preserve their assets for future generations); nouveau riche enjoy exhibiting wealth (driving fancy cars, living in expensive homes and buying 5-star meals for their friends). Rich people know their strengths and limitations. Nouveau Riche people often think their prowess in one arena (say earning) extends to others (say investing).

Examples: Lottery winners, athletes and others who earn a lot of money in a short period of time, especially if that launches them into an income bracket far above their friends and family, are more apt to lose all of their money than they are to become a staple in the society pages. Marion Jones, Mike Tyson, Courtney Love, child stars, Michael Jackson (whose career spanned decades and was one of the most successful performers of all time) and even Donald Trump have all had bouts with bankruptcy.

3. Avoid Get Rich Quick Schemes. There’s a well-known saying that if it sounds too good to be true, it probably is. Well, it’s hard to open your email or turn on the tube without getting hit up with a once-in-a-lifetime opportunity to earn vast amounts of money doing practically nothing. These enticing scams have gotten even more sophisticated. Convicted felons tell you they were framed by a power elite that wants to keep you down. Well-known pundits strike fear into you on their shows and then offer the solutions in the form of a product or investment you can buy (neglecting to tell you that they have ownership in the solutions outlined). Pay-to-play and product placement have become so common that almost every second in our entertainment hour has a sponsor, including TV comedies and dramas, national news and films.

A very popular solution these days for massive government debt, slow economic growth, potential inflation and declining real estate values is gold… Real estate was the Get Rich Quick scheme du jour of 2005. DOT COMs were the Get Rich Quick Scheme of Y2K.

Examples: See below for a chart on how various assets perform over time. Yes, real estate, stocks, bonds, gold and even Treasury Bills can heat up and have their day in the Sun, so to speak, but over time, the returns fall into a fairly predictable pattern. Know the expected rate of return and you’ll be in a position to capitalize on the boom/bust cycle.

4. Have a Good Plan. If you have a plan that isn’t working, it’s time to get a new one! Most people think that everyone lost money in the Great Recession, and that couldn’t be further from the truth! Buy and hold investors lost money. Investors that were using Modern Portfolio Theory, avoiding the Bailouts, adding in Hot Industries, and were annually rebalancing have done great for the past twelve years, through two severe recessions (DOT COM and the current BAILOUT). If you think your nest egg is cracked, why not fix it?

Sounds complicated, but it is easy-as-a-pie-chart, and important that you learn and employ. The strategy is outlined in You Vs. Wall Street. You can also attend a 3-day Get Rich and Enrich Retreat and set up a plan that works for life.

Examples: On March 10, 2000, NASDAQ hit a high of 5,060.34. Today, NASDAQ is trading in a range of 2225. After a decade, NASDAQ is still worth half of what it was. It’s much better to employ a plan that works, than have patience and faith and prayers that your losses will be regained.

Listen to the video blogs of Bill and Nilo Bolden and Eva Roberts for examples of people who got rid of a plan that was costing them an arm and a leg, and found one that sparked dream come true living and returns!

Video Blogs of Bill and Nilo Bolden and Eva Roberts
http://www.youtube.com/watch?v=gMmsuT84S7E
http://www.youtube.com/watch?v=fUo6UVDylp8
http://www.youtube.com/watch?v=D5Z2HSX0hhM

5. Be the Architect of Your Dream Life. Warren Buffet selects his own stocks and is notorious for avoiding technology because he didn’t really understand it the way he understands insurance. Very rich people may employ others to manage their money, but the smart ones oversee the holdings and strategies, to avoid having their money MADOFF with. This means getting financially literate. If you have not received any fiscal training, don’t expect to have a beautiful bottom line. Once you do get smart, the world is at your feet. The difference is you – your ability to know what works and to hire great contractors to build that dream house. Not trying to regulate or reform the industry.

6. Reduce expenses in dramatic (not small) ways. Cutting out cafe lattes will not make you rich. Limiting your basic needs expenditures to just 50% of your take home pay, leaves you 50% to invest, give to charity, to educate yourself and to have fun. For more information on how to jumpstart dream come true living, read "The Billionaire Game," chapter eight of You Vs. Wall Street.

7. Take a break. I have a friend who recently discovered he has high blood pressure. He’s a smart, educated guy, and he’s completely aware of the statistics. Exercise, eating right and stress-reducing activities (like sleep) lower blood pressure. But, he’s too overworked to do anything of those things. (Huh?)

Sometimes relaxing is just the right answer. The Chinese call it "the path of least resistance." Americans call it "going with the flow." If you are spinning your wheels, it’s very possible that you’re not getting anywhere because your strategy is flawed. Calm reflection is what is needed to clean the slate and discover something that works better.

Example: Recently I was in the mountains, driving around a lake on a dirt road. The road suddenly disappeared and I found myself not knowing how to get back to the main building. I backed up, and while I was trying to turn around, I heard a very nasty, scraping sound. I opened the driver’s door to discover that my car was wedged on a gigantic rock. I tried pulling forward, but the wheels spun, the engine revved into the red and I worried I’d blow the car up. Then I noticed that I was on a slight decline. I took my foot off the brake, put the car in neutral and very easily slid back and down over the rock in a matter of seconds – without harming the underbelly of the car (or having to walk back to the main building to get a group of strong men to help lift the car over the rock!).

So, here’s your license to become obscenely rich. Because at the heart of lasting wealth lies value, balance, rest, relaxation and giving back to others. A win-win-win.

 

About Natalie Pace:
Natalie Pace, is the author of You Vs. Wall Street and host of the Pace and Prosperity radio show on BlogTalkRadio.com/NataliePace. She is a repeat guest on FoxNews, CNBC, ABC TV and has contributed to Forbes.com, Sohu.com and BestEverYou.com and Magazine. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on http://www.facebook.com/pages/Natalie-Pace/416616285568, on BlogTalkRadio.com/NataliePace and on YouTube.com/NataliePaceDOTCOM. For more information please visit, http://www.nataliepace.com.


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I Went Homeless So You Don’t Have To.

by Alvin Tam.

Every now and then I will do strange experiments to push my boundaries of comfort further. Being an acrobat in the circus means that I attempt flips, handstands, and high falls to challenge my physical skills and grow as an athlete. Being an acrobat of the soul means that I challenge my values, belief systems, and automatic behaviors so that I grow as a human being.

Last December, on a chilly winter day, I decided to challenge a deeply rooted fear I had by spending 24 hours on the street homeless. I carried no credit cards, cash, I.D., cell phone, house keys, extra jackets, tissue papers, chapstick, iPod (what else do you usually leave the house with?)

I set off in the direction of downtown, carried by my own two feet, dressed in tattered sweats, to challenge a fear (read: belief) that my failure as a businessman would lead to me being homeless.

I believed the equation: financial failure = homelessness. Do you believe this too?

I did and I needed to confront it. I chose to experience homelessness for 24 hours. Here are the highlights:
•    You can’t thumb a ride in Las Vegas if you look like a bum
•    Panhandling is one of the most difficult things to do
•    I’m not a good panhandler; I made $2 in 24 hours
•    Nothing costs less than a dollar, except for bananas at 7-11
•    It gets cold at night, even in Las Vegas
•    Misery likes company – I never realized how many homeless people there are
•    People look at you with hate in their eyes when you beg


I literally walked for 12 of the 24 hours because no one would pick me up and I had no money for the bus. I also got kicked out of a public library, so sitting down in a quiet, warm place was not an option.

I ended up walking to the worst part of Las Vegas, the hidden, swept-under-the-rug part called "Tent Village" because of all the bums living in tents on the side of the road.

There I encountered hundreds of homeless men milling about, exchanging words about where to get the next meal, who’s handing out free socks, how many nights the local shelter lets you stay, and the best places to bum for money.

When I bumped into another group of men, the conversation was the same.

Another group, same conversation.

That’s when it struck me.

I can never be homeless.

I don’t say that with an arrogant or pretentious intention. I say it because I simply don’t talk like a homeless person, which is to say I don’t think like a homeless person.

And that was the kernel of wisdom of my exploration into my fear of financial failure. I realized that though I could fail in business, I could never become homeless. I just don’t have the belief that I would end up on the streets.

I do speak like a professional acrobat. While others are scared about heights, rapidly moving vehicles, and fire, I get enthused and excited.

I do speak like a professional marketer. While others are lamenting about the economy, I talk about new online marketing techniques, social networking, blogging, and computer technology.

But…

I don’t speak like a millionaire entrepreneur. While millionaires are busy talking about their next deal, strategizing on new partnerships, and planning an investment, I talk about covering my mortgage, putting gas in my car, and the 3 for 1 special on avocados at the store. I spend too much time talking like an average income producer.

What do you talk about?

Here are the 3 things you can do to benefit from my experience on the streets:

1. Write down everything you say in 1 day.
2. Listen to the conversations or language of someone you want to emulate (a business person, a great athlete, a professional speaker)
3. Have a conversation with a homeless person and listen to his dialogue.

If you notice, all these activities are simply about building awareness, since awareness is the main catalyst for change.

***

I would love to hear from you. I always respond to every email I receive personally, so this is what I want to learn from you:

What is one fear you’ve overcome and HOW did you do it?

 

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

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

  • Book: The Art of Impossible
  • DVD: The Acrofit System Level 1, Expressive Yoga for the Soul


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10 Things That Make You Feel Good Fast.

by Suzanne Beecher.

This article first appeared on Glo.com.

1. Own at least two bubble machines. There is nothing more fun than turning on a bubble machine in my front yard — friends, neighbors, even strangers stop and want to play. One time, a mother and her two young children walked by my house. They couldn't see me, but I overheard the mom say to her kids, "Oh, look! This is the house of the lady who has a bubble machine. That lady is so cool!"

2. Create your own traditions. Why eat Thanksgiving dinner just once a year? Everyone always says, "We should do this more often." So, we do it at my house three times annually: turkey with all the trimmings, mashed potatoes, gravy, stuffing, cranberries, coleslaw, skunk beans, shrimp salad, deviled eggs, green beans jazzed with tomatoes, cherry and pumpkin pie with whipped cream — all served on my antique turkey dinner plates.

3. Bake chocolate chip cookies and give them away to a stranger — just because. When you step out of your comfort zone, you can discover some of the most precious moments of your life. The most memorable gift is unexpected. When I hand someone a bag of cookies, the smile on their face is amazing. We talk and laugh, and it's a moment that neither of us will ever forget.

4. Make fun of yourself. The next time something embarrassing happens, don't hide it. I was at a New Year's Eve party — brand new friends, brand new black velvet dress. But when I looked down at the white rug in the bathroom, pieces of my dress covered the floor. When I went back into the kitchen, there was my dress — everywhere. I was shedding. How does a girl gracefully clean her dress off the floor, without folks noticing? Take it from me, it's tricky. But if you very carefully shuffle your foot along the floor, while chatting with other party guests along the way, you can gather up enough of your dress to return it to the store the next day. At least it worked for me.

5. Be your own biggest and loudest cheerleader. I wrote myself a letter, listing my good qualities and why I would be a great catch, if someone were looking for a good friend. At first, it felt shameful to do a little bragging. But if I don't appreciate myself, how can I expect other folks to see the wonderful things inside of me?

6. Don't let the boogeyman hang out underneath your bed. Stop the "what ifs" in their tracks: If I'm going to tangle with the boogeyman at 3 a.m., I need to practice (similar to the fire drills we used to do in school, when the building wasn't on fire). When fear and anxiety strike, I recite this simple sentence as the antidote: "Somebody should have told me about this when I was a kid." This mantra doesn't have anything to do with my fear, but it stops my worrying cycle, because I've rehearsed it before the crisis and assigned it the job of interrupting fearful thinking.

7. Let go of the old, so you can make room for something new. I live in a 1926 historical home. This sounds romantic, and it is, until you need to find a place to store something. With only four tiny closets and no basement, everything has its place — literally. My maxim is: "If I buy something new, something old has to go." It's a formula that helps keep my life in balance, too, because it forces me to ask the question, "What's really important to me?"

8. Embrace the quirks in your personality. I've discovered I'm a little strange — stranger than the average Suzanne. There are many wacky things about my personality, and sometimes, I consider chasing them away. But then I recall the words Leonard Cohen so mindfully wrote, "There's a crack in everything. That's how the light gets in." So, even though some people might consider the peculiar parts of me "cracks" in my personality, in my case, that light coming in makes me creative, and, I think, a pretty interesting person.

9. Pass somebody a note. Letting a friend know that you're thinking about them will bring a smile to their face — and yours. Frequently, I'll send a spur-of-the-moment email to a friend saying something like, "I saw a gorgeous blue shirt when I was shopping yesterday. It reminded me of the one you were wearing the last time we had lunch together. Blue is definitely your color — wear it more often!" I admit, I do feel a bit strange hitting the send key after drafting one of my "little nothing" notes. But writing them brings a smile to my face, and I know reading them will do the same for my friends.

10. It's okay to break the rules sometimes. A rule in my house growing up was: "If you start something, you have to finish it." Consequently, I only checked out thin books from the library. But now I'm all grown up, so if I'm not loving a book, I just stop reading. If I desperately want to find out "whodunit," I give myself permission to skip over parts of the story and speed read to "The End." Dog-eared pages, writing notes in margins — if the book belongs to me, why not? No rules. I simply read for what I need at the moment, and enjoy losing myself in the fun of it.

 

About Suzanne Beecher
Suzanne Beecher is the author of Muffins and Mayhem: Recipes for a Happy (if Disorderly) Life (Touchstone/Simon & Schuster, $24.99). She has owned a restaurant, founded and published a business magazine, founded a nonprofit program to feed the homeless, and homeschooled her youngest son. She writes a daily column at DearReader.com and designs book clubs for publishers, booksellers, and libraries across the country. She lives with her husband in Sarasota, Florida. Please visit her at DearReader.com or visit MuffinsandMayhem.com and create your own cookbook of memories.


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A Courtroom with a View.

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

 

"Oh, no! Just my luck," I fumed. I was just selected as a juror in a criminal case in downtown Los Angeles. I was not happy thinking about how this was going to interfere with my work as a small business owner.

But there was no help for it – I was trapped. The next day, I appeared with my fellow jurors, ready to hear the case against the young man accused of three robberies. But there was a delay. We were kept waiting outside the courtroom for quite some time when the Court Clerk appeared and told us that she couldn't tell us anything yet but that "patience was a virtue". We guessed that settlement talks were going on, and sure enough, soon afterwards we were invited into the courtroom where the judge announced that they had come to a resolution in the matter, and we were dismissed. Yay! Sighs of relief and high-fives all around.

My friend, Patricia Guentzler of NAWBO, who just happened to be selected for the same jury, and I went outside for a bit to talk. After a few moments, Elise, the Court Clerk saw us and came over to say hello. She then told us exactly what had happened: the young man took a plea bargain of 27 years in prison.

Yikes! I thought, 27 years! That’s a bargain?? I don't think I'd last 27 days in prison... What had he been facing?

She told us that the young man was 26 years old, had two prior convictions of armed robbery, and conviction on any one of the three robberies in the current case would have been his third strike. He was looking at 115 years in prison – a life sentence. The frail older woman sitting in the courtroom was his mother and dying of cancer with only six months to live. She didn't want to die knowing her son was going to spend the remainder of his life in prison with no hope. If he accepted the plea bargain, she could die in peace knowing that there was hope for him to be released one day and have a better life. They were both crying.

How unutterably sad, to see this young man and his mother crying over his wasted life -- where 27 years in prison was the best option.

I am not usually sympathetic to criminals. The day before, when the prospective jurors were questioned, we were asked if we or anyone we knew had experienced violence, been burglarized, attacked, or robbed. It was sobering how many people had -- nearly everyone raised their hands. When I was called upon, I recited my litany: "I've had my car broken into 3 times, stolen once, been burglarized 3 times, been attacked in my home at 3:00 in the morning, and been robbed at gunpoint in my parking garage."

While the judge said he was sorry that these bad things had happened to me, the retired African American gentleman with the deep chocolate voice sitting next to me leaned over and said, "I’m amazed you’re not black with all that bad luck!" I cracked up, and we enjoyed a private giggle over that.

The judge shook his head and commiserated that those experiences were regrettable, but asked if I could be impartial, recognizing that the defendant had nothing to do with any of them. "Of course, your honor," I replied. "Those things happened in the 70s and 80s and I don’t think he was even born yet!" There was some laughter at that, and then I said, "I don’t have these experiences anymore because I changed my thinking." I just had to give a little hint about the Law of Attraction, because I know the day I took responsibility for my experiences and consciously determined not to be a victim any more -- and I haven’t been since that day. I mean, when you take your valuables to your sister’s house overnight because your home is being tented for termites, and she’s burglarized while you’re out for dinner and your jewelry is stolen yet again, you have to notice that the common denominator in all these experiences is you!

No one likes jury duty – we all have busy lives with a lot to do. It interferes with our plans, costs us time, money, and inconvenience. I had wanted to be excused. I had an 8-week tele-course coming up and needed the time to enroll more people in it. Like many small business owners, jury duty was potentially a big hindrance to my ability to produce income. I was nervous about being put on a long trial, and I was angry about this "enforced servitude." I imagined what I might say that would get me excused.

I was embarrassed out of that attitude fairly quickly. I watched as some prospective jurors made it clear that they were angry to be there and searched rather obviously for the "right answers" to questions that would result in them being excused. You could see the lie on their faces. Those who answered truthfully spoke of them later with scorn.

As I listened and learned throughout the court proceedings, my attitude shifted. Judge William Sterling honored us for our service and reminded us to appreciate our great country with its guaranteed freedoms protected by our laws and trial-by-jury-of-our-peers system. I was reminded anew of what a wonderful life I have, that I am among the most fortunate people on the planet. I felt reconnected to my community, beyond just my family, friends, and business associates. I saw how narrowed my world had become in my daily life. Here, I opened up to the sea of interconnecting people from all walks of life, seen and unseen, surrounding and affecting us every day, with their millions of stories of loss, tragedy, strength, joy, and hope.

I knew that if ever I was on trial, I would want you to show up for jury service. I would want you to be an honest, thoughtful, and caring juror. It is through the everyday actions of each citizen that our freedoms are assured and our way of life preserved. It is up to us.

 

Chellie Campbell is the creator of the Financial Stress Reduction® Workshops, and author of The Wealthy Spirit and Zero to Zillionaire. She has been prominently quoted as a financial expert in the Los Angeles Times, Good Housekeeping, Lifetime, Essence, Woman’s World and more than 50 popular books. She can be reached at Chellie@chellie.com .

 


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The Best Jobs.

by Natalie Pace.

Photo by: Mary Margaret Stratton. 2010.

The Bureau of Labor Statistics has released information on the top jobs of tomorrow, and the majority of them require college. About half are in the healthcare industry. Two of the fastest growing fields are in the technology arena – network systems/data communications analysts and computer engineers. The majority of these fast-growing occupations, like home health aides and all of the health care emphasis, are a direct result of having our Baby Boomers (one-third of the population) enter retirement.

 

 

 

 

 

 

Table 1. Occupations with the fastest growth

Occupations

Percent change

Number
of
new jobs
(in thousands)

Wages (May 2008 median)

Education/training category

Biomedical engineers

72

11.6

$ 77,400

Bachelor's degree

Network systems and data communications analysts

53

155.8

71,100

Bachelor's degree

Home health aides

50

460.9

20,460

Short-term on-the-job training

Personal and home care aides

46

375.8

19,180

Short-term on-the-job training

Financial examiners

41

11.1

70,930

Bachelor's degree

Medical scientists, except epidemiologists

40

44.2

72,590

Doctoral degree

Physician assistants

39

29.2

81,230

Master's degree

Skin care specialists

38

14.7

28,730

Postsecondary vocational award

Biochemists and biophysicists

37

8.7

82,840

Doctoral degree

Athletic trainers

37

6.0

39,640

Bachelor's degree

Physical therapist aides

36

16.7

23,760

Short-term on-the-job training

Dental hygienists

36

62.9

66,570

Associate degree

Veterinary technologists and technicians

36

28.5

28,900

Associate degree

Dental assistants

36

105.6

32,380

Moderate-term on-the-job training

Computer software engineers, applications

34

175.1

85,430

Bachelor's degree

Medical assistants

34

163.9

28,300

Moderate-term on-the-job training

Physical therapist assistants

33

21.2

46,140

Associate degree

Veterinarians

33

19.7

79,050

First professional degree

Self-enrichment education teachers

32

81.3

35,720

Work experience in a related occupation

Compliance officers, except agriculture, construction, health and safety, and transportation

31

80.8

48,890

Long-term on-the-job training

SOURCE: BLS Occupational Employment Statistics and Division of Occupational Outlook

Below you’ll find occupations that will add the largest number of new jobs. Most of these occupations require on-the-job-training (rather than advanced education) and pay less. Ten of the 20 occupations with the largest numbers of new jobs earned less than the National median wage in May 2008.

Table 2. Occupations with the largest numerical growth

Occupations

Number
of
new jobs
(in thousands)

Percent change

Wages (May 2008 median)

Education/training category

Registered nurses

581.5

22

$ 62,450

Associate degree

Home health aides

460.9

50

20,460

Short-term on-the-job training

Customer service representatives

399.5

18

29,860

Moderate-term on-the-job training

Combined food preparation and serving workers, including fast food

394.3

15

16,430

Short-term on-the-job training

Personal and home care aides

375.8

46

19,180

Short-term on-the-job training

Retail salespersons

374.7

8

20,510

Short-term on-the-job training

Office clerks, general

358.7

12

25,320

Short-term on-the-job training

Accountants and auditors

279.4

22

59,430

Bachelor's degree

Nursing aides, orderlies, and attendants

276.0

19

23,850

Postsecondary vocational award

Postsecondary teachers

256.9

15

58,830

Doctoral degree

Construction laborers

255.9

20

28,520

Moderate-term on-the-job training

Elementary school teachers, except special education

244.2

16

49,330

Bachelor's degree

Truck drivers, heavy and tractor-trailer

232.9

13

37,270

Short-term on-the-job training

Landscaping and groundskeeping workers

217.1

18

23,150

Short-term on-the-job training

Bookkeeping, accounting, and auditing clerks

212.4

10

32,510

Moderate-term on-the-job training

Executive secretaries and administrative assistants

204.4

13

40,030

Work experience in a related occupation

Management analysts

178.3

24

73,570

Bachelor's or higher degree, plus work experience

Computer software engineers, applications

175.1

34

85,430

Bachelor's degree

Receptionists and information clerks

172.9

15

24,550

Short-term on-the-job training

Carpenters

165.4

13

38,940

Long-term on-the-job training

SOURCE: BLS Occupational Employment Statistics and Division of Occupational Outlook

Finally, below are jobs that are being phased out (shipped overseas) in the new information and service economy of the United States. You’ll note that most of these jobs are in the manufacturing arena, requiring on-the-job-training, but not necessarily an education. The majority of these jobs pay less than the national median wage, of $32,390.

Table 3. Occupations with the fastest decline

Occupation

Percent change

Number of jobs lost
(in thousands)

Wages
( May 2008 median)

Education/training category

Textile bleaching and dyeing machine operators and tenders

-45

-7.2

$ 23,680

Moderate-term on-the-job training

Textile winding, twisting, and drawing out machine setters, operators, and tenders

-41

-14.2

23,970

Moderate-term on-the-job training

Textile knitting and weaving machine setters, operators, and tenders

-39

-11.5

25,400

Long-term on-the-job training

Shoe machine operators and tenders

-35

-1.7

25,090

Moderate-term on-the-job training

Extruding and forming machine setters, operators, and tenders, synthetic and glass fibers

-34

-4.8

31,160

Moderate-term on-the-job training

Sewing machine operators

-34

-71.5

19,870

Moderate-term on-the-job training

Semiconductor processors

-32

-10.0

32,230

Postsecondary vocational award

Textile cutting machine setters, operators, and tenders

-31

-6.0

22,620

Moderate-term on-the-job training

Postal Service mail sorters, processors, and processing machine operators

-30

-54.5

50,020

Short-term on-the-job training

Fabric menders, except garment

-30

-0.3

28,470

Moderate-term on-the-job training

Wellhead pumpers

-28

-5.3

37,860

Moderate-term on-the-job training

Fabric and apparel patternmakers

-27

-2.2

37,760

Long-term on-the-job training

Drilling and boring machine tool setters, operators, and tenders, metal and plastic

-27

-8.9

30,850

Moderate-term on-the-job training

Lathe and turning machine tool setters, operators, and tenders, metal and plastic

-27

-14.9

32,940

Moderate-term on-the-job training

Order clerks

-26

-64.2

27,990

Short-term on-the-job training

Coil winders, tapers, and finishers

-25

-5.6

27,730

Short-term on-the-job training

Photographic processing machine operators

-24

-12.5

20,360

Short-term on-the-job training

File clerks

-23

-49.6

23,800

Short-term on-the-job training

Derrick operators, oil and gas

-23

-5.8

41,920

Moderate-term on-the-job training

Desktop publishers

-23

-5.9

36,600

Postsecondary vocational award

SOURCE: BLS Occupational Employment Statistics and Division of Occupational Outlook

Occupations in the associate degree category are projected to grow the fastest, at about 19 percent. Occupations in the master’s and first professional degree categories are anticipated to grow by about 18 percent each, and occupations in the bachelor’s and doctoral degree categories are expected to grow by about 17 percent each. However, jobs in the on-the-job training categories are expected to grow only by 8 percent each.

Bottom line: save up for college -- if you want to get a job in the world of tomorrow!

 

 

About Natalie Pace:
Natalie Pace, is the author of You Vs. Wall Street and host of the Pace and Prosperity radio show on BlogTalkRadio.com/NataliePace. She is a repeat guest on FoxNews, CNBC, ABC TV and has contributed to Forbes.com, Sohu.com and BestEverYou.com and Magazine. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on http://www.facebook.com/pages/Natalie-Pace/416616285568, on BlogTalkRadio.com/NataliePace and on YouTube.com/NataliePaceDOTCOM. For more information please visit, http://www.nataliepace.com.



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Look Before You Leave: Don't Be Misled By Early Retirement Investment Pitches That Promise Too Much.

A FINRA.org Investor Alert.

Early retirement is an alluring prospect. When faced with a pitch that promises that you can cash in your company retirement savings in your 50s, reinvest the money, and live comfortably off the proceeds for the rest of your life, many simply can't say no. But usually they should. This Alert is being issued because we are aware of instances in which employees who had built up sizeable retirement savings have been misled, and financially harmed, by flawed, even fraudulent, early-retirement investment schemes.

Misleading Statements and Excessive Withdrawals
An enforcement action in 2006 identified one such scheme. Employees of a major corporation attended free seminars where a broker pitched a strategy that recommended investors take one or more of the following actions:

  • Retire earlier than they might otherwise have done
  • Opt out of the company's retirement plan (opting out typically required the employee to cash out of his or her 401(k) plan or take a lump-sum payment for the cash value of his or her pension)
  • Open a traditional Individual Retirement Account at the broker's firm
  • Invest in variable annuities, Class B and C mutual fund shares, and exchange-traded fund shares, which were substantially more risky than the fixed benefit pension they had given up

During the seminars, these investments were represented as being able to generate aggressive annual returns as high as 18 percent. Little mention was made of the risks associated with such an aggressive growth scenario, such as the fact that the value of the investments would fluctuate with changes in market conditions. The pitch also failed to adequately explain that the overall return to customers on their investments would be reduced by various fees and expenses associated with the purchase and ongoing administration of the investments.

Furthermore, the strategy recommended annual withdrawal amounts generally starting at 7.5 percent to 9 percent of the customer's initial investment, with increases at five-year intervals. While materials given to individual customers in one-on-one meetings portrayed these rates as being sustainable for more than 30 years, they assumed returns of 11 to 14 percent. The reality is that these rates proved unrealistic and were not achievable. Customers who followed the broker's program could not maintain the recommended withdrawal amounts without depleting their retirement accounts to levels that threatened their retirement security. By the time many of the customers realized this, they had lost a significant portion of their retirement nest egg. Thirty-three customers who invested more than $22 million will be paid restitution of more than $13.8 million by the broker's firm.

Finally, the broker in this case misrepresented his own qualifications as a Certified Public Accountant (his CPA certification had long-since become inactive), overstating his ability to handle the complicated tax planning associated with taking early withdrawals from a qualified retirement plan.

What the IRS Says About Early Withdrawals from Your Retirement Plan
In addition to the income tax you pay on most retirement plan withdrawals, Section 72(t) of the Internal Revenue Code imposes an additional tax of 10 percent on distributions from qualified retirement plans—including traditional IRAs—made before age 59 ½. The IRS does, however, allow you to avoid this 10 percent penalty if the distributions from your retirement plan "are part of a series of substantially equal periodic payments." These payments must last for five years or until you reach age 59 ½, whichever is longer, and IRS rules govern how you calculate the amount of the payments. For more information on Section 72(t) and methods for calculating payments, see the IRS's FAQs regarding Revenue Ruling 2002-62.

Be Skeptical of Early Retirement Investment Claims
Because the allure of a leisurely retirement can be quite tempting, and those who promote early retirement schemes can be extremely persuasive, it's critical that you think carefully before you act. Taking early retirement presents risks, and only makes sense if you have saved enough to begin with, make smart investment choices during your retirement years, and withdraw money at a rate that does not deplete your savings too early. While there is no perfect consensus on what this withdrawal rate should be, the uncertainty of return, market fluctuations and increased life expectancies among other factors argue for being conservative with your withdrawals, especially during the first years of retirement. While FINRA can make no recommendation, many experts recommend withdrawal rates between 3-5% per year—considerably less than the 7-9% withdrawal rates being recommended in the scheme above.

Be especially skeptical if you hear comments such as the following:

  • Everyone can retire early! The reality is that not everyone has the resources to do so. Early retirement is not feasible for many people and is particularly risky for workers who haven't saved enough for an extended retirement and who have limited opportunities for other employment.

  • You can make as much in retirement as you can by continuing to work! Promises like this usually hinge on unrealistically high returns on investments and unsustainably large yearly withdrawals.

  • You can expect returns of 12% or more! First of all, no one can predict what an investment will do from one year to the next—and even if an investment performed well in the past, this is no guarantee it will do so in the future. Second, any return over 10.4% exceeds the historical long-term returns for the stock market (assuming all dividends were reinvested rather than spent), and greatly exceeds long-term returns for less risky investments such as bonds, for which the average annual return over the long term is less than 6%. Finally, the stock market is inherently volatile - it goes up, and it goes down. Over the past 80 years, there have been many short term periods that produced returns well below the historical average of 10.4%.

  • You can withdraw 9% or more and never run out of money! Unless you have substantial retirement assets, withdrawing this amount can lead to rapid depletion of your principal, and even smaller withdrawal amounts may cause you to outlive your retirement assets.

Tips to Avoid Being Taken In
Don't let the promise of easy money lure you into an early retirement you weren't otherwise considering. Before you quit your day job (or night job) and invest your retirement savings, follow these tips:

  1. Be skeptical of "free lunch" training sessions and other seminars that promote early retirement strategies, even if those events take place at the workplace. Don't assume that your employer is behind the event.

  2. Be wary of early retirement pitches that invoke exceptions to IRS Section 72(t) as a "little-known loophole" that allows you to retire early. There's a lot more to a successful early retirement than avoiding a 10% tax penalty.

  3. Think hard before trading the relative certainty of a company pension—which may offer steady and predictable payments for as long as you live—for the uncertainty of investments such as variable annuities and mutual funds whose value fluctuates, creating an unpredictable income stream and putting your nest egg at risk.

  4. Many employers allow former employees to leave their 401(k) assets in the company's plan. If that's a choice you have, you may find that it's the safest and least costly option. For more information on how to make smart decisions concerning your retirement nest egg, please see Smart 401(k) Investing.

  5. Before quitting and cashing in a 401(k), do a little math. Remember that even if you avoid the 10 percent early withdrawal tax penalty, you won't be able to spend every penny. Instead, you will have to pay ordinary income taxes on your withdrawals. Be sure to ask a tax professional about any other potential tax consequences of your decision.

  6. You may also wish to consult an attorney about any other unintended consequences, especially if you are in debt or owe child support or alimony. Depending on the laws in your state, cashing out of your retirement plan may mean that your creditors can collect against that payment you receive—even if you're rolling the assets to a traditional IRA.

  7. If the strategy involves mutual fund investing, keep in mind that Class A mutual fund shares may be the best choice if the investment amount is large enough to qualify for a discount on front-end sales loads that may be offered for larger mutual fund investments and usually starts at $50,000, but sometimes can be as low as $25,000. Use FINRA's Fund Analyzer to compare and calculate mutual fund expenses.

  8. If the strategy involves variable annuities, be aware that most variable annuities have sales charges, including asset-based sales charges or surrender charges. In addition, variable annuities may impose a variety of fees and expenses when you invest in them, including mortality and expense fees, administrative costs, and investment advisory fees. Some products offer, for an extra fee, enhanced benefits that go beyond standard contract features, such as living benefits—which are designed to protect a client's future income stream—as well as death benefits—which are designed to protect a client's death benefit payable to a beneficiary. The bottom line: variable annuities can be complex and expensive relative to other investments.

  9. Check out whether the person offering you early retirement investments is registered with FINRA by checking FINRA BrokerCheck or calling our Hotline at (800) 289-9999. If he or she is registered, be sure to check out any red flags raised by employment or disciplinary history.

  10. Seek a second opinion before committing to an early retirement strategy. Consider taking the initiative to set up an appointment with a financial professional before taking the advice of someone who "found you." To get started, read the Securities and Exchange Commission's How to Pick a Financial Professional.

Keep in mind that your retired life may be as long as, or longer than, your working life. Take the time to research your retirement options carefully—before you leave the working world behind.

Additional Resources
Investor Alert, Variable Annuities: Beyond the Hard Sell
Investor Alert, Mutual Fund Breakpoints: A Break Worth Taking
Investor Alert, Understanding Mutual Fund Classes
Investor Alert, Think Twice Before Cashing Out Your 401(k)
Securities and Exchange Commission's Variable Annuities: What You Should Know
IRS's FAQ related to Section 72(t), FAQ regarding Revenue Ruling 2002-62

To receive the latest Investor Alerts and other important investor information, sign up for Investor News.

 

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

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


Fireworks! More Valuable Than Gold.

by Natalie Pace.

Read and Discover Which 40 Investments Earned More Than Gold in 2009.

Includes my Hot News on Cool Stocks Report.

June 28, 2010

General Stock Market Performance

Monday, 1.2.2008

Monday, 1.2.2009

Monday 1.4.2010

Friday, 6.28.2010

Gains 2-yr, 1-yr & 5 mo.

Dow: 13,044.12

Dow: 9,034.69

Dow: 10,430.69

Dow: 10,138.52

-22% & +12% & -3%

Nasdaq: 2,609.63

Nasdaq: 1,632.21

Nasdaq: 2,294.41

Nasdaq: 2,220.65

-15% & +36% & -3%

S&P: 1,447.16

S&P: 931.80

S&P: 1,115.07

S&P: 1,074.57

-26% & +15% & -4%


Wall Street Highs/Lows in the New Millennium:

Index

Low

High

Dow Jones Industrial Average

6,547 (3.9.09)

14,164 (10.9.07)

NASDAQ Composite Index

1,114 (10.9.02)

5,060.34 (3.10.00)


Photo: Stacie Isabella Turk, Ribbonhead.com ©2008. Stylist: Melody White. Art Direction: Arlene Hylton-Campbell
Hot News on Cool Stocks Important Data
10X gains on U.S. Gold!
NASDAQ Outscored the Dow Jones Industrial Average, 40% to 15%, in 2009
NASDAQ Outscored Gold in 2009, 40% to 26%
79% of the positions listed in 2008-2010 are in the money. Woo hoo!
Gold returns top stocks, real estate, bonds and T-Bills Over the Last 10 Years… (see below chart)
Real Estate Lost -12.4% in 2009.

 

 

 

 

 

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

Market Update:
Gold is the talk of the nation, and gold certainly scored in 2009, with gains of 26%. However, the above chart reminds us that today’s investment darling has not always been the belle of the ball. Even T-bills scored double the gains of gold’s pitiful performance of just 2.33% annualized over the last 30 years. And in 2009, Latin America funds were three times as valuable, with gains of 116%, technology was more than twice as valuable and even high yield bonds were more golden than gold.

Check out the chart below for the Top 40 performers in 2009, and notice that all 40 fund classes performed above gold!

TOP 40 FUNDS of 2009

Name Annual  Ret  2009
US OE Latin America Stock 115.54
US OE Diversified Emerging Mkts 73.81
US OE Pacific/Asia ex-Japan Stk 71.16
US OE Technology 61.99
US OE Equity Precious Metals 52.56
US OE Foreign Small/Mid Growth 49.24
US OE Natural Res 48.48
US OE Europe Stock 47.32
US OE High Yield Bond 46.70
US OE Miscellaneous Sector 45.57
US OE Equity Energy 44.36
US OE Foreign Small/Mid Value 44.06
US OE Bank Loan 41.81
US OE Communications 40.74
US OE Convertibles 40.58
US OE Mid-Cap Growth 39.11
US OE Foreign Large Growth 38.02
US OE Consumer Discretionary 37.84
US OE Mid-Cap Blend 37.39
US OE Global Real Estate 37.01
US OE Large Growth 35.68
US OE Small Growth 35.46
US OE Mid-Cap Value 35.41
US OE World Stock 35.27
US OE Diversified Pacific/Asia 34.70
US OE Emerging Markets Bond 32.43
US OE Target Date 2050+ 32.20
US OE Small Blend 31.80
US OE Small Value 31.32
US OE Real Estate 31.26
US OE Foreign Large Blend 31.24
US OE Target Date 2036-2040 30.90
US OE High Yield Muni 30.89
US OE Target Date 2041-2045 30.88
US OE Foreign Large Value 30.33
US OE Target Date 2031-2035 30.06
US OE Multisector Bond 29.22
US OE Target Date 2026-2030 28.87
US OE Target Date 2021-2025 28.32
US OE Large Blend 28.17
Open End fund category average returns in 2009

@2010 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is, not warranted to be accurate, complete or timely. Neither Morningstar or its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

Hmmm… The real story behind the bulk of these gains (Latin America, Asia/Pacific and emerging markets) is that natural resources are gold in a recovery. Check out my "Hot FUNds" article in this month’s ezine and my CNBC appearance from June for more information on natural resources.

In the meantime, here are a few investment tips worth noting, when you do you mid-year nest egg check-up.

  1. Be sure to pick at least 4 New Hot Industries to include in your nest egg. Candidates include: Latin America, Diversified Emerging Markets, Pacific Asia excluding Japan (FYI: Australia and New Zealand are typically included in this category), Australia and New Zealand, Technology, Precious Metals, Natural Resources, gold, High Yield Bonds, Energy, Small/Mid Value, Small/Mid Growth.

  2. In your trading portfolio, Take Your Profits Early and Often. When the markets are swinging a thousand points in both directions over the course of 30 days, there is one investor making a lot of money – the savvy trader. Realize that today’s profits are here today and gone tomorrow, so incremental gains of 20% can be more valuable than trying to hold out for a big score (unless there is some reason to believe that a big score will break through the market volatility).

  3. Don’t Rely on Stop Losses. Extreme volatility means that people relying on stop losses are getting hit over and over again. Many times when the loss is triggered, the price recovers within a few hours. You have lost your money for no good reason in that scenario, and this happened in bulk during the Fat Finger May 6, 2010 Market Meltdown of 1000 Points. With your nest egg, Modern Portfolio Theory, underweighting the Bailouts and Large Cap Values, overweighting safe, adding in 4 Hot Industries and annual or semi-annual rebalancing is a better strategy. If you don’t know how to do this yet, read You Vs. Wall Street and come to a Get Rich and Enrich Retreat. You can get more information on the retreat on the home page at NataliePace.com, under the banner ad of the same name. The trading strategies that took me to the top of Wall Street and earned me the ranking of #1 stock picker are also outlined in You Vs. Wall Street.

  4. Get a Safe, Secure Plan Now. May 2010, which declined 8.2% in value was the worst performing May since 1962, when the markets tanked 8.6%. Does that mean we can expect a bounce back recovery? With volatility so high, it certainly is possible, but there is a very strong trend with election year cycles that suggest the 2nd year of a Presidency is when the elected officials try to secure all of the band-aid fixes that were applied before the election. (This is to prepare for next year, when everyone will want the economy to roar again in preparation for the 2012 election.) In other words, don’t expect 2010 to be the year your nest egg and home values come surging back from the brink. And batten up the hatches to prevent further leakage of your assets.

  5. The Bear Market Fund Got Killed. Bear market funds lost 33% of their value in 2009. Don’t believe all of the gloom and doomsday hype that you are hearing. Yes, there is a lot of debt and we have major issues in the US. There are a lot of things to sort through (entitlements, Baby Boomers retiring and more), and there remain a lot of things that make our country one of the most desirable places to live and work in the world. Unfortunately, almost everyone on TV, even the "newscasters," has a product they are trying to sell you. That is why the chart of returns for various assets (listed at the top of this article) is your Bible for investing strategy. The same Doomsday story was used in the DOT COM boom/bust, the real estate boom/bust, the commodities boom/bust and now the gold boom.

    Still, if you believe that 2010 will end down lower than we are currently, you can try a little Prudent Bear (symbol: BEARX) in the hot industries section of your nest egg.

Track Record of our Reporting
While the markets are still down significantly since their high in October of 2007, the Hot News and Cooling Off lists below have a winning track record – in bear and bull market years. 92 positions listed below – 79% -- have delivered impressive gains over the past two years, even while the Dow Jones Industrial Average is trading lower than it was ten years ago! Only twenty-four of our listings went in the opposite direction of the reporting, which is quite impressive given the market gyrations of more than 7000 point swings since 2008. FYI: If 2010 tracks the historical trend, the summer doldrums and particularly the Hurricane Season could be hard on the markets.

Remember that the trading portfolio should be equal to your experience, and should not be part of your nest egg. (The nest egg is money you earn while you sleep, not while you day-trade.) If you’re new, you should be using education or fun money, not your nest egg, to learn on. Take your trading profits early and often in these volatile, whip-sawing years. (Your nest egg is better off just rebalancing once or twice a year, not trying to market time.)

4 out of 7 Company of the Year selections more than doubled.  My 2003, 2004, 2007 and 2009 Companies of the Year posted up to 9000% gains (Taser), up to 690% gains (Opsware), up to 215% gains (Suntech Power Holdings), and up to 10X ROI for U.S. Gold, respectively. MySpace, my 2006 Company of the Year, was a large part of News Corp’s success with shareholders that year.   So five out of seven Company of the Year selections were superperformers. That’s the kind of record that puts you on top on Wall Street.  (I launched my first publication on 11.15.02, and featured the first Company of the Year, Taser International, on 1.1.03.)

Some of my best picks include: U.S. Gold (UXG) 10X return on investment, Google (GOOG) +585%, Opsware (OPSW) +690%, Rio Tinto (RTP) +145%, Sohu (SOHU) +150%, Suntech Power Holdings (STP) +107%, Taser (TASR) up to 9000% gains. Some of the best picks in 2008 and 2009 were put options – on the Cooling Off list -- which is why I added options training to my 3-day Get Rich and Green Investing Retreat. Look on the Cooling Off list for details on the incredible gains options investors enjoyed (and the losses that average investors avoided as a result of being alerted to the problem) on Wells Fargo, Fannie Mae, Toll Brothers, KB Home, Novastar Financial and more there.

This stock newsletter was the first to list the following 911 alerts:

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

Market Movers:
The Federal Open Market Committee and Monetary Policy
The Fed funds rate continues to be "0 to ¼ percent." The next FOMC meeting takes place on August 10, 2010.

Third Estimate GDP growth rates for 1Q 2010 were 2.7%, according to the Bureau of Economic Analysis. What caused the pullback from the 5.6% growth of the 4th quarter 2009? According to the BEA, "The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, and nonresidential fixed investment that were partly offset by decreases in state and local government spending and in residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased."

Advance Estimate GDP growth rates for 2Q 2010 will be released on July 30, 2010 at 8:30 a.m. ET. These release days tend to be very active on Wall Street. For more BEA release dates, go to the BEA.gov website and be sure to visit the NataliePace.com calendar section often.

EDUCATIONAL OPPORTUNITES AND INFORMATION:
1. FOMC Information: Interested in reading the press release of the June 22-23, 2010 FOMC meeting for yourself? You can. The official Federal Reserve document is available online. Click on FOMC, or go to FederalReserve.gov to read! According to the Committee, "Financial conditions have become less supportive of economic growth… The pace of economic recovery is likely to be moderate for a time."

The tentative FOMC meeting schedule for the 2010-2011 calendar is: August 10 (Tuesday), September 21 (Tuesday), November 2-3 (Tuesday-Wednesday), December 14 (Tuesday), January 25-26, 2011 (Tuesday-Wednesday), March 15, 2011 (Tuesday), April 26-27, 2011 (Tues.-Wed.), June 21-22, 2011 (Tues.-Wed.), August 9, 2011 (Tuesday), September 20, 2011 (Tuesday), Nov. 1-2, 2011 (Tues.-Wed.), December 13, 2011 (Tuesday), January 24-25, 2012 (Tues.-Wed.).

2. Calendar Section: Conferences, Online Chats and more: Check out the Calendar section of NataliePace.com regularly. You will find great opportunities to attend the most exclusive business and Green Conferences, learn about upcoming TV and radio shows and other educational opportunities – many are FREE! Get more information on how to best use our articles in the FAQs article, located under the Investor Edu link on the home page of NataliePace.com.

Don’t miss the Pace and Prosperity Show with Natalie Pace on BlogTalkRadio.com. Natalie Pace is hosting a 3-part series of Tuesday Night Teleconferences on how to protect your investments and prosper in volatile markets, beginning on June 22, 2010 at 6:00 p.m. PT. Check BlogTalkRadio.com/NataliePace for other call-in and log-on instructions and to listen back to any shows that you might have missed. These shows are pod casts and are FREE!

BlogTalkRadio offers a Q&A format, where you can call in with your most pressing questions. Be sure to keep a list of your questions as they come up, and become a fan of Natalie Pace on Facebook at http://www.facebook.com/pages/Natalie-Pace/416616285568, so that we can interact on Facebook before, during and after the show.

3. Survey Results: Each month we have three new surveys so that we can stay in touch with your needs and desires. Cast your vote on our survey page! This month, we’re surveying your reaction to the BP Oil Spill.

4. Euro interest rates: ECB rates are at 1.00% (main refinancing), 1.75% (marginal lending) and 0.25% (deposit facility). The next meeting and interest rate announcement is scheduled for July 8, 2010 at 2:30 p.m. CET. (July 22, 2010 & August 5, 2010 after that.)

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

Hot News List (highlighted).  Be sure that you are buying low.
Blockbuster (BBI)
Sunpower (SPWRA)
Suntech (STP)

(We are heading into the summer doldrums, and June has been a negative month on average for the last decade. Be careful buying anything right now.)

Profit-Taking:
Hoku Corp. (HOKU) +63%
LDK Solar (LDK) +18%
U.S. Gold (UXG) 10X ROI

DELETIONS (Take your profits early and often):
Green Dot (Moved to the Watch List on 5.15.10)

HOT NEWS on COOL STOCKS LIST

Company NP owns? Symbol Price when featured

Price

6.28.10

Year High

Year Low

Gains since original feature

American Superconductor

No

AMSC

$30.70

$28.87

$43.73

$8.22

-6%

Read "The Sunny Side" Vol. 6, issue 3. AMSC should benefit from President Obama’s commitment to build a "a new smart grid to carry electricity from coast to coast." In fact, we know that AMSC is specifically on Obama’s mind, even though investors haven’t caught on yet.

4Q & FY earnings May 13, 2010: Revenues for the fourth quarter of fiscal 2009 were $87.6 million, a 43 percent increase over $61.2 million in revenues for the fourth quarter of fiscal 2008. Gross margin for the fourth quarter of fiscal 2009 was 37.8 percent, which compares with 32.6 percent for the fourth quarter of fiscal 2008. Net income of $4.9 million. Revenues for full year fiscal 2009 were $316.0 million, an increase of 73 percent from $182.8 million for full year fiscal 2008. Gross margin for full year fiscal 2009 was 36.4 percent, which compares with a 28.4 percent gross margin for full year fiscal 2008. Net income for full year fiscal 2009 was $16.2 million, compared to a net loss of -$16.6 million in 2008.

Cash, cash equivalents, marketable securities and restricted cash at March 31, 2010 were $155.1 million. The company reported backlog as of March 31, 2010 of approximately $588 million. Reuters reported a new $445 million contract with China’s Sinovel on May 17, 2010.

President Obama mentioned American Superconductor by name in his weekly address of Nov. 21, 2009. In the official transcript, it is written: "If we can increase our exports to Asia Pacific nations by just 5%, we can increase the number of American jobs supported by these exports by hundreds of thousands.  This is already happening with businesses like American Superconductor Corporation, an energy technology startup based in Massachusetts that’s been providing wind power and smart grid systems to countries like China, Korea, and India.  By doing so, it’s added more than 100 jobs over the last few years."

AOL

No

AOL

$23.00

$21.76

$27.00

$19.61

-9%

Read "AOL" from Vol. 6, issue 12.

1Q 2010 results showed a decline in advertising and subscription revenue, which prompted voters to pull back on their support. However, according to Chairman & CEO Time Armstrong, "AOL continues to make progress against our long-term objective of becoming an internet growth company. Our results highlight the accomplishment of our first goal in AOL’s turnaround which was to significantly reduce AOL’s cost structure."

To put this in context (and understand why AOL remains on the Hot News List), read the article written at the time of the IPO last December.

Blockbuster

No

BBI

$0.34

$0.27

$1.56

$0.24

-21%

Read "Blockbuster’s Second Coming" from Vol. 7, issue 5. Expect a reverse stock split any day now. Was approved in the Shareholder Meeting of June 24, 2010.

ENER1

No

HEV

$4.33

$3.74

$7.90

$2.75

-14%

Read "Life Begins with (Li) Lithium" from Vol. 6, issue 4. Ener1 develops and manufactures compact, high performance lithium-ion batteries to power the next generation of hybrid, plug-in hybrid and pure electric vehicles.

1Q 2010 report on May 10, 2010:

Net sales were $11 million in the first quarter of 2010 compared to net sales of $8.2 million in the prior year first quarter.  Net loss was $15.3 million in the first quarter of 2010 compared to $7.3 million in the 2009 first quarter.

EnerDel has been named as the exclusive battery supplier for the Volvo C30 Pure Electric Vehicle, set for production in 2011 and mass release in 2013.  According to Chairman and CEO Charles Gassenheimer, "We are truly excited about the C30 program, believing it to be a leapfrog product to a second generation electric vehicle design, currently undergoing the most rigorous set of crash-testing and safety systems in the industry."

Check out EnerDel’s batteries at their YouTube channel.

Galaxy Resources

RISK: HIGH

(off the boards, thinly traded)

No

GALXF

$1.07

$0.89

$1.92

$1.00

-17%

Read "Should You Put the Brakes on Toyota" from Vol. 7, issue 2. Lithium exploration, mining, etc. in Australia and China. Traded off the boards in the US, but is listed on the Australia Stock Exchange.

Hoku Scientific

Hawaii

RISK: HIGH

Yes

HOKU

$8.03

$2.00

(3.2.09)

$3.24

$14.55

$1.90

-59% &

+63%

Read "The Sunny Side," Vol. 6, issue 3 and "Solar Giants Tap a Small Hawaiian Company For Silicon," in the Oct. 2007 ezine, Vol. 4, issue 10.

5.26.10 Annual report: Revenue for the fiscal year ended March 31, 2010 was $2.6 million compared to $5.0 million for fiscal 2009. All revenue in fiscal 2010 and 2009 was derived from photovoltaic, or PV, system installations and related services, the sale of electricity, and the resale of solar inventory. GAAP net loss for the fiscal year ended March 31, 2010 was $5.4 million, or $0.23 per diluted share, compared to $3.0 million, or $0.15 per diluted share, for fiscal 2009.

Mr. Paul continued, "In Idaho, despite some delays due to the timing of our financing, Hoku Materials recorded $83 million in construction progress during fiscal 2010 and -- thanks to the support of our customers, vendors and partners -- ended the fiscal year in position to conduct a polysilicon production demonstration, which we completed successfully in April. Looking ahead, we plan to commence commercial shipments of polysilicon in the third quarter of calendar 2010, and expect to reach a total polysilicon production capacity of 4,000 metric tons by the end of March 2011."

On April 29, 2010, Hoku announced it had successfully produced polysilicon at its manufacturing facility in Pocatello, Idaho. HOKU operated the reactors continuously for approximately five days during the final phases of the commissioning procedure. During these live reactor runs, Hoku utilized trichlorosilane purchased from third-party suppliers. This is the same product that the Company plans to use during its initial commercial production runs this year.

This is an historic day for Hoku," said Scott Paul, president and chief executive officer of Hoku Corporation. "We have completed the first step in our planned production ramp-up and successfully manufactured our first batches of polysilicon. Importantly, this challenging, month-long commissioning process also allowed us to flex our operations team, and validate our training, systems and procedures. I am extremely proud of our team's accomplishment."

Hoku’s annual report is scheduled for June 2010

LDK Solar

GREEN

Yes

LDK

$30.02

$4.94

(3.2.09)

$5.82

$76.75

$3.75

-81% &

+18%

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

LDK is benefitting from a 4-star rating from Motley Fool CAPS and lots of press from the same in February.

 

1Q on 5.10.10: revenue was $347.6 million; net income was $7.2 million. LDK Solar ended the first quarter of fiscal 2010 with $347.4 million in cash and cash equivalents and $96.3 million in short-term pledged bank deposits.

"Continued momentum in the solar industry drove results for the first quarter," stated Xiaofeng Peng, Chairman and CEO of LDK Solar. "Our efforts to diversify our business within the module market tracked well in the quarter. We brought crystalline module manufacturing in house and signed several module supply contracts during the first quarter. In our wafer business, we continue to closely monitor demand levels to meet our customers’ needs. In April we achieved annualized wafer capacity of 2.0 GW, maintaining our industry leadership as we continue to represent a significant share of global wafer capacity.

MEMC Electronics

No

WFR

$11.99

$10.59

$73.56

$11.32

-12%

Read "The Sunny Side" Vol. 6, issue 3.

Acquisition of solar developer SunEdison (announced on 10.22.09) should start putting meat on MEMC’s bottom line in 2010. They now enter solar power generation with an A-list company in that field. Recovering after silicon re-pricing completely threw off their profit margins. Better times going forward.

4.29.10 1Q results:

1Q highlights:

- Revenue increases to $438 million
- Solar Energy (SunEdison) revenue of $60.7 million
- GAAP net loss of $9.6 million

Rio Tinto

No

RTP

$44.95

$48.42

$218.15

$30.00

+8%

Gold, copper and other commodities mining. Based out of UK. Mines worldwide, but focused greatly in Australia. Annual general meeting is May 26, 2010 in Melbourne, Victoria. 4:1 stock split took place on April 30, 2010.

Sunpower

No

SPWRA

$24.83

$13.07

$34.00

$10.11

-46%

Read "The Sunny Side" in Vol. 6, issue 3.

Sunpower panels are the most efficient in the world and have helped countless Solar Decathlon teams win the competition. This year’s #2 and #3 teams (Illinois and California) both used Sunpower panels.

Announced on March 11, 2010 that the company was awarded two grants totaling approximately $1.5 million from the California Solar Initiative Research, Development, Deployment and Demonstration (CSI RD&D) Program.  

 

1Q earnings on 5.11.10: Revenue for the 2010 first quarter was $347 million, which compares to $212 million in the first quarter of 2009 and $548 million in the fourth quarter of 2009.  The company's Components and Systems segments accounted for 81% and 19% of first-quarter 2010 revenue, respectively.

 

SunPower has more than 550 large public and commercial solar power systems installed or under contract, representing more than 450 megawatts of solar power generation.

 

March 29, 2010: SunPower Corp. acquired SunRay Renewable Energy, a leading European solar power plant developer with offices in Europe and the Middle East.

Suntech Power Holdings

No

STP

$14.26

$9.51

$49.60

$5.09

-31%

Read "The Sunny Side" Vol. 6, issue 3. The world's largest crystalline silicon photovoltaic (PV) module manufacturer.

1Q report on June 3, 2010: Total net revenues were $588.0 million in the first quarter of 2010,representing 0.8% growth sequentially and 86.3% year-over-year. Net income: $20.7 million.

U.S. Gold

Colorado USA

RISK: VERY HIGH

Company of the Year 2009

Yes

UXG

$5.05

$.50 (10.20.08)

$2.66 (10.09)

$5.18

$7.04

$.38

+2.5% &

10X &

+95%

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

As you can see, U.S. Gold has been a super performer this year. And the news on Forbes.com and Motley Fool is just now heating up. Expect more as Junior Gold Miners capture headlines on strong gains in share price (largely due to the world’s current infatuation with gold).

Added to the S&P/TSX Global Gold Index and S&P/TSX Global Mining Index on 9.15.09.

If you believe in this CEO and company, you’ll want to make sure you have shares of U.S. Gold going forward. Gold should be a great hedge against inflation, which is predicted to become an issue once the economy starts to rebound (2010 and forward). Right now, the Feds are still a little concerned about deflation, but inflation could begin on the 12-24 month horizon.

This is an exploration company, not a mining company. They don’t produce gold at this time.

Began trading on the AMEX stock exchange on 12.11.06. (Also trades on the Toronto Stock Exchange.) Listen to my feature interview with CEO and Chairman Rob McEwen on BlogTalkRadio.com. You can review my original Q&A with Rob McEwen and interview on U.S. Gold in Vol. 4, issue 2. (Feb. 2006).


Recently Deleted Companies 2008-2010:
Echelon +20%, GE, +13% and +18%, Google, +15% and +31%, Johnson & Johnson +10%, LDK Solar +18%, Microsoft +12%, Satcon +13%, Suntech +35%, Trina Solar +22%, World Water & Solar +22%. Genentech (8.1.08) +40%. Altair (deleted on 8.7.08) posted gains of +3% and +57%. Zoltek (deleted on 8.18.08) lost 30% before being removed. LDK Solar was deleted on 9.2.08 with 46% and 29% profits. U.S. Gold profit taking on 11.6.08 amounted to 72% gains. Conergy gains of 51% were taken on 11.7.08. American Superconductor posted 50% gains between 12.1.08 and 1.14.09. MEMC Electronics (WFR) had 21% gains between 12.1.08 and 12.15.08. STP had gains of 69% between 12.1.08 and 1.2.09. SQM profits 20% on 1.14.09. WWAT was deleted on 2.1.09 with -62% losses. On 2.15.09, AMSC had gains of 65%, MEMC Electronics 26%, Sociedad de Quimica y Minera 48% and U.S. Gold 432%. Citigroup gains of 42% on 3.15.09. Genentech was deleted on 3.15.09 with gains of 29%. OSI Pharmaceuticals was deleted on 3.15.09 with 7% gains. Rio Tinto was deleted on 3.27.09 with gains of 67%. On 3.27.09, the following companies were in the money: ALTI (+48%), AMSC (+51%), eBay (+24%), GE (+40%), HOKU (+38%), LDK (+46%), MEMC (+44%), PBW (+35%), SATC (+42%), SQM (+76%), STP (+211%), TSL (+207%), U.S. Gold (+456%) and WBK (+25%). Profit-taking 4.13.09: ALTI +209%, AMSC +70%, HOKU +32%, LDK +64%, PBW +42%, SQM +42%, UXG+418%. Deleted 4.13.09: eBay, +45%, Eurox -11%, GE +47% & -56%, Google +9%, Maxwell +25%, MEMC Electronics -33% & +49%, Microsoft +24%, SATC +67%. STP +262% & -64%, TSL +216% & -67%, Westpac +42% & -22%. Deleted 5.4.09: FMC Corp. with 19% gains. PZD with losses of -39%. SPWRA with 19% gains. TREMX with 50% losses. WSDT with losses of -59%. Deleted 5.15.09: SQM with gains of 38% and 62%. Deleted 5.31.09: EMKR with losses of 13% and 88% and Melco with losses of 8%. Ener1 with gains of 11% and 17%. Deleted 7.20.09: Conergy with losses of -52-98%. Deleted Smith and Nephew on 8.15.09 with gains of 17% and losses of 28%. Deleted the New Zealand dollar currency ETF by Wisdom Tree with 36% gains on 12.12.09. 12.18.09: Deleted Ener1 with 22% gains and Satcon with 29% gains. Deleted 1.11.10: KCI with 88% gains!

Recently Deleted from the Hot News list:
None

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

Note that right now most of our favorite companies are on the Watch List. Getting the price right is as important as picking the right company. Never pay retail!

Recent Additions:
Federated Prudent Bear Fund (BEARX) (added 7.1.10)
Tesla (TSLA) (added 7.1.10)

Tidewater (added 6.1.10)

Recent Deletions:
Netflix (NFLX) (moved to Cooling Off List on 5.15.10)
VM Ware (moved to Cooling Off list on 6.14.10)

Company

NP owns?

Symbol

Price when featured

Price

6.25.10

Year High

Year Low

Gains since original feature

Allscripts Misys Healthcare Solutions

No

MDRX

$19.94

$16.60

$22.21

$9.70

Read "Health Care Reform" Vol. 7, issue 4.

Altair Nano-technology

No

ALTI

$1.16

$0.43

$2.94

$0.56

Read "Life Begins with (Li) Lithium" Vol. 6, issue 4.

1Q2010 earnings announced on May 6, 2010: For the quarter ended March 31, 2010, Altairnano reported revenues of $1.2 million, up from $0.9 million for the same period in 2009. This increase is the result of a higher level of contract and grant activity with the Office of Naval Research and the Department of Defense compared to 2009 which are expected to continue throughout most of 2010. Operating expenses of $6.4 million for the first quarter of 2010 were down $0.5 million from operating expenses of $6.9 million for the first quarter of 2009. The net loss was $6.1 million, or six cents per share, compared to a net loss of $6.4 million, or seven cents per share, for the first quarter of 2009.

Altairnano's cash and cash equivalents decreased by $5.8 million, from $18.1 million at December 31, 2009 to $12.3 million at March 31, 2010. Altairnano's cash burn rate is about $1.9 million per month.

"We continue to experience an increased level of customer requests for quotes compared to the first half of 2009," said Dr. Terry Copeland, Altairnano's president and CEO. "We are working diligently with these prospective customers to translate this increased sales quote activity into firm orders which will in turn provide us with a larger revenue stream and referenceable customer base."

Was a contender in the lithium ion battery marketplace a few years back, but lost market share, orders and prestige.

Federated Prudent Bear Fund

No

BEARX

$5.42

$5.42

$8.19

$5.05

--

Read "Discount Designer Stores," from Vol. 5, issue 6.

Big Lots

No

BIG

$30.28

$32.99

$41.42

$19.49

Read "Discount Designer Stores," from Vol. 5, issue 6.

Canadian Imperial Bank

RISK: Medium

No

CM

$65.88

$68.47

$108.79

$30.64

Refer to the "Banking on Iraqi Dinars" article in Vol. 5, issue 2 for details. Financial markets are under duress. Avoid most banks for now. Canada’s banks were ranked #1 by the Milken Institute for global capital in 2009; Australia was #2.

Citigroup

RISK: HIGH

No

C

$2.26

$4.01

$5.43

$2.55

One of the troubled, bailed out banks… May 7, 2010 earnings: Citigroup reported net income of $4.4 billion.  The total allowance for loan losses for consumer loans increased to $41.4 billion at the end of the quarter, or 7.8% of consumer loans, up from 6.7% of consumer loans at the end of the fourth quarter of 2009. Consumer non-accrual loans totaled $15.6 billion at March 31, 2010, compared to $18.3 billion at December 31, 2009 and $14.9 billion at March 31, 2009. Citigroup's total assets of $2.0 trillion increased $146 billion from December 31, 2009, primarily from the adoption of SFAS 166/167, as discussed above.

It’s important to remember that we don’t really have a clue how deep and wide the losses at these bailed out banks are. Most of this is still hidden and the Feds are not releasing the info, nor are the banks…

eBay

No

EBAY

$16.80

$20.81

$32.10

$9.91

Etail should perform better than retail in the recession, but eBay is priced higher than I’d want to pay in a vulnerable "jobless" recovery.

Eldorado Gold

No

EGO

$10.56

$18.40

$18.62

$7.65

 

Read "Investing in Gold" from Vol. 6, issue 9. Annual report on March 18, 2010:

Net income of $102.4 million, down from $164 million in 2008 (-38%). Revenue $361 million for 2009, 25% increase over $288 million in 2008.

"This was a very successful quarter and year for Eldorado," stated Paul Wright. "We had record quarterly production with strong performance from both our Kisladag and Tanjianshan gold mines. And with the successful completion of our acquisition of Sino Gold and the continued development of our projects in Turkey, China and Greece, we are solidifying our position as one of the world's lowest cost gold producers. Our gold sales revenue increased by 29 percent to $358.5 million as we benefited from increased production and gold prices. Looking ahead, we anticipate 2010 production of 550,000 to 600,000 ounces of gold at a cash operating cost of between $385 and $400 per ounce."

First Solar

No

FSLR

$144.76

$120.24

$207.51

$98.71

 

See "Solar Springs Up Again," article in Vol. 5, issue 4.

First Solar joined S&P500 on 10.02.09.

First Solar uses cadmium telluride instead of silicon to transfer sunlight into useable energy. This was a huge competitive advantage when silicon was hard to get at a reasonable price. That is shifting, however, for two reasons. Silicon manufacturing is heating up and costs are lowering as a result, and cadmium telluride isn’t as abundant or as efficient a power source as silicon. Read the article for more details.

FMC Corp.

No

FMC

$51.36

$60.43

$80.23

$28.53

 

Read "Life Begins with (Li) Lithium" from Vol. 6, issue 4 and "Should You Put the Brakes on Toyota," from Vol. 7, issue 2.

FMC is the real winner of the stimulus package because they supply lithium to the battery makers. On the other hand, that is not all that this company manufactures, and sales were off in 2009. Waiting for a better buy-in point.

Ford Motor Company

No

F

$9.65

$10.54

$14.57

$4.71

 

Read "How Cap and Trade Saved Ford" from Vol. 6, issue 4. Ford is making cars people want to drive, but it owes over $100 billion dollars. Be careful with any investment here. The same conditions that plagued Chrysler and GM are present here – with one exception. Ford built cars that won awards in 2010 (and attracted consumer interest). 

Google

No

GOOG

$393.69

$473.49

$629.51

$395.98

See Vol. 6, issue 5 for "Hulu Your Heroes" Be careful not to buy in too high.

1Q 2010 on 4.15.10: Google reported revenues of $6.77 billion for the quarter ended March 31, 2010, an increase of 23% compared to the first quarter of 2009. GAAP net income was $1.96 billion, compared to $1.42 billion in the first quarter of 2009.

Cash – As of March 31, 2010, cash, cash equivalents, and short-term marketable securities were $26.5 billion. No debt.

On a worldwide basis, Google employed 20,621 full-time employees as of March 31, 2010, up from 19,835 full-time employees as of December 31, 2009.

Green Dot

No

Not available

IPO

IPO

IPO

--

Read "IPO of the Year" from Vol. 7, issue 3. Check with your broker to see if you can be a part of this IPO. It is underwritten by J.P. Morgan, Morgan Stanley, Piper Jaffray and UBS. If you cannot participate in the IPO, then you can buy when Green Dot is traded on the public marketplace. No word, yet, on when exactly that will be. This is a "quiet" period for the company, when insiders are not allowed to talk to press.

 

Ay this point, given the volatility of the markets, I’d be tempted to "wait and see" what the general marketplace does before buying in. The Santa Rally has brought coal in the stockings of investors for too many years this past decade for me to have faith in this 2nd year of a Presidential term (typically the worst performing year of the cycle).

Orocobre

No

OROCF

$1.70

$1.55

$2.72

$0.99

Read "Should You Put the Brakes on Toyota" from Vol. 7, issue 2.

PowerShares Wilderhill Clean Energy ETF

No

PBW

$9.78

$8.74

$11.95

$4.00

Read "The Sunny Side" Vol. 6, issue 3.

Ross Stores

No

ROST

$35.90

$54.86

$58.93

$34.74

Read "Discount Designer Stores," from Vol. 5, issue 6. Sales have been impressive, especially given the "jobless recovery."

Sociedad Minera y Quimica de Chile

No

SQM

$36.36

$33.90

$43.93

$30.70

 

This is a great company that manufactures silicon for the solar and IT industry. Looking for a better buy-in, after we get through the current down-trending volatility.

Read the article, "Treasure Hunting," in Vol. 5, issue 10 and the article "Life Begins with (Li) Lithium," from Vol. 6, issue 4. SQM announced on Sept. 30, 2009 that prices for lithium carbonate and lithium hydroxide will be reduced by approximately 20% from current levels for the renewal of all its supply contracts. The purpose is to accelerate demand recovery, create incentives for research of new lithium uses, and contribute to the sustainable long-term development of the lithium market.

1Q earnings on May 25, 2010: earnings for the first quarter of 2010 of US$76.5 million, a decrease of 13.5% with respect to the same period of 2009, when earnings totaled US$88.4 million. Revenues totaled US$388.5 million for the first quarter, representing an increase of 21.0% over the US$321.1 million reported in the same period of 2009.

SQM's Chief Executive Officer, Patricio Contesse, stated, "After undergoing unprecedented economic challenges during 2009, which negatively impacted global markets, the first quarter of 2010 showed strong signs of a transition to pre-crisis levels. We observed positive signs of recovery in all of our business lines with higher volumes in each business segment in the first quarter of the year compared to first quarter of 2009. Although prices in our fertilizer and lithium businesses are lower than the same period last year, they are in line with our expectations for 1Q10. Although there continues to be economic uncertainty in global markets, improved economic conditions and a more encouraging outlook in general have had a positive impact on our businesses, and we expect this positive trend to continue throughout the year."

Sohu (Chinese Co. ADR)

Beijing, China

Small Cap

RISK: MEDIUM

No

SOHU

$46.54

$41.54

$72.29

$41.02

 

See NataliePace.com ezines, Vol. 3, issue 4 and Vol. 2, issue 9 for feature articles on Sohu. Dr. Charles Zhang, the Chairman and CEO of Sohu.com, is one of our CEOs of the year in 2007. Read the articles in Vol. 4, issue 1. You can watch a Q&A with Dr. Charles Zhang in an exclusive interview I did on the Forbes.com Video Network.

Tesla No TSLA $17.00 $17.00 $17.00 --
Read "Tesla Trades on NASDAQ" from Vol. 7, issue 7. Should you buy now? There will be quite a lot of shares available, up to 80 million or 86% of the total outstanding shares, meaning that even with a hot story and major headlines, and especially considering the current volatile marketplace, there could be downward pressure on the share price. IPO participants have agreed not to dispose of or hedge Tesla for 180 days after Tesla begins trading on NASDAQ, however, be forewarned that if the IPO participants decide to dump for Christmas, when their period of restriction ends, that could be coal in Tesla investors' stockings. Elon Musk will still own 28-29% of Tesla.

Tidewater

No

TDW

$41.81

$40.06

$57.08

$40.05

Read "Clean Up" from Vol. 7, issue 6.

Trina Solar Ltd.

No

TSL

$35.12

$18.39

$31.18

$8.32

Read "The Sunny Side" Vol. 6, issue 3. Please note that TSL had a 2 for 1 stock split on 1.20.10. That is why the price looks dramatically different. Investors will note that they should now have twice as many shares…

1Q earnings 5.25.10: Net revenues were $336.8 million, an increase of 7.5% sequentially and 155.0% year-over-year. Net income was $44.5 million.

Westpac

No

WBK

$73.54

$93.49

$133.55

$68.75

Issued it’s half-year results on May 8, 2010. Go to Westpac.com.au to access.

Net profit of $2,875 million, up 32% from a year ago.


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):
Amazon (AMZN)
Apple (AAPL)

DELETIONS:
None

Company

NP owns?

Symbol

Price when added to Cooling Off List

Price 6.28.10

52-week High

52-week Low

Gains/Loss

Amazon

No

AMZN

$121.00

$121.00

$151.09

$75.41

--

Read the article "The High Cost of Cheap Tech Products," from Vol. 7, issue 7.

American Express

Yes

AXP

$16.98

$41.56

(11.16.09)

$42.23

$49.19

$22.00

+249% &

+2%

Read the article "American Express," from Vol. 6, issue 2. 1Q 2010 Earnings on 4.20.10: Revenues were down 11%. To $ 6,606 billion. Net income was income of $885 million, up 103 percent from $437 million a year ago. $21 billion cash on hand. Debt is $44 billion and liabilities total $130 billion. (Market value of AMEX is $56 billion.)

"Cardmember spending was up 16 percent, rebounding strongly from the recessionary lows of last year," said Kenneth I. Chenault, chairman and chief executive officer. "Credit metrics also continued the improvement that began in the second half of 2009."

Apple Computer

No

AAPL

$132.07

$200.38

(2.12.10)

$268.75

$272.46

$132.88

+203% &

+34%

See archived ezine Vol. 4, issue 2, for the feature article, "Apple Chips."

6.11.10: The Wall Street Journal is reporting that the FTC is investigating Apple’s Mobile policy. Additionally, there have been ten deaths reported at Foxconn, which assembles Apple products (and other tech companies, like HP, Intel, Cisco, Amazon and Dell also). The factory is under investigation by the Chinese government and the companies also say that they are also looking into the conditions that might have contributed to the suicides. There is an extensive update on the situation in the July 1, 2010 ezine, in the article, "The High Price of Cheap Goods."

2Q 2010 earnings on 4.20.10 were amazing: posted revenue of $13.5 billion, down from $15.65 billion in the 1st quarter (and $9.08 billion a year ago). Net quarterly profit of $3.07 billion (down from $3.38 billion in 1Q and almost double $1.62 billion of a year ago).

Apple sold 2.94 million Macintosh® computers during the quarter, representing a 33 percent unit increase over the year-ago quarter. The Company sold 8.75 million iPhones in the quarter, representing 131 percent unit growth over the year-ago quarter. Apple sold 10.89 million iPods during the quarter, representing a one percent unit decline from the year-ago quarter.

 

"We’re thrilled to report our best non-holiday quarter ever, with revenues up 49 percent and profits up 90 percent," said Steve Jobs, Apple’s CEO. "We’ve launched our revolutionary new iPad and users are loving it, and we have several more extraordinary products in the pipeline for this year."

 

"Looking ahead to the third fiscal quarter of 2010, we expect revenue in the range of about $13.0 billion to $13.4 billion and we expect diluted earnings per share in the range of about $2.28 to $2.39," said Peter Oppenheimer, Apple’s CFO. (FYI: This will be the second Q in a row with lower earnings.

Insider selling is in the range of $300 million. Consensus insider selling from multiple directors and officers, including CFO and COO. I Love Apple. At a better price in a more stable marketplace, with a better succession plan to Jobs. Seems like the insiders agree.

Applied Materials

No

AMAT

$12.76

$13.51 (9.15.09)

$12.90

$14.61

$8.19

Flat &

-4%

Leadership, product line and recessionary actions were strong, but AMAT transitioned to solar just when sales dropped off. Weathering the storm is imperative in the meantime. Investors should be aware of the high P/Es of this company, which is hard to justify in a contracting environment. With almost $2 billion in cash and marketable securities, AMAT is in a position to regroup and recover in the future. With any luck and with the worldwide emphasis on clean energy, this is a temporary setback.

1Q 2010 earnings call on Wed., February 17, 2010. FY loss (released on 11.11.09): For fiscal year ended Oct. 25, 2009, the company reported net sales of $5.01 billion and a GAAP net loss of $305 million or $0.23 per share.

Baidu

No

BIDU

$18.32

$74.15

(6.1.10)

$74.60

$82.29

$23.23

+400% &

flat

Leading Chinese website for search (similar to Google). 115 P/E is high for a revenue stream so tied to advertising (during a global recession). (Advertising revenue models tend to suffer greatly in recessions and Google’s P/E is only 23, by comparison, right now.)

The primary Risk Factor for Baidu is: We derive revenues primarily from online marketing services, which accounted for 98.9%, 99.8% and 99.9% of our total revenues in 2006, 2007 and 2008, respectively.

10 for one stock split on 5.12.10.

Berkshire Hathaway

No

BRK.A

$97,000

$114,000 (2.12.10)

$121,607

$125,252

$84,600

+25% &

+7%

See archived ezine Vol. 6, issue 8, for the feature article, "The Oracle Turns 80."

Added to the S&P500 on February 12, 2010. BRK.B did an unprecedented thing. Buffett made the stock affordable, by splitting it 50:1. Anyone can now buy in the $45-$78 range. Many tout triumph, but they may not be aware of the exposure that BRK has to financial giants, Wells Fargo and American Express, among other challenging industries (including insurance). BRK is also a big owner of Goldman Sachs, which was just charged with fraud.

Capital One Financial

No

COF

$22.29

$42.04

(1.11.09)

$43.05

$47.73

$16.57

+93% &

+2%

Read the articles "IPO of the Year," and "American Express," from Vol. 7, issue 3 and Vol. 6, issue 2. COF has a lot of liabilities that are highlighted in the Stock Report Card of the IPO of the Year article from volume 7, issue 3. If you read the SEC filings and realize how much COF has off the books, how much money they’ve had to take from the Feds and much liability they may have for mortgages that second parties want them to be responsible for, you’ll know why COF is on the Cooling Off List. Additionally, S&P rating is BBB with negative outlook.

Fortress Investment Group

No

FIG

$3.57

$5.37 (8.13.09)

$3.18

$8.30

$1.02

-11% &

-42%

1Q 2010 results on May 6, 2010:

For the quarter ended March 31, 2010, FIG’s GAAP net loss was $261 million compared to a loss of $287 million for first quarter 2009. Excluding principals agreement compensation, first quarter GAAP net loss was $27 million, as compared to a net loss of $52 million for first quarter 2009. (In other words, the principals at FIG are getting paid handsomely to lose their client’s and shareholder’s money for years now…)

Daniel H. Mudd, currently member of the Fortress board of directors, became the firm's new CEO effective August 11, 2009. George W. Wellde has been elected to Fortress' Board of Directors.

Read the articles, "Cherry Picking the Cherry Bombs" (Vol. 5, issue 12) and "Money Grows on Wisdom Trees," from Vol. 4, issue 3.

On 9.22.09: dividend was canceled by Board.

Intel

RISK: LOW

No

INTC

$16.66

$20.25 (9.1.09)

$20.50

$25.29

$12.06

+24% &

flat

Intel is a great blue chip. But we are in a challenging year.

Maxwell Labs

No

MXWL

$18.05

$12.53

$21.81

$4.50

-32%

Read "Life Begins with (Li) Lithium" from Vol. 6, issue 4.

1Q earnings on 4.30.10: Revenue of $26.6 million for its first quarter ended March 31, 2010, up 19 percent over the $22.5 million recorded in the same period in 2009. Operating loss for the first quarter 2010 was $1.6 million, compared with an operating loss of $1.8 million in the same period last year.

Cash and restricted cash totaled $38.1 million as of March 31, 2010, compared with $37.6 million as of December 31, 2009. Q110 gross margin was 38 percent, compared with 31 percent in Q109 and 34 percent in Q409.  Operating expenses totaled approximately $11.8 million, or 44 percent of revenue in Q110, compared with $8.8 million, or 39 percent of revenue in Q109.  

$47 million in debt, with $5 million due in the near future, and $30 million owed on accounts payable and employee compensation. (Uh oh!) (No mention of this in the 4.30.10 press release. Check the SEC earnings report for more details.)

Medtronic

No

MDT

$33.35

$42.44

(2.12.10)

$36.96

$46.10

$24.06

+11% &

-13%

Medtronic’s Infuse Bone Graft product has been at the center of the debate of some controversial deaths, and has investigated by a Congressional Panel, the Justice Department, the SEC and other national, state and local governance officials for issues related to the use of this product and others. Read the earnings report for a complete list of the complaints and current status. The company reports that on August 21, 2009, the Department of Justice decided not to intervene at this time but may intervene at any time for good cause based upon a Court Order entered on August 28, 2009.

MGM Mirage

No

MGM

$26.79

$11.04

$16.66

$5.10

-59%

Get more information in Vol. 5, issue 10 in the (No) Viva Las Vegas article.

1Q on 5.6.10:

Net revenue, excluding reimbursed costs, decreased 4% to $1.4 billion, compared to a 6% year-over-year decrease in the fourth quarter of 2009. First quarter diluted loss per share of $0.22 compared to earnings of $0.38 per share in the prior year first quarter.

Debt is a big issue with MGM. Check the SEC filing.

Microsoft

No

MSFT

$29.64

$24.32

$30.53

$14.87

-18%

Read the "AOL" article from Vol. 6, issue 12 to review the Stock Report Card on Microsoft from December 2009.

Great blue chip (certainly better than Citigroup, Bank of America, AIG and GM were), if you buy at the right price. Good profit margins. Low debt. Loads of cash. Revenue seems to be coming back. But, headwinds of the marketplace will likely continue now, with continued oil spill trauma and hurricane season upon us.

Netflix

No

NFLX

$103.98

$120.69 (6.15.10)

$117.65

$121.55

$36.25

+13% &

-3%

Read "Blockbuster’s Second Coming" from Vol. 7, issue 5.

Sears Holding

Yes

SHLD

$52.93

$98.06

(1.11.10)

$70.43

$124.96

$49.80

+33% &

-28%

Sears is up on Jim Cramer’s "appliance" picks from his January 8, 2010 show, not real earnings or outlook… (Remember: Jim also recommended Bear Stearns before it went bust, too.) Chairman Eddie Lampert has been dumping shares en masse, to the tune of over $376 million. Consensus insider selling…

Read the articles, "Cherry Picking the Cherry Bombs" (Vol. 5, issue 12) and "Discount Designer Stores," article (Vol. 5, issue 6). Sears is one of the largest, oldest retail chains in the U.S, and formerly, was as American as baseball and apple pie. These days, however, Sears is more of a hedge fund, which might help to explain why you’ve been trying to get that appliance repaired (under warranty) for months or been waiting for a replacement for your coffee pot for so long that you’ve taken up drinking tea. Almost all of the board directors at Sears are in the investment business, not the retail business. In fact, board director Emily Scott, a TV station founder, is the only person on the board without significant investment experience. No one on the Sears board has any experience at all in retail.

Still don’t have an official CEO. Bruce Johnson has been the interim CEO and president since January of 2008, which is not just "weird" it’s a BIG FAT RED FLAG! The former CFO Miles Reidy decided late in 2008 that he needed to spend more time with his family rather than to put is name on the 2008 annual report. Another big red flag.

1Q earnings on 5.20.10: Net income $16 million. Total revenues for the quarter of $10 billion in 2010 were flat with the first quarter in 2009. Cash balances were $1.8 billion at May 1, 2010.

Debt: $3.2 billion (as of 5.1.10). S&P gives a rating of BB- to Sears.

During the 13-week period ended May 1, 2010, Sears repurchased common shares at a total cost of $1 million under their share repurchase program. They have authorization to repurchase up to $581 million of common shares.

Taubman Centers REIT

No

TCO

$24.74

$41.10

(6.15.10)

$40.45

$45.00

$21.85

+64% &

-2%

Read the article, "Global Recession," from Vol. 6, issue 6 in June 2009.

1Q on 4.22.10:

Net income allocable to common shareholders per diluted common share (EPS) for the quarter ended March 31, 2010 was $0.11 versus $0.22 per diluted common share for the quarter ended March 31, 2009.

"These results are in line with our expectations for the quarter and our guidance range for the year," said Robert S. Taubman, chairman, president and chief executive officer of Taubman Centers. Rents were lower and lease cancellation income was higher than the comparable period last year. In addition, pre-development expense was up in large part due to nonrecurring consultant fees in 2010 and recoveries in the prior year.

Consensus insider selling.

Time Warner

No

TWX

$24.44

$30.51

$50.70

$17.81

+25%

Read the article, "Hulu Your Heroes," from Vol. 6, issue 5 in May 2009.

1Q results on May 5, 2010:

In the quarter, Revenues grew 5% from the first quarter of 2009 to $6.3 billion, reflecting increases at the Networks and Filmed Entertainment segments. Adjusted Operating Income rose 37% to $1.4 billion, the highest quarterly Adjusted Operating Income in the Company's history, due to strong results at all of the Company’s segments. Operating Income increased 43% to $1.5 billion.

For the first three months of 2010, Cash Provided by Operations from Continuing Operations reached $1.4 billion, and Free Cash Flow totaled $1.3 billion. As of March 31, 2010, Net Debt wasunchanged from $11.5 billion at the end of 2009, due mainly to share repurchases, investment and acquisition spending, as well as dividends, offset by the generation of Free Cash Flow.

Turner signed Conan O’Brien to host a late-night talk show on TBS.

Toyota Motor Company

No

TM

$77.05 (2.12.10)

$69.45

$91.97

$51.79

-10%

Read "Should You Put the Brakes on Toyota" from Vol. 7, issue 2. Sales fallout from the January 2010 floor mat and accelerator recall, which halted sales and affected 4.8 million (or more) vehicles; should show up on the interim earnings report on or about June 24, 2010. Look at price/viability going forward after that date. (If Toyota wasn’t such a strong leader in the auto manufacturing world, this company would be on the Cooling Off List until June.)

Transocean

No

RIG

$56.77

$50.08

$94.88

$50.04

-12%

For more information, read the article, "Clean Up," from June 2010 ezine, Vol. 7, issue 6.

VMWare

No

VMW

$70.58

$67.47

$71.38

$25.27

-4%

Read "Health Care Reform" Vol. 7, issue 4.

Wells Fargo

No

WFC

$20.05

$29.21

(10.15.09)

$27.03

$44.69

$7.80

+35% &

-8%

See "Wells Fargo’s Incredible Exploding Earnings" in Vol, 5, issue 9, and "Wells Fargo’s Great Depression," in Vol. 4, issue 12. Annual report will be issued at the end of Feb. 2010.

1Q on 4.21.10: Wells reports the following:

Revenue of $21.4 billion, up 2 percent from first quarter 2009

Net charge-offs declined $83 million to $5.3 billion.

Reduced high-risk/non-strategic consumer loans by $4.3 billion in the quarter, $23.2 billion cumulatively since Wachovia acquisition

Supplied more than $128 billion in credit during the quarter, including mortgage originations and consumer and commercial loans and lines of credit

Loan modification efforts continued to help homeowners remain in their homes

523,336 active and completed trial modifications between January 2009 and March 31, 2010:

Should you believe this, however, when most of the non-performing loans and other problems are off the books, and the Federal Open Market Committee Chairman Ben Bernanke is not releasing information on which banks are receiving which kind of support from the FOMC? Here’s a link to the Testimony that Chairman Bernanke gave on February 24, 2010 to Congress. The most interesting reading is at the bottom, in the section entitled, "Federal Reserve Transparency," where he states, "An appropriate delay would also allow firms adequate time to inform investors through annual reports and other public documents of their use of Federal Reserve facilities." This indicates that the public has not been properly informed at this time, but might be in the future, after an appropriate delay, which indicates that the earnings reports you are reading by this bank and others have a good deal that is not transparent in them.

Wells Fargo Chairman takes early retirement:

Dick Kovacevich stepped down as chairman and a director at the end of 2009.

Wynn Resorts

No

WYNN

$95.42

$85.10

$176.14

$18.06

-11%

Check out the article, "(No) Viva Las Vegas" in Vol. 5, issue 10.

Watch Steve Wynn discuss Washington, Macau, Vegas, his new Beach Club at Wynn Encore (Las Vegas) and the future of America on CNBC, from a May 28, 2010 interview.

"When you ask me about predictability and uncertainty in China compared to Washington, I’d take China. Washington is unpredictable these days… The people who buy our bonds in other countries don’t know what’s next. The uncertainty of the business climate in America is frightening to everybody and it’s delaying our recovery. We’re on our way to Greece in the hands of a confused and foolish government."

"People want to grow old ungracefully and at any price cling to immaturity.

"There were supposed to be 10,000 rooms across the street and they all went bust. They quit. The strip side of the Encore property was quiet and unanimated… We’re a group with uncompromising dedication to the pursuit of excellence."

"We lose money in Las Vegas because of lower room rates. Not enough to bother me because we have such a good capital structure. But Las Vegas is not a profitable city at the moment, and unlikely to become a profitable city right away."

 

1Q earnings on 4.29.10: Net revenues for the first quarter of 2010 were $908.9 million, compared to $740.0 million in the first quarter of 2009. Net revenues for the first quarter of 2010 were $908.9 million, compared to $740.0 million in the first quarter of 2009. Wynn Resorts also announced today that its Board of Directors has approved a cash dividend for the quarter of $0.25 per common share. This dividend will be payable on May 26, 2010 to stockholders of record on May 12, 2010.

As of December 31, 2009, Wynn’s total debt outstanding was $3.6 billion, including approximately $2.5 billion of Wynn Las Vegas debt and $1.1 billion of Wynn Macau debt.

Yahoo

No

YHOO

$15.00

$14.73

$18.02

$9.42

-2%

Read the "AOL" article from Vol. 6, issue 12 to review the Stock Report Card on Yahoo from December 2009.

 

Deleted in 2008/2009/2010:
Fannie Mae was deleted on 2.11.08 after losing -50% and -56% of its share price value, and then again on 7.1.08, after losing another -40%. (Both puts more than doubled.) Novastar Financial (NFI) was deleted on 6.2.08 with -95% share price implosion. Sears Holding Corp. was deleted on 7.1.08 with 64% gains on the put option. Wells Fargo was deleted on 7.1.08 with 83% gains on the put. Apple was deleted on 8.1.08 with 35% gains on the put. The Google put, deleted on 8.1.08, was another great performer, with over 50% gains. First Solar had gains of over 32-34%. Mentor was deleted on 9.30.08 with 75% gains on the put option (-17% on the share price); Medicis was deleted with gains of over 37% on the share price (down direction). Boston Properties, Las Vegas Sands and Macerich were deleted on 10.9.08 with gains of 16-30%, 66% and 28-42% respectively. Wells Fargo was deleted on 11.6.08 with 35-50% gains on the put and again on 12.1.08 for 50-70% gains. American Express posted 35% gains in just 30 days, between 2.1.09 and 3.2.09. First Solar was deleted on 8.13.09 with 33% gains. KB Home with 74% gains and Toll Brothers with 51% gains on 10.01.09.

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

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

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


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NataliePace.com Calendar:

FREE Teleconferences. Learn how to get started investing, and Easy-as-a-Pie-Chart Nest Egg strategies that work in bull and bear markets.

This month, due to all of the crises and disasters, we’ve taken action to make solutions and answers readily available to you. There are two FREE interactive Tuesday Night teleconferences discussing easy strategies to get safe and prosper in volatile markets. Learn what is really happening with the oil spill (and which companies are responsible for the disaster and the cleanup) and secure your assets before hurricane season. See below for details.

Easy as a Pie Chart FREE Teleconference
Tuesday, June 29, 2010

6:00PM through 6:30PM PT
Fat finger May 6th meltdown. The worst oil spill in history. What is happening? Amidst all of the chaos and headline horrors, there is a strategy for your survival that is easier than you think. Buy and hold and blindly checking off the box doesn't work in today's wild stock marketplace and hasn’t worked for the last decade. (We’ve had the DOT COM bust, the real estate bust, the bailouts and the Great Recession in the last ten years.) However, Modern Portfolio Theory, avoiding Bailouts, adding Hot Industries and annual rebalancing does. Learn these easy-as-a-pie-chart investing strategies that work great in bull and bear markets.

Call-in Number: (347) 215-7305. Log onto: http://www.blogtalkradio.com/nataliepace.

Money While You Sleep FREE Teleconference
Tuesday, July 6th, 2010

6:00PM through 6:30PM PT
You could have kept half of your nest egg completely safe and still earned 20% gains in 2009 (and there were just as many horrific headlines last year as there are today). Learn how in this FREE teleconference. Bring your friends.

Call-in Number: (347) 215-7305. Log onto: http://www.blogtalkradio.com/nataliepace.

Day Without a Drink
Wednesday, July 21st, 2010
Can you go a day without oil, gas, plastic or polyester?
Sundown on the 20th to sundown on the 21st. Some people are driving electric cars to work. Others are sleeping under their desk to avoid the commute. Get creative. See what you discover. And share it with us on the Facebook page. We’ll be doing it again on August 21, 2010 and September 21, 2010 as well.

Get Rich and Enrich Retreat, Santa Monica, CA
July 23-25, 2010
You spend hundreds of thousands learning how to earn money. Why not spend a fraction of that learning how to invest? 3 days in a boardroom setting, learning investing directly from Natalie Pace, sets you up for life. There are only three seats remaining in this intimate, boardroom retreat. Call 866-476-7442 to register NOW!

http://www.nataliepace.com/flyers/YouVsWallStreet%20Mar10/SeminarFlyerMarch2010.htm

GDP 2Q 2010 report (Advance)
Friday, July 30th, 2010

8:30AM ET
The U.S. Dept. of Commerce, Bureau of Economic Analysis (BEA.gov) releases its advance report on GDP growth in the 2nd quarter of 2010. Final results for the 1st quarter of 2010 came in at 2.7%.

FOMC Meeting
Tuesday, August 10th, 2010
The Federal Open Market Committee meets to determine Federal Reserve policy in the U.S.

Day Without a Drink Saturday, August 21st, 2010
Can you go a day without oil, gas, plastic or polyester? Sundown on the 20th to sundown on the 21st. Some people are driving electric cars to work. Others are sleeping under their desk to avoid the commute. Get creative. See what you discover. And share it with us on the Facebook page. We’ll be doing it again on September 21, 2010.

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VISION: To build a global community of investors through a worldwide website, seminars, radio, television and print partners.
GOAL: To provide high-quality, first-run, ethical financial news, information and education, presented in an entertaining format, across all media (television, radio, print and online).
MISSION: To provide the news, information and education investors need to make better choices and to make investing as much fun as shopping.
PHILOSOPHY: Member Mosaic. Piecing together a more complete picture of the publicly traded company, one tile at a time, by valuing firsthand consumer experience, conducting evaluations of the executive team and lining up the numbers of the publicly-traded company with its competitors in a Stock Report Card.
For more information on NataliePace.com contact us at
www.NataliePace.com, P.O. Box 1350, Santa Monica, CA 90406-1350 or 1-866.476.7442 (toll-free telephone number).

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

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