Should You Link in to LinkedIn?

by Natalie Pace.

Includes an Internet Stock Report Card.

LinkedIn CEO Jeff Weiner in front of the New York Stock Exchange.

The LinkedIn IPO was so hot that shares doubled the first day of trading, and are still trading in that lofty range, at $95.26/share. That puts the company value at more than $8.34 billion – about four times the market value of AOL. So, is this just the beginning? Should you link into the stock now, before it pops again?

One of the best ways to judge a new business is by how much people love the product. Google it! and Skype me! are verbs now. Those businesses, like Kleenex tissue before them, are passed on by word of mouth. If you want to search, you automatically think of Google, and if you want to call outside of the country, the first company you’ll dial into is Skype. But is LinkedIn more popular for professionals than KornFerry or Monster or Craig’s List? Are you just dying to visit the website today? Are your friends? Please click and take my online survey, and review what others are saying about their loyalty to LinkedIn there as well.

When the tipping point from noun to verb occurs, sales explode. Google’s annual sales have increased from a billion in 2005 to over $31 billion today. Skype used to give everything away for free, however, company sales were $860 million in 2010, and should top a billion in 2011. Skype’s video conferencing and premium add-ons will now be marketed and distributed by their new owner, Microsoft -- likely through the Microsoft Office product suite. And those growth possibilities make this acquisition very exciting for both companies. (You can read my analysis of the Microsoft acquisition of Skype in this June 2011 ezine.)

LinkedIn had revenue of $243 million in 2010, with $15 million in net income, and yet their IPO value is as high as the price Skype sold to Microsoft ($8.5 billion). If LinkedIn’s first quarter revenue of $94 million (and $2 million net income) continues apace, then 2011 will end with $376 million taken in -- still less than half of Skype’s sales. By contrast, AOL is on track to bring in $2.2 billion in sales and at least $18.8 million in net income. Is LinkedIn really worth more than AOL and Skype?

AOL, with its online properties HuffingtonPost, Mapquest, Moviefone and more, had another thing to boast about in April. While most people spent slightly less time online in April than in March, AOL’s suite of sites increased time online by 5%. AOL is the 7^th most trafficked brand, with 72 million unique visitors in April 2011 and two and a half hours online per visitor per month, on average. LinkedIn had just 14.5 million unique visitors in the U.S. with an average time online of 17 minutes and 21 seconds per visitor each month (source: The Nielsen Company).

Another real concern for investors is that Linked In has given a huge advantage to insiders by offering only a very small piece of the company to outside shareholders in this IPO, and by limiting the voting power of Class A common stock shareholders to 1/10 the power of Class B shareholders. Outstanding shares of Class B common stock represent approximately 99.1% of the voting power, with the LinkedIn co-founder and board Chair, Reid Hoffman, retaining approximately 21.7% of the voting power. Only 7,840,000 shares of Class A common stock were made available, with 86,658,627 shares of Class B common stock held by insiders.

Those insiders have restrictions on when they can sell, but once the lockout period expires in 180 days (around November 15, 2011), there could be a mass of insiders jumping ship. Especially if the LinkedIn online UVs and time online do not improve dramatically.

It’s pretty easy for the insiders to sell. According to the prospectus, "Each share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock." Sure: they give up 9/10s of their voting rights, but if they can double or triple (or more) their dough, why not?

The venture capital behind LinkedIn is mixed on the prognosis. Those that sold shares into the IPO include a venture capital affiliate of Bain Capital LLC, McGraw-Hill Cos., Goldman Sachs Group Inc. (GS) and founder and Chairman Reid Hoffman, according to the SEC prospectus. Sequoia Capital, Greylock Partners and Bessemer Venture Partners aren’t selling shares, according to the filing.

All in all, unless LinkedIn has some surprises that will make the site stickier and more compelling to users and advertisers alike, it’s hard to imagine that LinkedIn comes close to the values of AOL or Skype. AOL and Skype (as part of owner Microsoft) are the rocket ships I’d expect to ignite on Wall Street in the coming months, based upon the online metrics, the market valuation and the brand loyalty.

I added LinkedIn to the Cooling Off list today. AOL continues to be on my Hot List and Skype/Microsoft was added to the Hot List on May 15, 2011. Be sure to read the Skype/Microsoft article in this June 2011 ezine as well.  

About Natalie Pace:
Natalie Pace is the author of You Vs. Wall Street. She is a repeat guest on Fox News, CNBC, ABC-TV and a contributor to HuffingtonPost.com, Forbes.com, Sohu.com and BestEverYou.com. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on Facebook.com/NWPace and on YouTube.com/NataliePaceDOTCOM. For more information please visit 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.

Is the Microsoft/Skype Marriage a Good One?

by Natalie Pace.

Includes an Internet Giant Stock Report Card.

Skype Video for iPhone.

I called Skype the IPO of the Year on CNBC last September (2010).  The longer the IPO was delayed, the more I looked like a dope. From my point of view, a company that had almost as many friends as Facebook, had become a verb (Skype me!), was the leading video conferencing software platform worldwide and was profitable (if you exclude one time events, like paying off the founders) was worth at least twice as much as the valuation at the time – which was under $4 billion. So what delayed the planned IPO?

In his blog of May 10, 2011 (the day the Microsoft acquisition of Skype was announced), Ben Horowitz, a partner in the venture capital firm Andreessen-Horowitz, explained that during the IPO road show, investors feared the founders were going to shut down Skype in court. Or Apple and Google would kill Skype with their own video conferencing phones. Or in-house bickering with the multiple transfers of ownership would lead to talent attrition.

Ben and his partner, Marc Andreessen, along with Silver Lake Partners and the Canada Pension Plan Investment Board believed in the talent and the team of Skype. They placed a bet that the founders would play an important role going forward, and worked diligently to put all of the stakeholders (including part-owner eBay) on the same page, with a focus on winning with superior technology and brand loyalty. And it worked, over the last eight months, despite Google and Apple launching competing products, Skype friends continued to Skype In and Out and pulled all of their friends into the fold as well. Today, Skype boasts:

• 500,000 new registered users per day
• 170 million connected users
• 30 million users communicating on the Skype platform concurrently
• 209 billion voice and video minutes in 2010
• an unsolicited offer from Microsoft to buy Skype for $8.5 billion in cash

The question now becomes, "Will the Microsoft/Skype marriage reward investors going forward?" The bottom line is that Skype is the second fastest growing social network on the planet.  Growing almost as fast as Facebook, with 170 million users, and 500,000 new users registering every single day.  

Microsoft’s Office suite makes it possible for Skype video conferencing to be available to all of Microsoft’s small and medium sized businesses, which is where a good portion of Skype’s future revenue lies. Skype explodes the possibilities for Microsoft’s Smart Phone platform. As Microsoft CEO Steve Ballmer explains, "Talking to friends and colleagues around the world will be as seamless as talking to them across a kitchen table or a conference room. We dream about building experiences that are not limited by distance or device."

Video Conferencing.  40% of Skypers already use video conferencing.  That amounts to over six million people a day worldwide. Skype intends to monetize this service with video ads and with a premium video conferencing service, targeted at small and medium size business. Microsoft Office is an outstanding platform for that.

Mobile.  Skype just introduced 2-way video on mobile devices and sees this as just the beginning of a rich communications experience on Mobile, above and beyond just voice. 

Social.  There are over 170 million users who say, "Skype me!" which amounts to almost as many friends as Facebook has, especially considering that each person has 8-10 people that they talk to every day. Skype CEO Tony Bates believes that Skype "is a platform and a set of services that can reach everyone on the planet."

Reach. When a noun becomes a verb, you have reached the tipping point of easy sailing into the mainstream.  The last company to do this was Google (worth $173 billion). 

Almost a billion in revenue...  2010 revenue was $860 million, 20% growth year over year.  The primary revenue growth targets for 2011 are premium services and advertising.  So, I was early in calling Skype the IPO of the Year in 2010. It is now the engine of growth that Microsoft needed to beef up the Office suite and make it the preeminent player in Smart Phones. Early believers Andreessen-Horowitz, Silver Lake Partners and the Canada Pension Plan Investment Board more than doubled their investment with this acquisition. And it should increase the value of Microsoft going forward as well.

I added Microsoft to the Hot News on Cool Stocks list on May 15, 2011.

Full Disclosure: I do not own shares in Skype or Microsoft as of the publishing of this article.

About Natalie Pace:
Natalie Pace is the author of You Vs. Wall Street. She is a repeat guest on Fox News, CNBC, ABC-TV and a contributor to HuffingtonPost.com, Forbes.com, Sohu.com and BestEverYou.com. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on Facebook.com/NWPace and on YouTube.com/NataliePaceDOTCOM. For more information please visit 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.

Are Options Safer Than Stocks?

Investors Ask Natalie.

I am a basic newbie to the Stock Market. I have been hearing a lot about options trading and how it is supposed to be "less risky" than trading actual stocks. I have also been told that options allow people with more limited funds to buy shares of larger companies that would otherwise be unaffordable. What are your views on this subject? Thanks.

Signed,

Ready to Stick My Toe in the Water

Dear Toe,

Wow. The information that you received is so misleading that I encourage you to check with the U.S. Commodity Futures Trading Commission (CFTC.gov) to make sure that the person who is trying to sell you the options trading platform has not had complaints from others in the past. (Click to go directly to CFTC’s website.) CFTC has an Education Center for consumers that should be read thoroughly before any investment in futures or options is made. Here’s a direct quote from the Consumer Protection home page. "Futures markets are inherently volatile, complex, and risky." In other words, newbie: beware!

The best illustration I can give of the risk involved in options trading is this. The guy who wrote the book on options, and received a Nobel Prize for doing so, has had two hedge funds "restructure." Dr. Myron Scholes (of Black-Scholes fame) had his hedge fund Long-Term Capital Management bailed out by the New York Federal Reserve Bank in September of 1998. In August of 2006, his hedge fund Oak Hill Platinum Partners restructured and changed their name to Platinum Grove Asset Management. You can learn more about the Long-Term Capital Management bailout on Wikipedia. Good luck finding out more about the restructuring of Oak Hill.

So, with regard to your first question, options are far more risky than owning stock. As for affordability, if you can’t afford Google at $500/share, you probably can’t afford the Google option at $5,000 either. (You have to buy options in lots of 100, so one option at $50/per is purchased as 100 for $5,000.) If you see a very cheap option for an expensive stock, check the expiration date! Today, I found a $2.00 Google call that expires in just 14 days, meaning that if you are not "in the money" within that brief two-week period, you will lose ALL of your investment.

Four Important Tips

1. Not for beginners. Options trading is not easy and is absolutely not for beginners. Even experienced hedge fund managers have had huge losses trading options. Brokerages are not allowed to let you trade options until you sign a piece of paper verifying that you are an experienced investor who has been trading for more than a year.
   
   
2. Most options traders lose money. Options trading software companies say that their software predicts with 80 percent accuracy. That claim has nothing to do with how much money their clients make. With options, you have to be right within a narrow window of time. If you are a day late, you are a dollar short (and could lose all of your investment). For true measurements on how successful a strategy is, you need to see the actual annualized gains earned over time by every single client (something the company will never provide you with). The statistics that I have seen indicate that less than 2% of options traders make money.
   
   
3. Track records must be scrutinized. Many money managers and companies will quote cumulative gains, which must be divided by the number of years in order to get an idea of what the gains each year are. For instance, 50 percent cumulative gains for twenty years is only 2.5 percent gain per year. That is not very impressive when Treasury bills have beaten that return, with far less risk and work.




4. Narrow window to be "In the money." Options trading limits the amount of time that you have to make a return on investment. When the option expires, you can lose all of your investment, if you are not "in the money."

I devoted an entire chapter of You Vs. Wall Street to options. In my book, you can get more information on what options are and why they are so risky. Throughout the rest of the book, you can read up on the strategies I developed to become a #1 stock picker and to make those strategies low-risk and easy-as-a-pie chart – which is perfect for the newbie investor! Your best move, as a newbie, is to come to my next Financial Independence Day Retreat on July 2-4, 2011 and learn the financial strategies that you should have been taught in high school. Call 310-430-2397 now to learn more.

FYI: You Vs. Wall Street is enthusiastically endorsed by another Nobel Prize winning economist, Dr. Gary Becker, who, by the way, has had an outstanding track record at predicting the direction of the U.S. economy for many decades now.

About Natalie Pace:
Natalie Pace is the author of You Vs. Wall Street. She is a repeat guest on Fox News, CNBC, ABC-TV and a contributor to HuffingtonPost.com, Forbes.com, Sohu.com and BestEverYou.com. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on Facebook.com/NWPace and on YouTube.com/NataliePaceDOTCOM. For more information please visit 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.

Financial Infidelity and the Governator.

by Natalie Pace.

How much money did Arnold Schwarzenegger spend to keep his secret?  

Former California Governor Arnold Schwarzenegger and California First Lady Maria Shriver were the quintessential power couple. During Arnold’s first campaign for governor in 2003, and throughout the groping scandals that dogged him, Maria stood by her man, saying, "I see every day, an extraordinary human being of great character, who is honest and full of integrity." (Yes, she said this without choking on her words. Did she have a clue at the time that their housekeeper’s 5-year old was Arnold’s son?)  

Being First Lady was a role that Maria visibly delighted in. Each year, from the podium at her sold-out California Governor and First Lady’s Conference for Women, Maria welcomed her husband, the Governor of California, to the stage with great pride, listing his achievements and sounding his personal attributes. Maria’s conference hosted the most powerful people in the world, including former British Prime Minister Tony Blair, the Dalai Lama, First Lady Laura Bush, Supreme Court Justice Sandra Day O’Connor and First Lady Michelle Obama.  

First Ladies Maria Shriver and Michelle Obama.

So, how much did Maria know and when did she first discover that her four children have a half brother? (Can we really believe that she just found out this year?) How much did Arnold spend to keep his secret while he was governor? Will the Schwarzeneggers stay married, despite this scandal, as the Edwards did before them? Do blood, money and power run thicker than cheating and financial infidelity? One thing that is assured, the finances, family accounting, bank accounts and asset ownership will be more clearly defined going forward, whether or not there is a divorce.  

The public will likely never know all of the sordid details, as Maria’s family law attorney Laura Wasser is best known for keeping her celebrity divorce negotiations discreet. However it is very likely that financial infidelity will be the battle cry. If Maria didn’t before, she will now receive a full accounting of every dime Arnold has spent during their 25 years of marriage, so that the attorneys can haggle over what Maria is rightfully owed. Maria will become a very rich woman and, if she is smart, many assets will become hers free and clear.  

What is the right level of support that the Schwarzenegger family should provide to Governor Schwarzenegger’s not-so-secret son going forward? Maria will be involved in these financial negotiations, since she is part owner of the money being paid out. TMZ reports that Governor Schwarzenegger helped Mildred Patricia Baena purchase a home worth $268,000 in Bakersfield, California and kept her happy enough to deny the paternity, when Baena was approached in May 2011 by the Los Angeles Times. TMZ.com has posted a PDF of "gift" payments to Baena totaling $65,000 from the Governor’s personal bank account, though that is likely a small fraction of the total support Arnold provided for his son over the past 13 years.  

Unfortunately, financial infidelity is far more prevalent than most Americans admit. Another high profile politician who lied about his mistress – not just to his wife, but also to his donors – is former Senator John Edwards. In his book, The Politician, Andrew Young, an aide for Senator Edwards who initially claimed to be Rielle Hunter’s Baby Daddy, outlines years of secret, high society support of Rielle and their daughter, Frances Quinn.

Did Eliot Spitzer, Client #9, spend as much on high society hookers as Charlie Sheen? How much money was diverted to Newt Gingrich’s mistress when the Speaker of the House was prosecuting President Bill Clinton for dalliances with Monica Lewinsky? Senator John Ensign’s parents gave (at least) $96,000 to Cynthia Hampton and her husband. (Ensign’s father Michael is a former casino mogul who wrote the check. Did Senator Ensign’s mother know of and approve the payments?) King Abdullah bin Abdul-Aziz Al Saud of Saudi Arabia currently has 4 wives, however he has reportedly been married over 30 times. (Muslim men can divorce women by saying, "I divorce you" three times. They can only have up to 4 wives at a time.)  

Though these may be the worst examples of financial infidelity, clearly, anytime there is betrayal in the marriage, money is a likely bed partner. One will break your heart. The other can destroy your future. According to the U.S. Department of Commerce, nearly six of every ten children living with only their mother are near or below the poverty line.  

As the founder and CEO of the Women’s Investment Network, LLC, I have listened to the personal stories of many people who woke up to foreclosure notices on their front door. Some discovered that their partner had purchased real estate, jewelry, vacations or other expensive gifts for a lover, while others suspected but could never find the paper trail. Some spouses gambled away their equity and life savings in the stock or real estate markets without the knowledge or approval of their life partner. Far too many had to start over in the wake of these disasters.  

So, how do you protect yourself and prevent your life partner from wiping out your livelihood? Be aware that in the event of a divorce, all of the family assets will be on the table for negotiations, however, those belongings that are clearly "yours" are more likely to end up on your side of the table than those that you have no named ownership in. CPA Mark S. Gottlieb, a respected forensic accounting expert, advises married partners to:

1. Maintain your own retirement account and plan.
2. Make sure your name is on all of your joint investment assets.
3. Review your financial assets, bank accounts, etc. on a regular basis with your partner
4. Review your financial assets, bank accounts, etc. on a regular basis with an independent financial professional and accountant of your own
5. Take responsibility. If your partner loses your money, it is still your loss.

"Stay tuned for my next move." Arnold Schwarzenegger, from his website Schwarzenegger.com.

If you are seriously worried about your spouse’s spending habits, then you might need to set up your own trust, put your spouse on a tight budget and/or consider a divorce so that you are not responsible for the debt and liability that an out-of-control spouse can run up.

Of course, just like politicians, divorce impacts your social standing with your friends and family. However, even if you might condone some "flings" or mistakes for the sake of the marriage, you should not turn a blind eye to financial infidelity. The Governator, a mega movie star and land mogul, can afford to write some very large checks to Maria and to the housekeeper/mother of his fifth child. However, don’t count on that being the case in your marriage.

About Natalie Pace:
Natalie Pace is the author of You Vs. Wall Street. She is a repeat guest on Fox News, CNBC, ABC-TV and a contributor to HuffingtonPost.com, Forbes.com, Sohu.com and BestEverYou.com. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on Facebook.com/NWPace and on YouTube.com/NataliePaceDOTCOM. For more information please visit NataliePace.com.

Grade Your Guru Before You Buy Into Anything.

by Natalie Pace.  

I am writing this one day after the world was supposed to end. Harold Camping, the president of Family Radio (based out of California), predicted that the world would end on May 21, 2011, beginning at 6:00 p.m. in your time zone. He’s not sure how he got it wrong. It’s a bit perplexing, however, this wasn’t the first time Camping got the date of the Apocalypse wrong. He tried to whirl up a frenzy back in 1994 as well.  

Another guru with failed predictions is Harry S. Dent. In his book, The Roaring 2000s: Building The Wealth And Lifestyle You Desire In The Greatest Boom In History, Harry Dent predicted that the Dow Jones Industrial Average would hit "at least 21,500 and likely higher." Dent predicted "the greatest boom in history" six months before the NASDAQ began its slide down a canyon of losses totaling 75%. NASDAQ bottomed out at a low of 1,114 on October 9, 2002, and has rarely come within half of the distance of the high of 5060, set on March 10, 2000. The Dow Jones Industrial Average spent most of the last decade below 11,000, and had bottomed out at 6547 by March 9, 2009. At that point, rather than admit defeat, Dent’s newest prophecy became that America was in a Great Depression.  

Dent titled his new book, The Great Depression Ahead: How to Prosper in the Crash Following the Greatest Boom in History (even though the boom he predicted never occurred). This book was released on January 6, 2009, just a few months before the Dow stalled out at its 12-year low. Since that time, the Dow has almost doubled, for one of the most spectacular two-year gains the Index has ever posted! The Dow is up 40% since January 2009, while NASDAQ is up 73%! Investors that followed Dent’s suggestion of moving into bonds and Treasury bills were earning dismal, or negative, returns, instead of rolling in the returns of stocks, as bonds suffered worldwide due to excessive debt in almost all of the developed world.  

Whether it is a doomsday prophet or a cheerleader tossing out candy with his data, your first move isn’t to listen and learn. It is to grade the guru, to determine if s/he is worthy of listening to at all.  

One of my subscribers recently asked me about a guru who might even be a scam artist! This person was speaking on the stage of a bestselling author, so the listener assumed he was legitimate, but a simple Internet search revealed that this "expert" had a history of problems with the SEC. According to the Securities and Exchange Commission, a few years ago, subscribers paid over a million to this expert when he promised them that he would "DOUBLE YOUR MONEY ON MAY 22ND ON THIS SUPER INSIDER TIP." The e-mail was promoting a company that was involved in the nuclear energy field and was supposed to benefit from the arms reduction treaty between the U.S. and Russia.

Recently, this "expert" claimed that people made a lot of money by listening to his warnings and using his strategies, but he never provided testimonials of those happy campers. In fact, the articles that I did find (it turns out the guru was a writer, not an analyst) would have lost a lot of money for people. If you began shorting stocks in December of 2008, as the guru advised, you would have lost a lot of dough because 2009 was an outstanding year on Wall Street. NASDAQ earned 40%, more than gold!, while the Dow Jones Industrial Average earned 15%. Shorting would have lost beaucoup money in that rally.   Are you surprised that, after all of the hoopla on gold, that NASDAQ beat gold over the last two years? And, believe it or not, NASDAQ is far less risky than gold is! The trouble with gold is that when it’s hot, it’s hot, and when it’s not it’s the worst performing asset, usually stagnating at returns that are lower than inflation. Over the last 10 years, gold has earned 17% annually. Woo hoo! Over the last 30 years, it was less than 3% annualized gain. Meanwhile, over the last 10 years, small cap stocks have earned 9.63% annually, and over the last 30 years, 12%.  

I’ve penned an article that you should read on gold (if you haven’t already)...  

http://www.nataliepace.com/newsletters/members/news.php?np=yes&issue=709/709&article=02

When I see fear mongering (so common these days) with very little evidence to back it up, I start smelling a rat. There are definitely issues in the U.S., however, the issues are worldwide, not limited to US alone. Many other countries are in far worse shape. PIIGS comes to mind – Portugal, Ireland, Italy, Greece and Spain. And those countries that are perceived to be in better shape (like say, China) are tied to the success of our future. We are China’s biggest customer.  

The U.S. invents a lot of things that the rest of the world loves. We live in the most free country on the planet. We have oceans bordering our nations, and two friendly, fairly free neighbors. By contrast, China is the most polluted nation and has to import our innovations (Google, Apple, etc.). China loves our products so much that many clean energy and technology companies rack up to 80% of their sales from Asia. As Chinese President Hu said in his visit to the White House on January 21, 2011, "Our two sides have acted in the spirit of cooperation as if we were in the same boat and we should row in the same direction when we tackled previous international challenges. And I think we need to keep up the spirit in the future as we tackle challenges."  

I am touting the strengths of the U.S. but that doesn’t mean I’m Pollyanna all of the time. I did in fact predict the fall of General Motors, the fall of Freddie Mac and Fannie Mae and the Great recession.  GM is outlined in my book, You Vs. Wall Street, which I penned in 2006. The Great Recession was predicted in January of 2008, and I included a simple way to get safe that MADE MONEY during the Great Recession.  And I told investors to get out of Fannie and Freddie as early as 2003.  All of my research is available online 24/7, dating back to 2003.  And more importantly, I have many testimonials from happy investors who have incorporated my strategies in bull and bear markets quite successfully more than 12 years. Perhaps the biggest testimonials I have are TD AMERITRADE chairman Joe Moglia and Nobel Prize winning economist Dr. Gary Becker, who wrote, ""Many people, including educated men and women, get into trouble when they neglect to follow the simple rules in this book. That is why I recommend it with enthusiasm."  

You might think it is tough to distinguish between the testimonials of Moglia and Becker and a bestselling author, but it isn’t really. If someone is on the stage of a bestselling author, you can bet that person is paying the author to be on that stage, or giving him/her a commission on any sales. You can’t buy the testimonial of the TD AMERITRADE chairman or the University of Chicago professor (Dr. Becker).  

Another important noteworthy clue is when your guru has been in business for longer than seven years, with no complaints and no problems with regulators. In fact, FINRA.org, the broker-deal overseer, actually contributes to my website every month.  

Having an Ivy League MBA or a big job sounds impressive, but that doesn’t mean anything either, unfortunately. Harry Dent has a Harvard MBA. Bernie Madoff was the non-executive chairman of the NASDAQ stock market. Dr. Myron Scholes won a Nobel Prize for writing his options theory, and yet his hedge fund Long-Term Capital Management went bankrupt. Secretary of the Treasury Hank Paulsen, who oversaw the biggest bailout in the history of the United States, was the Chairman of Goldman Sachs when all of the troubles were reaching their zenith.  

A great guru will have a PhD in results, and you’ll be able to see those results easily when you request them. So, grade your guru by how well her strategies have worked for the last decade (one or two years of outstanding gains hasn’t withstood the test of time) before you waste any time learning from her.

About Natalie Pace:
Natalie Pace is the author of You Vs. Wall Street. She is a repeat guest on Fox News, CNBC, ABC-TV and a contributor to HuffingtonPost.com, Forbes.com, Sohu.com and BestEverYou.com. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on Facebook.com/NWPace and on YouTube.com/NataliePaceDOTCOM. For more information please visit 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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Roadmap for the U.S. Recovery.

by Natalie Pace.

How to Keep the Bush-era Tax Cuts, Invest in Clean Energy and Still Get Ahead. Q&A with Dr. Gary S. Becker.

Learn what America needs to do to recover and compete in the New Millennium.

He’s a rock star at the Billionaire Boys Club, having keynoted the luncheon at the Milken Global Conference every year since it began. His lyrics – namely human capital – are pop vernacular. He’s rich – after winning the Nobel Prize for economics in 1992 -- well dressed and respected. Bestselling Freakonomics economist Dr. Steven Levitt is the director at his think tank (the Becker Center) at the University of Chicago.

Yet, as we enter the restaurant at the Beverly Hilton on April 4, 2011 for this interview, it is me who the waiter rushes to appease. Dr. Gary S. Becker, an icon in the world of economics, recipient of the Presidential Medal of Freedom and one of the most important thinkers of our day, despite all of his achievements, is still a humble, likable guy with an easy-going smile. The kind you might walk right by without knowing it.

More importantly for this article, he has been right on the money for decades. Each year he packs the ballroom at the Milken Global Conference, with thousands of the world’s most rich and powerful people (mostly men) leaning on his every word, as he directs them on how to promote public policy and business practices that will stimulate GDP growth, curtail deficit spending, reduce debt and reform the tax code. He was right, where most were still burned and wrong, on when the tipping point of recovery had taken hold in the Great Recession, and the Dot Com Recession before that.

Most people don’t think of University of Chicago professors as having much regard for government spending, however, as the author of human capital, Dr. Becker believes that investing in education and health care are critical to a healthy economy. Though he says entitlement spending is "too generous," his approach would be to reduce Medicare subsidies for "those who can afford it," and provide incentives for staying healthy, such as Health Savings Accounts. In Dr. Becker’s view, the Stimulus Spending was a mistake, however, he supports investments in alternative energy. He "often agrees with the Republicans," but describes himself as an Independent.

So how can we keep the Bush-era Tax cuts, invest in clean energy and still get ahead? Is it even possible? Dr. Becker sat down with me to outline the details to his Roadmap for the U.S. Recovery.  

Natalie Pace: With the recent S&P downgrade of the U.S. debt outlook, how close are we to a downgrade?

Dr. Gary Becker: I don’t think we’re very close, in sense of the next few months. In terms of the next few years, it’s very possible that we’ll be downgraded, if we don’t do anything about the deficit. Then there is a very high probability that we’ll be downgraded.

What happens then?

The interest rates that we have to pay on the debt go up. It becomes more expensive. That makes it harder to finance the deficit. So, that’s why it’s self-enforcing. That’s how countries like Greece get into trouble. I don’t think that’s going to happen in the United States, but the consequences will be higher interest rates.

Will the states have to face this before the national government does?

Some of the states and local governments, like California, the city of Chicago and other cities are in serious financial trouble. They can’t issue substantial debt, the way the government can do.

What can they do to start pulling back the reins on debt and escalating interest rates?

States really can’t go bankrupt; local governments can. They have to get their delayed payments under control, particularly their pensions and medical care. They are much too generous. They have to extend the age at which people retire. And they have to make retirement income based, not on the earnings of the last year or two, but on your lifetime contributions to some kind of fund. All of those things almost every state in the union does wrong.

What is the best cost-cutting strategy for the federal government that is on the table?

The big programs are three – Social Security, Medicare and Medicaid. And the fourth one would be defense. We have to make some adjustments. We could delay the age of eligibility for Social Security to age 70, which is not an unreasonable age with modern health. Medicare should be means-tested. When higher-income people can afford it, they should get much smaller subsidies from the government. With Medicaid, we need block grants to the states, and if they want to spend more money, they have to spend their own money, not the federal taxpayer’s money.  

Editor’s Note: Dr. Becker walks the walk on delaying retirement. He’s 80 and still carrying a full teaching load at the University of Chicago, writing a weekly blog and keynoting conferences.

Natalie Pace: What about defense?

Dr. Becker: I can see some cuts in defense. Hopefully we will wind down our involvement in Afghanistan and Iraq and that will have a big impact on our defense spending.

What happens if the Bush-era tax cuts are not renewed this year?

I think it would be a mistake. The tax cuts are good, although other tax reforms should occur. If you want to increase the revenue back to before the Bush tax cuts, you want to make the tax base flatter and the income base wider. That’s the real tax reform that should occur.

Do you think the economy needs to be stronger before that occurs?

I think that should occur now. That would be lower taxes for most people, higher taxes for some people and generous no taxes for lower-income people. It would be much more rational. Lower corporate tax would be folded into the income tax.

What about capital gains?

I would fold that into a flat income tax and it would be taxed at the same rate as income. Dividend income would not be taxed separately; it would be taxed as income to the individuals. Undistributed corporate profits would be taxed as regular income tax.

The U.S. Feds have been slow, compared to China, the European Union and Canada, in raising interest rates. How do you feel about that?

There’s no rush in raising rates. But I was opposed to QE2, the $600 billion dollars that the Federal Reserve spent. I thought that was not wise spending. Rates would have gone up a little if we hadn’t done that. I am worried down the road -- not this year and not 2012 -- about inflation. Nominal rates will rise if you get inflation. We have to be moving from an aggressive anti-Recession crisis mode into a mode more similar to the European Union.

Do you think interest rates have to rise in the near term?

No, not rapidly in the near term, but before too long the Feds have to stop easing. And if that means a rise in interest rates, we have to accept that.

What is the best strategy for increasing income and stimulating GDP growth?

We have to invest in education. Human capital is the capital in the modern global capital. That is our number one priority. Our number two priority is flattening the tax rate and widening the tax base and number three is getting spending under control. If we do all of that and improve our immigration policy, we can increase the growth rate.

What do you think of the Stimulus Spending?

I think it was a mistake. I don’t think it accomplished its goal. It’s still controversial, and we won’t know that answer – maybe we never will – and certainly not for a while. There was a lot of money spent too quickly and too unwisely.

President Obama always emphasizes that he is investing in clean energy and emerging economies, like bringing Federal agencies online and automating health care...

I would separate that from Stimulus. If you want to invest in alternative energy, that’s fine. I support some of that, up to a point. I think it’s important to support alternative energy, but don’t call it a stimulus. Call it an investment in trying to get us less dependent on oil, on global warming and all of these issues.

Clean energy is a part of the spending that the Republicans are keen on cutting...

I don’t agree with everything that the Republicans put forward. I’m an Independent, though I often agree with the Republicans. Medical research should be supported generously and other basic research should be supported. That’s one thing the government can do that the private sector can’t do well because they don’t have the right incentives. We should increase our investment in alternative energy. I think that’s desirable. I think we have to become less dependent and we have to worry about the global warming issue.  

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

Photo: Courtesy of SoulAcrobats.com.

Principle Training Versus Technique Training.

by Alvin Tam.  

When I train my students, my number one goal is not to help them lose weight, show them different exercises, or improve their endurance. My main goal is to cultivate in them a mindset of principle-based training. Training from principle is: understanding how the body works, versus how to physically copy and execute a movement.  

Many exercise forms focus on technique. Yoga focuses on postures, boot camp runs you through circuit drills, and swimming makes you do laps. In most classes, you follow the instructor move for move, copying as closely as you can the form of the exercise. You imitate the placement of the toes, the fingers, the arch of the back, and depth of the squat. Unfortunately in many classes, it resembles a factory production line where student after student forces herself into a carbon copy of the instructor.  

Learning technique is important but only if it is accompanied by principle training. Learning the principle of a movement frees your mind from training by rote and teaches you to develop self-awareness and creativity. Here are a few examples of the principles behind the technique:

There are thousands and thousands of movement techniques but only a few principles. Once you begin to understand how the body moves, you can begin to apply the principles across multiple exercise forms. For example, my two main movement specialty areas are acrobatics and martial arts. How do principles cross over between the two?

Martial arts are based on two primary principles: generating power by rotating your center of gravity and compressing and expanding the body. The speed and power behind any punch, kick, knee, or elbow comes from rapidly torquing your waist – your center of gravity – and extending a limb. As you extend your punch, kick, knee or elbow, you expand your body, then quickly compress it again.

Acrobatics is based on two primary principles: generating movement by off balancing your center of gravity and compressing and expanding your body. A back handspring requires you to fall off balance first, then rapidly expand your body backwards in an arch, while firing your legs. You expand to your maximum range and then return to a normal range, standing.

Other exercise forms may have only one main principle. Running is the act of constantly falling off balance and catching yourself.  You move your center of gravity, the waist, forward and wait for your feet to catch up. Then you repeat over and over again – and suddenly you’re running. Your speed is not determined by how quickly you move your feet, but by the degree to which you’re willing to be imbalanced.

Benefits of Principle Training
When you begin to actively seek to understand the principle behind all your movements, you increase your body awareness. Instead of being distracted by techniques, you become much more in tune with what you are doing and if you are overdoing a movement, or if you can go further with it. You learn faster because you see the similarities across multiple moves and you become more creative as an athlete because you can make up exercise routines instead of following rigid programs that lead to boredom and chronic injury.

Once you understand movement based on principle, you also learn faster. Instead of dissecting a technique, you seek automatically to understand the physics and dynamics of the movement. The technique happens to be the specific requirements of that sport or exercise form, so your learning accelerates because you already understand what 90% of your body has to do.

Spiritual Parallel
On a spiritual parallel, principle training is like having a clear set of values versus a rulebook to dictate your actions. For example, you might value kindness, courage, and community contribution. All your actions stem from these simple values. You’ll choose to help people instead of hindering them, encourage others in need, and volunteer your time, money, or expertise to your community.

On the other hand, if you haven’t identified your values, you’ll struggle with your daily choices because you won’t have an internal compass to guide your actions. You’ll rely instead on a rulebook, which by its very nature is inflexible and can’t adjust to new circumstances. For every new situation or variable, you’ll need a new rule. That’s why life gets laborious when you don’t have clear values – there are too many rules to remember and some of them will end up contradicting each other!

For example, I used to have a strict rule that I should never drink alcohol. It was a belief I inherited from my upbringing, and I applied it dogmatically to my life without question. I thought I valued health but I was really locked into a rule that I had never thought to ask it if served me.

My non-drinking rule probably saved me from a lot of heartache, nights of regret and an overtaxed liver. On the other hand I missed out on a lot of fun as well. If I had defined my value as enjoying life through healthy moderation, then I would have made choices that allowed me to drink when I wanted to, but not overdo it to cause long term damage. I finally replaced this rule with a value at the age of 33, when I finally had my first hangover.

So any rule, when not backed by a value you truly care about, results in rigid, robotic behavior. You end up enforcing your rule with aggression because you don’t really have options, unless you write more rules to accommodate a changing situation. Then you end up with a personal rulebook thousands of metaphoric pages long, and, instead of aggression, you experience exhaustion.

***

Physical training is the same. When your mind is flooded with thousands of techniques without principles, you become overwhelmed with the choices and you simply shut down. Perhaps you stop training, or resort to the boring forms of training, like watching the same video over and over again because your entire program is dictated to you and no thinking is required. Without principle-based training, the attrition rate on an exercise program is high because you don’t have variations – you can’t slow down on a long day, or speed up on an energetic day. With principle-based training, you have the knowledge to show you how to make a movement easier or more challenging, apply it to another form of movement or another sport, and even create your own form of exercise.

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

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

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

Investment Scams Follow in the Wake of the Crisis in Japan.

FINRA.org Investor Alert.

Millions of concerned people from around the world responded to Japan’s multiple tragedies with an outpouring of relief and generosity. Some, however, have sought to use the earthquake, tsunami and ensuing nuclear crisis to their own benefit—at the expense of unsuspecting investors.  

FINRA is issuing this Alert to warn investors about investment scams that seek to capitalize on the disasters in Japan by linking their products and services to efforts ranging from the detection of gamma rays, to clean-up of nuclear waste and the development of earthquake-resistant structures. To avoid exposing your finances to undue risk, learn how to spot such scams and know where to turn for help.
 
Spotting Potential Scams 
Like many investment scams, those associated with the crisis in Japan may arrive in a variety of ways—from phone, fax, email or text message solicitations to webinars, infomercials, tweets, blogs or message board posts. Regardless of how you first hear about them, these ploys typically contain classic red flags of fraud.
 
In particular, fraudsters may try to lure you with very aggressive, optimistic and potentially false and misleading statements or press releases that create unwarranted demand for shares of some small, thinly traded company. The con artists behind the scam can then sell off their shares, leaving investors with worthless stock. This is what’s known as a "pump and dump" fraud.  For example, one company seeking to capitalize on the crisis in Japan disseminated a press release promoting its "new generation" of radiation detectors, yet according to public documents the company is in weak financial condition and does not have any manufacturing capabilities.

How do you spot potential scams and distinguish frauds from legitimate investment opportunities? Rip off tip-offs include:  

• Unsolicited communication such as phone calls, faxes, emails, text messages, tweets and strategically placed "opinions" in blogs and message boards, usually related to a very low-priced stock.
   
• Price targets or predications of swift and exponential growth.  One press release related to the crisis in Japan stated that a new technology it developed to clean up radioactive waste is "very likely to cause a huge boost to immediate-term gain possibilities."
   
• Mention of associations with or actions by federal and international governments that bolster a company's product or service.  For example, in March and April 2011, a reseller of handheld radiation detection devices issued press releases claiming they had entered into an agreement with the U.S. Department of Commerce’s Commercial Service to be listed as a "Featured U.S. Exporter" in Japan, and that they were poised to begin shipping.  Its shares trade below $0.01 and have been featured by various penny-stock promoters.  However, in a year-end 2010 SEC filing, it reported losses of over $4.5 million, an accumulated deficit of over $45 million and virtually no revenue.
   
• References to well-known companies used to justify the growth of the company being promoted.  For instance, a company in very weak financial condition recently issued a press release stating that they would be providing supplies to aid in Japan’s recovery.  Importantly, the release attracts readers and tries to add credibility by including the names and ticker symbols of several well-known companies that are traded on the New York Stock Exchange. 
   
• Claims that they’re the next big thing. Companies that, despite having not produced any revenue to date, are purported to have a new technology that will allow it to dominate the marketplace.
   
• Products that are only in the development stages or that claim "working prototypes" but no actual products on the market.  Less than three weeks after disaster struck Japan, one company began promoting the development of an "earthquake resistant building," but their design has only been tested once on a "shaker-table" designed to simulate earthquakes.
   
• Pressure to invest immediately.

How to Avoid Being Scammed
One sure-fire way to avoid being taken in by an unsolicited recommendation is to ignore it—regardless of how it comes in. Someone claiming to be an unbiased observer—whether in a phone call, fax, email, text message or blog post—could very well be a paid promoter or con artist. Especially online, a single person can use multiple aliases to create the illusion of widespread interest.
 
To steer clear of potential scams, follow these tips.

• Consider the source. Never rely solely on information you receive in an unsolicited phone call, fax, email, text message or tweet—or in a blog post or online thread. It's easy for companies or their promoters to make glorified, unsubstantiated claims about new products, lucrative contracts, or the company's revenue, profits or future stock price.
   
• Always ask: "Why me?" Another tip-off that you're potentially being scammed is that the message is unsolicited, which raises the obvious question: Why would a total stranger tell you about a really great investment opportunity? The answer is that there is no such opportunity. In many scams, those who promote the stock are corporate insiders, paid promoters or substantial shareholders who profit handsomely if the company's stock price goes up.
   
• Exercise some skepticism. Scammers are very adept at making their pitches appear real, including the use of slick videos and websites. Be extremely wary of any pitch that suggests immediate pay-offs, especially if the investment involves a start-up company or a product or service that is still in development. Even technologies that show promise might be years or decades away from coming to market—let alone turning a profit.
   
• Find out where the stock trades. Most unsolicited spam recommendations involve stocks that can't meet, or choose not to meet, the listing requirements of The NASDAQ Stock Market (NASDAQ), the New York Stock Exchange (NYSE) or other registered national securities exchanges. Instead, these stocks may be quoted on an OTC quote platform like the FINRA-operated Over-the-Counter Bulletin Board (OTCBB) and the platform operated by OTC Markets Group, Inc., formerly known as the Pink Sheets.
  
  There are important differences between trading OTC securities that are not exchange-listed and trading securities that are formally listed on exchanges such as NASDAQ and NYSE:
  
  - Generally, there are no minimum quantitative standards that a company must meet to have its securities quoted in the OTC market. While OTC market companies have no obligation to file annual or quarterly reports with the SEC, certain OTC quote platforms require quoted companies to file timely financial reports.
  
  - Many of the securities quoted in the OTC market, including securities quoted on quote platforms operated by the OTC Markets Group, Inc. do not have a liquid market. They are infrequently traded and can move up or down in price quickly. This may make it difficult to sell your security at a later date.

• Read a company's SEC filings, if available. Most public companies file reports with the Securities and Exchange Commission (SEC). Check the SEC’s EDGAR database to find out whether the company files with the SEC. Read the reports and verify any information you have heard about the company. But remember that just because a company has registered its securities or has filed reports with the SEC does not mean that it will be a good investment.

• Look beyond a company’s name. The fact that a company has "Japan" in its name can be misleading—and does not necessarily mean the company is incorporated or based in Japan or does business there.  Similarly, the fact that a company’s purported business objective is reflected in its name does not guarantee the company actually delivers that product or service. Also be advised that stock promoters often change a company's name, trading symbol and even line of business in an attempt to align it more closely with a current event or issue—a trick you will be able to identify by looking at the SEC reports described above.
   
• Check out the person promoting the stock or investment. A legitimate investment salesperson must be properly licensed, and his or her firm must be registered with the Financial Industry Regulatory Authority (FINRA), the SEC or a state securities regulator—depending on the type of business the firm conducts. To check the background of a broker and his or her firm, use FINRA’s BrokerCheck. For an investment adviser, use the Investment Adviser Public Disclosure website. Also, be sure to call your state securities regulator. You can find that number in the government section of your local phone book or by contacting the North American Securities Administrators Association ( NASAA ).

If a Problem Occurs
If you believe you have been defrauded or treated unfairly by a securities professional or firm, please send us a written complaint. And if you suspect that someone you know has been taken in by a scam, be sure to give us that tip. Here's how:
 
Online:
File a Complaint (for you)
Send a Tip (for others)

Mail or Fax:
FINRA Complaints and Tips
9509 Key West Avenue
Rockville, MD 20850
Fax: (866) 397-3290

Additional Resources
FINRA News Release: FINRA Alert Warns of Japan Earthquake Related Investment Scams
FINRA Investor Alert: Avoiding Investment Scams
FINRA Investor Alert: Save Your Money and Energy – Don’t Fall for Energy Stock Scams
SEC Press Release: SEC Charges Promoters of "Green" Investments with Operating $30 Million Ponzi Scheme Based in Denver Area
SEC Publication: Oil and Gas Scams: Common Red Flags and Steps You Can Take to Protect Yourself
FINRA Risk Meter
FINRA Scam Meter
Fighting Fraud 101 : Smart Tips for Older Investors
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.

Are Commodity-Rich Countries Worth a Look?

by Michelle Gibley, CFA, Senior Market Analyst, Schwab Center for Financial Research 

May 2, 2011

Key points

• Investing in commodity-rich countries can be a good way to get exposure to emerging markets.
• The commodity price rise of early 2011 likely needs a breather and could result in a short-term correction.
• This could create a buying opportunity in commodity-rich countries, as the longer-term outlook remains strong. 

• Which are the key commodity-rich countries?
• How do commodities impact these countries?
• What is the outlook for commodities?
• How do you invest?

Which are the key commodity-rich countries?
Before we get started, it's important to dispel one misperception: Countries rich with commodities are not necessarily synonymous with emerging markets. Several very large developed economies have natural resource wealth, namely Australia and Canada (see Outlook box below). By the same token, not all emerging-market countries have resource wealth—there are both producers and consumers.

Commodity-rich countries possess and/or export sizeable amounts of natural resources. As you'll see the table below, these countries also tend to have a significant materials and energy sector weight in their respective country indexes (see the second and third columns).

The table also lists the primary investable commodity-rich countries and the main types of commodities they possess.

Commodity-Rich Countries

• Boosts investment and merger and acquisition (M&A) activity.
• Increases employment.
• Raises wages and household incomes.
• Reduces dependence on imports for growth.
• Supports corporate profits and growth of new companies and industries.

• Risk of inflation from an overheating economy. You may see a cycle of high employment, foreign and domestic capital chasing investments which boosts prices and can lead to inflation. There's also the potential for asset bubbles.
• Risk of inflation from commodity prices. This is a concern particularly in emerging markets because food as a percent of spending can be two-to-three times higher than in developed countries. Thus, rising food and energy prices can lead to broad-based price increases.
• Rush to fulfill demand in new industries can result in over-capacity or unsuccessful companies (a boom-bust cycle).
• Corporate profits may be reduced if wages begin to rise and there's not an offsetting increase in productivity.
• Chance of interest-rate hikes, which can slow growth and reduce stock returns.
• Currency appreciation due to inflows of foreign capital can reduce consumer purchasing power.

If commodity prices fall, does that hurt commodity-rich countries? Not necessarily. The virtuous cycle that can occur as incomes rise and consumers spend can continue even if prices fall, as long as the decline is moderate and temporary.

Second quarter 2011 outlooks for Australia and Canada
According to the Economist Intelligence Unit, a resource available to Schwab clients, the main commodity-rich countries with better risk profiles and diversified market indexes are Australia and Canada.

The fundamental factors impacting Australia are:

• Growth in China and Japan, which constitute 45% and 20%, respectively, of Australia's export markets. A slowdown in either economy, as a result of either China targeting property speculation or Japan's devastating earthquake and tsunami, could impact Australia's growth.
• The Queensland floods, which will likely have a negative impact on near-term growth.
• Despite record job creation in 2010, particularly in the natural resource sectors, consumer spending has been held back by one of the highest levels of household debt in the world, consisting primarily of mortgage debt. Most of these mortgages carry variable interest rates, and seven rate hikes from October 2009 through April 2011 increased debt payments and resulted in a tighter credit environment.
• Financials, the largest weight in the S&P Australia BMI Index at 37%, underperformed during the rate hikes. Banks have had to rely on foreign sources of capital due to low deposit growth.
• Record job creation in 2010, particularly in the natural resource sectors.

We believe a short-term slowdown in China's economic growth and a decline in commodity prices would set a better backdrop for the Australian market to resume strong relative performance.

The fundamental factors impacting Canada are:

• Growth in Canada is closely tied to growth in the United States, which receives more than 70% of Canada's exports, notably oil. (Canada is the largest exporter of oil to the United States.)
• Canadian growth estimates have been increasing along with the improving economic results in the United States but the strength in the Canadian dollar has dampened the outlook for exporters.
• Like Australia, household debt relative to income is above that in the United States.
• However, the outlook for consumer spending remains strong because the job market is still improving.

Meanwhile, the May 2 election is expected to have little impact on the outlook for Canadian stocks. While a decline in commodity prices would likely negatively impact Canadian stocks, we believe the market could outperform US stocks during the next year, and a correction would likely be a buying opportunity.

What is the outlook for commodity prices?
Price increases during the past year were driven by a perfect storm of globally unfavorable weather, geopolitical supply disruptions, a falling US dollar and speculative buying. We don't believe we'll see a simultaneous repeat of these factors again during the coming year. A short-term price correction is possible due to the price run-up and the potential for slower economic growth, particularly in China. This could result in a buying opportunity.

In the long term, we believe commodity prices are supported by underlying demand, the continued global economic recovery and investor demand (paper demand). The growth in emerging markets supports the longer-term demand for commodities, because individuals tend to enhance their diets as incomes grow, and governments build additional infrastructure.

The Rapid Rise of Commodities

Source: FactSet, Commodity Research Bureau, Dow Jones as of April. 27, 2011. Indexed to 100 = April 27, 2006.

In addition to weather, geopolitics, and speculators, influences on commodity prices include:

• Demand destruction: Price increases can ultimately become self-limiting as demand is reduced or substitution occurs in response to high prices.
• China's consumption: China's government is trying to engineer a slowdown in speculative property construction by reducing the availability of bank credit. However, a slowdown may be short-lived because the government is also aiming to build millions of affordable housing units.
• Interest-rate increases: Rates can negatively influence commodity prices because they raise both the costs for speculators in terms of lending rates and the costs to physically store the commodity. For example, rate hikes by China's central bank has pressured speculators within the country.
• US dollar trend: Changes in monetary policy expectations can impact the US dollar. Most commodities are priced in US dollars , and while the dollar may decline over the longer-term, a rise in the dollar could negatively impact commodity prices.

Declining US Dollar Boosted Commodity Prices

Source: FactSet, ICE Dollar Index, and Thompson Reuters/Jefferies CRB Index as of April 12, 2011.

How do I invest?
Investing in commodity-rich countries can be a good way to round out your portfolio. The growth of incomes and infrastructure building in emerging markets supports long-term demand. The run-up in commodity prices through early 2011 likely needs to take a breather and could result in a short-term correction, which could be a good buying opportunity. Remember that any investment should be part of a diversified portfolio, and that investing internationally has associated risks.

To find investments in countries that benefit from rising commodity demand, Schwab clients can use our International Page combined with the table above.

By selecting individual countries on the country page, you can view:

• The country risk level from The Economist Intelligence Unit.
• Top exports and imports.
• Largest stocks in the country's top index by market capitalization.
• The ETFs and mutual funds with the largest country-specific weightings.

A reminder: Many investors already have some commodities exposure because the S&P 500® index has a 13% weight in energy and 4% weight in materials. Also, country-specific investments may not necessarily closely track trends in commodity prices during short periods due to the influence of other sectors or large individual company weights in an index.

Important Disclosures
For mutual funds and ETFs, 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 returns will fluctuate and are subject to market volatility, so that an investor's shares, when redeemed or sold, may be worth more or less than their original cost.

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

Commodity-related products, including futures, carry a high level of risk and are not suitable for all investors. Commodity-related products may be extremely volatile, illiquid and can be significantly affected by underlying commodity prices, world events, import controls, worldwide competition, government regulations, and economic conditions, regardless of the length of time shares are held. Investments in commodity-related products may subject the fund to significantly greater volatility than investments in traditional securities and involve substantial risks, including risk of loss of a significant portion of their principal value.

Diversification does not eliminate the risk of investment losses.

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

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

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

My Experience at the Clinton Global Initiative University.

by Wilkista Akinyi.      

I had a privilege to visit America for the first time in my life and on a special mission -- to represent the African girl child. We were a group of 4 ladies selected to attend the Clinton Global Initiative University (CGIU) in San Diego, California from 1-3^rd April, 2011. We had a commitment to make at this meeting, which we are now in the process of implementing.  

My stay in the US was amazing and absolutely unprecedented!  I’ve tried so hard to get a term that would best explain and express my experience, but this is impossible because this was a visit of a special and unique nature.

Getting to meet with members of USAID in Washington DC was just the beginning of wonderful events. At USAID, I felt happy, while at the same time humbled, that I could actually have people from such an important body take their time and listen to what I had to say. They even asked me questions!!  Rarely do we get people who take their time and keenly listen to us and show true appreciation of what we have for to say.

After our visit to Washington DC, we flew to San Diego to attend CGIU and make a Commitment to Action titled "Hey Sister, Get Clued-Up". I believe President Clinton must be one of the greatest thinkers in our times. He believes that one of the best ways to address issues that affect our world today is by including young adults -- who make up a majority of the world’s population -- in problem solving.

All commitments, however tiny they may seem, are aimed at changing the world. It is extremely inspiring to see young minds fueled with so much energy, coming up with commitments that address and tackle real-time challenges in our communities and the world at large. It doesn’t matter where one is. A commitment, if well chosen and implemented in the right place at the right time, does make a significant impact in our society.

During the 3-day meeting we attended plenary and working sessions where we had commitment makers talk to us and give success stories of their commitments. There were group discussions on solutions to problems affecting our societies, especially in the areas of health and education. We also had interactive and exchange sessions where we got to learn about different cultures and education systems. On the final day, we carried out a community service project at the San Diego Food Bank, which gave me a practical feel of what it means to be a doer and not just a talker. Working collectively and on teams, we were able to complete in 3 hours of service what would otherwise take almost one month.

(from left) Linda Mwango, Wilkista Onyango, Khadija Said and Vivian Onano.

After CGIU, we left San Diego a happy group because a lot of input had been put to our commitment to make it highly applicable and realistic to our target -- girls in Africa. "Hey Sister, Get Clued-Up" is a peer-to peer website which seeks to educate girls on health issues, financial literacy skills and proper use of social media. Any girl who registers to our site does so as a "voice" for other girls in her village and commits to spreading the knowledge gained from the site (on the above issues) to other girls who do not have access to the Internet or other communication vehicles that bring critical information to the world.

In the heath area of our site, we want to address preventative measures to diseases such as HIV/AIDS and breast cancer. Also, we want to advise young girls to avoid early pregnancies, especially when they can’t support these children. Through our educational and interactive website, we aim to break the cycle of poverty.

We have a strong belief that in the first year we will reach 10,000 girls and change their lives through the POWER OF THE VOICE – a voice that is exponentially transmitted through innovations in technology and forever embedded through the bond of sisterhood.

Over the next two months we will be searching for partners to work with us and make ‘Hey Sister, Get Clued-Up’ a sustainable model for knowledge transfer among sisters. And I hope to report back to you from next year’s Clinton Global Initiative University about how we have exceeded our own goals and expectations.  

About Wilkista Akinyi
Wilkista Akinyi grew up in a fishing village on Lake Victoria, just a stone’s throw from the home of Mama Sara Obama. They are both members of the Luo tribe. Wilkista is an orphan and like most orphans of her generation, she was raised by her grandparents. She grew up in a mud/dung hut and walked to primary school barefoot. Wilkista is one of the Global Give Back Circle’s most talented sales professionals and she has successfully mobilized hundreds of thousands of dollars from the private sector to be invested in the empowerment and education of girls. She is currently a student at Nairobi University as a science major with a business minor.  

Wilkista is a member of the Global Give Back Circle, a nonprofit organization founded by Managing Director Linda Lockhart. The Global Give Back Circle (GGBC) is an Empowerment and Enablement Process whereby disadvantaged girls are guided, inspired, encouraged and motivated through a Mentoring Model and Methodology that facilitates Gratitude, Goals and Giving Back. Kenya's GGBC connects over 535 disadvantaged girls to mentors from eleven different countries, including Kenya. Through a structured Five-Phase Mentoring Process, that includes Workshops, Journaling, Letter Writing and Personal Visits, the girls are guided to articulate their goals and dreams and supported to make them realities.  

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

The Secret to Saving Your Home From Foreclosure.

by Natalie Pace.

Includes my Hot News on Cool Stocks List.

The Secret to Saving Your Home. By Natalie Pace. Includes my Hot News on Cool Stocks List.

May 25, 2011

General Stock Market Performance

Wall Street Highs/Lows in the New Millennium:

Hot News on Cool Stocks Important Data
Up to 15X gains on U.S. Gold, our 2009 Company of the Year!
NASDAQ Doubled the Dow Jones Industrial Average gains from 2009-2011
NASDAQ is as Hot as Gold 2009-2011, 70% NASDAQ gains to 68% in gold
13 out of 14 Company of the Month features from 2010 posted gains. Woo hoo!
Gold tops stocks, real estate, bonds and T-Bills Over the Last 10 Years.

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

Market Update:
The Secret to Saving Your Home.
The secret to saving your home is that there is no magic wand and many of those companies promising load mods and foreclosure prevention have turned out to be frauds. Severely distressed homeowners have been promised the moon and the sky, desperately believing in a savior, only to find the shysters running off with thousands of dollars that might have been used to actually save their home. The Federal Trade Commission (FTC.gov) has been cracking down as fast as they can, however, they find out about fraudulent companies after the homeowners have been bilked and have lost their homes.

For that reason, I’m going to host two real estate experts on my radio show Thursday, June 9, 2011 at 9:00 a.m. PT (noon ET). :  Steve Dietrich has been a real estate consultant for two decades and is the President of Financial Research Group. Pamela D. Simmons, a partner with the Law Office of Simmons & Purdy, is an expert on mortgage lending law.  Learn your rights, just how high the stakes are if you lose your home, what types of liens may be filed against you and what you can do now to squirrel away your assets from banksters and financial predators. Whether you save your home or give it back to the bank, this information will arm you with the information you need to make the best choice possible. Call in to (347) 215-7305 and log on at BlogTalkRadio.com/NataliePace.

This is an interactive Q&A show, so if you have a question you’d like to have answered, be sure to raise your virtual hand. You can also email your question to info@NataliePace.com, if you want to be sure it is raised in the call.

Wonder what having 3.7 million foreclosures waiting in the wings will do to the real estate, stock and bond markets and recovery?  

Don’t let the recent foreclosure report fool you. In April 2011, foreclosures were down 34% from a year ago, at 219,258 foreclosed U.S. properties compared to 332,209 in April 2010. However, that is not because fewer homeowners are in trouble. It is that banks are so backlogged they can’t keep up. As James J. Saccacio, chief executive officer of RealtyTrac, puts it, "This slowdown continues to be largely the result of massive delays in processing foreclosures rather than the result of a housing recovery that is lifting people out of foreclosure."  

There were 2.9 million foreclosure filings in 2010. Foreclosure filings in 2009 were 2.8 million, with 2.3 million in 2008 and 1.3 million in 2007.

So how many more homes will be lost this year? According to Saccacio, "Data from the Mortgage Bankers Association shows that about 3.7 million properties are in [a] seriously delinquent stage." This likely means that there will not be much upside in real estate values until 2013. 13 million+ homes could be foreclosed on before this real estate correction is over.

Pete Flint, co-founder and CEO, Trulia, also believes that we have at least 18 months to go before prices stabilize. "Most Americans, as our latest survey revealed, overestimated how quickly the housing market would bounce back," Flint said. Flint expects the rest of 2011 to be volatile for real estate.

However now still might be a good time to buy a new home or some cash-positive income property. According to Flint, "On the flip side, mortgage rates won’t stay low forever and even if home prices continue to fall for a bit, now is still a good time to enter the housing market."

So, the bottom line is that real estate remains underwater and under attack. With a minimum of four million homes still in trouble, prices in real estate will continue to drop. However, with interest rates still at a 40-year low, the actual cost to finance your purchase could be far lower now than it will be going forward. Now could be the best time in years to buy -- particularly for anyone looking at cash-positive property and a holding horizon that is longer than seven years.

If you are one of those unfortunate people who has been caught with a home you can’t afford that is worth less than your mortgage, there might still be hope. HopeNow.com reports that there were 1.76 million permanent loan modifications in 2010. Call 1-888-995-HOPE or visit http://hopenow.com/ to work with HUD-approved counselors. The HOPE NOW Alliance includes a number of counseling organizations, which consists of all HUD Intermediaries that have affiliate offices across the United States. The organizations provide homeowners with in-depth debt management, credit counseling and overall foreclosure counseling.  

For additional information and resources on how to avoid foreclosure, if possible, and important information you need to know whether you modify your loan, walk away from your property or are considering buying into the real estate market now, be sure to join me for the call-in radio show on June 9, 2011 at 9 a.m. PT. Get the information you need to protect your assets, resolve the problem and start rebuilding your financial future here and now.

Investor Alerts:

1. OPEC & a Basket of Currency: On October 14, 2010, OPEC released a press release stating that they had agreed upon a new "long term strategy." The details of that strategy were scheduled to be released at the December 11, 2010 OPEC meeting in Quito, Ecuador, but were not. OPEC never responded to my inquiry requesting details and/or the summary of the new LTS (which was sent on December 11, 2010). There is speculation that the strategy will be going from the U.S. dollar valuation to a "basket of currency." It will likely be distressing to investors to learn of this. Watch and wait, but definitely be aware of the potential

2. Debt: The U.S. isn’t in the worst shape, but we are adding to the deficit every year and approaching levels that were problematic for PIIGS (Portugal, Ireland, Italy, Greece and Spain), Japan and other countries. Current debt to GDP (excluding $4.5 billion held by our federal government) was 63.6% in 2010, according to the U.S. Office of Management and Budget. It would be near 100%, if all of the government debt was added to the equation. On April 16, 2011, Standard & Poor’s lowered the U.S. Debt Outlook to negative from stable. This is a big warning to U.S. policymakers to cut spending and reduce the budget deficit and national debt.

3. Real Estate: There were 2.9 million foreclosure filings in 2010. According to RealtyTrac CEO James J. Saccacio, on May 12, 2011, "Data from the Mortgage Bankers Association shows that about 3.7 million properties are in [a] seriously delinquent stage." Foreclosure filings in 2009 were 2.8 million, with 2.3 million in 2008 and 1.3 million in 2007. 13 million homes could change hands before this real estate correction is over, as foreclosures are predicted to continue apace in 2011 and 2012. This likely means that there will not be much upside in real estate values until 2013.

4. 911 Investor Alert: Bonds: Inflation and interest rates have yet to weigh on the bond market (preview of coming attractions), however debt has already begun to take its toll. Don’t be suckered into muni bonds or any other bond before understanding the debt load of the entity and the fiscal health/capacity to make good on the bond. The downgrade of the U.S. debt outlook to negative by Standard and Poor’s (on April 18, 2011) is a wakeup call. I have penned multiple articles and interviewed countless experts on bonds over the last two years. Peruse the archives of 2010 and 2011 and read all of them!

5. Gold: If you purchased gold at $850/ounce in 1980, you had to wait 26 years for the value to return. Most of the time, gold seesawed between $250-$350 an ounce over that period. Between September 2009 and December 2010, the International Monetary Fund sold 403.3 metric tons of gold on the open market. Other large holders of gold, including the United States, Brazil and more, could also be tempted to sell high. For a brief history of gold and information on which countries are the biggest holders of gold, read, "The Gold Crash of 1980," from the September 2010 ezine, volume 7, issue 9.

So is There Anything Good Out There?
Yes, believe it or not, there are some excellent areas in the economy. My 2009 Company of the Year, U.S. Gold, has posted up to 18X gains. Applied Materials, the 2010 Company of the Year, posted 25% gains within a few months of being named. 13 out of 14 Companies featured in my Company of the Month articles in 2010 were winners. Your nest egg has almost fully recovered from the Great Recession. If you have a great credit rating and can get a loan, there are areas of the country where you can buy cash positive, low risk income property. And even if you’re in trouble, in doubt, losing a home or declaring bankruptcy, there are some very important things to do to squirrel away as many assets as possible. The best way to learn about these things is to read this ezine top to bottom, read You Vs. Wall Street and register to attend the next Get Rich and Enrich Retreat. Once you have the wisdom and education that you should have received in high school, all of this will be easy and can be set up on auto-pilot. Until then, you are vulnerable to more boom/bust markets.

Banks Are Still Failing There were 157 bank failures in 2010, 140 bank failures in 2009 and 25 in 2008. 43 banks have already failed in 2011 (source: FDIC.gov). Don’t be seduced by the banks reporting record earnings! Most of them are fairy tales. (Nonproducing loans are carried off the books; TARP and other Federal Reserve swaps are about as easy to figure out as the origin of the life.) However, the $600 billion that the Federal Reserve is putting in the mega-bank coffers between November 2010 and May 2011 should help their earnings reports shine up real nice. 13 million homes could be lost between 2007 and 2012 and not all of them hitting the financial statements with as much force as they should...

Track Record of our Reporting While the markets are still down significantly since their high in October of 2007, the Hot News and Cooling Off lists below have a winning track record before, during and after the Great Recession – in bear and bull market years. 101 positions listed over the last four years – 78% -- have delivered impressive gains, even while the Dow Jones Industrial Average is still trading lower than it was in 2007 (when it cracked through 14,000)! Only twenty-nine 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. 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.)

Half of My Company of the Year selections more than doubled.  My 2003, 2004, 2006, 2007 and 2009 Companies of the Year posted up to 9000% gains (Taser), up to 690% gains (Opsware), up to 215% gains (Suntech Power Holdings), and up to 15X 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, and Applied Materials, my 2010 Company of the Year posted 25% gains in just two months of being listed.   So six out of eight 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) up to 18X 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. 13 out of 14 companies featured in the Company of the Month articles in 2010 earned gains – 93%! The NataliePace.com ezine was the first to list the following 911 alerts:

1. Muni bond and bond funds 911 Investor Alert in Sept. 2010.
2. 2008 Recession (Get Safe)
3. Trim back on Faded Blue Chips in 2006
4. Get out of Dodge (real estate) in 2005
5. Google at the IPO! (May 2004)
6. 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 June 21-22, 2011.
GDP Growth Rates: Advance estimate 1^st quarter 2011 GDP growth came in at 1.8% (blame the high price of oil). 1^st quarter 2011 second estimates will be released on May 26, 2011 at 8:30 a.m. ET. 4Q 2010 growth was 3.1%. 3Q 2010 GDP growth was 2.6%. 2Q 2010 was 1.7%.  1Q 2010 was 3.7%.

These release days tend to be very active on Wall Street.  For more information on GDP growth and other important economic statistics, 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 April 26, 2011 FOMC meeting for yourself? Want to see the first ever press conference by a Federal Reserve Board Chairman? You can. The official Federal Reserve document is available online. Go to FederalReserve.gov to read! According to the Committee, "Information received since the Federal Open Market Committee met in January suggests that the economic recovery is on a firmer footing, and overall conditions in the labor market appear to be improving gradually... The recent increases in the prices of energy and other commodities are currently putting upward pressure on inflation. The Committee expects these effects to be transitory, but it will pay close attention to the evolution of inflation and inflation expectations."

The tentative FOMC meeting schedule for the 2011-2012 calendar is 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.), March 13, 2012 (Tuesday), April 24-25 (Tuesday-Wednesday), June 19-20 (Tuesday-Wednesday), July 31 (Tuesday), September 12 (Wednesday), October 23-24 (Tuesday-Wednesday), December 11 (Tuesday), January 29-30, 2013 (Tuesday-Wednesday).

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

Don’t miss the Pace and Prosperity Show with Natalie Pace on BlogTalkRadio.com. Check BlogTalkRadio.com/NataliePace for upcoming shows and call-in and log-on instructions and to listen back to any shows that you might have missed. These shows are pod casts and are FREE!

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

3. Survey Results: Each month we have three new surveys so that we can stay in touch with your needs and desires. Cast your vote on our survey page.

4. Euro interest rates: ECB rates are at 1.25% (main refinancing), 2.00% (marginal lending) and 0.50% (deposit facility). The next meeting and interest rate announcement are scheduled for June 9, 2011 at 2:30 p.m. CET. (June 22, 2011 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.
American Superconductor (AMSC)
AOL (AOL)
Cree (CREE)
ENER1 (HEV)
Galaxy Resources (GALXF)
Green Dot (GDOT)
KLA Tencor (KLAC)
Memc Electronics (WFR)
Microsoft (MSFT)
Powershares Lux Nanotech (PXN)
Powershares Wilderhill Clean Energy Fund (PBW)
Satcon (SATC)
Trina Solar (TSL)

Profit-Taking:
LDK Solar (LDK) +94%

DELETIONS (Take your profits early and often):
None

HOT NEWS on COOL STOCKS LIST

Deleted Companies 2010-2011:
Deleted 1.11.10: KCI with 88% gains! Deleted 8.1.10: Galaxy Resources with 48% and 9% returns and Rio Tinto with 21% gains. Deleted 9.13.10: American Superconductor (flat) & AOL (flat). 10.1.10: Blockbuster busted out in bankruptcy on 9.28.10. KLAC was deleted with 11% gains. 10.15.10: ENER1 was deleted with flat performance. 11.11.10: ENER1 was deleted with 37% gains. VECO was deleted with 2% & 41% gains. 12.1.10: KLIC was deleted with 12% gains. 1.14.11: Advanced Materials was deleted with 30% gains. 2.2.11: BEARX with losses of 14%. 2.14.11: U.S. Gold with 14.5X gains.

Deleted Companies 2008-2009:
60 winners and 9 losers.

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:
None

Recent Deletions:
Eldorado Gold (EGO) moved to the Hot List on 5.15.11
Galaxy Resources (GALXF) Moved to the Hot List on 4.28.11
KLA Tencor (KLAC) moved to the Hot List on 6.1.11
PowerShares Lux Nanotech ETF (PXN) moved to the Hot List on 6.1.11
Shutterfly (SFLY) moved to the Cooling Off List on 4.28.11
Skype moved to Hot List on 5.16.11 (with parent company Microsoft)

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.)

ALERT: We are entering the Summer Doldrums of a pre-election year. Not the best time to initiate new short positions because in a good pre-election year, the markets don’t have much of a correction in summer and early fall. Some of the NASDAQ stocks on the list below are here simply to keep you from buying them high.

Highlighted Companies (Cooling Off List):
Linked In (LNKD) on 5.26.11
Taubman (TCO) on 4.28.11

DELETIONS:
None

Deleted in 2010-2011:
Deleted AMAT on 8.1.10 with gains of 12.5% & 7% (put gains would be double or more). 8.30.10: Deleted FIG (-10% & -40%), MXWL (-37%), MDT (-4% & -24%), MSFT (-20%) -- all for gains. Deleted MGM 9.13.10 for 61% gains. Deleted Tesla on 1.14.11 with 20% & 24% gains. 3.1.11: Deleted Shutterfly with -12% performance (cooling off gain) and Sears with mixed results (up & down). 3.11.11: Deleted PIMCO Muni Bond fund with flat performance. Deleted Amazon, American Express, Capital One, Ford, Kulicke & Soffa, Netflix, Taubman, VMWare with mixed results. Deleted Apple, Baidu, Berkshire Hathaway, Intel, Transocean & Wells Fargo with losses. 4.28.11: ABAT with 51% gains.

Deleted 2008-2009:
19 gainers and no losers.

Recently Deleted:
Advanced Battery Technologies, Inc. (ABAT) on 4.28.11

IMPORTANT DISCLAIMER (PLEASE READ):

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

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

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

NataliePace.com Calendar:

Special Foreclosures TeleSeminar Thursday, June 9, 2011 at 9:00 a.m. PT. If you’re behind on your payments or in danger of losing your home, get the information you need NOW.

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

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

Tesla Annual Shareholder Meeting
Wednesday, June 1st, 2011
9:00AM through 10:00AM
Tesla will hold their annual shareholder meeting for one hour at the TechMart, 5201 Great America Parkway, Santa Clara, CA 95054.

Foreclosures TeleConference
Thursday, June 9th, 2011
9:00AM through 9:30AM PT
Learn your rights, just how high the stakes are if you lose your home and what you can do now to squirrel away your assets from banksters and financial predators. Call-in to: (347) 215-7305. Log onto: BlogTalkRadio.com/NataliePace.

Step Up Women’s Network Inspiration Awards, Beverly Hills, CA
Friday, June 10th, 2011
11:00AM through 2:00PM PT
A star-studded luncheon where influencers inspire. Proceeds benefit Step Up's charitable programs.

Father's Day
Sunday, June 19th, 2011
Celebrate and honor Dads!

Summer Solstice
Tuesday, June 21st, 2011
The height of summer.

FOMC Meeting
Tuesday, June 21st, 2011
The Federal Open Market Committee meets to determine Federal Reserve policy in the U.S. Two-day meeting June 21-22, 2011.

Clinton Global Initiative Economic Summit, Chicago
June 29-30, 2011
Join President Bill Clinton as he leads a 2-day economic summit focused on job creation & economic growth in the U.S. CGI America will bring together leaders from business, nonprofits, and government to develop new ideas for generating jobs now in the U.S.

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