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Vol. 8 Issue 7, July 1st, 2011
Send comments and suggestions or get more information at info@NataliePace.com

QUOTE OF THE MONTH:
"Part of the reason that I got out of my chair at Google and went to AOL is that you have a company with a $2 billion valuation. The next closest competitor has a 10X market cap, and they don't have 10X the users we do. If we are able to translate our 118 million people in the U.S. and 250 million people globally with a business model, the market cap is not going to be $2 billion."

Tim Armstrong, Chairman & CEO, AOL, Inc.
Speaking on CNBC on May 16, 2011


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Is GroupOn the Next Google?

by Natalie Pace.

Includes an Internet Stock Report Card.

This is the season for Internet IPOs, with GroupOn in the initial stages, LinkedIn on the big boards and Facebook insiders predicting an IPO in the first half of 2012. LinkedIn's IPO was hot, with the share prices soaring to $123 in the first week of listing. Investors who bought into the hype very quickly got burned, however, as share prices sank by almost half, to $65.53 by June 20, 2011.

Sure the markets have been down in that period as well, however, one thing seems pretty clear. LinkedIn is no Google. (How many people do you know who visit LinkedIn daily? Weekly?) But what are the prospects for GroupOn? The company sold 28.1 million Groupons ($644.7 million) in the first quarter of 2011 compared to 116,231 Groupons ($3.3 million) in the second quarter of 2009. That’s supersonic sales growth – enough to generate major buzz on the investor bulletin boards...

There is a gold standard on the Internet – eyeballs. And to get the most eyeballs, you have to be numero uno at what you do. Google was the search engine (Google It!), and that meant that Google could attract advertising dollars and another even more broad-based and stable revenue stream. Google replaced the Yellow Pages as the spot where every Mom and Pop store across America had to be listed. And all of those micro-payments, combined with corporate advertising, added up to more than $31 billion in revenue last year.

Facebook is clearly the number one social networking site, and has Google-like potential. However, LinkedIn has yet to discover what it really wants to be when it grows up. (Social networking? Executive recruiting? Monster.com?) And GroupOn (a play on Coupon) is trying to beat mega-discount deal providers, like Priceline, Expedia, Ross Stores and even Costco, at their own game. How successful are LinkedIn and GroupOn in attracting eyeballs to their website? GroupOn’s average minutes online per customer looks like a rounding error of Google and Facebook, and the unique visits on both LinkedIn and GroupOn are still a small fraction of Google, Facebook and even AOL.

May 2011 U.S.

Total Unique Visitors (000)

Average Minutes per Visitor

Market Cap

Revenue (1Q 2011)

    Total Internet : Total Audience

216,250

1,926.1

    Yahoo! Sites

188,763

198.7

19 B

$1.2 B

    Google Sites

179,989

230.9

156 B

$8.6 B

    Microsoft Sites

179,762

143.3

205 B

$16.4 B

    Facebook.com

157,219

374.9

85 B ?

$2 B ? (2010 full year)

    AOL, Inc.

114,901

122.7

2.15 B

551 m

    Linkedin.com

33,383

15.4

7.21 B

$94 m

    Hulu

20,314

30.6

NA

NA

    Groupon

12,032

4.1

NA

$86.4 m

    Skype

11,578

31.9

8.5 B

$860 m (2010 full year)

 Source: ComScore

Running in the red is another weakness for GroupOn. At the time of the Google IPO in 2004, Google’s revenue was doubling annually, and the company was profitable. By contrast, Groupon lost $103 million in the first quarter of 2011, for an accumulated net deficit of $522.1 million since inception. In other words, they are undercutting the competition in pricing, but how long they can keep this unsustainable competitive edge going is anyone’s guess.

Company

1Q Sales

Net Income

Market Cap

P/E

GroupOn

$645 million

-$103 million

N/A

N/A

Expedia

$822 million

$52 million

$7.4 billion

18.64

Priceline

$809 million

$105 million

$23 billion

40.77

Ross Stores

$2 billion

$173 million

$8.8 billion

15

Google at the IPO (5.1.04)

$962 million (full year)

$106 million

(full year)

$40 billion

N/A

*Not available.
Google numbers are based on full year revenues in 2003.

While researching GroupOn and LinkedIn, I did come across a company that looks very, very interesting, however. This company is attracting almost as many unique visitors as Facebook with almost as much time online per visitor as Microsoft. That company is determined to become "the largest premium content company on the Internet and the next American media company that goes global," according to AOL’s Chairman and CEO Tim Armstrong. AOL was the biggest name on the Internet before the AOL-Time Warner merger. What was a colossal mistake in 1999, now makes a lot more sense – that is if Tim Armstrong (a recruit from Google) succeeds in his goals.

AOL is valued by investors as worth 1/3 of LinkedIn, even though the company has 3.5 times more unique visitors than LinkedIn and 10X as many as GroupOn. AOL Inc.’s 118 million U.S. and 250 million global visitors spend over two hours online every month, putting AOL in the leagues of Google and Facebook, companies that have market values of $156 billion and $85 billion, respectively. For that reason, Old School AOL is the next Internet Star, over either GroupOn or LinkedIn, in my book.

Why Old School AOL is a better bet than GroupOn or LinkedIn.

1.  More traffic.   AOL had 115 million unique visitors in May, compared to 33 million for LinkedIn and 12 million for Groupon (source: comScore). 
2.  More Time Online.  AOL users spent 123 minutes on AOL sites in May, compared to 15 minutes on LinkedIn and just four minutes on Groupon.
3.  Far more revenue.  1st quarter revenue for AOL was $551 million.  LinkedIn scored $94 million and GroupOn amassed $86.4 million in sales.
4.  Undervalued.  AOL's current market cap is just $2.2 billion, while LinkedIn investors have pushed up the value of that company to over $6 billion (and as high as $8.5 billion).

GroupOn is very exciting for customers, but it has a lot to prove before it will be exciting to investors. Being popular with college students doesn’t always translate to being profitable enough to keep the lights and Muzak on. Just ask Napster.

Join me on CNBC’s Power Lunch, on Friday July 8, 2011at 1:00 p.m., to hear more on this topic.

AOL is highlighted on the Hot News on Cool Stocks List. LinkedIn was put on the Cooling Off List at the IPO, after which it lost almost half of its value. (LinkedIn is now on the Stocks to Watch List.) Groupon has filed their intention to begin publicly trading and has hired Morgan Stanley, Credit Suisse and Goldman Sachs to launch the IPO. More details on the IPO should be announced within the next 60-90 days.

 

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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Another Tech Bubble in the Offing?

by Dr. Gary S. Becker.

Dr. Gary Becker.

The dotcom boom at the end of the 1990s was a classical and magnificent bubble. Venture capitalists and other investors were throwing tens, and often hundreds, of millions of dollars at Internet startups and fledgling biotech companies that usually were not making profits, and frequently did not have any sales. The bubble burst in 2000, and the huge valuations placed on these companies disappeared, along with many of the companies.

It is only a decade later, but a second dotcom boom has begun, and some early signs are surfacing of possibly another bubble. This boom is being fueled mainly by social networking companies like Facebook, Twitter, and LinkedIn, and also by Chinese Internet companies. Other Internet companies, like the Internet phone and video company Skype, are also in the mix. Microsoft recently purchased Skype for $8.5 billion, which is ten times Skype’s sales, and several hundred times its operating income last year.

During the dotcom frenzy of the ‘90s, tech companies that were traded publicly, usually on the Nasdaq, had greatly inflated valuations. Share prices were often immediately bid up by more than 100% after tech company shares started trading on public exchanges. LinkedIn is one of the few social networking companies that have had an IPO, and its market value already has soared. LinkedIn started trading on the New York Stock Exchange on May 18 at a share price of $45 that valued the company at about $4.3 billion. Its price rose the next day to close at $86 per share, almost double the offering price. It traded at around $88 per share [on May 30, 2011]. The company had revenues in 2010 of about $243 million, but indicated in its filing that it did not expect to make profits this year.

Facebook and Twitter have not yet had IPOs, but they are actively traded in secondary markets. In an excellent discussion in its May 14th edition of the boom in tech stocks, The Economist shows that Facebook is valued on this secondary market at over $75 billion, and Twitter at almost $8 billion. These are enormous valuations relative to the sales and profitability of these hugely popular social networking companies.

Adding to the froth in the tech market is the successful listing of many Chinese Internet companies on either Chinese or American stock exchanges. To be sure, China has almost 500 million Internet users, and this number is still growing rapidly, but the valuations placed on these tech companies is quite high relative to their sales, and much higher relative to their profits.

Does all this add up to a new bubble in the making?  I would like to believe that a company like Microsoft, which has had so much success in the past, knows what it is doing in paying an apparently very high price for Skype. But Microsoft has stumbled badly during the past decade or so as it tries unsuccessfully to compete against Apple and Google. This suggests there is a reasonable chance that Microsoft is stumbling again as it desperately tries to find its way. Recall too that Rupert Murdoch, an enormously successful investor in newspapers, television, cable, and film companies, apparently greatly overpaid in 2005 for Myspace.com, an online social networking company.

The present situation is not yet close to the situation in 1999 and 2000, when tech stocks listed on the Nasdaq had risen to ten times their prices in 1995. Still, if Microsoft and Murdock paid inflated prices for Myspace and Skype, it would be no surprise if other investors who have more limited business experience with Internet companies would have inflated expectations about future earnings prospects of these companies.

In trying to determine the likelihood of another bubble, there is on the one hand, the large worldwide growth in the number of Internet users since 2000, and the improvement in the business models of online companies. This might well mean that the present situation is very different than the bubble in the late 1990s. But there also is, on the other hand, the present love affair with social networking companies, which could mark the beginning of another bubble in tech companies. The prospects of a bubble, therefore, are uncertain at present, but if these high valuations of social networking and other online companies continues and worsens, a bubble could build that would cause great harm not only to careless investors, but also to the many basically solid social networking and other new tech companies.

 

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

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


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Bubble Trouble?

by Ben Horowitz.

I Don’t Think So.

Ben Horowitz.

Lately, everybody seems to be talking about a new technology bubble. Many very smart CEOs, VCs, reporters, and analysts can’t seem to stop worrying about the second coming of the dot com bust. Are the prognosticators correct? Will we head mercilessly into another crash? I don’t think so.

A Comparison Between Today’s "Bubble" and the Last Tech Bubble
Since so many distinguished people report a broad variety of qualitative bubble signs, let’s attempt to pattern match the quantitative data. As we do so, keep in mind that the relevant bubble statistic is not valuation. It’s the valuation:value ratio. High valuations are fine if the underlying value is there. Let’s look at public market comparables and venture capital flows to see if we can find a match.

1. Public market comparables
In the great bubble of 1998-2000, the boom in public valuations mirrored the boom in private valuations. Similarly, in recent high profile private financing rounds for private technology companies with valuations over $1B, the valuation multiples were at or below corresponding multiples for publicly traded companies such as Google. This has generally been the case for the bulk of deals that we’ve seen at Andreessen Horowitz. If publicly traded technology companies are not at bubble-like prices, then private technology valuations aren’t either because they are roughly equivalent.

To find out whether or not today’s public technology companies have hit bubble valuations, let’s compare some companies that survived the great bubble with their bubble era valuations:

The Enterprise Value-to-Revenue multiple (EV/Rev) and Price-to-Earnings multiple (PE) are commonly used metrics to tell the valuation:value story. Companies that produce little value today might still receive high valuations due to high growth expectations. The PEG Ratio normalizes the valuation:value ratio for growth expectations by tracking the valuation:value ratio per unit of expected earnings growth.

Bubble era valuation multiples were more than 10 times higher than current comparable multiples. As you can see, not all of these multiples are comparable as some of the bubble era multiples were NM—not meaningful—due to negative earnings. This means that the valuations ascribed to these companies were not quantitatively based on the earnings they were generating or projected to generate.

The valuation:value ratio of today’s private and public technology companies look nothing like the bubble ratios.

2. Venture capital flows
A basic driver for a private technology market bubble is the over-supply of venture capital into the sector. If too much venture capital hits the streets, valuations will bubble up. The inflation-adjusted data from the last bubble tells the story:

In the 3-year period from 1998-2000, venture capital firms raised more than $200 billion, which represented about 0.55% of the national GDP. To put that in perspective, that’s more money than the entire venture industry raised collectively over the prior 18 years.

Flush with lots of capital, venture capital firms naturally invested at historically high rates—from 1998-2000 alone, venture capital investments also topped $200 billion.  Again, more dollars were invested in this single 3-year period than in total over the prior 18 years.

Now let’s take a look at the current version of the same inflation-adjusted data:

Total venture capital raised from 2008-2010 was just shy of $55 billion, about 0.12% of the national GDP, with the trajectory of capital raising declining in each year. In fact, 2010 venture capital fundraising is at the same level as it was in 1995 and 1996.

Approximately $90 billion has been invested by the venture capital industry from 2008-2010—less than half of the 1998-2000 level. More significantly, total capital invested should continue to remain constrained in light of the significant reduction in new venture capital dollars raised over the last 3 years. Keep in mind that because the life of a venture capital fund is generally 10 years, it takes a while to see the impact of lesser fundraising on total dollars invested.

The inflows don’t actually look that bubblicious.

The Long Awaited Arrival of the Internet Boom
Looking at the numbers in the previous section, you may be wondering: "How in the world did people get so totally out of control in the last bubble?" The short answer is that the expectations of the great Internet boom vastly outstripped the actual activity. Specifically, the market wasn’t nearly as big as anticipated and the products were not nearly as good as imagined—at the time.

When Netscape peaked in the late 90s, we had 90% market share and 50 million users. The total Consumer Internet market was 55 million people. That’s about 36X smaller than today’s 2 billion. Worse yet, over ˝ of those 55 million were dialup users. In addition, to horrible bandwidth and latency, the technology products were very crude in other ways. Programming languages were radically less functional, hardware was literally a hundred times more expensive, and there was no virtualization or cloud computing or AJAX. Constrained by such an early and weak technology platform, companies built poor applications. As a result, the expectations of what the Internet would be radically outstripped the reality of what it was. And hence the great crash of 2000 and 2001.

Since then and over the last 10 years, everything has gotten better. Much better. Servers moved from proprietary systems made by Sun, IBM, and HP to commodity hardware at a fraction of the price while radically improving in performance. The open source movement dramatically reduced the cost and improved the quality of systems software. Average consumer bandwidth increased 100 fold due to cable modems, DSL, and high-speed wireless networks. Cloud computing, which was not available then, now enables companies to build massively scalable products with very little initial capital outlay. The combination of the Internet and open source transformed the functionality in modern programming tools, increasing developer productivity 10 fold. The resulting applications have been so easy to use that even older generations of consumers now rapidly adopt new technology, like Facebook. And there are 2 billion people on the Internet. All of these factors have led to an exciting new set of leading companies, including a special few which grew to over a billion dollars in annual revenue in less than 5 years. Welcome to the great Internet Boom of 2011.

At this point, you may still be worried about the startling rise in valuations of privately held technology companies. As I mentioned before, privately held technology companies trade at reasonable valuations vs. publicly traded comparable companies. These public companies trade at reasonable valuations vs. historical precedents.

In addition, these companies are significantly more mature—in terms of revenue and profit generation—than their counterparts in the last bubble. For example, the 1998 IPO class had average revenue of $120 million (and net losses of $65 million to boot). If you just look at the tech IPOs that have been completed year to date from 2010, the average revenue of this group is north of $300 million.

What about companies with reportedly very little revenue and very high valuations such as Twitter? A good investing rule of thumb is that any company that simultaneously saves Charlie Sheen’s career and starts a revolution in Egypt may be on to something. While Twitter doesn’t make that much money yet, historically media companies that capture hundreds of millions of highly engaged users tend to make money.

Where do we go from here?
You still may be thinking that Twitter and Zynga are great, but now it’s really over—there is no new opportunity. If you think that, you’d be wrong again. In addition to the unprecedented number of people now reachable via the Internet, we are at the very beginning a gargantuan new technology cycle: the move from Web/PC computing to cloud and mobile.

Back when I was a youngster in the early 80s, the technology landscape shifted from Mainframe to Client/Server computing. Interestingly the biggest opportunity wasn’t investing in the lighter weight computers that replaced the mainframes, but rather in new products created due to other results of the change. When you don’t have to pay for computing cycles on a MIP/minute basis, developers can change the way they program.

The first major change was the move to relational database technology. Relational databases notoriously wasted CPU cycles vs. the old hierarchical databases such as IMS. However, if you didn’t care about CPU cycles, then you could easily cut your database development time by a factor of 10 or more and radically reduce the level of expertise required. By moving to the relational model, developers were released from the tedium of navigating hierarchical databases and used their new found freedom to rewrite every existing application from financial systems to HR applications and wrote a whole set of new systems like Customer Relationship Management. The relational database and application boom created hugely valuable new companies such as Oracle, Siebel Systems, and PeopleSoft. It didn’t stop there. As a result of the shift in application architecture, the old computing infrastructure became inappropriate and created new companies in Networking, Storage, and Management Software like Cisco and EMC.

The shift to cloud computing will have a more profound impact on the computing ecosystem than the shift to client/server. As with client/server, one of the first technologies to break has been the database. Application developers, no longer constrained by the massive administrative costs to set up servers, can solve previously impossible problems by seamlessly adding more hardware—except at the database layer. As a result, dozens of new exciting companies have emerged to replace the old "scale up" relational technology with new scale out solutions. Moving up the stack, everything about today’s application architectures suffers from the performance, scale, and programming model constraints of relational databases. Much like in the days of hierarchical databases, there is a large and important set of functionality that developers dare not tackle due to these limitations. New application companies like WorkDay and Proferi that take advantage of the cloud to deliver never-before-possible solutions, will devastate their old school RDBMS-based competitors.

While server virtualization enabled cloud computing on the server tier, it broke the current networking and storage architectures leading the way for the next generation of decabillion dollar companies in those categories. In the cloud, where applications have been completely decoupled from the underlying infrastructure, the old network and systems management software no longer works leading to an opportunity for a new company to grab that $30B market.

The greatest beneficiary of the mainframe->client/server shift was a software company called Microsoft which took full advantage of the switch from dumb ASCII terminals to personal computers. Microsoft broke the mold by delivering solutions to both consumers and enterprises and leading the original consumerization of the enterprise. As today’s clients move from PCs to mobile devices, a huge set of opportunities will emerge for new companies to solve important problems.

The largest opportunities will likely come from companies for which there are no analogy or precedent. Profound new platforms open the market to ideas never before imaginable.

Conclusion
While we can see many signs of a bubble these days, it’s important to keep in mind that signs of a bubble look almost exactly the same as signs of a boom. In fact, it’s usually not a bubble until everyone agrees that it’s a boom. As Warren Buffett said about the housing bubble:

The basic cause was, you know, embedded in, partly in psychology, partly in reality in a growing and finally pervasive belief that house prices couldn’t go down. And everybody succumbed, virtually everybody succumbed to that. But that’s, the only way you get a bubble is when basically a very high percentage of the population buys into some originally sound premise—and it’s quite interesting how that develops—originally sound premise that becomes distorted as time passes and people forget the original sound premise and start focusing solely on the price action. So the media, investors, mortgage bankers, the American public, me, you know, my neighbor, rating agencies, Congress, you name it. People overwhelmingly came to believe that house prices could not fall significantly. And since it was the biggest asset class in the country and it was the easiest class to borrow against it created, you know, probably the biggest bubble in our history. It’ll be a bubble that will be remembered along with the South Sea bubble.

Will all the excitement around the opportunities created by the Internet and the shift to cloud/mobile computing eventually lead to a bubble? Absolutely. Are we in a bubble today? I don’t think so.

 

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


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American Homeowners Are Underwater and Drowning.

by Natalie Pace.

Experts discuss how to catch a lifeboat back to safety.

One out of every five Americans spends more than s/he earns (source: FINRA.org) and 38% of Americans with home-equity loans are underwater (source: CoreLogic). There have been 9.3 million foreclosure filings since 2007 and 2011 could be another record-breaking year of foreclosures. According to James J. Saccacio, chief executive officer of RealtyTrac, "Data from the Mortgage Bankers Association shows that about 3.7 million properties are in [a] seriously delinquent stage." Clearly, a large number of Americans are in trouble.

So, if you are one of those seriously delinquent homeowners, or one who is draining your nest egg or tapping home equity to make the mortgage payments, is there a way to hang on long enough to reach the promised land? Or should you abandon ship, swim to shore and start all over? Below is a sobering look at the available options for homeowners who are underwater on their loans, with resources and tips from experts in real estate.

1. Hanging On
2. Selling to a Friend
3. Loan Modifications
4. Short Sales
5. Foreclosures & Bankruptcies
6. Tapping Your Retirement Plan.
7. Recovering Your Credit Rating.

1. Hanging On.
May 2011 sales were lower than a year ago, and prices, on a nationwide basis, are down another 5% this year over last, according to Dr. Lawrence Yun, the chief economist for the National Association of Realtors. Certain areas, like North Dakota, Alaska, many parts of Texas and Washington D.C, are seeing a local renaissance in home prices, largely because the job market is stronger. So, look to the local economy for signs of when real estate will recover in your neighborhood. If the math makes sense for another 2-5 year horizon (at some point, retirees should start snatching up bargains in some of the most distressed areas) then hanging on could be an option for you. For additional information read, "When Will Real Estate Stop Losing Ground?" in this ezine and listen to my radio show with Dr. Yun on BlogTalkRadio.com/NataliePace.

2. Selling to a Friend.
Think that you should short sale to a friend, who can then sell your property back to you in a few months for a more reasonable price? According to Pamela D. Simmons, a partner with the Law Office of Simmons & Purdy, who is an expert on mortgage lending law, you could be risking jail time. In the short sale process, you have to list your home on the open market and sign papers declaring that you have not used a straw buyer. If you lie, that’s fraud.

3. Loan Modifications.
Buyer beware. There have been far too many distressed homeowners who put their faith in a company that promised them the moon and the sky, after a rather substantial upfront fee, only to be ripped off. Don’t trust fee-based strangers, especially when the advice you need is available from HUD-approved counselors for free at HopeNow.com. Even if you received a loan modification a few years ago, you could qualify again at even lower terms. So, this is an option to consider, especially if you’ve done the math on hanging on and determined that this is your best course going forward.

4. Short Sales.
Some short sales come with hidden terms that could Shark Attack you while you’re trying to swim away. According to Simmons, "Lenders have become rather sophisticated in making it sound to the layperson that they are going to release you from liability on the loan, when in fact, they are going to release the security interest, meaning the property, but they are not releasing you from the liability." After you complete the short sale, the shortfall is then sold to a debt collector who comes after you to pay it. In order to protect yourself, be sure to have an attorney with a strong background in real estate review the short sale document to ensure that you are being released from all liability and that the account is being closed.

5. Foreclosures and Bankruptcy.
Let’s take the case of Roger, who is a semi-retired widower, who has two grown children with young families. Roger was lonely and got sucked into seminar land, where he was convinced that if he purchased real estate, he could flip the property for a profit and become a multi-millionaire. Roger got stuck with five houses in Las Vegas that are worth half the price he paid. His ARMs reset and for the money he is spending each year, he could buy two homes for his kids free and clear. The banks refuse to work with him because he has a lot of money in his retirement plan. Roger is worried that if he forecloses he’ll lose everything he’s worked to build up his entire life, and he knows that if he doesn’t foreclose, he’ll be left with nothing anyway in just a few short years. What Roger doesn’t know is that the worst plan is to try and stay afloat by tapping his retirement plan and taking on more debt through his credit cards and hard moneylenders. (So, send this article to Roger now, if you know him!)

6. Tapping Your Retirement Plans.
As Pamela Simmons counsels, "If you are using debt to pay your mortgage, you really need to stop." Why? Simmons says, "No matter what happens, you can almost always count on being able to protect your retirement fund from the lien holders. So why would you want to spend that money?" The truth is that your nest egg may be the only lifeboat you can row away with, if you purchased more home than you can afford, at the top of the market. If you’re underwater on a mortgage and struggling to survive, the last thing you want to do is to give up your lifeboat. If you can’t afford the home, face reality. Don’t go through all of your retirement money, rack up additional high interest debt and completely bankrupt yourself.

7. Recovering Your Credit Rating.
A few years ago, anyone with a heartbeat and the willingness to lie on a no-doc, no-down loan could access enough credit to buy a home. Now, the richest person on the planet might have a problem borrowing money from a bank. As Steve Dietrich, President of Financial Research Group, points out, "It is hard to say what the future is going to hold in terms of credit. Probably, however, it might take 5-7 years before you could repurchase a home [after a bankruptcy or foreclosure]." Then again, if you’ve got enough money in your retirement account, you might be able to pay cash.

Losing a home to foreclosure is one of the hardest decisions you’ll ever make. Short selling is a risky process that might not get rid of the problem. Tapping your retirement plan or taking on more debt to pay your mortgage is a no-no. And your best bet for a loan modification is available for free at HopeNow.com. Once you have the facts, you can and must do a serious evaluation of the best course for you, including putting the option of the unthinkable on the table.

Go to BlogTalkRadio.com/NataliePace to listen back to the complete radio show that I hosted with Pamela Simmons and Steve Dietrich, on June 8, 2011. This show is available 24/7 streaming on demand, or by pod cast. So be sure to share this article and link with your friends (and with Roger).

 

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.

This article is intended to educate and inform individual homeowners, and, thus, to give homeowners a competitive edge in their personal decision-making.

ALWAYS do your research and consult an experienced, reputable financial and legal professional, and consider your long-term goals and strategies, before making any decision or actions. 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 personal advice, or 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 homeowners.


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When Will Real Estate Recover?

Q&A with Dr. Lawrence Yun, the chief economist of the National Association of Realtors.

Existing home sales were down again in May, 15.3 percent below May 2010 when sales were surging to beat the deadline for the home buyer tax credit. Investors who had hoped hanging on for another year might improve their equity standing are now wondering whether they’ve caught a falling knife.

Despite this rather dismal news, Dr. Lawrence Yun, the chief economist of the National Association of Realtors, has some hope on the horizon for homeowners. Learn when the sun is going to shine on your neck of the woods, from my interview with Dr. Yun, on June 18, 2011. (You can listen back to that interview on BlogTalkRadio.com/NataliePace, available streaming 24/7 or as a pod cast.)

Natalie Pace: Dr. Yun, May home sales were down yet again. When will real estate turn around?

Dr. Lawrence Yun: The good news is that the market is recovering. The bad news is that the recovery is very sluggish. We have to remember that last year, there was a homebuyer tax credit stimulus measure. The market was artificially high at that point. If we can maintain the current pace, this year will actually be slightly better than last year, in terms of home sale activity.

What about prices? How are they holding up this year over last year?

Prices are down about 5%, based on national median price. But remember that all real estate is local. What we have seen is that in areas where there is solid employment, for example North Dakota, Alaska, many parts of Texas and the Washington D.C. area, prices are firming up and rising. But in areas where there is a continuing struggle in the employment, that is where we are seeing continuing weakness in home values.

So, if you’re living in an area and you’re worried about where home prices are headed, you should look at the local economy. And if a lot of new jobs are being created, that might be a great sign, right?

Absolutely. The job market recovery will be the key driver for everything in the housing sector.

So, for the buyer, now might be a great time in real estate, right?

Yes. Mortgage lending rates are at a generational low. Prices have already plunged and people can enter the market at the low point. In everything from prices, to home price to income ratio and home price to rent, all of the metrics are implying that home prices are back to fundamentally justifiable levels.

Over 9 million homes have been foreclosed on, and RealtyTrac is reporting that 3.7 million are waiting in the wings to foreclose. Do you think that the homeowner should have been bailed out instead of the banks?

At that time, the $700 billion TARP money went to the banking system to stabilize the system because of so much inter-dependence. I will not try to second-guess the government officials as to why they chose that. But without a doubt, the reason for the defaults we are seeing – the legacy impact of the bubble years – is that homeowners are underwater. And anyone who is underwater and then loses their job – and we had eight million people lose their job in the Great Recession – that is a bad combination for not being able to make mortgage payments.

The idea at the time was that we’ll bail out the banks and then the banks will work with their customers to keep them in their homes. That doesn’t seem to be happening, however.

The banks need to be more reasonable. Banks refuse to talk to people who are current on their payments. They will only talk to people who are defaulting. So this is leading to a very perverse incentive -- forcing responsible homeowners to purposefully default, just so that they can get a return call from the bank to restructure their mortgages. The system still has too many obstacles to modify the loans, and that needs to occur so that we can speed up the recovery.

Editor’s Note: If you are in need of help in restructuring your loan, go to HopeNow.com, where you can get help for free from HUD-approved counselors.

The Feds have kept interest rates low, but the banks aren’t lending! Are the standards too tight now? There are people who want to buy, but can’t.

Mortgage rates are at generational low levels. But who can tap into these low rates? Data clearly suggests that it is only people with extremely high credit scores. So, Oprah or Bill Gates, if they want to take out a loan, sure, they can get it! We do not want the standards of the Bubble Years, but these stringent standards are holding back the recovery. Homeowners should contact their members of Congress, so that there could be pressure from Congress on the regulators and then from the regulators to the large banks.

What about high down payments? Is there a new guideline that is forcing homeowners to put 20% down?

Some policymakers believe that it was the low down payment situation that led to the crash, and they are trying to raise the down payment percentage to 20%. What happened is a very simple process whereby very large loans were given to people with insufficient income. This is still in the discussion phase. For the current homeowners, there is still a low down payment mortgage product. For example, the FHA (Federal Housing Administration) mortgage has a 3.5% down payment requirement. For veterans, there is no down payment needed.

Can people go directly to FHA.gov to learn more about those loans?

Yes, and they can also inquire about the loans with their local mortgage lender.

Is FHA mostly for low-income people and veterans?

It is available for everyone. Typically first-time buyers are heavy users because there is mortgage insurance on the FHA loan product. Repeat buyers or existing homeowners typically go for traditional mortgages, which have lower mortgage insurance premiums.

What about the rumor that the home mortgage interest tax deduction might be taken away? Is this political posturing, or do Americans have to worry about this, too?

This is not a real possibility. Every 10 years or so, there are always people who are considered deep thinkers who say, "Maybe we should get rid of this deduction." But it never gains traction and if it did, the President would veto it. Most Americans are homeowners and they rely on this deduction to arrange their finances. This deduction has been around for over 100 years.

Canada doesn’t allow the home mortgage interest tax deduction and some of their economists say that was the cause of the U.S. real estate Bubble.

It’s not the source of the bubble. The peculiarities of recent times were that lending standards were too loose and anyone with a heartbeat could get a loan. We need to make sure that doesn’t happen again.

The price per square foot in other metropolitan cities, like Hong Kong, is mind-boggling. Are we seeing any international buying activity in the U.S.?

Some have children who attend U.S. schools, so they want to buy real estate while they are at the university. Others buy it for a status symbol or for a vacation home. Of course, they think that the price is stabilizing and they are making a good investment. The U.S. is relatively cheap by international, major cosmopolitan city standards.

Some of our more depressed areas are fantastic vacation homes for foreigners, right?

Vacation and retirement destinations for foreigners and for U.S. citizens, as well. Given Baby Boomers, and all of the people who will be going through the retirement process over the next 15 years, I believe that Florida, Vegas and Phoenix markets, and other typical retirement destinations, will do well. Will it take one year, two years or five years for the retirees to reach these markets? That is unknown. But, the number and size of the Baby boomers reaching retirement age is just right over the horizon.

If you are a young family or couple who have been renters, when you factor in the home mortgage interest rate deduction and mortgage rates being so low, the cost to buy could be cheaper than renting, couldn’t it?

For those who are able to obtain a loan, just do a simple calculation comparing what they are paying in rent today, compared to their net out cost if they were to buy. In Washington D.C., the rents are high and are rising. After renters move into homes, they are getting a break!

What are the options for people who do not have a stellar credit rating?

If the individual is willing to stay well within their budget, then they’ll have more success. Remember that when your grandparents bought their first home, it was not their dream home. It was their starter home. Over time, they were able to build equity and trade up and trade up and eventually get to that dream home. The American Dream is a long process. It takes hard work and responsibility to steadily move up the scale.

Is now a great time to begin that process?

It’s a transitional market. Some people are finding great bargains. As long as consumers remain cautious, they are going to realize 3-5 years from now that they entered the market at a low point and they made the right decision. It’s always in hindsight when things become more clear. People who hold back and hold back may miss out on the greatest buying opportunity this country has offered in a generation.

However, don’t look at this as a buy and flip situation, right? Next year may not be a rocket ship of real estate returns...

People who are flipping, they are taking a gamble. Investors who are coming into the market now do not have the intention to flip. They buy and rent it out. This easily covers the mortgage payment, so they are automatically getting their equity gains from the rental payments. They are looking at a 10-year horizon to resale. Investors today are not speculators. They are truly looking at that longer time horizon.

 

Dr. Lawrence Yun is Chief Economist and Senior Vice President of Research at the NATIONAL ASSOCIATION OF REALTORS®. In 2008, USA Today listed him among the top 10 economic forecasters in the country. From 1995 to 1998, while a research associate at the University of Maryland, he was based in the former Soviet Union where he developed economics programs at several universities to help in the transition from communism to a market based economy.

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Electric Vehicles.

by Dan Fink.

From Smart to Sexy, EVs are available from every major automaker, with Chinese automakers entering the race.

You have to admit it. Gasoline and diesel are pretty convenient fuels for motor vehicles. They pack a lot of energy, and can be easily stored and transported in a small, lightweight and portable "can." The big problem with electricity—and electric vehicles—is that the only "can" available is a battery. It's big, heavy, doesn't hold much juice, and eventually springs a leak. You can pay a lot of money for a new, high-tech can that's smaller, lighter and holds more juice, but it will eventually leak too. Batteries are the biggest barrier to electric vehicles today, and have been so for over 100 years.

But that electricity "can," the battery, has one big advantage over oil cans: you can fill it from a variety of energy sources including solar, wind, hydro, coal, nuclear, natural gas, oil, and yes, even gasoline and diesel. And your electric utility can pick and choose which fuel to use at what time based on lowest price.

That versatility in fuel choices might just be what finally brings EVs into the American mainstream. Energy security is a critical issue that needs to be addressed before the next energy crisis, and there's a particularly vulnerable spot: fuel for transportation. We consume 27 percent of our total energy use for transportation, with a whopping 94 percent of that in oil.

That's not very secure, considering that about half of our oil is imported. When transportation is disrupted due to high costs, all sectors of the economy suffer. Our current high oil prices can't even be considered a "crisis" like the eye-opener of 1973, and are instead more related to worldwide demand rising faster than supply, and increasing costs of extraction. With the explosive growth of oil consumption in China, India and other rapidly developing countries, the trend of higher prices and increasing market volatility is likely to continue unabated for many years.

Electricity prices, on the other hand, have remained far more stable over the last few decades, thanks to the variety of fuels that can be used to generate it. Oil prices have very little effect on the price of electricity in the US, with less than half of one percent of total petroleum burned used for electrical generation.

I hope it doesn't take another oil crisis to convince consumers that electric vehicles can be eminently practical in certain situations. Many of the barriers to widespread EV adoption are being rapidly addressed by both industry and science. For example; batteries do wear out, but they are also easily recycled. Charging stations are popping up in urban areas where EVs perform the best, and where most drivers commute less than 100 miles per day. Consumers in more rural areas where charging opportunities are scarce and commutes are longer can still benefit from a plug-in hybrid, charging it with cheap electricity at home each night, but with no anxiety about range. And while it's true that a portion of the electricity to charge most EVs will be coming from fossil fuel sources, state Renewable Portfolio Standards are rapidly increasing the percentage of solar, wind, hydro and bio-gas that are put into the electric grid.

Want an EV right now? You have only a few choices for a fully electric, highway-capable vehicle. But by 2012, your options will be wide open with many choices.

The Tesla Roadster is fast, mean looking, has a 245-mile range and packs a hefty price tag. But you can reserve a more modestly priced Tesla model-S Sedan right now, with deliveries scheduled to start in 2012. This sedan also gives you options on the battery bank—lower prices if you choose a shorter cruising range, but with a 300-mile battery available.

The Tesla Model S all electric sedan.

The Nissan Leaf is also now shipping. It boasts a modest price and 100-mile cruising range, putting its focus squarely on commuters in urban areas. A lease on a LEAF can run as low as $350 per month. The Leaf just won 2011 World Car of the Year.

Nissan Leaf: 2011 World Car of the Year.

With the Chevy Volt now shipping, General Motors is exploring an innovative idea that's not really a "hybrid"—The tiny gasoline motor is used only for charging the battery bank, not for providing power directly to the wheels. This combination of low plug-in electricity prices and an engine that sips rather than gulps fuel is very attractive to anyone who is not in an urban area and might have range anxiety. The framework of this GM project also keeps the door open for many new future variations of the Volt, for example an all-electric version, and models that burn natural gas, diesel, and E-85 or E-100.

The Ford Transit Connect Electric Van is quietly making inroads with the operators of large fleets of delivery vehicles with short cruising range needs. Ford expects to sell thousands in 2011 to utilities, universities and cities where it's a perfect fit. Keep an eye on Ford for consumer electric cars this year, too—the 2012 Ford Focus family of vehicles will offer fully electric, plug-in hybrid, hybrid and efficient gasoline models.

Honda plans to ship both a pure EV and a plug-in hybrid soon, the Fit EV. Also keep an eye out in 2012 for the micro-compact and reasonably priced Mitsubishi i, with an 85-mile cruising range. The micro-compact SmartForTwo will be available in 2012 too, using battery packs from Tesla.

Toyota will also be offering a plug-in hybrid Prius for 2012, and you can buy a Fisker Karma plug-in hybrid right now if you have a need for speed, suffer from range anxiety, and have a fat checkbook. The Volvo (now owned by Geely in China) C30 Drive E is on the way too, but at first will only be selling in Europe.

The Fisker Karma is the world’s first premium plug-in hybrid electric vehicle.

Also in 2012-2013, be prepared for an avalanche of low- and moderately-priced EVs from overseas, primarily Asia, as these vehicles clear the labyrinthine regulatory and safety hurdles required for importation into the US. Look for EVs from Rava, Tata, SAIC, Chery and others.

This combination of a massive influx of EVs into the US market and increasing worries about energy security at home (especially in the transportation sector) will do nothing but good for the EV market as a whole. When demand and production both increase, prices drop and innovation is spurred. Battery storage is where progress is most critically needed.

It takes only some basic high-school chemistry class math to figure out all the myriad combinations of materials that can be used to make a portable "can on wheels" that stores electricity. But it takes researchers, innovators, entrepreneurs and investors to figure out how to build the best can that stores the most juice—for the lowest price. Our energy security depends on it.

 

AUTHOR BIO:
Dan Fink has lived off the grid, high in the Northern Colorado mountains, since 1991, 11 miles from the nearest power pole or phone line. He has a BA in Technical Journalism from Colorado State University, and spent 10 years in the field as a renewable energy system consultant, designer and installer. He has been a renewable energy technical author and educator since 2000, and is the Executive Director of Buckville Energy Consulting, the Editor-in-Chief of Buckville Publications LLC and the co-author of the book Homebrew Wind Power.
Dan teaches renewable energy classes throughout the USA.


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Step Up Girls Shine for Their Celebrity Mentors.

by Tabby Biddle.  

Step Up Women’s Network boasts 100% graduation rate for their high school members.

The star-studded stage at the annual Step Up Inspiration Awards has been graced by Marcia Cross, Jamie Lee Curtis, Jennifer Love Hewitt and Mad Men’s Christina Hendricks. But these celebrities and over 500 A-list Hollywood women come to honor the inner-city high school graduates who succeed and shine despite daunting challenges in their schools and neighborhoods.

Mad Men’s Christina Hendricks.

Thirteen years ago, Kaye Popofsy Kramer posed a challenge to a small community of women in Los Angeles. As the circle of women sat in her living room, supporting Kaye after her mom’s recent breast cancer diagnosis, Kaye asked: "How can we take a more proactive role in our community … How can we make a difference?"

 

 

 

Kaye Popofsky Kramer, Founder, Step Up Women’s Network.

"My mother taught me that repairing the world is not an abstract concept," said Kaye. "It requires us to take action, and in doing so, forces us to confront our fears, to push our boundaries, and to act across lines of race, gender, religion and class."

Inspired by the wisdom of Kaye’s mom, the 30 women in Kaye’s living room decided it was time for them to take action on that day and create something that could better their future and the future of other women. The result: Step Up Women's Network.

On June 10, 2011 I attended the Step Up Women’s Network Inspiration Awards at the Beverly Hilton in Beverly Hills. The event showcased the inspiring work of this non-profit organization that connects professional women with urban teen girls living in poverty who can benefit from their love and guidance. The program is active in Los Angeles, New York and Chicago.

Isidra Favela (L) of Gertz-Ressler High School, Ali Vidrio (C) of Environmental Science & Technology High School, and Bany Guardado (R) of Los Angeles Leadership Academy speak about how Step Up Women's Network has changed their life. photo credit: Amy Tierney/Elevation/PictureGroup

"Girls my age usually talk about getting married and having kids after high school - living under a man. They don’t talk about being independent, and doing more than what everyone else is doing." – Step Up Teen

With violence, abuse and addiction inside their homes and bullets, drugs, and gangs outside their front door, these girls are at risk for a dismal future. "I realized if I was going to make anything of my life, I needed to get out. I had to leave," said one Step Up Teen.

Another young woman said: "A lot of time I’ve been told to just give up because of my race or because of statistics." Yes, the statistics are disheartening. Did you know that one in three students nationwide drops out from high school?

photo credit: Amy Tierney/Elevation/PictureGroup.

"They are the next generation of leaders." – Jenni Luke, Step Up Women’s Network CEO.

The way Step Up works is that the girls promise Step Up in the ninth grade that they’ll stick with them through their senior year, and Step Up promises to the girls that they will graduate high school confident, college-bound and career ready, "These girls are strong and resilient, and they are eager to overcome their circumstances," said Jenni Luke.

"Our daughters our the future. They are the workers. They are the leaders. They are the mentors. They are the mothers. It’s vital that we give them the tools. We can not leave it to chance." - Kaye Popofsky Kramer

Through mentorship, after-school programming, internships, college tours, and support throughout the entire college application process, Step Up has seen a great success rate with the girls. In 2010, 100 percent of the Step Up teens nationwide graduated from high school and 100 percent got accepted to college. The same can be said for the class of 2011.

Step Up Women's Network CEO Jenni Luke (L) with Dermalogica Founder & Owner Jane Wurwand (R). Jane was honored at the Step Up Inspiration Awards for her exemplary commitment to investing in the community through finances, mentorship, and teen internships at Dermalogica. photo credit: Amanda Edwards/Elevation/PictureGroup.

Today Step Up Teens are attending some of the top colleges in the country including Yale University, Barnard College, UCLA, Dartmouth, Vassar College, and studying to be leaders in the fields of communications, economics, animation, foreign affairs, medicine, and law.

Yosselin Melgar (L), winner of the 2011 Step Up Teen Scholarship, with actress Tatyana Ali (R). Photo credit: Amy Tierney/Elevation/PictureGroup

"Through Step Up, I have become authentic, passionate and most of all, courageous. I won’t let anything destroy my dreams," says Yoselin Melgar, winner of the Step Up Teen College Essay contest. Yoselin is graduating from high school this week and is off to Kenyon College in Ohio in the fall.

As each new generation of Step Up women succeeds and gives back, it provides a cycle of inspiration and philanthropy that advances women and girls everywhere. As Lulu, a junior in high school said: "It’s important for my sister to see me go to college because I want her to see that I made it. And when I graduate from college, I want to show her that she is going to make it."

The truth of the matter is that the cycle of poverty, violence and abuse that these girls face will not end unless we give them the opportunities and the tools to bring themselves out of it. In Kaye Popofsky Kramer’s words: To mentor is a privilege. It is also a responsibility, and an obligation." Today, Step Up has a network of over 50,000 supporters nationwide.

To get involved with Step Up Women’s Network, please visit www.suwn.org.

 

About Tabby Biddle:
Tabby Biddle, M.S. Ed., is a writer, speaker, writing coach and goddess retreat leader dedicated to amplifying the voices of women changemakers. She lives in Santa Monica, CA with her husband and kitty.


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The Soul of Selling is Service.

by Chellie Campbell, author of Zero to Zillionaire.

Chellie Campbell.

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

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

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

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

How can I be of service to you?

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

I said, "Yes, they are."

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

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

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

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

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

"I really do care," I answered softly.

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

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

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

 

Chellie Campbell:
Chellie Campbell is a professional speaker and author of The Wealthy Spirit and Zero to Zillionaire. She has been teaching Financial Stress Reduction® Workshops since 1990. The Wealthy Spirit was a book-of-the-week on the Doctor Laura Schlessinger radio show and a GlobalNet book-of-the-month selection. She has been quoted in Good Housekeeping, Lifetime, Woman's World, and Essence, and more than 30 popular books.

If you are stuck in a rut in your business or life and/or having too much "month at the end of your money," Chellie’s Financial Stress Reduction® workshop might be just what you need to get things on the right track. You can sign up for Chellie's Ezine and workshop at www.chellie.com.

 


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Travel Rewards.

by Natalie Pace.

Emerging economies top the world in GDP growth and investment returns.

The Heritage Foundation and the Wall Street Journal publish an annual Index of Economic Freedom, which is a handy tool for economists and sophisticated investors. However, it’s not a good idea to blindly invest in the top ranked countries in this index. Although free markets are essential to economic growth, most developed nations are trapped in a slow growth cycle (largely due to debt and pension promises made to a large, aging population). Thus, there is currently very little correlation between freedom and Gross Domestic Product growth. In fact, as you can see from the chart below, you’d be better off traveling to the least free countries for investment returns.

Countries with the Strongest GDP Growth

Country

4Q GDP Growth 2010

4Q GDP Growth % 2009

2011 Index of Economic Freedom Ranking

China

9.8

10.7

135

Philippines

9.8

6.7

115

Angola

9.4

2.4

161

Peru

9.2

3.44

41

Qatar

9.2

9.7

27

Sri Lanka

8.6

6.1

107

India

8.3

6.5

123

Nigeria

8.29

7.67

111

Vietnam

7.34

6.9

139

Taiwan

7.1

9.24

25

Indonesia

6.9

5.43

116

Kenya

6.1

3.5

106

Bolivia

5.7

4.6

147

Kazakhstan

5.6

10.30

78

Morocco

5.3

9.1

93

Source: TradingEconomics.com and The 2011 Index of Economic Freedom

The top 10 most free (economically speaking) countries are Hong Kong, Singapore, Australia, New Zealand, Switzerland, Canada, Ireland, Denmark, the United States and Bahrain, respectively. The Top GDP Growth Countries are China, the Philippines, Angola, Peru, Qatar, Sri Lanka, India, Nigeria, Vietnam, Taiwan, Indonesia, Kenya and Bolivia, most of which bottom out the 2011 Index of Economic Freedom.

The Risk Factor
Emerging economies, which are rich in commodities and cheap labor, are leading the world in economic growth, supplying the cheap widgets, goods and manufacturing that consumers in the developed world buy into. These countries offer the best return on investment, but they also carry the most investment risks. China is a Communist country, India suffers from corruption and fuzzy property rights and Peru just elected a socialist-leaning President.  The editors of The 2011 Index of Economic Freedom remind us of the risks of investing in China, writing, "The Communist Party, though allowing some economic movements in response to market forces, still maintains ultimate authority over virtually all economic decision-making. The state-controlled financial sector often allocates credit based on political criteria, undermining economic efficiency and productivity."

Peru is another fertile ground of GDP growth, posting 9.2% GDP growth in the 4th quarter of 2010 – far above Chile’s GDP growth. The tables are turned with regard to freedom and stability, however, with Chile ranked #11 most free country in the world and Peru at 41. Peru’s instability took another hit on June 6, 2011, with the election of leftist President-Elect Ollanta Humala. Investors are concerned that the country’s economic growth and business freedom might be in peril, in the hands of a socialist-centric leader who has promised that the poor will share in the country’s new wealth. The iShares All Peru Capped Index Fund (EPU) posted 60% gains in 2010, however, the fund has fallen 20% since January of this year, largely on concerns about the outcome of the election.

Source: Money.MSN.com (for illustration purposes only)

So, how do you heat up your nest egg stock returns without burning it? 
Significant risk accompanies the significant growth seen in the emerging (largely third world) economies. As you travel the world seeking returns to strengthen your assets and nest egg, be sure to immunize against the perils and guard against political turmoil. The developed world economies are languishing and volatile, while the developing world economies are explosive and volatile.

Comparing ROI
Hong Kong stock returns have been right in line with the U.S. over the last three years, as one might expect for a free economy that is over a century old.

Source: Money.MSN.com (for illustration purposes only)

A new Indonesia ETF is already quadrupling the return of the Dow Jones Industrial Average.

Source: Money.MSN.com (for illustration purposes only)

Even though GDP growth is tepid in Chile, investors have a lot of confidence in the country’s potential. The iShares Chile Fund (symbol: ECH) has more than doubled since 2009.

Source: Money.MSN.com (for illustration purposes only)

There are only a few funds with a focus on Africa this early in the game, and, not surprisingly, the fund returns are tracking in line with the U.S. stock market. (Investors who hold these new funds are actively managed, i.e., there is no broad-based awareness of this investment yet.) Once growth is sustained, the word will get out, and investment returns could start exploding.

Source: Money.MSN.com (for illustration purposes only)

With all of these funds, the key to reducing risk is having only a slice of your nest egg invested, buying at a reasonable price and rebalancing (profit-taking) annually. 

To learn this firsthand, join me at my next Get Rich Retreat in the sunny beautiful beach town of Santa Monica, California.  Call 310-430-2397 to learn more!

I moved the Peru ETF (EPU) from the Hot List to the Watch List, with flat performance, and added the China Small Cap fund (ECNS) to the Hot List on June 13, 2011. The Chile fund (ECH) remains on the Watch List for now, awaiting a better buy-in point. The Indonesia (EIDO) and Africa (GAF) funds were added to the Watch List on June 13, 2011.

 

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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Secrets to a Million Dollar Nest Egg.

by Natalie Pace.      

Learn 10 Golden Rules about abundance and why you must start the habit of prosperity now – even before you pay down all your debt.

I received a call from a woman who had a tragic event in her life, which completely changed her income status overnight. Her life partner passed away unexpectedly (and before his time), and she inherited a million dollars from the life insurance policy. She called me and said, "As soon as I pay off $100,000 in debt, I want you to help me budget and invest the rest of the money."

"Hmmm," I said, "So, you want to strip yourself of millionaire status and then ask me how to help you get there again."

A millionaire thinks quite differently. A million dollars to a millionaire is a chance to earn 10% gain – which is $100,000. In the millionaire’s mind, the first year’s gains pay off the debt, and you get to keep the million in principal to earn another $100,000 the following year. If that were your sole "income," then you would live off of the $100,000 annual gains, keep the principal in tact, and your job would be to figure out how to earn 10% annual gains, while keeping the risk factor to a minimum.

Below are 10 easy steps to do just that.

  1. Tithe to yourself first– not the bill collector.
  2. Keep a percent equal to your age SAFE.
  3. Diversify your stock holdings.
  4. Diversify your assets.
  5. Never loan money to relatives or friends.
  6. Startups are not investments.
  7. Never let relatives or friends manage your money.
  8. Underweight distressed industries and overweight hot industries.
  9. Rebalance at least once a year.
  10. Trust no one. Verify everything.

And Here’s Why, How, When, etc.

  1. Tithe to yourself first – not the bill collector. Your 401K, IRA, Health Savings Account and other "retirement" plans are your chance to start living a rich life now. Increased assets provide you with all sorts of freedom, including lower interest rates on loans, better credit profiles and more. This money is also protected from your own tendency to throw it down the drain of bills and retail therapy and from the liens of anyone whom you owe money to. Banksters and bill collectors are not going to take up a collection to keep you housed and fed if you lose your job, so don’t short-change yourself. You have an obligation to yourself and your family first, even now, even if you are underwater on a mortgage or have credit card debt. I’m not saying to ignore your bills. I’m saying to focus on your fiscal health, so that you are in better shape to generate income, increase your assets, reduce your spending, negotiate better terms and pay off any debt you might have, without draining your own life blood.

  2. Keep a percent equal to your age SAFE. If you were 50 during the Great Recession and you kept a percentage equal to your age safe, plus 20%, your maximum losses would have been 15%. Unfortunately, too many retirees lost half, and are now back at work as a result. Not losing is winning in a recession. Stocks and bond funds are not safe, and many bonds are vulnerable these days (think Greece), particularly those where the underlying corporation or municipality is carrying too much debt. Learn more about how to get safe in the articles, "Are Bonds Safe?" (vol. 8, issue 5) and "What’s Safe?" (vol. 7, is.s 6).

  3. Diversify your stock holdings. Read You Vs. Wall Street, particularly page 92, to see an example of an easy-as-a-pie-chart nest egg strategy that has worked in bull and bear markets for more than 12 years now -- through the Dot Com Recession and the Great Recession and the bull runs in between. Select just 10 diversified funds and you can easily see and capture your gains each year. Six of the 10 funds should be diversified by size and style and four funds should be hot industries for that year. Be sure to avoid the Bailouts to maximize your returns!

  4. Diversify your assets. Be an and person. Own your own home and stocks and bonds and a little gold and then start thinking about other low maintenance, low risk, cash positive, hard assets that can earn a 10% annual gain. Now might be a great time to purchase income property, or a car wash, or a dry cleaners, or a mini-mall with some essential, recession-proof service, like a grocery store, anchoring it.
  5. Never loan money to relatives or friends. Read the "Don’t Be Famous and Bankrupt" chapter from You Vs. Wall Street for details. You don’t want to be the bank of the family and you certainly aren’t in a position to evaluate these "loans" based upon merit or the probability that the loan will be repaid. Look at your spending in the harsh light of reality. It might be charity (so give the money). It might be fun or educational (so spend the money, if you wish). But it’s rarely a loan or an investment that will pay you back – even if you are promised equity in a startup with the potential to become the next GroupOn.

  6. Startups are fun or charity – but not nest egg investments. If you are an actor/waiter or a singer/secretary or an author/executive, you might wish to invest (spend) every spare dime on your CDs, self-published books or actor reels. If you lost a job, you might have taken a seminar telling you how easy it is to self-publish a book and start your own consulting business. The truth is that most startups fail. If they make it to cash positive, that’s great, but in the meantime, you’re going to spend a lot of time and money. On the other hand, no matter what your passion project is (and why not have a passion project!), if you invest 10% of your income in a tax-protected retirement account, and that 10% earns a 10% gain, you’ll have more money than you earn in seven years and your money will make more money than you do, within 25 years. That kind of wise investing will generate a whole lot more money to film that American Idol video, or to fund your own book tour, or to take a year off to audition for toothpaste commercials.

  7. Never let relatives or friends manage or invest your money. According to a 2006 FINRA.org study on investment fraud, 70 percent of victims made an investment based primarily on advice from relative or friend. Interview your money managers as if your life depends upon it because your lifestyle does. There are 12 questions to use when interviewing your financial partner candidates in You Vs. Wall Street.

  8. Underweight distressed industries and overweight hot industries. AIG, GM, Bank of America, JP Morgan and Citigroup were all part of the Dow Jones Industrial Average, meaning that the former leading blue chip index was really the bailout index. Not surprisingly, the DJIA earned less than half as much as NASDAQ since 2009, with gains of 30%, compared to NASDAQ’s 60%. Meanwhile, countries rich in natural resources, like Australia and Latin America, have doubled in share prices since 2009.

  9. Rebalance at least once a year. Rebalancing once a year means that you’ll always have enough safe, can capture your gains (increasing your net asset value), can determine which industries are hottest for the year and which industries, countries and companies to avoid, like banking, Greece and Japanese nuclear power plants. Doing this meant that you would have captured most of the Dot Com gains you made in 2000 – before the crash wiped most investors out. You would be rich in real estate gains in 2006 – before the crash. And high on clean energy gains in 2007 (when clean energy was the top industry on Wall Street) – before the crash.

  10. Trust no one. Verify everything. Your bank: Bailed out. Some brokerages: Bankrupt. Others: bailed out. The "experts" failed, with few exceptions. The only experience that counts these days is a PhD is in results. You must check the fiscal health and fine print of any bank, annuity, brokerage account, etc. that you sign up for. Read up on the "Stock Report Card" and how to "Hitch Your Wagon to a Star" in You Vs. Wall Street for tips on how to identify the bailouts from the brightest stars in the universe. Some brokerages are now offering FDIC-insured money market accounts – a good thing.

If you inherit a million and still have a thousand-aire mindset and lifestyle, you’ll be broke in just a few years. If you start out with a few thousand and you follow these golden rules, you’ll create prosperity and abundance and the life of your dreams.

 

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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NASDAQ Companies are Leading the U.S. Recovery.

by Natalie Pace.

Includes my Hot News on Cool Stocks List.

June 22, 2011

General Stock Market Performance

Monday, 1.2.2008

Monday, 1.2.2009

Monday 1.3.2011

Friday, 6.22.2011

Gains 3-yr, 2-yr & 3 mo.

Dow: 13,044.12

Dow: 9,034.69

Dow: 11,577.43

Dow: 12,161.48

-7% & +35% & +5%

Nasdaq: 2,609.63

Nasdaq: 1,632.21

Nasdaq: 2,676.65

Nasdaq: 2,686.72

+3% & +65% & flat

S&P: 1,447.16

S&P: 931.80

S&P: 1,257.62

S&P: 1,293.15

-11% & +39% & +3%

Wall Street Highs/Lows in the New Millennium:

Index

Low

High

Dow Jones Industrial Average

6,547 (3.9.09)

14,164 (10.9.07)

NASDAQ Composite Index

1,114 (10.9.02)

5,060.34 (3.10.00)

Hot News on Cool Stocks Important Data
Up to 18X 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:
There are no ads on TV telling you about the magnificent performance of NASDAQ, like there are every second for gold. But, if you haven’t gotten the word yet, be aware that NASDAQ is hotter than gold, and has also been beating the Dow Jones Industrial Average by a wide margin, over the last two years.

Performance of NASDAQ, the Dow and Gold

March 1, 2009 – June 23, 2011

Source: Money.MSN.com (for illustration purposes only)

Gold is an emotional purchase, built upon the value gold bugs assign to it during recessions. For the 20-year period between 1980 and 2002, gold was valued in the $350/ounce range, and anyone who purchased gold as an investment was pretty sorry that they did.

This month, gold prices have been trading as high as $1,552/ounce, however there are signs that investor demand is abating. According to The World Gold Council's Gold Demand Trends report on May 19, 2011, the demand for gold by investors trimmed back rather significantly last year, from 617 billion tonnes ($19.3 billion) in 2009 to 338 billion tonnes ($13.3 billion) in 2010. Demand in gold used for jewelry is picking up the slack for now, but savvy investors would be smart to note the reduction in demand by ETFs and sophisticated investors.

Meanwhile, NASDAQ’s performance is based on solid fundamentals. The Dow Jones Industrial Average has a lot of legacy corporations with slow growth, high debt and pension liabilities, whereas many of the younger NASDAQ companies have high growth, no debt, a war chest of cash and employee-directed retirement plans.

Company

Growth

Net Profit Margin

Cash on hand

Debt

All Liabilities

Google

+27%

26.82%

$35 B

$3.5 B

$11.6 B

Apple

+83%

22.36%

$29 B

0.00

$24 B

Boeing

-2%

5.28%

$5.7 B

$11.6 B

$65 B

Wal-Mart

+4%

3.78%

$9.4 B

$52 B

$118 B

So, Google and Apple are printing money and have a lot more cash on hand than they have in liabilities and debt. Boeing and Wal-Mart (and other Dow component companies) are borrowing to stay afloat and have 10X the debt and liabilities than they have cash on hand.

Gulp.

And you wonder why I keep calling the former blue chip index, the Bailout Index.

Natalie

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.

Investor Alerts:
1. OPEC & a Basket of Currency: OPEC has released a new Long Term Strategy report. There is speculation that OPEC will be going from the U.S. dollar valuation to a "basket of currency," though the Report doesn’t state this explicitly. If true, this will be distressing to U.S. investors. The Long-Term Strategy document that OPEC released was very vague on the topic, writing, "While cohesion among Member Countries is of crucial importance, enhancing their resilience through economic diversification could also contribute significantly to the attainment of the Strategy’s objectives." Watch and wait, but definitely be aware of the potential.

http://www.opec.org/opec_web/en/press_room/1907.htm

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. If you know a homeowner in trouble, be sure to forward my Real Estate pod cast to them. Therein is a lot of very essential information on loan mods, short sales, foreclosures and bankruptcy. Go to BlogTalkRadio.com/NataliePace now to access.

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. Now, with prices at $1500/ounce, large holders of gold, including the United States, Brazil and more, could 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. 47 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.) 13 million homes (or more) will 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. 102 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-eight 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 Ľ percent."
The next FOMC meeting takes place on August 9, 2011.
GDP Growth Rates: Second estimate 1st quarter 2011 GDP growth came in at 1.8% (blame the high price of oil). 1st quarter 2011 third estimates will be released on June 24, 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%.

The Federal Reserve Board member and bank presidents released their economic projections on June 22, 2011. Revised 2011 GDP growth estimates are 2.7-2.9%, down from forecasts of 3.1-3.3% earlier this year. At the current pace, that means that GDP growth will average 3.13% in the coming quarters (likely to be less in 2Q and more robust in the 2nd half of 2011).
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 June 21-22, 2011 FOMC meeting for yourself? The official Federal Reserve document is available online. Go to FederalReserve.gov to read! According to the Committee, "The slower pace of the recovery reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan... "

The tentative FOMC meeting schedule for the 2011-2012 calendar is 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.
AOL (AOL)
iShares MSCI China Small Cap Index Fund (ECNS)
Cree (CREE)
Eldorado Gold (EGO)
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)
Suntech Power Holdings (STP)
Trina Solar (TSL)

DELETIONS (Take your profits early and often):
Peru Index Fund (EPU) moved to Watch list on 6.13.11

HOT NEWS on COOL STOCKS LIST

Company

NP owns?

Symbol

Price when added to Cooling Off List

Price

6.22.11

52-week High

52-week Low

Gains/Loss

American Super-conductor

No

AMSC

$27.77

$7.77

(6.13.11)

$8.08

$38.88

$11.00

-70% &

+4%

Read "The Sunny Side" Vol. 6, issue 3. The company has not yet announced the date of the 4Q and full year earnings report, although they did issue a press release saying that it would be after May 31, 2011 and that the revenue will be materially lower than the $355 million forecast. NASDAQ has given AMSC until August 16, 2011 to file the report or submit a plan outlining details of remaining in compliance with NASDAQ listing requirements (according to June 21, 2011 AMSC press release).

AMSC is a leader in renewable energy, providing proven, megawatt-scale wind turbine designs and electrical control systems. The Company also offers a host of Smart Grid technologies for power grid operators that enhance the reliability, efficiency and capacity of the power grid, and seamlessly integrate renewable energy sources into the power infrastructure. These technologies include superconductor power cable systems, grid-level surge protectors and power electronics-based voltage stabilization systems. The Company operates in two business segments: AMSC Power Systems and AMSC Superconductors. IBM mentioned AMSC by name in their press release of April 18, 2011, honoring the 25th anniversary of high-temperature superconductivity, pointing out that AMSC’s high temp wire is the wave of the future in energy. On 4.21.11 American Superconductor Corporation announced that its high temperature superconductor wire is being used in an electrical substation in China.

According to the 4.5.11 AMSC press release:

On March 31, 2011, Sinovel Wind Group Co., Ltd. (Sinovel) refused to accept contracted shipments of 1.5 megawatt (MW) and 3 MW wind turbine core electrical components and spare parts that AMSC was prepared to deliver. AMSC believes that Sinovel intends to reduce its level of inventory before accepting further shipments.

These delayed shipments are the primary cause for lower-than-anticipated financial results for AMSC's fourth quarter and full fiscal year 2010. On May 31, 2011, AMSC issued a press release stating that, "Although a resolution has not yet been reached, AMSC remains involved in regular executive-level discussions with Sinovel and expects that it will continue to do business with this customer."

3Q 2011 released on 2.3.11:

$114 million in revenues, an increase of 42% over last year. Net income tripled, from $5 million a year ago to $16 million.

AMSC still has $240 million in cash, cash equivalents & marketable securities, as of 4.5.11.

As of March 31, 2011, AMSC had backlog of approximately $588 million. The increase in backlog was primarily the result of a substantial new order received from AMSC’s largest customer, Sinovel Wind Co., Ltd.

73% sales are derived from one customer – Sinovel, increasing risk level.

On May 24, 2011, AMSC announced that Daniel P. McGahn, President and Chief Operating Officer, has been appointed Chief Executive Officer and a member of the Board of Directors, effective June 1, 2011. Dan McGahn succeeds founder Gregory J. Yurek, who is retiring after more than two decades of service to the company as part of the CEO succession plan that has been discussed with the Board of Directors since late 2010. Yurek, 64, will continue to serve as Chairman of the Board until the company’s annual meeting of stockholders in August and as a Senior Advisor to the company for the next two years.

AOL

No

AOL

$21.22

$19.37

$20.31

$29.45

$18.51

-4% &

+5%

Read "AOL" from Vol. 6, issue 12 and "Is GroupOn the Next Google?" from Vol. 8, issue 7.

1Q2011 earnings on May 4, 2011: revenue was $551.4 million, down 17% from a year ago. Net income was $4.7 million, down 86% from a year ago. Restructuring charges totaled $27.8 million.

AOL purchased Huffington Post for $315 million in Feb. 2011 (Huff generates upwards of $50 million). Perhaps the biggest value is that AOL will have Arianna’s personal vision overseeing the integration of the sites’ content on its various sites and holdings. AOL owns Moviefone, Mapquest, among other popular destinations.

Per Nielsen Net Ratings, AOL is the 10th most trafficked "web parent companies" in the United States, with more time online than the other top 9, at 51 minutes per person. Sales for AOL is $2.30 billion annually, but there is plenty of room for this company to come closer to Yahoo’s $6 billion in annual revenue and take a bite out of Google’s $31 billion.

"Part of the reason that I got out of my chair at Google and went to AOL is that you have a company with a $2 billion valuation. The next closest competitor has a 10X market cap, and they don’t have 10X the users we do. The leader in this space has a 50-60X market cap. If we are able to translate our 118 million people in the U.S. and 250 million people globally with a business model around high-scale advertising and services for them, the market cap is not going to be $2 billion," Tim Armstrong, CEO, AOL.

iShares MSCI China Small Cap Index Fund

No

ECNS

$48.38

$46.61

$58.80

$48.18

-4%

Read "Travel Rewards," from Vol. 8, issue 7.

Cree

Yes

CREE

$52.10

$33.56

$83.38

$31.12

-46%

Read "Let There Be Light" and "LED Lighting," from the December 1, and August 1, 2010 ezines, Vol. 7, issue 8. Love the company. Revenue growth is solid. Sales to Asia are strong. Future likes bright! And the price is finally right.

3Q 2011 earnings on 4.19.11: Cree, Inc. CREE, a market leader in LED lighting, today announced revenue of $219.2 million for its third quarter of fiscal 2011, ended March 27, 2011. This represents a 6% decrease compared to revenue of $234.1 million reported for the third fiscal quarter last year and a 15% decrease compared to the second quarter of fiscal 2011. GAAP net income for the third quarter of $18.9 million, or $0.17 per diluted share, decreased 58% year-over-year compared to GAAP net income of $44.6 million, or $0.41 per diluted share, for the third quarter of fiscal 2010.

Cree announced on 3.21.11 that Bruce Renouard will join the company as senior vice president – sales and business development – a new position.

"We continue to be a leader in LED lighting and remain confident we are on the right track as we look forward to further disrupting the market and leading the LED lighting revolution in the years ahead," Chuck Swoboda, Cree chairman and CEO said, in a press release.

Eldorado Gold

No

EGO

$15.48

$14.11 (6.13.11)

$14.83

$20.23

$13.93

-4% &

+5%

Read "Investing in Gold" from Vol. 6, issue 9.

Eldorado is a gold producing, exploration and development company actively growing businesses in Brazil China, Greece, and Turkey and surrounding regions. We are one of the lowest cost pure gold producers.

ENER1

Yes

HEV

$3.68

$1.06 (6.1.11)

$1.29

$5.90

$1.06

-65% &

+22%

Read "Earth Hour" in Vol. 8, issue 4 and "Life Begins with Li (Lithium)" from Vol. 6, issue 4. Ener1 develops and manufactures compact, high performance lithium-ion batteries to power the next generation of hybrid, plug-in hybrid and pure electric vehicles.

1Q earnings on May 10, 2011: Total consolidated revenue for the quarter was $23.1 million, an increase of 110% over the first quarter of 2010.  Consolidated gross profit margin improved to 24%, compared to 10% in the year-ago quarter.  Due primarily to an impairment charge, the company reported a net loss of $84.7 million, or diluted net loss per share of $0.51 for the quarter.  The impairment charge represents a $69.4 million increase in net loss, which represents a one-time $59.4 million impairment recorded during the first quarter to write down the company's investment in Think Holdings and a $13.9 million loss on financial instruments, which is primarily attributable to the impaired value of the investment.  The impairment charge and loss on financial instruments totaled $73.3 million, or $0.44 per diluted share, for the three months ending March 31, 2011.  This compares to a net loss of $15.3 million, or diluted net loss per share of $0.13, during the same period last year.  

According to Ener1 Chairman and CEO Charles Gassenheimer, "We have laid a strong foundation within our grid energy storage business, and we anticipate rapid revenue growth in the second half of 2011.  We are also seeing positive revenue growth from our industrial small pack business, and we have repositioned our transportation business to attack the medium- and heavy-duty markets.  In addition, we expect our joint venture with Wanxiang to come on-line in the second half of 2011 adding to our growth trajectory this year." 

Investors have been concerned about ENER1’s stake in THINK EVs, causing the current pullback in interest. However, the government backing, sales and more remain strong for ENER1.

Galaxy Resources

RISK: HIGH

(off the boards, thinly traded)

No

GALXF

$1.18

$0.88

$0.85

$1.80

$0.79

-28% &

flat

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

Galaxy has two strong components – Australia-based company in an emerging market – lithium.

Annual meeting was held on Friday, May 13, 2011 at 10 a.m. in Perth, Australia. Loss for 2010 was $29.6 million. Had $28 million in cash before the $120 million private placement in April 2011.

Announced private placement of $120 million at $1.10 share on April 14, 2011. The issue was substantially oversubscribed with strong interest coming out of Europe, Asia, US and Australia.

Galaxy wholly-owns and operates the Mt. Cattlin mine, which is currently producing spodumene concentrate. Galaxy’s Jiangsu lithium carbonate plant, once completed, will have a design capacity of 17,000 tpa of lithium carbonate, which Galaxy expects would make it one of the largest plants in China converting hard rock lithium mineral concentrates into lithium compounds and chemicals.

Lithium compounds such as lithium carbonate are forecast to be in high future demand due to advances in long life batteries and sophisticated electronics including mobile phones and computers.

Galaxy Resources has positioned itself to meet this lithium future by not only mining the lithium, but also by downstream processing to supply lithium carbonate to the expanding Asian market.

Green Dot

Yes

GDOT

$41.25

$32.85

$65.10

$32.63

-20%

Read "IPO of the Year" from Vol. 7, issue 3.

1Q results on April 28, 2011: Total operating revenues increased 26% from a year ago, to $117.3 million. Net income was $12.7 million for the first quarter of 2011 compared to $12.8 million for the first quarter of 2010. Gross dollar volume increased to $4.6 billion this quarter, up from $2.8 billion in 2010.

On March 21, 2011, Green Dot announced that board member W. Thomas Smith, Jr. will not be running for re-election to the board due to his commitments to his firm Total Technology Ventures, LLC.

Shares plunged earlier in the month after Janney Capital Markets analyst Thomas McCrohan issued a Sell rating on Green Dot, with a target price range of $40-$48. Institutional buyers moved in fast to pick up the shares at a 52-week low.

Revenue grew 41% in 2010, however the pace was much more slow toward the end of the year, with sequential growth of only 3% from the -33rd to the 4th quarter.

Cool progress and steady, though not stellar growth, in a space that is bound to see a lot more competition (from MasterCard and Visa to name two). WalMart is a partner and investor.

Hoku Corporation

RISK: HIGH

No

HOKU

$8.03

$1.75

(3.15.11)

$1.79

$14.55

$1.90

-78% &

flat

Read "One Hot, Overlooked Commodity: Sand," Vol. 8, issue 5, "The Sunny Side," Vol. 6, issue 3 and "Solar Giants Tap a Small Hawaiian Company For Silicon," in the Oct. 2007 ezine, Vol. 4, issue 10.

4Q and FY 2010 earnings on 6.9.11: Revenue for the fiscal year ended March 31, 2011 was $3.6 million compared to $2.6 million for fiscal 2010. Revenue in fiscal 2011 and 2010 was derived primarily from photovoltaic, or PV, system installations and related services, the sale of electricity, and the resale of solar inventory. GAAP net loss was $11.8 million.

Scott Paul, chief executive officer of Hoku Corporation, said, "Our increase in revenues compared to the prior fiscal year reflects our focus on the commercial, industrial and institutional PV markets. That said, we viewed fiscal 2011 as a year to reset our priorities, clarify our strategy, and develop a solid plan for future growth. As our focus on developing large-scale PV projects begins to pay-off, I believe Hoku Solar is positioned well to be a stronger competitor going forward."

Tianwei has invested more than $129 million of its own capital in Hoku, and they have provided support for another $244 million in debt financing from banks in China. Tianwei continues to support the financing required to bring HOKU’s 4,000 metric ton polysilicon facility online.

HOKU will be supplying a 2.25 MW PV facility for Forest City Sustainable Resources in Oahu.

KLA Tencor

No

KLAC

$40.59

$38.85

$51.83

$26.69

-4%

Read "LED Lighting," from the August 1, 2010 ezine, Vol. 7, issue 8. With revenue double over last year, profit margins of 20%, and a forward P/E of 9.53, even at a price that is near the 52-week high, KLAC seems undervalued.

Watch my 2.3.11 report on the LED marketplace on CNBC, or by visiting my YouTube channel at YouTube.com/NataliePaceDOTCOM.

LDK SOLAR

No

LDK

$30.02

$4.94

(3.2.09)

$7.06

$15.10

$4.97

-77% &

+43%

Read the articles, "One Hot, Overlooked Commodity: Sand," Vol. 8, issue 5, "Green" in Vol. 6, issue 2 and "Solar Springs Up Again," in Vol. 5, issue 4.

1Q 2011 earnings were announced on June 7, 2011. Quarterly revenue of $766.3 million, a decrease of 16.8% sequentially and an increase of 120.5% year-over-year; Net income was $135.4 million.

FY earnings on 5.2.11: Net income of $296 million, compared to a net loss of $234 million a year ago. Sales were $2.5 billion, compared to $1 billion in 2009.

In the 20-F filing, which was uploaded to the SEC website on 5.2.11, LDK states "We are operating with a significant working capital deficit; if we do not successfully execute our liquidity plan, we face the risk of not being able to continue as a going concern." Just how serious is it? The capital deficit was $1.6 billion, with cash of only $202 million.

It appears that LDK has raised the capital needed, however investors should be aware that LDK’s debt, including short-term debt that is due now, is high. That means risk on this investment is much higher than MEMC Electronics, which is a LDK competitor with much lower debt. Here’s the LDK explanation in their 1Q 2011 Earnings press release.

""We remain focused on managing our operations to drive profitability.  Going forward, we expect to continue to use free cash flow to pay down debt, while also continuing to evaluate opportunities to convert short-term to long-term obligations," said Xiaofeng Peng, Chairman and CEO of LDK Solar.

MEMC Electronics

Yes

WFR

$11.99

$8.30

$19.31

$8.52

-30%

Read "One Hot, Overlooked Commodity: Sand," Vol. 8, issue 5 and "The Sunny Side" Vol. 6, issue 3.

1Q earnings on May 4, 2011. GAAP net sales of $735.9 million, an increase of 68% or $298.2 million from $437.7 million in the first quarter of 2010.   MEMC reported a GAAP net loss for the 2011 first quarter of $4.5 million, or $0.02 per share, compared to net income of $12.6 million, or $0.05 per share, in the 2010 fourth quarter and a net loss of $9.6 million, or $0.04 per share, in the 2010 first quarter.  Non-GAAP net income for the 2011 first quarter was $21.5 million, or $0.09 per share. First quarter earnings per share was negatively impacted by $0.07 of charges related to the Japan earthquake ($0.02) and unfavorable net legal verdicts and settlements ($0.05), primarily due to the previously announced Semi-Materials case.

MEMC ended the 2011 first quarter with cash and cash equivalents of $684.1 million excluding $61.0 million of restricted cash.  Total company debt, including non-recourse project debt and capital leases, was $1,229.1 million at quarter end.  Non-recourse project debt and capital leases were $616.2 million, and there was no short-term borrowing under the company's corporate revolving credit facility as of March 31, 2011.

The Japanese earthquake, tsunami and nuclear crisis interrupted operations at MEMC Electronics Utsunomiya facility between March 11, 2011 and early April 2011. This factory is 130 miles away from Sendai, so no one was hurt and there is expected to be no real damage.

On Feb. 25, 2011 it was announced that SunEdison was awarded an additional 31 MW (AC) of Solar Projects by the Ontario Power Authority.

2.9.11: SolarParking Canopy will provide 25-30% of Cal State Bakersfield energy. The 1.2 MW solar parking canopy will generate over 1.6 million kilowatt hours (kWh) of clean energy in the first year of operation and produce over 30 million kWh over 20 years. That is enough energy to power more than 3,100 average U.S. homes for one year. The solar parking canopy will offset more than 29 million pounds of carbon dioxide over the initial 20 years of operation – the equivalent of taking 2,800 cars off the road.

"SunEdison continues to provide smart solar solutions to universities and school systems across our nation," said Jaime A. Smith, U.S. Vice President of Commercial Systems for SunEdison.  "By bringing together our strong financing capabilities along with cutting-edge technologies, SunEdison makes affordable solar solutions a reality for universities like CSUB."

SunEdison said Feb. 2, 2011 that it has agreements in place to install more than 1,400 megawatts of solar panels, doubling its pipeline of projects from 700 megawatts of projects a year ago.

Microsoft

No

MSFT

$24.88

$23.71

$24.58

$29.46

$22.73

Flat &

+4%

Watch my appearance on CNBC, outlining the reasons Skype is a very hot acquisition for Microsoft, and read my article, "One Very Hot IPO" from the September 1, 2010 ezine, Vol. 7, issue. 9. Microsoft just purchased Skype for $8.5 billion in cash. I added Microsoft to the Hot News list on 5.15.11.

PowerShares Lux Nanotech

No

PXN

$8.87

$8.40

$10.85

$7.74

-6%

Potential hot industry for your pie chart. Read the 2011 Company of the Year article from December 2010 ezine, Vol. 7, issue 12. Watch my 2.3.11 report on the LED marketplace on CNBC, or by visiting my YouTube channel at YouTube.com/NataliePaceDOTCOM.

PowerShares Wilderhill Clean Energy Portfolio ETF

No

PBW

$9.91

$8.69

$11.42

$4.00

-13%

Read "$100/Barrel Oil" from the March 1, 2011 ezine, Vol. 8, issue 3.

Satcon

2011 Company of the Year

Yes

SATC

$3.77

$2.03

$5.51

$2.22

-47%

Read "2011 Company of the Year," from Vol. 8, issue 4 and "$100/Barrel Oil" from the March 1, 2011 ezine, Vol. 8, issue 3.

On 5.23.11: Satcon announced that it had achieved the number one position in market share for the North American solar inverter market.

Satcon 1Q earnings on 4.27.11: Revenue for the first quarter of 2011 was $62.0 million, an increase of 321% over the same period last year. Net loss was $2.14 million.

North America continued to be the company’s strongest performing region, representing 76% of total sales. Asia contributed 22% of sales, while Europe represented 2%. During the first quarter, the company shipped 276.5 MWs of its industry-leading PowerGate® Plus, Prism®, and Solstice® solutions. Satcon's utility scale solutions, of 250kW and above, continued to be the company’s strongest performing offering, shipping over 240 MW, and representing 87% of total units shipped in the quarter.

At March 31, 2011, the company's backlog, which consists of purchase orders from its customers, was $72.2 million. Backlog from North America represented 78.5% of orders to be delivered. Asia contributed 14.7%, while Europe contributed 6.8%.

According to Satcon’s president and CEO Steve Rhoades, "For the second quarter of 2011 we believe the markets in North America and Asia will remain strong and that Germany and Italy will define their long-term FIT strategies. We expect Q2 revenue to be in the range of $50 to $60 million."

On 5.13.11 Satcon announced that Aaron M. Gomolak has replaced Donald R. Peck as Satcon’s Executive Vice President, Chief Financial Officer and Treasurer. This was a last minute shuffle. Not a good sign.

Sunpower

No

SPWRA

$24.83

$13.07 (7.1.10)

$17.53

$22.60

$9.61

-29% &

+34%

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

1Q 2011 earnings on May 12, 2011. $451 million in revenue, an increase of 30% over the previous quarter. Net loss of $2 million. $368 million in cash on hand. Long term debt and liabilities of $1.8 billion.

On May 3, 2011, Total (a French company) offered to purchase up to 60% of shares at a price of $23.25 per share. On May 9, 2011, the FTC granted approval of the deal.

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

Suntech Power Holdings (solar)

No

STP

$14.26

$7.16

(6.13.11)

$7.82

$15.55

$7.05

-45% &

+9%

Read "The Sunny Side" Vol. 6, issue 3. The world's largest crystalline silicon photovoltaic (PV) module manufacturer. 1Q earnings will be announced May 25 before the markets open (announced after press time).

Suntech began manufacturing in the US on Oct. 8, 2010, at its Goodyear, AZ HQ. Dept. of Energy Secretary Steven Chu visited Suntech and reported on it to The National Press.

1Q 2011 earnings were reported on May 25, 2011. Total net revenues were $877.0 million in the first quarter of 2011, representing a sequential decrease of 7.2%, and an increase of 49.1% year-over-year. Net income was $31.9 million. "Our recently acquired silicon ingot and wafer facility is now fully integrated and operating smoothly. We expanded annualized wafer production capacity to 1GW and are on track to reach 1.2GW in the second half of 2011. The increasing output of internally produced wafers will drive progressive reduction in wafer costs through 2011. We also continued to expand our cell and module capacity and achieved 2.2GW of capacity by the end of the first quarter of 2011," according to Dr. Zhengrong Shi, Chairman and CEO.

David King was named CFO on March 28, 2011. Amy Zhang, the former CFO is resigning to pursue "other opportunities."

On March 21, 2011, Suntech announced a new solar installation on "the roof of the world," in Tibet. The project should be complete by the middle of the year and generate 20,000 MWh annually for Tibetan residents. "With intense sunlight and cool temperatures, Tibet is extremely well-suited for the utilization of advanced photovoltaic technology," said Dr. Zhengrong Shi, Suntech's Founder, Chairman and CEO. "We're proud to invest in preserving the region's fragile ecosystem by providing an economically-viable and sustainable solution for electricity generation. From the desert sands of Arizona to the peaks of the Himalayas, anyone can look up and harness nature's cleanest and most abundant energy resource."

Trina Solar LTD.

No

TSL

$27.92

$19.11

(6.13.11)

$20.48

$31.89

$14.85

-27% &

+7%

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

1Q earnings on 5.17.11. Gross profit was $151.3 million, a decrease of 25.0% sequentially and an increase of 45.1% year-over-year. Net income was $47.7 million, which included a net foreign currency exchange loss of $24.1 million, compared to net income of $145.3 million in the fourth quarter of 2010 and $44.5 million in the first quarter of 2010.

The SEC launched an inquiry in 2010 into the way that Trina is booking revenue that hasn’t yet been received, but, on January 2011, the SEC issued a letter saying they had no further comments at this time.

Announced an agreement to supply solar modules to SunEdison, a subsidiary of MEMC Electronic Materials, Inc. ("MEMC"). Under the terms of the agreement signed with MEMC, the Company is expected to supply SunEdison with approximately 35 MW of PV modules over the remainder of 2010.

 --   Announced the signing of a Letter of Agreement with the Massachusetts Institute of Technology ("MIT") to become a member of its Industrial Liaison Program, a program devoted to promoting university-industry collaboration, innovation and technology sharing

"We are very pleased with our outstanding performance in the fourth quarter, which saw record shipment volume and resulted in our exceeding previous guidance for both the fourth quarter and full year 2010," said Mr. Jifan Gao, Chairman and CEO of Trina Solar.

U.S. Gold

Yes

UXG

$5.57

$5.93

$9.87

$2.02

+6%

Note: U.S. Gold is not producing gold at this time; is it a gold exploration company, based in Nevada and Mexico which has begun the process of filing for production permits, with a goal of producing gold by 2014.

Added back to the Hot List on June 8, 2011 (in a special Subscriber Only Alert).

U.S. Gold announced on Valentine’s Day that they intend to offer 15 million shares, plus an over-allotment of 2.25 million additional shares. CEO and Chairman Rob McEwen will purchase $20 million. (The overall raise should be in the $124 million range.) The funds will be used "to complete feasibility study work and acquire long lead-time capital items for the El Gallo Project in Mexico, complete pre-feasibility and feasibility work at the Gold Bar Project in Nevada, continue ongoing aggressive exploration programs in Mexico and Nevada and for general corporate purposes," according to the company. At that time, we removed U.S. Gold from the Hot News List, meaning that we believed the share price would be under pressure. On February 18, 2011, U.S. Gold announced that the share price for the offering would be $6.50/share (and we sent out a note to subscribers).

What does this mean for you, the investor? As the company enters into pre-production mode, the share price becomes more vulnerable. U.S. Gold veteran Rob McEwen proved he could find gold and silver. Now he has to prove that he can build a mine and extract it from the ground. As with any construction project, that means lots of forms, inspections and rigmarole. Gold prices can continue to rise and I also have faith in the vision of veteran gold mining CEO Rob McEwen. However, the pre-production phase of any company is one where the share price can lag on investor concerns of timelines, delays, etc. It is your call whether or not you wish to keep a skin in the game during this period or not. Ultimately, U.S. Gold could become as great of a company (and as valuable) as Goldcorp did under McEwen’s leadership. The share price has fluctuated over the past year, however, going as low as $5.35/share in November of 2010, and it did take Mr. McEwen 18 years to make Goldcorp the great company that it is today.

U.S. Gold began trading on the New York Stock Exchange on Nov. 2, 2010, and has a goal of qualifying for the S&P 500 by 2015. Added to the S&P/TSX Global Gold Index and S&P/TSX Global Mining Index on 9.15.09. Added to the Chicago Board of Options Exchange on July 19, 2010. Began trading on the AMEX stock exchange on 12.11.06. (Also trades on the Toronto Stock Exchange.)

According to the press release issued on 2.7.11, "Baseline environmental studies have been initiated and permitting for full mine operations is scheduled to be completed concurrently with the feasibility study. The project is currently estimated to reach commercial production in early 2014." Average annual silver production is expected to be 5 million, with 50,245 ounces of gold annually.

U.S. Gold was the 2009 Company of the Year. The article was featured in the October 2009 ezine, Vol. 6, issue 10.

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. 6.13.11: EPU with flat performance.

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

Recently Deleted from the Hot News list:
Peru ETF (EPU) moved to Watch List on 6.13.11

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:
Africa & Middle East Fund (GAF) added 6.13.11
Indonesia Fund (EIDO) added 6.13.11
LinkedIn (LNKD) added on 6.13.11
Ishares MSCI All Peru Index Fund (EPU) added on 6.13.11
Orocobre (OROCF) added on 6.13.11
Priceline (PCLN) added on 6.13.11
Shutterfly (SFLY) added on 6.13.11

Recent Deletions:
Eldorado Gold (EGO) moved to the Hot List on 5.15.11
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
Skype moved to Hot List on 5.16.11 (with parent company Microsoft)
Tesla Motors (TSLA) moved to Cooling Off list on 6.13.11
U.S. Gold (UXG) Moved to the Hot List on June 8, 2011

Company

NP owns?

Symbol

Price when added to List

Price

6.22.11

52-week High

52-week Low

Gains/Loss

S&P Emerging Middle East and Africa Fund

No

GAF

$73.75

$72.85

$79.97

$57.00

-2%

Read "Travel Rewards," from Vol. 8, issue 7.

Allscripts Healthcare Solutions

No

MDRX

$19.94

$19.24

$23.13

$15.65

-4%

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

Applied Materials

2010 Company of the Year

No

AMAT

$15.32

$12.58

$16.94

$10.27

-18%

Read "Let There Be Light" and "LED Lighting," from the December 1, 2010 and August 1, 2010 ezines, Vol. 7, issue 12 and 8. 2010 Company of the Year!

Amazon

No

AMZN

$168.07

$191.66

$206.39

$105.80

+14%

Hot company. Buy at a good price. P/E ratio is very high, at 83 on June 22, 2011.

Apple

No

APPL

$351.99

$322.34

$364.90

$235.56

-7%

Hot company. Buy at a god price. Also, be aware that Steve Jobs is on medical leave of absence. Tim Cook, current COO, has been running company many times during Jobs’ leaves and investors may be accustomed to having him run the show, if Jobs should announce his resignation.

2Q results were announced on April 20, 2011: The Company posted record second quarter revenue of $24.67 billion and record second quarter net profit of $5.99 billion, or $6.40 per diluted share. These results compare to revenue of $13.50 billion and net quarterly profit of $3.07 billion, or $3.33 per diluted share, in the year-ago quarter.

With quarterly revenue growth of 83 percent and profit growth of 95 percent, we’re firing on all cylinders," said Steve Jobs, Apple’s CEO. "We will continue to innovate on all fronts throughout the remainder of the year."

iShares Australia Index

No

EWA

$20.34

$25.04

$28.36

$15.40

+24%

Read "Hot Funds," from Vol. 7, issue 7. This fund was a rock star on Wall Street in 2009-2010. There are a few factors that might pull back share price in the short term (which we are waiting for). The Queensland floods, the Japanese tsunami (Japan is a big customer of Australia) and a policy change in China and potential slowdown in that economy. Love the long-term prognosis of this commodity-rich country. Also read, "Commodity-Rich Countries" by Michelle Gibley, CFA, Schwab, from Vol. 8, issue 6.

Baidu

No

BIDU

$124.96

$124.70

$154.89

$54.98

flat

Hot company. Buy at a god price. P/E 82 on 6.22.11.

Berkshire Hathaway

No

BRK.B

$85.30

$75.95

$87.65

$73.25

-11%

Warren Buffett’s company has more exposure to the bank bailouts (Wells Fargo and American Express to name just two) than most investors realize. And, contrary to what he used to say, the company engages in active trading and hedging. Plus, he’s 82 and doesn’t have a clear, young successor.

Canadian Imperial Bank

RISK: Low

No

CM

$65.88

$80.14

$88.76

$61.12

+21%

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

iShares Chile Fund

No

ECH

$71.21

$72.33

$80.38

$50.48

Flat

Read "Hot Funds," from Vol. 7, issue 7 and "Latin American Funds Doubled" article from the August 2010 ezine, Vol. 7, issue 8.

iShares Emerging Markets Index

No

EEM

$39.58

$45.64

$50.30

$35.21

+14%

Read "Hot Funds," from Vol. 7, issue 7.

iShares JP Morgan Emerging Markets Index

No

EMB

$104.63

$108.89

$114.14

$92.42

+4%

Read "Hot Funds," from Vol. 7, issue 7.

First Solar

No

FSLR

$144.76

$122.95

$163.32

$98.71

-15%

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

First Solar uses cadmium telluride instead of silicon to transfer sunlight into useable energy. First Solar’s sales are flat, whereas sales with the silicon-based solar suppliers are up 80-100% year over year. The shift to silicon is occurring for two reasons. Silicon manufacturing is heating up and costs are lowering as a result, and cadmium telluride isn’t as abundant or as efficient a power source as silicon. Read the article for more details. They still list CdTe as the semiconductor of choice on their website, citing old data from 2004 that this is a good strategy. Be forewarned!

FMC Corp.

No

FMC

$51.36

$82.04

$89.28

$55.64

+60%

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

1Q earnings on May 2, 2011: net income of $94.0 million, or $1.30 per diluted share, in the first quarter of 2011, versus net income of $77.4 million, or $1.06 per diluted share, in the first quarter of 2010. First quarter revenue of $795.0 million was 5 percent higher than $756.5 million in the prior year.  

Pierre Brondeau, FMC president, chief executive officer and chairman, said, "The year is off to a good start as each of our business segments delivered strong profit gains.  Agricultural Products’ earnings were driven by broad-based sales growth in North America, Latin America and Asia.  Specialty Chemicals’ performance was led by robust earnings gains in lithium."

Ford Motor Co.

No

F

$14.55

$13.36

$18.97

$4.71

-8%

Read "How Cap and Trade Saved Ford" from Vol. 6, issue 4. Ford is making cars people want to drive, but it owes over $100 billion dollars. Be careful with any investment here. The same conditions that plagued Chrysler and GM are present here – lots of debt, pensions and Other Post Employment Benefit Obligations. Ford built cars that won awards in 2010 (and attracted consumer interest). And for that they get a big bravo…

Ford’s total debt is over $100 billion and their credit rating is below investment grade, at BB- (as of 2.1.11, by S&P).

General Motors

No

GM

$33.11

$30.00

$39.48

$28.30

-9%

Read "One Very Hot IPO," from the September 1, 2010 ezine, Vol. 7, issue 9. Chevy Volt won Motor Trend’s 2011 Car of the Year, but can GM regain market share from worldwide market leader, Toyota? GM may have shed a lot of debt in the bankruptcy filing, however, the company’s profit margins remain very slim at 4%.

Old GM began selling their 10% of GM on May 23, 2011. Click to access an excellent article by the Associated Press that outlines the $276 billion in claims that old GM had to settle in bankruptcy. FYI: The U.S. government still owns 1/3 of the new GM. No surprise that shares in GM are down today. While the selling continues, there will be a downward drag on share price.

Google

No

GOOG

$600.05

$487.01

$642.96

$433.63

-19%

See Vol. 8, issue 2 article, "Big Bites Out of Apple and Google," and Vol. 6, issue 5 for "Hulu Your Heroes." Excellent company and great anchor for your large caps in the nest egg, with one huge hitch – the company lost its leader on April 1, 2011. Larry Page became the CEO, moving Dr. Eric Schmidt, whom everyone considers to be the mastermind from Google the search engine to Google the ubiquitous Internet and phone behemoth, to executive chairman. Sergey Brin will handle "strategic projects" without a real title, except "co-founder."

Sorry, I just don’t believe that this level of a shake-up, occurring so quickly without warning, is a good sign. Executive exodus has begun, but hard to tell how far-reaching it will be. Share price value is off by 20%.

Oracle is suing saying that Android used Java without permission. Oracle wants "billions."

Announced 1Q results on April 14, 2011.

Google reported revenues of $8.58 billion in the first quarter of 2011, representing a 27% increase over first quarter 2010 revenues of $6.77 billion.  53% of total revenues came in from international markets. GAAP net income in the first quarter of 2011 was $2.30 billion, compared to $1.96 billion in the first quarter of 2010.

Cash – As of March 31, 2011, cash, cash equivalents, and marketable securities were $36.7 billion.

Headcount – On a worldwide basis, Google employed 26,316 full-time employees as of March 31, 2011, up from 24,400 full-time employees as of December 31, 2010.

Kulicke & Soffa

No

KLIC

$8.71

$10.77

$12.72

$4.03

+23%

Read "Let There Be Light" and "LED Lighting," from the December 1, 2010 and August 1, 2010 ezines, Vol. 7, issue 12 and 8. 2010 Company of the Year!

2Q earnings report on 5.3.11: Net revenue of $206.7 million and net income of $39.9 million, higher than expected. 4Q 2010 revenue was $259.3 million and net income was $56 million. This was expected and announced (which is largely why the company was placed on the Cooling Off list).

KLIC has a new CEO & CFO, is moving offices to Singapore and offered earnings guidance of $125 million – down almost 50% from the 4th quarter. Yikes! As might be expected, there is consensus, colossal insider selling…

Consensus colossal insider selling on Nov. 4, 2010.

iShares MSCI Indonesia Index

No

EIDO

$30.72

$30.02

$32.15

$22.80

-3%

Read "Travel Rewards," from Vol. 8, issue 7.

iShares S&P Latin America 40 Index

No

ILF

$43.92

$49.53

$55.38

$39.21

+13%

Read "Hot Funds," from Vol. 7, issue 7 and "Latin American Funds Doubled" article from the August 2010 ezine, Vol. 7, issue 8.

LinkedIn

No

LNKD

$72.83

$66.32

$122.70

$45.00

-10%

Read my article, "Should You Link In?" from the June 1, 2011 ezine, Vol. 8, issue. 6.

Oracle

No

ORCL

$33.47

$32.26

$36.50

$21.24

-2%

Read "Big Bites Out of Apple and Google" from the February 1, 2011 ezine, Vol. 8, issue 2.

Orocobre

No

OROCF

$2.35

$2.20

$4.03

$1.29

-6%

Read "Should You Put the Brakes on Toyota?," from Vol. 7, issue 2. This is an Australian lithium company with a deal with Toyota to supply lithium for lithium ion batteries. Began trading on TSX (Toronto Stock Exchange) in June of 2010 and trades on the Australian Stock Exchange as well.

Orocobre issued almost 7 million new shares in the price range of $3.20 Canadian on Feb. 25, 2011 to fund ongoing design work, pilot plan operation and other activities in relation to the construction of the Salar de Olaroz.

Recent trouble: On March 7, 2011, Orocobre announced that the Argentinian government is slowing down the permit process for the proposed lithium potash project in NW Argentina. On March 4, 2011, the local government declared lithium to be a strategic mineral resource and introduced a secondary approvals process. According to the decree, additional approval will be required for both the Olaroz lithium-potash project for which the Company has already received approval of its development and production EIS, and the Cauchari lithium-potash project, for which an exploration EIS has been submitted. This new process does not affect the Company’s program at Salinas Grandes, which is predominantly located in Salta Province.

The company is based in Brisbane, Queensland, which had extensive flooding. The company’s projects are located in South America, so it’s possible that the floods won’t impact this company severely. Lithium production isn’t projected to begin until 2012 and with the new developments in Argentina, this could be further delayed.

Orocobre Limited is listed on the Australian Securities Exchange and Toronto Stock Exchange (ASX:ORE, TSX:ORL) and is the leading lithium-potash developer in the lithium and potassium rich Puna region of Argentina. For further information, please visit www.orocobre.com.

iShares MSCI All Peru Index Fund

No

EPU

$40.73

$37.65

$51.35

$29.79

-8%

Read "Hot Funds," from Vol. 7, issue 7 and "Latin American Funds Doubled" article from the August 2010 ezine, Vol. 7, issue 8. Left-winger Ollanta Humala, a career military man who has moderated his anti-capitalist views since narrowly losing the 2006 election, won the Presidential election and has become the President-Elect.

Humala notes that Peru has had economic growth of 7-8% for 8 years. He calls the Peruvian economy "solid." While Humala promises that the poor will receive more of the country’s profits, he also says that his central bank will be run by an independent and that he wants to work closely with the United States. Check out this video interview with Humala by Reuters.

Priceline

No

PCLN

$493.18

$480.79

$549.55

$173.32

-2%

Read the article "The Priceline Negotiator," from Vol. 7, issue 10. Great company. Not a short. Just don’t want people buying in high.

1Q 2011 results on May 5, 2011. Revenue was $809 million, up 38.5% year over year. Net profit was $105 million, down from the 4Q net profit of $175 million, but double the net profit of one year ago.

Rio Tinto

No

RIO

$54.60

$68.19

$76.67

$39.30

+25%

Gold, copper and other commodities mining. Based out of UK. Mines worldwide, but focused greatly in Australia.

FY 2010 released on Feb. 10, 2011. Record underlying earnings1 of $14.0 billion, 122 per cent above 2009. Net debt reduced to $4.3 billion at 31 December 2010, from $18.9 billion at 31 December

2009. $5 billion share buyback program now through year end 2012. Net earnings are up to $14 billion in 2010, over $4.9 billion in 2009. Chairman Jan du Plessis said "This year’s record results reflect a combination of strong commodity markets, first class assets and excellent operational performance at our managed operations.

Prices improved for nearly all of Rio Tinto’s major commodities: copper prices were up 47 per cent, molybdenum prices were up 45 per cent, gold prices were up 26 per cent and aluminium prices were 31 per cent higher than 2009. Demand and prices for diamonds and minerals improved significantly as the worldwide economy emerged from the global financial recession.

Ross Stores

No

ROST

$35.90

$78.26

$83.11

$48.71

+115%

Read "Discount Designer Stores," from Vol. 5, issue 6. Sales have been growing steadily in this discount marketplace, especially given the "jobless recovery." Profit margins are slim, however, 7%.

Skype

No

N/A

N/A

N/A

N/A

Read "One Very Hot IPO," from the September 1, 2010 ezine, Vol. 7, issue 9. Microsoft purchased Skype for $8.5 billion in cash. I added Microsoft to the Hot News list on 5.15.11.

Shutterfly

No

SFLY

$51.19

$52.46

$66.70

$18.43

+3%

Read "Diamonds or Scrapbooking," from the November 1, 2010 ezine, Vol. 7, issue 11. PE is 110 – far too high for our taste – especially for a company that posted a loss in the most recent quarter.

1Q 2011 results on April 27, 2011. Net revenues increased 25% year-over-year to $57.2 million (but down from $166.2 million in the 4th quarter). GAAP net loss was ($7.8) million, compared to ($4.7) million in Q1 2010. At March 31, 2011, cash and cash equivalents totaled $216.3 million.

Sociedad Minera y Quimica de Chile

No

SQM

$36.36

$60.68

$61.54

$30.98

+65%

This is a great company that manufactures lithium for the electric car & IT industry. Looking for a better buy-in, after we get through the current down-trending volatility. Announces 4Q 2010 results on March 1, 2011 after the markets close.

Read the article, "Treasure Hunting," in Vol. 5, issue 10 and the article "Life Begins with Li (Lithium)," from Vol. 6, issue 4.

SQM began paying a dividend in 2010. The annual dividend was US$0.72592 per share, with US$0.30798 per share to be paid on May 11, 2011.

4Q and FY earnings on March 1, 2011. Revenue was $1.8 billion, 27% higher than $1.438 billion a year ago. Net income was $382.1 million, 13% higher than 2009. Cash on hand = $525 million. $1.7 billion in debt.

Businesses include: Specialty Plant Nutrition, Iodine and Lithium.

Sohu (Chinese Co. ADR)

Beijing, China

Small Cap

RISK: MEDIUM

No

SOHU

$46.54

$68.64

$109.37

$40.05

+45%

Chinese based Internet portal. Growing and profitable, with 32% net profit margins.

iShares S&P North American Tech Semi-conductors

No

SOXX

$45.94

$53.75

$64.19

$40.95

+16%

Read "LED Lighting," from Vol. 7, issue 8 and 2010 Company of the Year from Vol. 7, issue 12.

Watch my 2.3.11 report on the LED marketplace on CNBC, or by visiting my YouTube channel at YouTube.com/NataliePaceDOTCOM.

Veeco

Yes

VECO

$44.08

$48.79

$56.05

$29.54

+11%

Read "LED Lighting," from Vol. 7, issue 8 and 2010 Company of the Year from Vol. 7, issue 12.

Watch my 2.3.11 report on the LED marketplace on CNBC, or by visiting my YouTube channel at YouTube.com/NataliePaceDOTCOM.

Reported 1Q on 4.25.11. $255 million in revenue for the 1Q, compared to $135 a year ago. Net income of $53 million, compared to $23 million last year. Quarter-end backlog was $530 million. Veeco’s operating cash flow during Q1 was extremely strong at $75 million, resulting in cash and short term investments at the end of the quarter of $779 million.

John R. Peeler, Veeco’s Chief Executive Officer, commented, "LED & Solar revenues were $215 million and Data Storage revenues were $40 million... While China remained the majority of our bookings, we also received orders from key customers in Taiwan, Korea and the U.S."

Peeler sold $2.6 million of stock on 2.11.11 ( a few days after earnings) at $52.82.

VMWare

No

VMW

$83.26

$94.27

$99.19

$51.23

+13%

Read "Health Care Reform" Vol. 7, issue 4. P/E is high, even for this great company! Love the company – at a better price...

Wells Fargo

No

WFC

$32.25

$27.37

$34.25

$23.02

-15%

 

3.9 million people are over 90 days late on their mortgage. Additionally, WFC credit card holders report getting charged 29.9% interest rates, while class action lawsuits against WFC continue to mount. However, the Feds keep giving the banks money and the SEC keeps allowing banks to carry their losses off the books. Which means that earnings reports are fairy tales.

See "Wells Fargo’s Incredible Exploding Earnings" in Vol. 5, issue 9, and "Wells Fargo’s Great Depression," in Vol. 4, issue 12.

Westpac

No

WBK

$73.54

$113.94

$138.58

$85.72

+55%

Issued it’s half-year results on May 4, 2011. Go to Westpac.com.au to access. Australian banks fared far better than the rest of the world banks. So did Canadian banks. P/E is good, but the debt is quite high, at 4.34 X equity (on 5.15.11).

Key financial highlights (comparisons are with prior year):

• Cash earnings $3.2 billion, up 7%

• Statutory net profit of $4 billion, up 38%

Westpac’s Chief Executive Officer, Gail Kelly, said: ""Key indicators were generally positive during the half with the economy generating good growth, low unemployment and moderate inflation. Despite this, both consumers and businesses remain relatively cautious and while confidence is expected to pick-up, lending growth is likely to be moderate in the immediate future."

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. GDP growth is expected to pick up in the coming quarters, so not the best time to initiate a short position. Some of the NASDAQ stocks on the list below are here simply to keep you from buying them high.

Highlighted Companies (Cooling Off List):
Taubman (TCO) on 4.28.11

DELETIONS:
LinkedIn (LNKD) dropped 25% in less than one month, moved to the Watch List on 6.13.11.
eBay was deleted with flat performance on 6.13.11.
Orocobre (OROCF) moved to Watch List on 6.13.11.
Priceline moved to Watch List on 6.13.11.
Shutterly (SFLY) moved to Watch List on 6.13.11.

Company

NP owns?

Symbol

Price when added to Cooling Off List

Price

6.22.11

52-week High

52-week Low

Gains/Loss

Netflix

No

NFLX

$258.62

$249.00

$277.70

$95.33

-4%

Read "Blockbuster’s Second Coming" from Vol. 7, issue 5. 80 P/E is too frothy for our taste, especially while Netflix’ content continues to lag behind the competition. Great, innovative company. Not a short. Just don’t want people buying in high.

1Q 2011 on 4.25.11: $719 million revenue; $60 million net income. Content deals are increasingly large and complex and competition, particularly in streaming (from rivals, like Hulu) is heating up.

As Netflix acknowledges in their earnings report:

Over the past 12 months, both Hulu Plus and free video on Amazon Prime have launched. Dish Networks is likely to launch a substantial subscription streaming effort under the Blockbuster brand. Netflix’s competitive strategy relative to other streaming services is simply to grow as fast as the company can, so they can afford more content, more marketing, and more R&D than the competitors.

Unfortunately, with Blockbuster’s exclusive access to first-run movies and Dish Networks reach, Netflix is likely to take a big hit. According to Ira Bahr, Chief Marketing Officer for DISH Network. "DISH Network now offers more than twice as many movie choices as any other TV provider. If you love movies, you're going to love DISH Network." New DISH subscribers now receive 3 months of Blockbuster by mail free.

Rochester Municipals Bond Fund

No

RMUNX

$14.86

$15.35

$16.91

$14.49

+3%

Read "Bond Beautification Project" from Vol. 7, issue 10 and "Bonds, Bond Funds and T-Bills: The Next Disaster," from Vol. 7, issue 9.

Taubman Centers

No

TCO

$24.74

$58.71

$59.37

$21.85

+135%

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

1Q earnings on April 20, 2011. "We’re very pleased with this quarter’s performance, in particular the momentum of our tenant sales growth," said Robert S. Taubman, chairman, president and chief executive officer of Taubman Centers.  "Our earnings growth was largely driven by increased rents and net recoveries, partially offset by the expected decrease in lease cancellation income."

I searched the EDGAR database on the SEC.gov site and could not find a detailed P&L for Taubman. This is a red flag!

Taubman Centers is a real estate investment trust engaged in the development, leasing and management of regional and super regional shopping centers. Taubman's 26 U.S. owned, leased and/or managed properties, the most productive in the industry, serve major markets from coast to coast. Taubman Centers is headquartered in Bloomfield Hills, Michigan and its Taubman Asia subsidiary is headquartered in Hong Kong.

Mall owners are hit with the quadruple whammy of sluggish retail sales, high turnover, high occupancy and declining real estate value. Much of Taubman’s 2011 earnings were from canceled contracts.

Time Warner

No

TWX

$24.44

$35.47

$59.37

$17.81

+48%

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

Toyota Motor Company

No

TM

$77.05

$80.70

$93.74

$67.56

+5%

Read "Should You Put the Brakes on Toyota?," from Vol. 7, issue 2 and "One Very Hot IPO" from Vol. 7, issue 9.

The earthquake and nuclear crisis in Japan is weighing heavily on Toyota. Toyota continues to be the #1 automaker and a fave among greenies. The industry is vulnerable, however, and investors should be aware of the price and that 55 P/E is very high for a slow growth industry – especially given the unfortunate disaster that just occurred.

FY earnings report on 5.11.11 was flat, but more profitable: Net revenues for the fiscal year ended March 31, 2011 totaled 18.993 trillion yen, an increase of 0.2 percent compared to the previous fiscal year. Net income* increased from 209.4 billion yen to 408.1 billion yen.

Vehicle sales decreased in Japan, North America and Europe, but increased in Asia, Central and South America and Africa.

Commenting on the results, TMC President Akio Toyoda said, ""We finished the fiscal year to March 31, 2011 with improved operating income of 468.2 billion yen as a result of our efforts on marketing and cost reduction despite a negative impact of around 100 billion yen from the Great East Japan Earthquake. Our business environment continued to be challenging due to Yen appreciation among others. Nevertheless, we managed to improve our profit structure even further thanks to the support from all our stakeholders, in particular our customers."

PowerShares Treasury Bill Index Fund

No

PLW

$30.02

$28.57

$30.02

$26.30

-5%

Read "Don’t Get Fooled Again," from Vol. 7, issue 8. When interest rates rise, bonds and bond funds fall in value. Time to find another "safe" place for your assets.

Tesla

No

TSLA

$28.48

$27.21

$36.42

$14.98

-5%

Read "Tesla Trades on NASDAQ" from Vol. 7, issue 7.

Tesla shareholders are being diluted. On June 3, 2011, Tesla announced an offering of 5,300,000 shares of common stock, plus an additional 795,000 shares at $26.72/share. Goldman Sachs is handling the sale. Elon Musk, CEO and Blackstar Invesco LLC are purchasing 2 million of the shares.

Tesla held its annual meeting of shareholders on June 1, 2011 at 9 a.m. at the TechMart in Santa Clara, CA for one hour. Can you say, "We don’t really want you there," three times very fast? (There was no press release issued, although investors did receive notice on the website.)

Should you buy now? Very volatile stock. Also, beta models of the new sedan are just rolling out and production is in the early phase. It’s at a former Toyota factory, which places a lot of ducks in a row, however, ramping up for production is something that can be wrought with delays and other unexpected kinks. Combine that with competition for the Leaf and the Volt, and you have a more vulnerable company. The Leaf is lower-priced, but also has a lot less battery power and distance. The Volt is a hybrid, more like the Prius. However, the Volt just won the 2011 Car of the Year Award! Another concern is that Tesla CEO, product architect and Chairman Elon Musk is also the CEO and CTO of SpaceX and the chairman of SolarCity.

1Q results were announced on May 5, 2011. Revenues increased to $49 million, 35% higher than a year ago. Net loss was $48.9 million.

According to Elon Musk, CEO of Tesla Motors, "Our Model S alpha build proceeded as scheduled during the quarter. In fact, our engineering and manufacturing teams have now completed the construction of all of our Model S alpha vehicles, having finished the final alpha in April. These vehicles are successfully undergoing the planned cold weather brakes testing, ride and handling evaluation, safety validation, electrical integration, and noise, vibration and harshness evaluation," continued Musk. "As has been our plan, we will continue testing this quarter with a particular focus on durability and systems integration as we prepare for our beta build later this year. Overall, we remain on track for first customer deliveries of the Model S in mid-2012."

Panasonic purchased 1,418,573 shares of Tesla for $30 million (about $21/share). According to the Tesla press release, "Tesla and Panasonic are continuing their development of next generation battery cells designed specifically for electric vehicles."

Tesla has now delivered over 1,650 Roadsters around the world. Roadster owners have driven almost 11 million miles. In addition, Tesla has now received over 4,600 reservations for the Model S. The 300-mile version of the Model S will be the first version to be delivered to customers in mid-2012. In April, Tesla opened its first interactive store in the high-traffic Santana Row retail center in San Jose, California. The store features a new retail experience in which Tesla customers can learn about electric vehicles, explore Tesla’s innovations, and configure their cars through hands-on interactive touchscreens.

Very exciting car company. But very early stage, and in need of raising more and more dough to stay on production track. Be careful.

Wynn Resorts

No

WYNN

$149.80

$71.00

$133.07

$151.73

$71.00

-11% &

+87%

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

Wynn is a great marketer and capital raiser. However, Vegas is one of the worst places for real estate in the U.S. and the city has taken a huge hit as a convention center as well. Be very careful here.

The new Wynn pool scene is hot. Buying a vulnerable company with a high price to earnings ratio is not.

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. 6.13.11: LinkedIn was deleted with 25% gains, Orocobre with 18% gains, Shutterfly with 20% gains, Priceline with mixed performance and eBay was deleted with flat performance.

Deleted 2008-2009:
19 gainers and no losers.

Recently Deleted:
LinkedIn (LNKD) dropped 25% in one month. Moved to Watch List.
eBay (EBAY) deleted with flat performance.
Orocobre (OROCF) with 18% gains. Moved to Watch List.
Priceline deleted with mixed performance. Moved to Watch List.
Shutterly (SFLY) with 20% gains. Moved to Watch List.
Yahoo (YHOO) on 6.23.11.

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.


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NataliePace.com Calendar:

Try Financial Independence this Fourth of July at our Investor Education Retreat in the beautiful beach town of Santa Monica, California.

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.

GDP 1Q 2011 (3rd Est.)
Friday, June 24th, 2011
8:30AM ET
The U.S. Dept. of Commerce, Bureau of Economic Analysis (BEA.gov) releases its 3nd estimate on GDP growth in the 1st Q of 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.

Financial Independence Day Retreat. Santa Monica, CA
Saturday, July 2nd, 2011 – Monday, July 4th, 2011

July 2-4, 2011. Master the Thrive Budget and the easy-as-a-pie chart investing strategies that have worked fantastically for over a decade now and start earning great gains while you sleep. Only a few seats remain. Call 310-430-2397 NOW!

Natalie Pace on CNBC
Friday, July 8th, 2011

1:00PM through 1:30PM ET
Natalie Pace will appear on CNBC's Power Lunch discussing Hot Internet IPOs of GroupOn, LinkedIn and more. Be sure to tune in!

TEDGlobal. Edinburgh, Scotland
Monday, July 11th, 2011

The TED community actively seeks new members who are leaders in their field -- and who can make a strong contribution to the TED community through their energy, influence and connections to change the world.

U.S. Surpasses $14.3 Trillion Debt Ceiling
Tuesday, August 2nd, 2011

Today is the day that the Congressional Budget Office predicts the U.S. will exceed $14.3 trillion in debt.

FOMC Meeting
Tuesday, August 9th, 2011

The Federal Open Market Committee meets to determine Federal Reserve policy in the U.S.

NASA IT Summit, San Francisco
Monday, August 15th, 2011
Topics will range from Mission IT, Security, Green IT, and Collaboration to developing our future workforce. Get the latest on IT innovation and jobs! Aug 15-17, 2011.

Labor Day
Monday, September 5th, 2011



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

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

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