Vol.5 Issue 1 January 1st, 2008
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Quote of the Month:
"Companies with the smallest market capitalizations produce the highest returns. As companies get bigger, returns go down until you get to the blue chips, which produce the lowest returns of all."

Paul Woods
CEO & President, Odyssey Advisors .

The Loews Santa Monica Beach Hotel

California Dreaming: Striking Gold in the World’s 8th Largest Economy.

by Natalie Pace.

The market victory of the Nasdaq, which crushed the returns of the S&P500 and Dow Jones Industrial Average in 2007, is largely a tale of one state – the golden state of California.

General Stock Market Performance

Wednesday, 1.3.2007

Monday, 12.14.2007


Dow: 12,474.52

Dow: 13,549.33


Nasdaq: 2,423.16

Nasdaq: 2,713.50


S&P: 1,416.60

S&P: 1,496.45


Broadband connected households to the Internet, and shoppers shifted into cyber consumers, buying everything from music on Apple iTunes (a California based company), to business listings from Google (another California based company) to long distance from Skype, an eBay company, which is also California based. As a result, many California companies are sitting pretty with no or low debt and a war chest of capital, compared to many of the Dow Jones Industrial component companies that are strapped with debt. As we enter a period of increasing borrowing costs and subsequently lower merger and acquisition activity, cash is king and those companies that are positioned well have a strong advantage in the global marketplace.

NASDAQ vs. the Dow Jones Industrial Average


Debt/Equity Ratio

Cash on Hand

2007 Returns (to date)

Current Price to Earnings Ratio


0. No debt.

$15.4 billion




0. No debt.

$13.1 billion




0. No debt.

$4.4 billion





$12.2 billion





$2.7 billion





$910 million



(Nasdaq companies are highlighted in blue. Dow companies are listed in red.)

Caterpillar, one of the 30 Dow Jones Industrial Components, has less than a billion in cash on hand, with almost $5 billion in debt due within one year and $17 billion due in the coming years. Caterpillar’s liability for postemployment benefits (health care and pension plans) rang up to almost $6 billion. That equals a stunning $28 billion in debt in a company that makes machinery for the construction business. With new construction screeching to a halt in the U.S., this is the kind of portfolio pruning that investors need to attend to.

So, as we enter 2008, a year where GDP growth is expected to slow, it could pay to continue to trim back on your legacy DOW holdings and weight toward the new Blue Chip companies. As one of our favorite money managers, Paul Woods, the CEO of Odyssey Advisors, says, "Companies with the smallest market capitalizations produce the highest returns. As companies get bigger, returns go down until you get to the blue chips, which produce the lowest returns of all."

Of course, the larger companies are also the ones that withstand market downturns, providing stability to your nest egg. However, the tides have shifted from companies that have been around at the turn of the century to those that are redefining the world we live in. The Blue Chips of the past are not the stabilizing force that they used to be, when you consider the amount of money that has been lost in companies like General Motors, which reported another net loss of $39 billion in the 3rd quarter of 2007, on November 7, 2007.

So, this month, rather than looking for a new hot company to invest in, why not take your nest egg into the examining room for a check up? While anchoring your portfolio with the hefty Googles and Apples of the world could be more beneficial than relying on Caterpillar and General Motors for stability, both Apple and Google are trading for a high price to earnings ratio and at an all-time high stock price. If you don’t already own these companies, consider that a sinking tide in the stock market might ground even the speedboats like Apple and Google, meaning you could find a better opportunity for buying later in 2008. It might pay to have a stock shopping list on hand, rather than be too eager to buy in now.

Did you know that corporations like Google and Apple have made California the eighth largest economy in the world? California has become its own country by economic standards. Investors are a large part of that change. The California "Governator" Arnold Schwarzenegger trades with the world’s most powerful leaders, but it was everyday investors who demanded to own a piece of Google, making it one of the largest corporations in the world, with a market value of $219 billion. (Exxon Mobil is the world’s largest corporation, with a market capitalization of $513 billion.)

The World’s Largest Economies (by GDP, 2006)
Source: Milken Institute

United States ($13.24 trillion)
Japan ($4.37 trillion)
Germany ($290 trillion)
China ($2.63 trillion)
United Kingdom ($2.37 trillion)
France ($2.23 trillion)
Italy ($1.85 trillion)
California ($1.73 trillion)

Google became a $224 billion company because it was simply the best search engine, with an easy platform for businesses to advertise on. People love it, and they wanted to own it. At the same time, Altria (Wall Street’s name for Philip Morris) has remained a $164 billion dollar company simply by being one of the top holdings in the most popular mutual funds. Many investors own Philip Morris (stock symbol MO) without even knowing it. Ever wonder how Exxon Mobil became worth half a trillion dollars? With your retirement money (those mutual funds that you buy without knowing what you own). Imagine how fast our world would change if you took your money out of oil, war and cigarettes (death) and invested in clean technology and renewable energy. And by the way, you will be making MORE money when you do that. Clean energy was the top performing industry on Wall Street in the 1st and the 3rd quarters of 2007 — above energy! Our 2007 Company of the Year Suntech Power Holdings (symbol: STP), a solar energy corporation based out of China, more than doubled in share price.

With the entire world, led by Europe, signing on to alternative energy and reducing the carbon footprint, clean energy is the wave of tomorrow. You can be someone who paves the path, reaps the rewards AND changes the world — a win*win*win situation.

So, when beautifying your bottom line for a fiscally fit New Year, be sure to peek into the companies that you hold within your mutual funds. It’s as easy as two clicks on your computer. Simply:


  1. Go to
  2. Enter the 5-letter symbol of the mutual fund in the Company Research box (located near the bottom of the middle column)
  3. This will take you to a stock information page
  4. Click on Top Holdings
  5. This year, getting smart about your investments could be a new lease on life – for your bottom line and for our world!

It’s not too late to come to the January 2008 retreat in Santa Monica California, where you will learn how to rebalance your portfolio and options for investing in corporations that are making money by making our world a better place. Escape the snow! Play the Billionaire game, meet money managers and consultants who have handled billions of dollars in deals and investments and learn how to protect and grow your nest egg – all in a sunny, beachfront setting in Santa Monica, California! Set up the year and your future right! For more information, go to Click on the Get Rich and Enrich banner ad.

Please note: does not act or operate like a broker. We are a publishing, media and information center. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.

IMPORTANT DISCLAIMER: Information has been obtained from sources believed to be reliable however 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.

Beyond Kyoto: Convincing Capitalists to Buy Clean Air.

by Natalie Pace, CEO,

Q&A with Dr. Richard Sandor, the Chairman and founder of the Chicago Climate Exchange.

A reprint from, vol. 1, issue 50.

The Kyoto Protocol didn’t fail. It became a spark plug for a market place solution that has been alive and growing since 2000. The Chicago Climate Exchange (CCX), which launched in 2000 with a grant from the Joyce Foundation, is North America's only and the world's first global marketplace for integrating voluntary legally binding emissions reductions with emissions trading and offsets for all six greenhouse gases. Time magazine has called Dr. Richard L. Sandor, the founder, Chairman and CEO of CCX, a Hero of the Planet and the "father of carbon trading." Dr. Sandor is an economist and financial innovator who has convinced hundreds of corporations and cities around the world to voluntarily reduce pollution and to promote a clean, healthy atmosphere through "offsetting" behavior, such as reforesting Brazilian rain forest.

CCX emitting Members make a voluntary but legally binding commitment to meet annual greenhouse gas emission reduction targets. Those who reduce below the targets have surplus allowances to sell or bank; those who emit above the targets comply by purchasing CCX Carbon Financial Instrument® (CFI™) contracts. Current member corporations include: Amtrak, Ford Motor Company, Knoll, Rolls-Royce, Dow Corning, Dupont, Motorola, Sony, Bank of America, Bayer, the cities of Aspen, Berkeley, Boulder, Chicago, Oakland, Melbourne, Australia and Portland and almost a hundred other corporations. Click for a complete listing of members.

Goals of CCX:

  • To facilitate the transaction of greenhouse gas allowance trading with price transparency, design excellence and environmental integrity
  • To build the skills and institutions needed to cost-effectively manage greenhouse gas
  • To facilitate capacity-building in both public and private sectors to facilitate greenhouse gas mitigation
  • To strengthen the intellectual framework required for cost effective and valid greenhouse gas reduction
  • To help inform the public debate on managing the risk of global climate change

I first spoke with Dr. Richard Sandor about his nascent project in 2002 before all of his acclaim, before the world took global warming seriously and before Al Gore became the winner of the Nobel Peace Prize. Certainly, if you haven’t already heard of the Chicago Climate Exchange and Dr. Sandor yet, you will. See below for Dr. Sandor’s description of what the Exchange can and should do now and going forward.

This is a reprint from, vol. 1, issue 50.


From left to right: Dr. Richard L. Sandor, Chairman and CEO of CCX; Bill Clinton, 42nd President of the United States; Andrew B. Cogan, Knoll CEO; and Lou Newett, Knoll Environmental, Health and Safety Manager at the GreenBuild Conference in Chicago, Illinois on Nov. 7, 2007. Greenbuild is the world's largest conference on green building. Knoll has committed to sustainable design in their line of modern furniture that "inspires, evolves and endures."
Photo © Knoll.

Natalie Pace – Citizens around the world have seen startling photos of deforestation and melting ice sheets, yet so many of us continue with old habits. What does it take to convince consumers and companies to give up a little comfort now for the sake of our children?

Sandor-- What kind, if any, discomfort results from lower greenhouse gas emissions? Is it possible to have a net gain? We are in the business of trying to develop financial institutions and infrastructure to deal with pricing carbon. The debate can’t be brought to an adequate conclusion until we know what the price of carbon is. We’re here to inform the debate more than anything else. Rather than, basically, hypothesize or build models, we really need to be Orville or Wilbur Wright. We need this thing to fly for 56 seconds to prove that you can use the price system to effectively allocate air, water, etc. That’s the part of the debate that we’re participating in.

Are the technology and development needed to reduce emissions prohibitively expensive for companies? How do you tempt corporations, which have just now returned to capital spending, to sign on? Are corporations signing on because they believe in the cause or because they want to be on the right side of the "green" debate?

Sandor--I think they’re signing on for both of those reasons. They’re signing on because, as one of the companies said it, "We really want to learn about energy efficiency and carbon pricing and how they’re related." When asked, what side of the debate he was going to be on, he justifiably answered, "It depends on what the price is." It depends upon the company’s abilities to learn and what incentives are provided. We’ve got to paint the picture. Another motivation is that corporations see a trend among their shareholders. Over $2 trillion is environmentally screened in the U.S. capital markets. There’s a school of thought that companies have a 1-2% "sustainability" premium in their stock price. There seems to be customer demand on that side.

Some people may be able to be low-cost providers of carbon credits. Another facet of the issue is a desire to participate in the policy debate, to learn what kinds of things should be included in the trading systems, and what form that debate takes. [Corporations] want to have an opinion that is based upon experience and data, and to advocate their positions with solid information. And a very important reason is that pro-active action on climate change is being perceived as the right thing to do. There is growing scientific evidence suggesting there is a significant problem, and they want to be seen to be on the right side of the issue. There are also threats to shareholder value in the form of growing demand for corporate disclosure on climate change action, shareholder resolutions and increased liability. You have risks and rewards driving the process, as well as people believing in the right thing. So, the primary incentives are:

A. Increased shareholder value and demand from stakeholders;
B. Threat to shareholder values; and
C. The desire to be on the right side of an issue with potential global implications.

What is a carbon credit? Please explain how these credits are traded, and what kind of real world offsetting behavior can be expected.

Sandor---A carbon credit is an allowance. This is a system of allowance and offsets. You are allowed to emit a certain amount, and then you would have a targeted reduction. Let’s say it was a million tons, and you promised to get it down to 990,000 tons. If you knock it down to 980,000, you have 10,000 allowances or credits. Those extra allowances can be sold to somebody who hasn’t met their commitment. The result of this will be that the people who can cut most efficiently will do so. They have an incentive to do so because they can sell their excess cuts. Those people who can’t are going to buy them. That will be the cheaper cost to society of reaching the lower level systematically.

Just how is the Chicago Claim Exchange poised to address the problems of environmental pollutants BETTER than the public sector?

Sandor--We believe in free markets, and we believe that the government shouldn’t be in the chip, semiconductors or financial exchange business. This is a voluntary approach. We’re multi-sector. We have the involvement of the agriculture and forestry sectors. We’re multi-national. This is just one more evolutionary step to a full-scale market.

Just how does the Chicago Climate Exchange bring sustainable farming and forestry practices into the equation? What are your plans for Brazil, and what other areas globally do you believe are ripe for reforestation?

In some other systems you are only allowed to buy or sell credits that come from emission reductions elsewhere in the system. We allow offsetting behavior. For example, if you are a utility, you can reduce net emission in your entity by doing offsetting behavior, such as planting trees or changing soil practices. In a hypothetical example, you can eliminate a million tons out of the smokestacks, or you can sequester 20 million by bringing in carbon sequestration from reforestation. Agriculture and forestry--we think that these are beneficial effects to society, in addition to the carbon in the trees, wetlands, etc., in the form of improved soil and water quality.

Describe the reforestation deal that you coordinated with the Montana Indian Bureau, how it works and what the results so far indicate.

This was a deal coordinated by our predecessor firm--Environmental Financial Products. We were engaged by the Salish and Kootenai tribes. They had lost some forest area to fires. We represented them and we sold the future carbon that would come from reforesting parts of their land. They took the proceeds and bought seedlings. The buyer was a European firm that wanted to own carbon credits. It was a novel, cross-border trade.

( Note: The purchase of "greenhouse gas emissions offsets," aka reforestation, was a coordinated effort between Dr. Sandor, then Chairman of Sustainable Forestry Management, the Confederated Salish and Kootenai Tribes of Montana and the Montana Carbon Offset Coalition. Mr. Tom Corse, Supervisory Forester for the Montana Tribes was pleased to be part of the "win-win" deal, saying, "This first project will set the stage for a process that will help fund chronically under-funded tribal reforestation projects and start the ball rolling on market-based solutions to global warming.")

The fifteen companies that made up the Founding and Charter members of the Chicago Climate Exchange in 2002 had carbon dioxide emissions of 275 million tons annually, which was half of the annual CO2 emissions of the U.K. Was the commitment that they signed, binding them to reduce emissions by 4% by 2006, enough?

Again the purpose of this was initially as a pilot program. It was a demonstration project. The job was to build the institutions. It’s like saying to the Wright Brothers, "You only flew for 56 seconds. You couldn’t even carry mail on that plane, so what good is it?" We want to build the institutions. Markets are like personal computers. What Steven Jobs had in the garage in Berkeley was a very rough copy of what you have today. Financial innovation is like industrial innovation. It occurs with a big idea and then subsequent refinements. We hope to prove that it will fly. You can build the banking, verification, monitoring, protocol, and prove that the system works and will evolve over time.

If you have more questions about this program, how it works or how to sign up your corporation, go to

Will Dr. Sandor save the world and win a Nobel Prize to boot? Will Americans catch on to the hybrid craze, started by Cameron Diaz, Harrison Ford, Susan Sarandon and Robin Williams, who began showing up at the Oscars in 2002 in their new Toyota Priuses? You know that your gas-guzzler is so last year, when General Motors has committed to selling e-flex electric cars, like the Chevy Volt, beginning in 2010.

The Subprime Housing Crisis.

by Dr. Gary Becker, Nobel Laureate, University Professor, Department of Economics and Sociology, Professor, Graduate School of Business, The University of Chicago.

The vast majority of economists, including me, were surprised by the extent of the subprime mortgage crisis. This needs to be recognized when evaluating the numerous proposals about how to prevent the next housing crisis, and also about how to help those who are in danger of having their homes foreclosed.

Many economists and members of Congress have claimed that the housing crisis was greatly magnified because unqualified home buyers with limited incomes and assets were not fully aware of the terms of their mortgage loans, such as that the low initial (teaser) interest rates were only temporary. This belief in the beneficial effects of greater knowledge about mortgage terms is inconsistent with the evidence that the most sophisticated banks and investment companies, including Merrill Lynch, Citibank, and Morgan Stanley, have written down their housing investments by billions of dollars. No one can reasonably claim that these banks lacked the skills and knowledge to evaluate all the terms of, or the likelihood of repayment, on the subprime and other mortgages that they originated or held as assets. The losses to investors have been so large, and have so eroded their capital base, that some of the major investment companies have needed large infusions of capital from Middle Eastern and Asian Sovereign Funds (see our discussion of these funds on December 10th).

Although there was some fraud by mortgage lenders and by borrowers, fraud was not the main reason why so many subprime mortgages were issued. Otherwise savvy investors greatly undervalued the risks associated with many of the mortgage-backed securities that they held. They and borrowers alike did not fully appreciate that interest rates were likely to increase from their unusually low levels, and that many borrowers lacked the financial means to meet their mortgage repayment obligations at higher rates, and sometimes even at the low initial rates they had received.

Given the low interest rate lending atmosphere of the past few years, it is highly unlikely that borrowers would have turned down the mortgages they received if they had much better information about terms, or that lenders would have been more reluctant to originate or hold these mortgage assets if they had better information about the credit and other circumstances of borrowers. This is why I doubt that the rules proposed this week by the Federal Reserve to require lenders to get more information about borrowers, and to provide more information to borrowers about the terms of mortgage loans, would have been effective in warding off this crisis, or will be effective in preventing future crises.

Some have proposed that families should not be allowed to get mortgages if they do not meet minimum standards of income and assets, even if lenders would be willing to provide mortgages, and would-be borrowers still want a mortgage after being informed of the risks. This proposal is a dangerous form of paternalism that denies the rights of both borrowers and lenders to make their own decisions. Moreover, it is ironic that only a few years ago, banks were being investigated for "redlining"; that is, for avoiding lending to blacks and other residents of poor neighborhoods. The Fair Housing Act of 1968 prohibits discrimination in lending, and The Community Reinvestment Act of 1977 requires banks to use the same lending criteria in all communities, regardless of the living standards of residents. As a result of the present crisis, however, banks and other lenders are being criticized for equal opportunity lenient lending to all, including black residents of depressed neighborhoods.

The United States housing market is riddled with subsidies and regulations, including among many others, insurance by the Federal Housing authority of mortgages to first time and low income homeowners, tax deductibility of interest payments on mortgages –to families that itemize their deductions- and the quasi-governmental Fannie Mae and Fannie Mac Corporations that channel billions of dollars to the mortgage market. Nevertheless, both the White House and leading Congressional Democrats have proposed additional rules to help borrowers who may have difficulty avoiding foreclosure under present conditions. Treasury Secretary Paulson has been negotiating "voluntary" agreements with mortgage lenders to freeze the low introductory rates for five years on some subprime home loans, and to offer borrowers the right to refinance their loans into more affordable mortgages. The Democrats want to go much further than the administration, and have proposed, for example, to help homeowners renegotiate terms of their mortgages if forced into bankruptcy.

I am skeptical of additional government interventions into a housing market that already has too much. To be sure, homeowners who only temporarily have trouble meeting repayment schedules on their mortgages should not have to go into foreclosure. But lenders already have strong incentives to help these borrowers since lenders are also hurt by foreclosures, especially in the current weak housing market where it is not possible to sell repossessed homes at reasonable prices in poorer neighborhoods. Lenders also have much better evidence and experience than governments can ever have regarding which borrowers have a reasonable chance of handling their mortgages if given some temporary help, such as allowing selected borrowers to be in arrears on payments for a while, permitting some borrowers to renegotiate terms, and making other adjustments that raise the likelihood of eventual repayment. Lenders also are better informed about which borrowers are hopelessly in debt, and are better off going into bankruptcy rather than trying to sacrifice savings or consumption to meet their mortgage payments.

A counterargument to this skepticism is that the government should intervene further in the housing market because the Fed is partly responsible for the crisis by keeping interest rates artificially low. Perhaps the Fed did keep the federal funds rate too low for a couple of years preceding the onset of the crisis, but low interest rates were found worldwide. The main reason for the low rates was not the Fed, but the high savings rates in China and other rapidly developing nations that put pressure on interest rates all over the world.

Instead, the Fed, Treasury, and Congress should concentrate on using monetary and possibly tax policies to help maintain the strength of the American economy that has so far done well despite the housing crisis. If these policies can help promote continued growth of GDP, probably for several months at a slower pace than during the past few years, with a robust labor market and low unemployment, borrowers in reasonably good economic shape will likely keep their homes as they navigate through the housing crisis.


To keep track of Dr. Becker’s continuing research and recommendations, visit his web site and blog. To hear more of Dr. Becker’s recommendations for strengthening the U.S. economy, attend the Milken Global Economic Conference in April 2008.

Oil and Gas Scams:

by the Securities and Exchange Commission

Common Red Flags and Steps You Can Take to Protect Yourself.

Henry . . . was a successful business man, married for 30 years, raised a family and had a good life . . . after his wife’s death, he received an [overnight] package of materials with all kinds of reports, and it was offering an oil and gas investment . . . And it was unsolicited. . . he ignored it . . . But the next day, a salesman called him and used high-pressure sales tactics . . . to persuade him to invest $40,000. And here are some examples of what was said to him on the phone: "These gas wells are guaranteed to produce $6,800 a month in income;" "Some of the most successful investors in the country are interested in these wells;" "There are only two units left in this project;" "We drilled a well in Texas that had these same early gas readings, and the investors all made millions." . . . Over a three year-period, Henry was recontacted 12 times and invested, essentially, his life savings in 4 different gas wells, each time thinking that he had to invest or lose his original investment . . . He ultimately lost over $500,000 to this oil and gas scam investing in wells that always seemed promising at first . . .

- Description of an oil and gas scam victim at the SEC’s first-ever Seniors Summit (July 2006)

If you think you’ve found the right oil or gas investment to "strike it rich," consider this: it may be a scam. While some oil and gas investment opportunities are legitimate, many oil and gas ventures are frauds. Many of these schemes start in so-called "boiler rooms," where skilled telemarketers use high pressure sales tactics to convince you to hand over your hard-earned money.

Once they have your money, scam artists pay themselves first, often using funds to pay personal expenses. In the end, only some of your money may be invested in an actual oil or natural gas well, or none at all.

Red Flag Warnings
If you are considering an oil and gas investment, look for these "red flag" warnings of fraud:
1. Sales Pitches Focused on Highly Publicized News. Scam artists read the headlines, too. Often, they’ll use a highly publicized news item, like volatile gas prices, to lure potential investors and make their "opportunity" sound more legitimate.

2. "Can’t Miss" Wells. Every investment carries some degree of risk so you should be skeptical of any oil and gas investment opportunity pitched as completely safe. Fraudsters often spend a lot of time trying to convince you that extremely high returns are "guaranteed" or "can't miss." Don't believe it.

3. Unsolicited Materials. Be especially careful if you receive unsolicited materials about an investment. Simply ignoring investment-related "junk" faxes, emails, voice mail messages, and regular mail may be your best strategy. And don’t let a package full of colorful marketing materials impress you, even if it’s sent by certified or overnight mail. If you’re not going to research an opportunity fully, do yourself a favor and put any unsolicited materials in the recycle bin immediately. If someone calls to follow up regarding the materials, tell him or her "thanks, but no thanks" and hang up. [Hanging up is critical because scam artists often use scripted sale pitches to keep you on the phone.]

4. Limited Opportunities. Scam artists often try to give you the impression that the " opportunity" they are promoting is scarce, hoping you will hand over your money hastily before doing any due diligence. Resist the pressure to invest quickly, and take the time you need to investigate before sending money.

5. High Rates of Return. Compare promised yields with current returns on well-known stock indexes. Any investment opportunity that claims you'll get substantially more could be highly risky. And that means you might lose money.

6. Tips or Secrets. A promoter may discourage you from talking about the opportunity with someone you trust, like a loved one, attorney or financial professional. If that happens, stop listening, and leave or hang up. Then, be sure to contact us.

Steps You Can Take to Protect Yourself
Here are some steps you can take to avoid being scammed:

  • Ask questions and check out the answers. Fraudsters rely on the sad truth that many people simply don't bother to investigate before they invest. It's not enough to ask a promoter for more information or for references - fraudsters have no incentive to set you straight. Savvy investors take the time to do their own independent research.

  • Contact state oil and gas regulatory agencies. You may be able to verify information provided in offering materials by contacting the oil and gas regulatory agency in which the wells are allegedly being drilled. For example, these agencies generally have information about a company’s drilling history that could confirm claims of prior success.

Investor Tidbit:
You might be surprised to learn that the Railroad Commission of Texas oversees the Texas oil and gas industry. Unfortunately, state oil and gas regulatory agencies don’t have uniform names. If you’re having trouble finding the agency that regulates oil and gas in a particular state, enter the State’s name - followed by "oil and gas" - into your favorite Internet search engine. The appropriate agency should be listed near the top of your search results. If you are still having trouble, call us at (800) 732-0330.

  • Research the company before you invest. You can contact the secretary of state where the company is incorporated to find out whether the company is a corporation in good standing. You also will want to understand the company's business and its products or services before investing. Before buying any stock, check out the company's financial statements on the SEC's website, or contact your state securities regulator. All but the smallest public companies have to file financial statements with us. If the company doesn't file with us, you'll have to do a great deal of work on your own to make sure the company is legitimate and the investment appropriate for you. That's because the lack of reliable, readily available information about company finances can open the door to fraud. Remember that unsolicited materials should never be used as the sole basis for an investment decision.

  • Know the salesperson. Spend some time checking out the person touting the investment before you invest - even if you already know the person socially. Always find out whether the securities salespeople who contact you are licensed to sell securities in your state and whether they or their firms have had run-ins with regulators or other investors. You can check out the disciplinary history of brokers and advisers quickly - and for free - using the SEC's and FINRA's online databases. Your state securities regulator may have additional information.

If you encounter a problem with an oil and gas investment, you can send the SEC your complaint using their online complaint form at You can also reach the SEC by regular mail at:

Securities and Exchange Commission
Office of Investor Education and Advocacy
100 F Street, N.E.
Washington, D.C. 20549-0213

Remember - an educated investor is the best defense against fraud! For more information on how to invest wisely and avoid fraud, please visit the Investor Information section of the SEC website.


This article is reprinted with permission from the SEC.

2008 Company of the Year.

Natalie Pace chats with Premium Subscribers on 2008, green, how to get started on the path to wise investing and more!

Earlier this month, premium subscribers were treated to a Q&A with Natalie Pace on how to start on the path of wise investing, how to use the Hot News on Cool Stocks article and what to do about companies, like Apple, that are so exciting that everyone wants to buy in at the 52-week high! Natalie also dropped the news that she will be reporting on her Company of the Year in October, instead of January, and discussed the reasons why. Very important news indeed!



Natalie: Good morning! Before we begin the Q&A, let’s start with a general market overview. It’s been quite a rollercoaster this year, hasn’t it? One thing I don’t want to overlook, however, is that the markets are still up on the year and have produced strong results over the last two years.

General Stock Market Performance

Wednesday, 1.3.2006

Wednesday, 1.3.2007

Monday, 12.24.2007

Gains 23 & 11 months

Dow: 10,847.41

Dow: 12,474.52

Dow: 13,549.33

+25% & +8.6%

Nasdaq: 2,243.74

Nasdaq: 2,423.16

Nasdaq: 2,713.50

+21% & +12%

S&P: 1,268.80

S&P: 1,416.60

S&P: 1,496.45

+18% & +5.6%

FYI: we predicted Nasdaq to be the 2007 superstar performer earlier back in November of 2006. Click on Wow! Dow! Or Nasdaq Now! Article, from vol. 3, issue 11, to review that article.

As you can see in the chart above, Nasdaq is still outperforming the S&P500 and the Dow Jones Industrial Average indices by quite a lot. Legacy corporations have been more burdened with debt and pension plan obligations than younger corporations, like Google and Microsoft, and as a result are underperforming the marketplace. On the other hand, technology, Internet, new media and clean energy were posting very strong growth in real sales worldwide, and employed staff who were accustomed to managing their own pension and health care. Without the extra pressure on the bottom line or the administrative nightmare of managing the plans, many younger companies on the West Coast are sitting on war chests of cash, including Google, Microsoft, Apple and more.

Going forward, the most important thing for everyone to do is to look at their current nest egg and make sure that it is properly allocated, so that they are not over-exposed to pension, debt and health liabilities in the event of a slow-down in the economy – which is being predicted. The pension plan revolution that is going on in America is not being well-publicized, but rest assured that those corporations that are still negotiating with their workforce to pay pennies on the dollar on their retirement obligations are increasingly vulnerable in a worldwide marketplace.

Clean energy is the bright spot on the horizon, and the returns in that industry are only beginning. Europe is leading the world on its commitment to clean energy, with Germany as the number one solar energy country. However, as a result of the popularity of all things green, you have to beware of extremely high prices in any company that is involved in solar, wind or clean electric energy.

A rising tide lifts all ships in the stock market, but a sinking tide certainly grounds even the speediest boats as well. In fact, as a result of the uncertainty in the marketplace going into 2008, I am postponing the naming of the 2008 Company of the Year until September 2008. I’ve been tempted to do that every year since I began publishing because September is the lowest performing month of the year in the stock market (historically), and thus, a better buying month for the year. (Even companies like Suntech, our 2007 Company of the Year, have done better from their October buy-in than the January price.) Since I’m not thrilled with the forward-looking economic data I’m seeing, 2008 is the year to switch the Company of the Year announcement from January to October.

In short, I think the most important game in town in 2008 will be asset allocation and underweighting legacy companies, particularly in the Dow Jones Industrial Average. In the trading portfolio (that much smaller percent of your nest egg where you take on higher risk for higher gain), I’d be very interested in profit taking at every opportunity available. I’d avoid buying into high price to earnings ratios. Price to earnings ratios vary by industry and maturity of a company, so I cannot merely give you a number to avoid. If you don’t have a great understanding of P/E, your first step should be getting more educated, in the chats and retreats that we offer, before you begin trading stocks or options!

There is still room in the January 2-5, 2008 Get Rich and EnRich Retreat. If you are interested in re-examining your portfolio, retracing or learning the fundamentals and getting your foundation of wealth secure, then move heaven and earth to be at this life-changing retreat. Call 1.866.476.7442 NOW or go to the Get Rich and EnRich banner ad, which is located on the home page at

Questions and Answers:
Subscriber: I am starting out my subscription with fully invested and holding perhaps 75 different stocks. Should I just sell them all and start with Natalie's suggestions? Or what?

Natalie: Your first step will be selecting a great certified financial planner, who can help you assess the best plan going forward based upon your desires, goals, income and retirement age. Be careful about just selling everything. You could have very expensive, and perhaps unnecessary, tax liabilities, unless you are selling within a tax-protected account and not withdrawing any funds. Again, getting educated and selecting the second most important person in your life – your certified financial planner – are the first steps before you just jump in and take bold actions. I’d suggest that you consider coming to the retreat January 2-5, 2008. The investment you make into four days of learning should be enough to get the foundation of your house of wealth laid and a game plan going forward. (Remember: I’m not a broker; I’m a journalist. A broker should know your individual needs and goals and help draw the game plan to get you there.)

How do you think Apple is performing?

We listed Apple at $85. I think it’s performing fantastically! Are you looking to buy or sell?

I think it looks exciting from the ground and grass roots, the iPhone and the computer, so I think I’m looking to buy.

Have you done the Stock Report Card yet, to make sure that you are following the investment recipe? Have you asked the four questions to determine that it is going to lead the industry going forward? Are there any competing companies that might challenge Apple in 2008?

Click to access your own Blank Stock Report Card. I recommend setting this up in your own Word or Excel document, so that you can sort the companies by Price to Earnings ratio. (You can also find a blank stock report card under the Investor Edu section, Stock Report Card option.)

Below are the investment recipe and the four easy questions for picking the leader in the sector.
Investment Recipe:

  1. Invest in what you love
  2. Pick the leader in the industry (in real estate, it’s location, location, location)
  3. Buy low, sell high

4 questions to Determine the Leader in the Sector

  1. What’s the product?
  2. Who’s going to buy it and why would they like that product more than the competitor’s version?
  3. Can the company make a superior product now and going forward, and get it to the masses while the appetite of their customers is piqued and the product is fresh?
  4. Who’s running the company, and how motivated are the employees to deliver superior product faster, cheaper, better?

I’m a newbie. I was going to open an account on Scottrade and put in some money on the highlighted picks on the hot list, but don’t know if I should invest in the highlighted picks that came out on the 1st of December and are no longer highlighted in the mid month report.

Good thinking! Your perspective is key for all newbies. The highlights are key! The companies that are highlighted are trading at or near the price that we first featured them at, and thus, might be in buying range. The companies on the list that are not highlighted are already moving up from where they came onto the list. It could be because the price has risen, or it could be because the outlook going forward has become less auspicious.

Thank you. When a pick gets taken off and you have it, do you sell it then right away?

It is important to realize the difference between "taken off" and "not highlighted." When a company is on the Hot list, but not highlighted, it means that it still has potential to earn gains, based upon the news that we’ve been able to review and report on. When a company is deleted from the list, then that means that there is a lot of news and red flags indicating that the prognosis going forward is not great. Since we are a news organization and not a brokerage, we’re reporting on news, not giving you a buy/sell recommendation, so you’ll always be able to review the facts and make your own determination. In fact, some companies might still be great for a long-term portfolio, but we’re taking it off the list because anyone looking to "buy low and sell high" would want to lock in gains for the short term. The real question to determine is simply "What is your personal game plan with regard to the stock in question?" And that question is for you and your CFP to determine.

I’m utilizing highlighting and deleting from the lists to help you understand how I would interpret the news, but, as I indicate at the beginning and the end of the article, your choice to buy and sell must take into consideration your personal needs and desires. For instance, a day-trader might buy and sell Google five times a year (and have great gains), whereas another person might buy Google at the 52-week low and hold it to for decades to will to the kids. Only you and your CFP know which plan is right for you.

Apple is a fantastic company with fantastic products that are going to continue to lead the world into 2008. There is a lot of room for sales growth, since they don’t own a very large percentage of the marketplace of computers. (They certainly own the marketplace of music.) However, their computers are so much more expensive that there will continue to be a built in marketplace for the PCs of the world. And Apple’s share price has already doubled this year. If the stock market softens in 2008, it will be harder for Apple to score fantastic returns. Not impossible. But harder. These are things that are to be considered when you buy and sell stocks, and statistics we report on twice a month, as conditions in the economy are always changing!

I’m new as well, and really did not use a technique to buy other than the fact I liked their products. I will do more research before I buy!

Apple’s price is high and the price to earnings ratio is also high for such a big company. Remember the third ingredient in cooking up profits – NEVER PAY RETAIL! A successful investment in anything, a great company, great home or a great classic car – is only possible when you buy low and sell high. If you buy high, you might wait years to earn gains!

I agree but I thought perhaps they would break out.

You are educating yourself! Bravo! Anyone who picks a great mentor and copies what s/he does is going to learn faster and better, so I applaud you for being willing to learn. Btw: Apple is a company that I follow on my Hot News list, so "researching it" can be as easy as reading a 5-minute update on the recent news (put in context with the news over the past few quarters). I featured Apple in February of 2007 at $85. They have already broken out, especially given that they had to jump above the market’s rollercoaster ride in 2007. Apple has more than doubled! Remember another cardinal rule: if you’re buying on news, you’re late. We listed Apple a few months BEFORE the iPhone release, and got to watch the elation of consumers who loved the product. If you’re buying now because the iPhone is making headlines, odds are that you’re buying high. If you want to verify, check the 52-week low and high.

You can always put Apple on your shopping list and wait for a better buy-in. The stock markets wax and wane month-to-month and year-to-year. Gains usually favor patient investors.

Do you suggest stop loss orders when initially buying the stocks on the Hot List? And how do I learn or know where to put them?

This is just my opinion, but I don’t like stop loss orders ever, and especially for the Hot News List. I think that you should do more research BEFORE you buy, which means there will be less odds that the investment is a bad one, if it heads south for a little while. In that scenario, when an investment heads south, it could actually be an opportunity to add more shares to your portfolio at a bargain price.

Thanks that makes things easier!

Well here’s why: most companies that I feature are featured early. Most companies that I’m featuring, we’re featuring them early. You never know when they are going to pop. I can give you tons of examples, including some of the best performing companies on the list, that have gone down before they went on for extraordinary gains. Since we’re highlighting the companies when they are in buying range, if they go down, you’ve got the opportunity – perhaps – for a two for one sale, as in the case of Wisdom Tree! The companies on the list have been carefully researched. They won’t all win, but I think stop loss orders are for people who are not going through the proper and thorough examination in the first place, to determine that they’ve made a sound investment and purchased at a reasonable price. Remember, sound evaluation of a stock means that you turn over enough pieces of the puzzle to get a good picture of the health of the company BEFORE you buy.

I recently came into an unexpected windfall and have a nice amount of money to invest. I know you suggest putting an amount equal to my age in safer vehicles such as bonds and certificates of deposits. What should I be looking for when considering those options?

Congrats on your windfall! The most important next step that you take is to find a great certified financial planner/money manager. Get referrals from rich people who love what their broker is doing for them. Do not rely upon referrals from banks or just walk in cold to brokerages, if you can avoid it. If you have more than $250,000, you should qualify for active money management from a veteran who has had over two decades in the business, like Kelley Wright at Investment Quality Trends and Paul Woods and Meri Anne Beck-Woods at Odyssey Advisors. (Contact them through their websites at and, respectively.)

Bonds are very difficult to invest in on your own. Bond funds are NOT bonds, they are stocks. So, if you have to diversify on your own for now, it’s easier to keep that safe part of your portfolio in T-Bills and money markets than it is to get up to speed on bonds. Although you may not be getting superstar returns, cash was the top-performing asset class in 2000 and 2001, when the stock market slid, during that recession. That is what asset allocation is for – to protect you from the volatility and/or backtracking of the stock market.

Read How to Find a Broker for tips on what questions to ask, and how to investigate (easily) whether or not the broker you are interviewing is a rock star performer or has complaints from prior clients. This article is located under the Investor Edu link on the home page at

I’m very new at this. My first question is, "Where do I go to get a good stock broker that will listen to me and what I want to choose, not try to force me into diversifying?" If you recommend that I do it myself, where do I start? I’ve heard of e-Trade, but like I said, I’m very new at this and would like to do what’s best for me. I am in the process of selling my company and will have some assets to leverage in the market soon. I need sage advice!

Brokers are salesmen, and you could get sucked into something that’s not right for you simply because s/he would like the commission. So, interview at least 3 qualified candidates for the job, and take the questions in the "How to Find a Broker" article with you. Make sure that you tell any qualified candidate your investment criteria BEFORE you open the account, and listen carefully to their response. If s/he responds, "You should be more concerned with returns," that is a red flag that should alert you that s/he wants to be in control and may be resistant to following your desires. If s/he says, "I know some great ETFs you can choose from," that’s a green light that s/he is not only listening, but also well versed in the space! Check into the person’s background on FINRA.ORG for any complaints before putting your life savings into his/her hands.

There are two great money managers, who take clients with over $250,000 in assets, who write frequently for my website. Both have decades of experience. So, you might call and as well.

ELON has taken a down side hit lately. They still look like they are on the right track to me, however. Any thoughts?

I just bought shares in ELON yesterday. Full disclosure. Their last quarter wasn’t up to the earnings potential they wanted, and Wall Street punished them, but I still like the company. I’m going to keep a close eye on upcoming news, but I like the product and love the red-hot industry of clean energy, which is only just beginning to catch fire!

I’ve also bought some more. Also, wondering about eBay with the Skype acquisition. No movement yet. Your thoughts?

EBay took a tax-related write down for their purchase of Skype. The markets interpreted that as the company "overpaying" for Skype, which in the one-year perspective might be true, but, in my view, will not be true for the long term. As I’ve said many, many times, most people are unaware that Skype is the fastest growing site on the Internet, ahead of social networking giants like MySpace! eBay’s write-down of the investment was beneficial on a tax basis. I think Wall Street didn’t report on this well, and that once investors start seeing the Skype revenue in a different light, eBay will benefit.

What’s hot this month to buy?

In general, I’m not in a buying mood in December. I like the September Back to School Stock Sales the most for buying. I like January for looking to see which companies have made me a lot of money and whether I need to sell to lock in those profits. As I mentioned earlier, I’m so keen on this going into 2008 that I’ve delayed announcing my Company of the Year until October 2008.

Do you think the Feds will continue to drop rates?

The Feds will have a lot of pressure going forward to keep the economy chugging in the face of less M&A activity and a softening real estate market, but that is offset against rising inflation due to the commodities costs, like oil and metals and a need for a stronger U.S. dollar to compete on the world stage. So, as I say quite a lot, "There are about 99 laws that can predict about 3% of the things that happen in the financial world," and nothing is ever certain in this field! I’ll have a very strong idea of what’s going on in a few months when I check in with my mentor, Dr. Gary Becker. Dr. Becker is the best predictor of forward movement of the economy of anyone I know! In the meantime, the best medicine is to check in twice a month to get my news updates, and make sure that your assets are allocated and protected!

Having said all of those disclaimers, I’m just journalist, but I’d say interest rate cuts may be in our future. It won’t help subprime mortgage foreclosures very much, however, because it is the people who having their payments double at the new reset rate who are getting into trouble, not the average homeowner.

What are your thoughts on Libor rates this year?

Libor is not my area of expertise. However, my general comment would be that unless you’re an economist or an analyst, there is no reason for you to be trying to figure out every economic update that comes across the wire. Newbies try to figure out what they should do by looking at the data that professionals look at, and that is not going to be a winning strategy until you become a professional and really know how to utilize all that data (a multi-year investment in financial services education). And even professionals are earning on average just 10-12% a year. I don’t profess to know the first thing about all of this, and have a system based upon common sense and consumer experience that works much better.

Dr. Becker looks at a lot of data, but the single-most important factor that correlates with GDP growth, according to Dr. Becker, is productivity. Makes sense, doesn’t it? When people are working hard making products that the world loves, that country grows. Google’s employees were doing a bang-up job of getting a product to the world that we loved. General Motors and Ford were surpassed by Toyota in their products. Those simple facts are not economic data that you see reported on very often, outside of these pages. So, if I were you, I wouldn’t hang on LIBOR reports, or Fed action or trying to read any tea leaves. The state of the corporations and its contributions to the larger economy are easier to sense, smell and understand when you see the conditions of the workplace, the popularity and durability of the product and all of that occurring at a price you can afford!

The pundits you are watching on television are briefed more on their sound bytes than they are on their statistics, so if you’re going to have a news source outside of, I only suggest that you be very discriminating and select journalists who are interviewing the same admired economists and analysts that I am relying upon and telling a more complete story than just the most recent news line item. Many of the television financial news shows are for entertainment, more than the usable value of their information.

So, are all the news programs about the economy and the market just a waste of time and energy?

Most news reports are negative – statistically – by far. And a large portion of the daily news shows are simply reporting the data off of press releases – i.e. recent news, without very little regard for important historical information or how that piece fits into the puzzle going forward. I think power searches to find information on the company you are interested in, along with that company’s competitors, are a far better idea. You can organize that data in a Stock Report Card, and get a far more complete picture than you’ll read in the majority of the articles and television reports available. If you come to my retreat, I’ll teach you both power searches and how to complete the Stock Report Card. If you can’t come, keep educating yourself by reading the news in this ezine and coming into the chats we host online.

When can we turn on and what stations? Are there any media sources that you recommend?

Dr. Gary Becker,,, and! Click on the names to access their websites, or Google them. Dr. Becker has a great blog on the subprime housing crisis this month! It is a must read. You’ll learn more at the seat of the masters than the pundits!

When can we see you on TV?

I’m flying under the radar while I finish my book. The book is slated for a fall 2008 release, at which time I’ll be booking as many national television shows as possible! Oprah here I come!

How do you currently feel about WWAT, UXG and HOKU?

Check out this month’s Hot News on Cool Stocks List for an update!


Please note: does not act or operate like a broker. We are a publishing, media and information center. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.

IMPORTANT DISCLAIMER: Information has been obtained from sources believed to be reliable however 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.

Citigroup, WaMu and HSBC:

by Kelley Wright, managing editor of Investment Quality Trends.

The Financials Swallow a Bitter Pill.

Kelley Wright, Managing Editor, Investment Quality Trends stock newsletter.

Well, this December/Santa Claus rally thing just isn't following the script now is it? With the inflation numbers of the mid-December, we now know why the Fed didn't lower by a half a point. Of course it didn't stop the Street from throwing a little tantrum when they didn't get their way but come on, with the dollar being systematically devalued what did everyone think was going to happen to the price of commodities? In hindsight the Fed didn't really have a choice. As I opined in this space in July/August, the banks needed to do three things: 'fess up and take the write-downs; roll the assets they couldn't sell or didn't want to mark-to-market onto their balance sheets; slash costs, which means pink slips.

One and three above have been pretty much done by most and now Citi, WaMu and HSBC have finally bit the bullet on number two. As an old mentor of mine was fond of saying, "There is no pain in change; only in the resistence to change." Indeed.

WaMu took some pretty severe medicine; my suspicion is that they know they have some more write-downs coming so they wanted to set aside the provisions for now and just get the pain and bad news out at once. They did give the Street a little surprise when they bumped their preferred offering to 3 billion from the originally stated 2.5 billion, which shaved another couple of points off the stock, but they may have finally found a bottom. We will know soon.

Gold is acting a little curious; with the inflation numbers, one would expect gold to be screaming higher. This may be a case of selling on the news, which means I believe it is just a normal retracement.

Well it is time to close the books on '07, which I think for many will be a pleasure. This is one pig that there just isn't enough lipstick for.

May you and yours have a Blessed New Year.



Kelley Wright is currently outperforming all of his peers, by bringing in the top risk-adjusted returns on Wall Street for the past 20 years, with his stock newsletter,, at 12.8% annualized gains, according to Hulbert’s Financial Digest. To subscribe, go to

Attract the People You Want and Repel the People You Don’t Want.

by Chellie Campbell, author of Zero to Zillionaire.

You want to become expert at repelling people. Take a stand for yourself, choose your likes and dislikes, and stand proudly in them. Don’t worry about trying to fit in. When you are truly yourself, other people will see it and know you for who you are. This simplifies life immeasurably. Your People will be drawn to you more quickly, and Not Your People run away far and fast. This is a good thing. You don’t want your life cluttered up with a bunch of people who don’t really like you. It’s too much of a time and energy—and money—drain.

I was thinking about this as I drove to the Jonathan Club in downtown Los Angeles, to speak to the Los Angeles Chapter of NAWBO (National Association of Women Business Owners). I was dressed in my usual "Give-a-speech-costume"—blouse, blazer, pants and gold tennis shoes. Gold tennis shoes are part of my brand now—I’ve been recognized in bookstores because of my shoes. I had a slight hesitation about wearing them to this event since it was a rather corporate environment, but I decided to stick with my usual style.

Wouldn’t you know, my momentary hesitation manifested itself in a challenge issued to me by one of the Jonathan Club employees in the lobby. "Excuse me, miss," he said frowning disapprovingly at my feet, "but we don’t allow tennis shoes in our club."

Oops! Caught already. I grinned up at him and said, "I’m terribly sorry, but I am the speaker this evening and this is my costume."

He wasn’t buying it. "Don’t you have any other shoes?" he inquired.

"No," I shrugged, "not with me." Oh, dear, I thought, am I going to be thrown out? Barred from the club? My eyes widened and I shifted into sales mode, "You know, I’m sure your dress code means tennis shoes as in gym shoes. These are clearly not dirty old gym shoes—they are gold mesh, dressy shoes with diamonds on them."

He paused for a long moment as he thought this over, examining my feet. It must have made sense to him, because he said, "Okay…but hurry!" He wanted me out of his jurisdiction as soon as possible, and I was happy to oblige him as I scurried upstairs to the meeting room.

The meeting was fabulous with lots of great people—no one else in tennis shoes, I noted. (They must have been tipped off to the dress code.) They were all wearing those high-heeled pointy-toed instruments of torture the fashion industry insists on foisting on us—and we pay big bucks for them, too. And this is different from ancient Chinese foot-binding—how? Now I’m always comfortable. It made a big difference in my shoe budget, too.

The reactions to my gold shoes are always very interesting. Lots of people smile and comment how they just love my shoes, how comfortable they look, etc. I know these are My People. And of course, some people don’t like them—one woman told me after the talk that I should dress more professionally if I was going to talk about a serious subject like money. I just smiled, because that’s one of the problems I’m trying to solve—that people are too serious about money. Besides, I knew what she did for a living—she sold suits!

People—like shoes—come in different styles. Yvonne Williams, author of Don’t Wear Tight Shoes, told me that women are having their little toes removed so they can wear Jimmy Choo shoes. Eeww. Stop blending in. You are unique. Pick your own style. I remember once walking through the Book Expo in my gold tennies, getting snooty looks from some New York babes-in-black in their pinchy-feet-eight-inch-spike heels. I reveled in it. I’m not part of any matched set. My astrologer promises me that I’m going to become more eccentric. Fabulous! Best news she could give me. Maybe I’ll "wear purple and a red hat that doesn’t go," too.

But don’t judge me until you walk a mile in my gold tennis shoes.

Chellie Campbell is the author of Zero to Zillionaire and The Wealthy Spirit. She created and teaches the Financial Stress Reduction® Workshops, on which her book is based, in the Los Angeles area and gives programs throughout the country.

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

Twenty Tax Tips for Year-End 2007.

by Rande Spiegelman, vice president, financial planning, Schwab Center for Financial Research

If tax time is more terrifying to you than your holiday credit card bill, read on. First, take heart that you have more than two months to take action to minimize the pain of April 15. Then, consider the 20 bite-size tax tips below affecting key areas of your financial life -- specifically your portfolio.

Whether you do your own taxes or rely on a tax professional, these tried-and-true strategies may help you keep more of your hard-earned income and boost your after-tax returns. After all, it's what you keep that counts!

Get Started: Six Simple Steps
Dust off last year's return. Using it as a starting point, begin this year's process by updating some of the key inputs: your salary and other income, deductions, and the dependents you'll claim. If you use tax preparation software (such as that available at, it's easy to run a quick estimate of where you stand.

Alternatively, you can ask your accountant for an early read. If the initial estimate seems high, don't panic. Get going by taking these six simple steps.

  • Double-check your withholding. You want to pay the IRS its due but not a penny more. So make sure you're not having too much (or too little) taken out of each paycheck. The same holds if you make quarterly estimated tax payments.

  • Consolidate debt. Consider replacing credit card debt with a lower-rate, tax-deductible home equity loan or line of credit.

  • Account for refinancings. If you lowered your mortgage interest rate in the past year, you may now have a lower-interest deduction. Also, if you used any of the proceeds for something other than physical improvements to your home, that amount may be subject to the alternative minimum tax (AMT). On the brighter side, remember that points paid in prior refinancings that you didn't already deduct can be deducted in the year you refinanced again.

  • Prepay quarterly estimated state tax payments. If you're not vulnerable to the AMT, consider paying your fourth-quarter 2007 estimated state income taxes (plus any estimated balance due) by Dec. 31 so you can take the deduction on your 2007 taxes.

  • Prepay property taxes. Many counties bill taxpayers twice, in November and February. If you pay your February installment by Dec. 31, you can take it as a deduction on your 2007 return. Again, watch out for the AMT, which disallows these deductions.

  • Avoid the AMT. More taxpayers are facing the AMT, particularly those living in high-tax states. If you're one of these taxpayers, you might want to flip the typical strategy of deferring income and accelerating certain deductions. Instead, try to defer payment of state and local taxes and accelerate income to the point where you're no longer subject to the AMT. Multiyear planning is a must -- talk to a tax professional.

Portfolio Planning: Three Tax-Smart Rebalancing Strategies
Year-end is a great time to give your portfolio a checkup. Consider these tax-smart strategies to help boost your after-tax returns.

  • Harvest losses. No one likes a losing investment. But at tax time, they can be blessings in disguise, as you can use capital losses to offset taxable capital gains, plus up to $3,000 in ordinary income ($1,500 for married couples filing separately). Look in your taxable accounts for investments with relatively large losses where you don't expect a comeback. Remember, any losses you can't use to offset gains this year can be carried over into future tax years. One word of caution: Watch out for the so-called wash sale rule, which prohibits taxpayers from recognizing losses on sales of securities that are repurchased within 30 days.

  • Make the most of tax-advantaged accounts. You can also use retirement accounts to help rebalance your portfolio without incurring a tax hit. Let's say your long-term plan calls for 60 percent stocks and 40 percent fixed income, but the recent rally has pushed your stock holdings to 70 percent of the portfolio -- and you have no losses (congratulations!). You might still be able to bring your asset allocation back in line without incurring 2007 taxes by selling stocks in tax-deferred retirement accounts like IRAs or 401(k)s.

  • Consider cash flow. If you're living off your portfolio in retirement, remember to set aside any cash you might need for the next 12 months as you rebalance. Assuming the portfolio described above, you'd sell the 10 percent overweight to stocks, take out what you need to live on and then reinvest the rest in bonds until you're back on target.

Retirement: Four Tax-Savvy Planning Ideas

  • Take full advantage of your employee retirement plan, at least to the point of any employer match. And if you're 50 or older, make a catch-up contribution. If you expect to be in a higher tax bracket down the road (for example, younger workers who have yet to reach peak earning years) and your employer offers the new Roth 401(k), consider it. You won't get any up-front tax reduction. But after you retire, qualified distributions will be tax-free.

  • If you're self-employed, consider a small business retirement account such as a SEP-IRA, SIMPLE IRA, Individual 401(k) or other qualified retirement plan. Contributions are tax-deductible and grow tax-deferred. If you open a qualified retirement account by Dec. 31, you have until the day you file next year, including extensions, to make this year's contribution.

  • Be sure to make your annual IRA contribution. Even though you have until next April 15 to make your 2007 contribution, the sooner the better -- your money will have more time to benefit from potential long-term compound growth. Then, make your 2008 contribution early next year. Consider a Roth IRA if you're eligible, especially if you're not eligible for a deductible traditional IRA contribution. If you're not eligible for a Roth today, you might want to make a nondeductible contribution to a traditional IRA anyway, as recently passed tax legislation allows anyone to convert to a Roth IRA starting in 2010 without any income restrictions, though you'll still have to pay taxes on the earnings.

  • If you're age 70 1/2 or older and required to take minimum distributions from your retirement accounts, don't forget to do so before year-end. If you just turned 70 1/2 this year, you have until April 1, 2008, to take your first required minimum distribution. However, waiting to do so means you'll need to take two distributions in 2008, which will boost next year's taxable income. A little multiyear planning using the tax estimator at can help.

Education: Two Tax-Preferred Savings Plans

  • Coverdell Education Savings Accounts: If you're eligible, you can contribute up to $2,000 to a Coverdell account on behalf of a child. Contributions grow tax-free and qualified K-12 and higher-education-related withdrawals are tax-free. You have until next April 15, but if you make the contribution by Dec. 31, it will count as a gift for this year instead of next year.

  • State-sponsored 529 plans: Anyone, regardless of income, can contribute up to $60,000 ($120,000 for a couple) this year, without incurring gift taxes, if you make an election to have the gift treated as though it were made over five years. You don't have to invest in your own state's plan. But if your state offers an income tax deduction on in-state 529 plan contributions, then that's another reason to make your contribution by Dec. 31. Still, it's a good idea to compare state plans -- especially if you live in a state with no deduction, such as California.

Giving: Five Tax-Smart Tips

  • Act before year-end. You can give up to $12,000 each to as many individuals as you wish this year and pay no gift tax. Spouses can "split" gifts for a total of $24,000 per beneficiary, per year. Gifts beyond that are taxable, but only to the extent they exceed $1 million over a donor's life. The lucky recipient of the gift owes no gift or income tax, and doesn't even have to report the gift unless it comes from outside the United States.

  • Pay someone's education or medical bills. You can also make unlimited payments directly to medical providers or educational institutions on behalf of others without incurring a taxable gift or dipping into your $1 million lifetime gift tax exemption.

  • Shift income to tax-advantaged children. Consider gifting appreciated securities and stocks whose dividends are taxed at low long-term capital gains rates to children age 18 or older, because they pay tax at their own rate -- likely 5 percent (and headed to 0 percent in 2008-2010 before expiring in 2011). (1)

  • Give appreciated securities to charities by year-end. Consider donating appreciated securities that you've held for more than a year for a full fair-market-value deduction and no capital gains tax. If you give to a donor-advised fund (such as the Schwab Charitable) by Dec. 31, you get the tax break this year and can take your time deciding how best to distribute your gift.

  • Donate from your IRA. If you're at least 70 1/2 years of age, you can donate up to $100,000 from your IRA directly to charity income-tax-free for 2007. That's likely better than taking a taxable distribution and deduction.

All of the Above?
Whether some or all of these suggestions fit your situation, we're only scratching the surface here. Get advice from a qualified planner, if you need it.

After you decide what to do this year, resolve to make financial planning a year-round exercise going forward (you've probably got better things to do around the holidays). That way, it'll be easier to check your progress, update your plan and, if necessary, take action long before the ball falls in Times Square on New Year's Eve.

For the online version of this story, please click to go to Market Insight, the Research and Strategies publication of


FAQs: Is Natalie just another Suze Orman?

Q&A with Natalie Pace, founder and CEO, Women’s Investment Network, LLC, dba, on what differentiates from the other financial news and information sources.

Question: What’s the difference between you and Suze Orman?

Natalie: Suze blazed the trail and got people thinking about their money. I am asking people to think about the power of their money to transform their own lives and the world at large. Our world and our lives look the way they look as a result of the things we invest our time and money in. Many people own tobacco companies (without even knowing it), when they’d rather be investing in solar energy. My ezine and strategies make it easy and effortless to put your money where your heart is – to take 136 billion dollars out of the tobacco industry and invest it in healthy lives and a healthy planet. If we’d all done this 10 years ago, everyone’s homes would be powered by clean energy because those companies would have had the investment dollars to develop their products and put them in Home Depot. Ever wonder how tobacco companies stayed alive while every state in the U.S. was suing them? With your money.

Is that what you mean by adding a splash of green to Wall Street and transforming lives on Main Street?

Yes, that is my mission and vision to create a group of enlightened investors out of the 100 million Americans who have stock holdings! And the great news is that my ezine is proving that going green creates green – for your own wallet. But the message is not limited to that to socially conscious investing – it is about empowering individuals to educate themselves and understand not only how to make money, but also how to protect their nest egg properly, so that they are never over-exposed in any one asset class. If you have all of your holdings in real estate or stock, you are too vulnerable in the event of a downturn. You can be into dirty coal, gas-guzzling cars and absinthe and still benefit from this ezine, with regard to the news and information you get from our ongoing market reporting. At least you’ll know how to cover your assets, which is where most people get into trouble with investing.

Speaking of covering your assets, why do you use so much sexual innuendo in your writing?

Many people have fear around money. I call it "investing with stomach acid." I touch pleasure points when I talk stocks to titillate the endorphins, to start touching pleasure points in your brain when you think about money. Once you come to love prosperity, then you can embody it in a healthy way. When people start investing with heart and soul and wisdom, instead of fear and greed, this world will become a very, very beautiful place. I also want to transform their personal ability to earn greater returns by making money a pleasurable experience for them. When you trade with fear, the odds are that you are buying high and selling low. That is what fear does, even though it is the exact opposite thing that everyone knows – with their brain – to do. When you invest in companies that have products and services that you know and love, then you know the value of your investment and stand a better chance of being on the winning buy low; sell high side of the Wall Street tennis match.

What does it mean when organizations, like, rank you as the #1 stock picker?

That means that the companies I report on are making readers who invest in those companies rich! I was the first on Fox News, back at the IPO in 2004, to say, "Invest in Google. It’s a stock you’re going to want to own." At the IPO, most Wall Street pundits were pooh-poohing the stock. I found MySpace when they had less than 35 million users. Taser International was my 2003 Company of the Year, before it went on to earn up to 9000% gains for investors. In fact, my 2003, 2004 and 2007 Companies of the Year have posted up to 9000% gains (Taser), up to 690% gains (Opsware) and up to 215% gains (Suntech Power Holdings), respectively. MySpace, my 2006 Company of the Year, has been a large part of News Corp’s success with shareholders. Only OSI Pharmaceuticals, my 2005 Company of the Year, has lost money. So three out of five are superperformers, one is performing well above the market and one is down. That’s the kind of record that puts you on top on Wall Street.

Why do you tell so much about your personal story in your articles?

When I first got married, my Chinese mother in law sent me into a fish market to buy "fresh fish" for dinner. She’s a fantastic cook, and a VERY discriminating person. I wanted to do a great job, even though I didn’t know the first thing about buying fish, let alone at a Chinese fish market where everyone spoke Cantonese – a language I did not understand at all. There were literally hundreds of options to choose from, and I was clueless. I asked the guy beind the counter. This young buck, who knew as much about cooking fish as I did, looked back at his boss, winked, and then held up a ridiculously large fish, saying that my mother-in-law would want to cook that one. I’m talking about a 50-pound fish that almost crushed him when he held it over his head! A brain-dead idiot could have seen that he was trying to take as much money as possible from me, just to impress his boss. I went back out to the car empty-handed, rather than spend our life savings on that fish. We all had a good laugh.

Unfortunately, that is the way that most brokerages -- real estate, mortgage and stock – are set up. There is a high turnover in the profession, and the person who greets you is incentivized to sell you the biggest, not the best, fish.

I tell my stories because parables are more fun than flow charts. The fact that these stories are true will, I hope, inspire others to believe that if I can do it, you can do it. I am really living the life of my dreams, and so can you. If a copper miner’s daughter can become the #1 stock picker in the U.S., you, too, can start investing in the life you adore, put your money where your heart is, trade with wisdom, and earn fantastic gains while you sleep.

Why do you place so much emphasis on the nest egg as opposed to the Stocks on Steroids?

No one should be daytrading their future. Juggling with your nest egg means that it could crack and splat. When you have your assets properly allocated within your nest egg, keeping a percent equal to your age in safer investments, like CDs, money markets and bonds, you can then take on higher risk with a smaller percentage, with the goal of achieving higher gains. So, have a nest egg, and then have a smaller, high performance account for your Stocks on Steroids. Also, do as much of your trading as possible in tax-protected individual retirement accounts. And remember, CASH was the top-performing asset class in 2000. Bonds were in 2002. Stocks were in 1999. Real estate had a fantastic run between 2002 and 2005, but has been softening in the last two years.

Why don’t you own all of the stocks that you feature in your ezine?

I am a journalist, not a money manager, which means that it is actually illegal for me to own all of the stocks that I feature. Journalism is built upon the foundation of fair and balanced reporting, and if I were just reporting on stocks that I owned, that is called front-loading. In other words, if I buy stocks, and then tell you about them, and then you buy them, pushing the share price up, I’d make a lot of money, but that isn’t a legal way to get rich. It is illegal to trade on information that is not publicly available, and if I know I’m doing a feature article that could push the price up then I’d be guilty of insider trading. I can own some of the companies I report on, but only if I purchase them after I report on the companies (or have owned them for awhile before I decide to do an article). Any trading I do always has to occur after my articles are made available to you, not before!

If I were a money manager -- and with the returns on the companies I’ve featured it would be relatively easy for me to get a job like that -- I would be helping rich people get richer and making a lot of income for myself. I have made a different choice, however. My choice was to add a splash of green to Wall Street and transform lives on Main Street by becoming the most trusted name in financial news. The income of a journalist is dismal compared to that of a hedge fund manager. But the lifestyle of doing exactly what you love is priceless, and in the long run of a lifetime, I’m confident that I’ll not only make more money with this approach -- by selling books and DVDs designed to help the average investor succeed -- but I’ll also be very happy with my contributions to your life and to society at large. Living the life you love is a fantastic reward, and I truly wake up every day happy to be alive and in charge of the career that I have made for myself.

Fast Facts:

  • 50% of companies featured as Natalie’s Company of the Month between October 2006 and May 2007 have more than doubled. Avg. return = 85.2%, as of 10.31.07.
  • 48% of the companies featured as Natalie’s Company of the Month between 2002 and 2005 -- 25 out of 52 companies – DOUBLED or more from the time they were first featured to the time they were taken off of Natalie’s Hot News on Cool Stocks list.
  • The investment club that Natalie founded with a group of soccer moms doubled their investments between the time of the founding in January of 2002 and when Natalie cashed out in April of 2004.
  • Natalie’s personal returns in 2001 were almost triple her investment – without shorting -- which is what lead many of her girlfriends to beg her to "teach us what you know."
  • In 2000, Natalie avoided the advice of a stock broker to "diversify" her real estate gains into 4 mutual funds – an energy fund, anchored by Enron, a telecommunications fund, anchored by Global Crossing, an international fund, anchored by Japan, a technology fund anchored by AOL. Instead, she kept the money in CDs, in a year when cash was the top performing asset class, at 4%.

"I've had a staggering year (any given day to this point 80%-90% gains) based almost solely on her picks." Anonymous, Investment Consultant

"My husband and I spent our 30th anniversary at Natalie's Get Rich and EnRich Retreat, and it was the turning point in our lives. Ten years ago I was diagnosed with cancer, and we have been searching for a better life for ourselves ever since. But it was not until Natalie and the Living the Rich Life Retreat helped us focus on defining and attracting the life we really wanted - from all perspectives, including investing - that we really started moving forward. I've lost 30 pounds and am now doing work I love with incredible people, and my husband is becoming more successful with his investing." Nancy

"Natalie helped to reawaken my passions and dreams after the drab year I had following my accident. My goals are once again in sight." Erik

Are You Gambling With Your Nest Egg -- Without Even Knowing It?

by Natalie Pace.

Includes my Hot News on Cool Stocks list.

The Hot News lists below feature 44 companies earning great gains, versus just nine that are headed in the opposite direction. 48% of the companies featured in my stock newsletter between 2002 and 2005 -- 25 out of 52 companies -- DOUBLED from the time we listed them in our feature article to the time when I took the company off of the Hot News on Cool Stocks list, and the majority of the remaining 52% well outperformed the marketplace. (See the chart in the article, "25 of Our Companies Have Doubled," from volume 4, issue 4, the April 2007 ezine, for a listing of companies.)


Additionally, the market performance of the companies that are featured in my Hot News on Cool Stocks list has kept me at the top of over 830 A-list pundits on I’ve repeatedly occupied the #1 position. listed me as a Highly Recommended Stock Picker, in 2006 and 2007.

Check out the performance of our featured companies over the last year! 5 out of 9 companies – over half – doubled or more.

Suntech Power Holdings

Oct 2006


MEMC Electronics

Nov 2006


Gap Stores

December 2006


Suntech Power Holdings

2007 Company of the Year


Apple Computer

February 2007


Wisdom Tree (ETFs)

March 2007


World Water & Solar

April 2007


Trina Solar

May 2007


Novastar Financial (short)

June 2007

-88% (we expected it to lose $)



Current Economic Conditions Commentary
(This report is a reprint of our December mid-month update, with updated statistics and data. Don’t overlook the new numbers or skim this update. The information is critical going forward!)

Ever wonder how O.J. Simpson can still play golf when he owes $33 million dollars to the Goldman Family? Because he knew how to cover his assets. This is an extreme example of how important it is to understand the most fundamental rules of investing. Even though you will never be involved in a scandal like O.J., covering your assets is just as effective in market downturns, lawsuits, job loss and the current pension restructuring that is going on in legacy corporations, such as we are seeing in the airlines and auto companies.

People lost their fortunes during the DOT COM bust. Speculators in real estate are losing their homes today. And I am telling you that the challenges in the United States economy today require your sober and serious attention NOW. If you are smart and prepared, you should be fine going into the next few years. If you lost money during the DOT COM bust and you did not take the time to understand how to avoid that in the future, you are just as vulnerable today as you were then. Needless to say, if you have no clue what you’re invested in and are just "trusting your broker" (who might have up to 500 other clients), you need to keep reading. Brokers can and should be well-versed in all of their company products, but few have a crystal ball or the time and experience to do high level investigative financial journalism on the companies their clients are interested in investing in. Steve Forbes has a different job from Charles Schwab.

Real estate, stocks, bonds, national debt, the value of the dollar, all of these wax and wane, but there are those who ride the tides for steady gains and those whose fortunes are sunk because their boat had leaks to begin with. So my question to you is, "Are you gambling on your investment future -- without even knowing it?"

I am writing in earnest about something so important that I need you to stop whatever you are doing and read this article now. I know you have heard phrases like this bantered about by other people, but when I utter them, I am dead serious. Look at my track record. Look at my performance. Look at my history. You know I know my business. You know my stock newsletter pays off in spades. You know I’m optimistic and bubbly and a fundamentally happy person.

When I turn serious on you, it is because there are conditions coming up that you need to be aware of. When I tell you that the odds are exceedingly high that you are gambling much if not most of your nest egg and investment activity, you should take it as a call to action. I do not put myself on the line and make claims idly. It may sound like a brash statement, but it is a true and provable one nonetheless. I began talking like this Christmas of 1999, just a few months before the DOT COM recession began. No one wanted to hear about it then either.

Here is a mental test. Do you have any idea how much of your nest egg is at risk and how much is safe from a downturn? Did your investments crash in 2001? Have you had difficulty getting rich on the software you purchased or the program you signed up for? Is your ARM about to break?

If you lost money in 2000 on Internet stocks or do not have a clue what holdings you have in your retirement plan now, or have a pattern of chasing money – coming to the real estate party or the Internet party late, buying high and then suffering losses -- whether you have $10,000 or $10 million invested in your account, you need to move heaven and earth to be at my retreat this January. Here is why. At the retreat, we will look at what is hot, what is not, and the danger zones that you need to avoid NOW before the real estate implosion starts to impact GDP growth (which will impact the stock market). We will carefully restructure your nest egg so that you are better protected against a downturn. You will learn sound, higher performing, less risky alternatives that could double or triple or redouble again the returns you could be enjoying. And you will learn which industry is poised to soar above the rest, no matter what the market conditions are.

Your current investment strategy is going to deliver a certain result for you over the next year, decade and your lifetime. If it is not properly allocated, you could actually lose money, instead of earning gains while you sleep. A better strategy could deliver as much as ten times the ultimate wealth creation, income and security. And it is not more money invested. It is simply getting more performance for the money that you work so hard to earn and invest.

I have put together a 4-day process that is extremely unique, powerful and result certain. On day one we are going to play the Billionaire Game. Once you start getting specific about how you will handle wealth on a daily basis, you can actually create the blueprint and step into that life. In the evening of the first day, I have two billionaire experts – one in real estate and one in financial services – who have handled deals valued at over a billion in aggregate. These experts will talk about how multi million dollar deals are handled.

On day two, we will take what we have discovered about what being rich means to you, and you will restructure your nest egg and investing habits to get you there. The evening will be crowned with a sermon that will strike lightning in your soul.

On day three, you will practice my easy 3-ingredient recipe for cooking up profits in your Stocks on Steroids portfolio and learn how to create stock report cards and great gains for yourself.

Now I have to stop for a minute and introduce the secret weapon that is going to make this work so well for you, not just in the moment, but now and forever in your everyday life. My keynote speaker is none other than Michael Bernard Beckwith. You probably know him from his appearances on Oprah and Larry King, from the blockbuster video The Secret and the fact that many of the celebrities, sports and business greats throughout the world turn to him for spiritual guidance and balance. Once you learn my strategies and hear the Rev strike lightning in your soul, you can address your investment future with maturity and confidence and without the fear and stomach acid that normally cost you so dearly.

By the time you leave that room on the fourth day, you will no longer be the same person. Even if you have been following my ezine to a T, I will teach you how to think how I think, so that you can have the same level of success in all of your investments, as well as in your daily life. I cannot promise you will make a billion dollars, but I can tell you that if you have enough capital in play and you invest with the foundation and strategies we will teach you, it is certainly possible. The one thing I will promise is that these four days will absolutely be the most enriching, the most important and the most valuable four days of your investment life, or I do not deserve to keep your modest registration fee.

Speaking of which, I am not charging the $5,000 or $10,000 that most investment training programs ask. I am not even charging half of that. I am creating a value-priced, valuable retreat where I can work deeply, intimately and personally with my most motivated, serious and ambitious subscribers. And the information you will receive and experiences and opportunities you will enjoy are quite simply not available anywhere else – not in universities, other seminars or even your brokerage.

If this resonates with you, sign up online now by clicking on the Get Rich and EnRich banner ad. I am holding a limited amount of rooms at a deliriously low rate for an oceanfront hotel. Mark your calendar right now and clear it for the dates January 2-5, 2007. The place is Los Angeles, California, Santa Monica to be exact, the Loews Hotel on the beach, to be even more specific.

You need this information as we go into 2008, especially given all of the economic pressures that we are facing. There is no downside to you attending my January retreat, outside of the travel and modest hotel. If I do not deliver more than I promised, you can ask for a refund. If I do deliver, your wealth will multiply dramatically and your life will change immediately and forever.

This is the first time EVER that I have had a world renowned keynote speaker at my 4-day intensive, highly limited, wealth building super summit. I do not have another retreat on the calendar because 2008 is devoted to the launch of my new book. You do not want to miss this unique opportunity. You may never get the chance again to experience Rev Michael, Dr. Rickie and I in such an intimate gathering.

REGISTER NOW using the following promo codes to receive almost $1000 off the regular price. Click on Register Now or go to, click on the Get Rich and EnRich banner ad, and register online there.

RetreatPeak ($1295 for one person)
RetreatPeak2 ($1880 for two people)

The promo codes are case sensitive.

This offer is valid now through December 31, 2007 only. Give yourself the gift of a new life this New Year. You deserve it!

Wisdom + the law of attraction = the rich life. It is that simple. It is that much fun. You’ll enjoy one of the most beautiful, warm beaches in the world! It was 80 degrees and sunny today in Santa Monica!

View of the famous Santa Monica Pier from the Loews Santa Monica Beach Hotel.
Poolside, overlooking the Pacific Ocean, at the Loews Santa Monica Beach Hotel.

Market Report:
The Federal Open Market Committee decided on September 18, 2007 to lower its target for the federal funds rate 50 basis points to 4-3/4 percent. The big, fat rate cut thrilled investors. The stock market immediately rallied on the news. For Halloween, the Feds decided to give investors some candy, with another 25 basis point reduction in the Fed Fund Rate. Investors fell in love with stocks and the markets soared on the news. Continued histrionic headlines and inflated statistics on the severity and pervasiveness of the subprime problems spooked investors in November, for the worst sell-off of the year. The Feds responded by cutting rates again in December. The rate currently stands at 4-1/4 percent.

General Stock Market Performance

Wednesday, 1.3.2006

Wednesday, 1.3.2007

Monday, 12.24.2007

Gains 23 & 11 months

Dow: 10,847.41

Dow: 12,474.52

Dow: 13,549.33

+25% & +8.6%

Nasdaq: 2,243.74

Nasdaq: 2,423.16

Nasdaq: 2,713.50

+21% & +12%

S&P: 1,268.80

S&P: 1,416.60

S&P: 1,496.45

+18% & +5.6%

FYI: we predicted Nasdaq to be the 2007 superstar performer earlier back in November of 2006. Click on Wow! Dow! Or Nasdaq Now! Article, from vol. 3, issue 11, to review that article.

The Bottom Line always is that getting rich is a matter of balance, strategy and patience. You should not be day-trading your nest egg. If you don’t know what the proper balance of real estate, stocks, bonds and Beanie Babies you should have in your investment portfolio, then your next investment should be in education.

The Writer’s Guild Strike Update
Formal negotiations from November 26 broke down. Strike continues.
You’ll see that I’ve made my choice to keep media on the Hot News List for now, though I continue to monitor the situation carefully (but not obsessively).

Peace and Prosperity,

Natalie Pace


  1. Interest Rates: The Big, Fat Rate Cut Continues! The Feds knocked the rates down on the past 3 consecutive meetings, in September, October and December. The federal funds rate is currently at 4-1/4%. According to the Federal Open Market Committee’s press release, "Incoming information suggests that economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending… Recent developments, including the deterioration in financial market conditions, have increased the uncertainty surrounding the outlook for economic growth and inflation." (If you haven’t read my message above and taken it seriously, you should reread it and consider coming to my retreat in January 2008 where you will learn to protect your assets in case of a recession. Remember the pain of 2000-2002, and consider that you need more than a Bandaid this time around.)

  2. FOMC Information: Interested in reading the press release of the December 11, 2007 FOMC meeting for yourself? You can. The official Federal Reserve document is available online. Click on FOMC, or go to, to read!
  3. The tentative FOMC meeting schedule for the 2007-2008 calendar is: January 29-30, 2008 (Tuesday-Wednesday), March 18, 2008 (Tuesday), April 29-30, 2008 (Tuesday-Wednesday), June 24-25, 2008 (Tuesday-Wednesday), August 5, 2008 (Tuesday), September 16, 2008 (Tuesday), October 28-29, 2008 (Tuesday-Wednesday), December 16, 2008 (Tuesday). The fact that the Federal Open Market Committee decided to increase the number of 2-day sessions from two to four in 2007 is an indicator of the concern in the economy at this juncture.

  4. Calendar Section: Conferences, Online Chats and more: Check out the Calendar section of regularly. There are many wonderful opportunities to chat one-on-one with millionaire money managers, economists, respected money gurus, real estate veterans and CEOs! Be sure to calendar the dates of the mid-month Hot News on Cool Stocks Update and the publication date of our special Company of the Year January 2008 ezine. Get more information on how to best use our articles in the FAQs article, located under the Investor Edu link on the home page of

Survey Results:
Check out our article on the Best Gifts for Guys and Women in this month’s ezine. Great holiday tips are to be found there.

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

The Hot News on Cool Stocks List
Full disclosure: I have listed the companies that I currently own under the column "NP OWNS?"

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

Highlighted Companies (Hot List):
Citigroup (C)
Conergy (CEYHF)
Echelon (ELON)
Genentech (DNA)
Smith & Nephew (SNN)
UQM Technologies (UQM)
U.S. Gold (UXG)
WisdomTree (WSDT)
Yahoo (YHOO)
Zoltec (ZOLT)

Recent Additions:
Only those stocks that are highlighted above and below are trading at a price that we consider to be attractive.

American Superconductor, Energy Conversion Devices and Zoltec were added on December 3, 2007.

Recent Deletions:
Jet Blue was deleted on December 3, 2007 with negative performance.

Disney (+31%), National Health Investors (flat), News Corp. (+33%), Opsware (+690%), Siri (mixed) and Time Warner (flat performance) were all deleted on December 26, 2007. See below for details. (The details on each deleted company are listed below the Hot News list.)

Hot News on Cool Stocks List

Company NP owns? Symbol Price when featured Price 12.26.07

Year High

Year Low

Gains since original feature

Altair Nanotechnology









Read the Article, "Golf Carts and Sports Cars," in vol. 4, iss. 6. The price was up sharply on unusually high volume on 10.23.07. The U.S. Senate approved a military funding budget that included funding for two cutting-edge nanotechnology research and development projects that Altairnano is conducting, providing funding for a staff of 90 highly qualified individuals in Reno, according to Altairnano President and Chief Executive Officer, Alan J. Gotcher, PhD. Completed a $40 million private placement of its common stock to Al Yousuf LLC, at $3.50 per share, on 11.30.07. Altair supplies the batteries to Phoenix's advanced battery-electric, zero-emission Sports Utility Truck, which can travel at freeway-speeds while carrying five passengers and a full payload. Phoenix already has 500 orders and just signed a letter of intent to start producing cars in Mexico for delivery to Mexico, Latin America and India.

American Super-conductor








Read the article "Clean Energy Rolls Out Worldwide," in vol. 4, iss. 12. Competitors include GE (NYSE: GE), Siemens (NYSE: SI), Rockwell (NYSE: ROK), and DRS (NYSE: DRS). High Temperature Superconductor (HTS) wire is able to transmit 150 times more energy than a copper wire of the same dimensions. This enables electric utilities to replace multiple conventional copper cables with one HTS-powered cable, leaving valuable underground real estate available for other uses – including future power upgrades. The worldwide cable market represents a multi-billion-dollar annual opportunity, but their power converters are also in the exploding marketplace of wind turbines and fuel cells. American Superconductor’s backlog of orders exceeds $180 million, with growth primarily driven by the wind energy market. AMSC expects the Asia-Pacific marketplace to account for up to 50% of sales in fiscal year 2007.

Apple Computer





($83.93 on 2.27.07)




+133% &


See archived ezine Vol. 4, issue 2, for the feature article, "Apple Chips." Next earnings report will be on January 22, 2008 at 5:00 p.m. ET (after markets close).

Google CEO Dr. Eric Schmidt is on the Apple board of directors, as is Nobel Laureate winner, Al Gore. The craze over the iPhone, iPod and all things Apple, and the clout that Jobs is gaining with his alliances with Disney and Google should keep Apple at the top of the technology performers over the next few years at minimum. Apple is a company you’re going to want to own – and everyone wishes they’d had the prescience to buy in at a better price. On 10.22.07, Apple announced revenue of $6.22 billion and net quarterly profit of $904 million, or $1.01 per diluted share. These results compare to revenue of $4.84 billion and net quarterly profit of $542 million, or $.62 per diluted share, in the year-ago quarter. Gross margin was 33.6 percent, up from 29.2 percent in the year-ago quarter. International sales accounted for 40 percent of the quarter's revenue.

Apple shipped 2,164,000 Macintosh(R) computers, representing 34 percent growth over the year-ago quarter and exceeding the previous quarterly record for Mac(R) shipments by 400,000. The Company sold 10,200,000 iPods during the quarter, representing 17 percent growth over the year-ago quarter. Quarterly iPhone(TM) sales were 1,119,000, bringing cumulative fiscal 2007 sales to 1,389,000.

"We are very pleased to have generated over $24 billion in revenue and $3.5 billion in net income in fiscal 2007," said Steve Jobs, Apple's CEO. "We're looking forward to a strong December quarter as we enter the holiday season with Apple's best products ever."

"Apple ended the fiscal year with $15.4 billion in cash and no debt," said Peter Oppenheimer, Apple's CFO. "Looking ahead to the first quarter of fiscal 2008, we expect revenue of about $9.2 billion and earnings per diluted share of about $1.42."

AU Optronics









On Sept. 6, 2007, AUO announced another record high, with revenue up 9.9% from the previous month. On a year-over-year comparison, August 2007 revenues increased significantly by 89%. Shipments of large-sized panels(a) used in desktop monitor, notebook PC, LCD TV and other applications for August also set a new record of 7.23 million units, a 5.7% increase from July 2007. Shipments of small-and-medium-sized panels broke the record as well and presented a 22.1% increase from the previous month, to 14.59 million units. Announced 3Q 2007 earnings on 10.22.07 of US$4.2 billion consolidated revenue and consolidated US$691 million net income (unaudited). Large-sized panel shipments increased by 14.3% to 22.26 million from 2Q2007, while shipments of small- and medium-sized panel amounted to 40.70 million with a 26.3% Q over Q increase, both once again set record high for the company's single-quarter unit shipment. AU Optronics Corp. ("AUO") is one of the top three largest manufacturers* of large-size thin film transistor liquid crystal display panels ("TFT-LCD"), with approximately 20.2%* of global market share. The company is based out of Taiwan.













Refer to the M&A Mania article in volume 3, issue 6 for details on Citigroup’s appeal. Citigroup, like all of the financial services industry, will continue to see hard times into 2008. This is a price that might be attractive for your long-term portfolio. Don’t expect wild gains in the short term with this company, and there could be more losses before you’ll see the upside. Again, the price is attractive if you’re looking at a 7-year plus horizon, not if you’re looking to post great gains in the next 12 months.

Citigroup announced on May 10, 2007, that Citigroup China would roll-out two new investment products -- Structured Investment Accounts -- for the Chinese consumer that would allow him/her to invest in equities or currencies, with a principal protection feature. Just a few years ago, all banks in China were state-owned enterprises. Citigroup was first mover in the Chinese consumer equity marketplace. Purchased AkBank (in Turkey) on 1.09.07. Akbank currently has 675 branches and 1,617 ATMs and is a premier, full-service retail, commercial, corporate and private bank in Turkey, with assets of $39.6 billion, loans of $19.6 billion and a deposit base of $25.0 billion. It is the world’s third largest bank by assets and the nation’s largest financial institution. Citigroup acquired servicing rights for $45 billion worth of loans formerly held in ACC’s Ameriquest company. Terms of the deal were not disclosed. Citigroup announced on November 3, 2007, that Charles Prince, Chairman and CEO, will leave the company. Robert Rubin has been named Chairman of the Board. Sir Win Bischoff has been named acting Chief Executive Officer. Citi will review fourth quarter and full-year 2007 results on Tuesday, January 15, 2008, at 8:30 AM (EST).

On Oct. 15, 2007, Citigroup reported net income for the 2007 third quarter of $2.21 billion, or $0.44 per share, a decline of 60% from the prior-year quarter.


Based out of Germany









See the Wind Power article in vol. 4, issue 11. Has multiple sales agreements with Suntech Power Holdings to utilize STP panels in their global systems integration.

Eastern Europe -- U.S. Global Investors









Vanguard seems to be in the right countries, and within those countries, in the right growing sectors. See vol. 2, issue 8. Great way to diversify, as well as to add growth. Eastern EU economy rocks. Western EU economy stalls. Your international fund should reflect the difference.










Announces earnings on 1.23.2008. See the articles, "eBay’s Skype Outpaces News Corp’s MySpace," in volume 3, issue 9, "Executives of the Year" in January 2007, which featured CEO Meg Whitman (vol. 4, iss. 1). eBay reported record consolidated Q3-07 net revenues of $1.89 billion, representing a year-over-year growth rate of 30%. GAAP operating loss was $938 million in Q3-07, representing (50%) of net revenues, compared to GAAP operating income of $339 million in Q3-06. GAAP net loss in Q3-07 was $936 million, or $0.69 loss per diluted share. Both the GAAP operating loss and GAAP net loss were the result of the previously announced goodwill impairment charge related to eBay's acquisition of Skype. (This can be a tax benefit, and Skype delivered record net revenues, excluding the impairment charge, and a record increase of registered users – to 246 million – which can then be sent over to the eBay marketplace. Don’t be fooled by headlines and young writers making silly assumptions.) The company purchased approximately 14.8 million shares of its common stock at a total cost of approximately $500 million during the quarter out of its authorized stock repurchase program of up to $2 billion by January 2009. According to eBay President and CEO, Meg Whitman, "eBay International, PayPal Merchant Services, StubHub, classifieds and our advertising businesses all performed above our expectations." Skype net revenues totaled a record $98 million in Q3-07, representing a year-over-year growth rate of 96%. Skype had 246 million registered user accounts at the end of Q3-07, representing a year-over-year increase of 81%.

Note: The GAAP effective tax rate for Q3-07 was (4%), compared to 26% for Q3-06 and 23% in Q2-07. Strong management and talent in the executive suite. The company's cash, cash equivalents, and investments totaled $4.44 billion at the end of Q3-07.'s traffic to merchants increased 61 percent over last year's Black Friday, November 24, 2006, exceeding industry expectations. According to Forrester Research, online payments are predicted to top $33 billion this season, a 21 percent increase over holiday 2006, signaling a strong season for eCommerce. Consumer spending habits this Black Friday showed that soft goods categories like Gifts and Flowers, Clothing and Accessories, and Health and Beauty continue to see the most growth online. On, traffic to merchants in the Gifts and Flowers and Clothing and Accessories categories throughout the Thanksgiving holiday grew by 57 and 52 percent respectively year-over-year.






$16.13 (12.14.07)




Flat &


Read the article, "Green San Jose Company," in vol. 4, iss. 8. Governor Schwarzenegger (CA) took Secretary General of the U.N. Ban Ki-Moon on a tour of Echelon’s HQ in Silicon Valley the week before ELON confirmed an order from Russia valued at $35 million. What other orders could come into this company that reported sales of $26.7 million in the 2nd quarter, over 19.4 million a year ago. On July 10, 2007, Echelon signed a contract with McDonald's to help it reduce energy costs and improve efficiency. Reported 3rd quarter results on 10.23.07 of $24.7 million in revenues compared to revenues of $13.3 million for the same period in 2006. The GAAP net loss for the quarter ended September 30, 2007 was $5.4 million, or $0.14 cents per share, compared to net loss of $6.3 million a year ago. "We are still on track to achieve non-GAAP profitability in the fourth quarter. We believe our strategies have positioned us well for the remainder of the year and for 2008," said Ken Oshman, Echelon's CEO and Chairman. "Our infrastructure product line did not grow as expected, especially in the Americas – and it will receive special attention in coming months."

Energy Conversion Devices









Read the article "Clean Energy," in vol. 4, iss. 12.






$17.50 (3.16.07)




+5% &


See the article, "Gap’s Inc(RED)ible Campaign," from vol. 3, iss. 12. Made Zachs buy list for Growth and Income on Nov. 2007. The Gap hired Todd Oldham as the design creative director for Old Navy, and immediately the television ads began to pop with sensuality and style. Who will helm The Gap’s creative ship? It’s hard to get too excited about a man whose last job was in Canada at Shoppers Drug Mart, but perhaps Glenn Murphy, 45, Gap Inc.'s Chairman and Chief Executive Officer, is a lot more fashionable than his pedigree would show. The Oldham hiring was genius and net earnings are up. Beat analyst estimates on 11.21.07. According to the 3Q earnings report, released on 11.21.07, net earnings for the third quarter increased 26 percent to $238 million, or $0.30 per share on a diluted basis, compared with $189 million, or $0.23 per share on a diluted basis, for the third quarter of last year. Third quarter net sales were $3.9 billion, which is flat compared with the third quarter of last year. The company's online sales for the third quarter increased 36 percent to $247 million, compared with $182 million for the third quarter of last year.

In the "show me your friends and I’ll tell you who you are" category, the friends surrounding Gap these days are mighty, powerful and successful. You’ve got Goldman Sachs advising them on the turnaround strategy. GAP is one of an elite group of companies that are attached to PRODUCT (RED), the pet project of Bono and Bobby Shriver, alongside Apple, American Express, Motorola, Emporio Armani and more. The ongoing commitment to Bono and Bobby Shriver’s PRODUCT (RED) and having Goldman Sachs in their corner really sets the stage for some promising surprises for this legacy clothing retailer.







$68.06 (12.26.07)






Announced its 2007 third quarter earnings on October 15, 2007: U.S. product sales of $2,155 million, an 18 percent increase over U.S. product sales of $1,830 million in the third quarter of 2006. GAAP operating revenues of $2,908 million, which include recognition of $3 million of deferred royalty revenue associated with the acquisition of Tanox, Inc. Avastin sales are up 37% over 2006, to $597 million for the quarter. Lucentis is up 29% to $198 million, while Tarceva is flat at about $101 million in sales. Major growth for a big cap, and trading at prices not seen in over two years! Purchased Tanox on 1.16.07. Received 8 FDA approvals in 2006. DNA is a Great Blue Chip Hold for your long-term portfolio. Genentech specializes in DNA-based cancer treatments that might ultimately eliminate the need for chemotherapy! (Avastin chokes off the blood supply to the tumor.) Biotechnology is a volatile sector, but this popular #2 biotechnology company has a big pipeline of drugs. Cancer drugs are a $20+ billion annual market, and DNA has appx. $8-9 billion of the market cornered. Avastin alone is on track to exceed $2 billion in annual sales in 2007. Tarceva is rocketing up the sales charts, with sales of $406 million in the first three quarters of 2007.

Google (Green)









Great Blue Chip Hold for your long-term portfolio. See my original article, "Google: the People’s IPO," in archived ezine, vol. 1, iss. 48. Owns, one of the most popular sites on the web, which got hit with a billion dollar lawsuit from Viacom on 3.13.07. Dr. Eric Schmidt was one of our Executives of the Year in 2007. Read the article in vol. 4, iss. 1. The growth continues to be amazing, and the share price continues to be amazingly volatile! The savvy day-trader would buy on disappointment and sell on hot headlines. The long-term investor would buy at the 52-week low and hold to will to the kids. (Notice that Google is NOT highlighted and is not considered to be a good buy right now.)

Google reported revenues of $4.23 billion for the quarter ended September 30, 2007, an increase of 57% compared to the third quarter of 2006 and an increase of 9% compared to the second quarter of 2007. Traffic Acquisition Costs totaled $1.22 billion, or 29% of advertising revenues. GAAP net income for the third quarter of 2007 was $1.07 billion as compared to $925 million in the second quarter of 2007. Google currently estimates stock-based compensation charges for grants to employees prior to October 1, 2007 to be approximately $801 million for 2007. Dilution is expected to be capped at 2%. Cash, cash equivalents, and marketable securities were $13.1 billion at the end of September 2007. There is a laundry list of insider selling going on at Google. We’ll do a closer evaluation as it gets closer to the annual report, which was released on March 1, last year. Until then, if you’re in the money, we’re still in the Santa Rally. If you’re thinking to buy, it’s very, very high. When you attach a 54 price to earnings ratio to a big, fat $216 billion company in a challenging economic environment, there are more ifs in the investment than you might be aware of. Google’s great, but so are Ferraris, and you can buy one for half the price if you wait and time your buy. Never pay retail!

On a worldwide basis, Google employed 15,916 full-time employees, up from 13,786 full time employees as of June 30, 2007 – all enjoying the Google 20 (pounds you gain from all of the free food provided by the company). As part of their "Do no evil" plan, Google has gone green, installing solar panels at HQs.

Hoku Scientific










Read "Solar Giants Tap a Small Hawaiian Company For Silicon," in the Oct. 2007 ezine, vol. 4, iss. 10. Contracted to build a polysilicon facility in Idaho and supply Suntech, Sanyo and Solar-Fabrik. Exiting the fuel cell business, in favor of solar, according to the fiscal 1st Q 2008 earnings report. The planned polysilicon manufacturing facility is still in the financing stages. According to Dustin Shindo, in the Hoku earnings report of 10.23.07, Hoku "received letters of credit of $25 million and $45 million for two of our polysilicon customers, Global Expertise Wafer Division, a subsidiary of Solar-Fabrik Group, and Suntech, respectively, to secure their prepayment obligations to us if we achieve various milestones in the construction and operation of our planned polysilicon plant." The $13 million line of credit with Bank of Hawaii has allowed Hoku to commit capital to the design and engineering of the plant, to purchase long lead-time items such as the reactors, and to stay on schedule for our planned 2009 product deliveries, according to a company press release. Hoku Materials, plans to build and equip a polysilicon production facility capable of producing up to 2,500 metric tons of polysilicon per year in Pocatello, Idaho. Hoku Materials estimates the total cost to construct and equip the polysilicon facility with an annual capacity of 2,500 metric tons will be approximately $300 million. Assuming the financing can be obtained, Hoku anticipates the availability of polysilicon beginning in the first half of calendar year 2009. Announced that Merrill Lynch will provide $185 million in financing for the construction and start-up of its new polysilicon plant, as long as it secures $35 million in additional funds, on December 5, 2007. Stock jumped after that report.










See "Apple Chips," article in vol. 4, iss 2. Intel is beating Advanced Micro Devices in products and price. Announces earnings on 1.15.08. AMD is fighting back in court and by slashing costs. The price war is tough on both, but easier for Goliath to win.   A Good Blue Chip long term hold for your portfolio, with dividends. On 10.16.07, Intel announced 3rd quarter earnings: revenue of $10.1 billion, operating income of $2.2 billion, net income of $1.9 billion and earnings per share (EPS) of 31 cents. "A combination of great products, strong and growing worldwide demand, and operational efficiency from our ongoing restructuring efforts led to record third-quarter revenue and a 64-percent year-over-year gain in operating income," said Intel President and CEO Paul Otellini. "Looking forward, we see each of these elements continuing to improve into the fourth quarter." Meanwhile, in the third quarter, AMD reported an operating loss of $226 million, and a net loss of $396 million, or $0.71 per share. AMD completed a $1.5 billion convertible debt offering and used the net proceeds, together with available cash, to repay in full the $1.7 billion outstanding balance of the term loan used to acquire ATI.

Johnson & Johnson










+10% & +13%

Read the article, "Bionic Baby Boomers," in vol. 4, iss. 7. Johnson & Johnson is a mega-cap corporation with many products, and a small presence in the hip resurfacing arena. Growth is 16% annually. Stable, dividend-paying Blue Chip.

Krispy Kreme





$2.59 (12.3.07)






Have you visited the Coffee Bean and Tea Leaf shops lately? Seen Krispy Kreme doughnuts in the pastry case? KKD is expanding into Asia – namely Macao, the Phillipines, Hong Kong, Indonesia and Japan. There are currently approximately 296 Krispy Kreme stores and 99 satellites operating system-wide in 41 U.S. states, Australia, Canada, Hong Kong, Indonesia, Japan, Kuwait, Mexico, the Philippines, the Republic of South Korea, United Arab Emirates and the United Kingdom. If you love their product, KKD’s CEO has proven to be a turnaround specialist, and he’s done a great job in the past. KKD caught up with all of their SEC filings as of 1.29.07, and is looking to the future now. Lynn Crump-Caine (a 30-year McDonald’s veteran) and C. Stephen Lynn (former Chairman and CEO of Shoney’s and Sonic Corp.) were recently added as directors. Missed analyst earnings estimates on 9.15.07 for second straight quarter. Revenues for the second quarter of fiscal 2008 decreased 7.5% to $104.1 million compared to $112.5 million in the second quarter of last year. Company Stores revenues decreased 4.7% to $75.3 million, Franchise revenues were flat at $5.1 million and KKD Supply Chain revenues decreased 16.8% to $23.7 million. KKD will announce earnings on 12/6/2007.

MEMC Electronics




$35.30 (11.11)





MEMC was added to the S&P500 in August of 2007. Read "Sun Powers Whole Foods," article in vol. 3, iss. 10. Silicon is in high demand, and MEMC has been able to price its product and pick its customers accordingly. On 10.25, the company reported earnings: 3Q net sales were $472.8 million, which represents an increase of 7.3% from 3rd quarter 2006 net sales of $ increase of 15.9%. Net income was $151.5 million. MEMC will receive $2.5 billion to $3 billion in revenue from sales of the wafers over the 10-year period from Taiwan’s Gintech Energy (solar). MEMC also will be eligible to purchase a 10 percent interest in Gintech, as well as acquire the rights to a parcel of land of about 1.7 hectares, or about 4.2 acres, located within the Hsinchu Science Park. Supplies silicon ingots to Suntech Power Holdings, and owns a stake in that company as well. The CEO has cashed out over $78 million, and plans to continue to "diversify" his holdings through 2010. Investors have cashed out over $3 billion. This is colossal insider selling, however, after decades of solar energy being out of favor, this may be the first time the investors have been able to roll out their decades long investments. According to MEMC’s Chief Executive Officer, Nabeel Gareeb, "Early last month we announced that a construction incident caused an abrupt power interruption at our Pasadena polysilicon production facility. Although the power was quickly recovered, the extended effects of the incident caused us to lose well over a week's worth of production, miss our cost projections by the double digit millions, and delay our expansion. In spite of this incident and its unanticipated consequences, we are pleased to report healthy sales and profits during the quarter, and a strong improvement over the year-ago quarter," said Nabeel Gareeb, MEMC's chief executive officer. "Cash flow generation continues to be strong, and cash balances crossed the $1 billion milestone." Implemented a 500 million share repurchase program in the 2nd quarter of 2007.


Silicon Valley, CA









Watch Natalie Pace’s Exclusive Video Network Q&A with Patrick Lo (from August 2006). Award Heaven! Patrick Lo, CEO, won the Ernst & Young’s Entrepreneur of the Year Award (on 6.16.06), NetGear was on Business Week’s Hot 100 list (for the 2nd year), NetGear was awarded Best Buy’s Bravo Award for Business Excellence and POPULAR MECHANICS just gave NetGear’s Skype phone its Breakthrough Award. The NETGEAR Skype WiFi phone is available online. It’s a great product that allows you to connect to Skype and call anyone worldwide anywhere there is a WiFi signal. An October 2006 report from Jupiter Research predicted that 20.4 million U.S. households will subscribe to some form of Internet-based broadband phone service by 2010. With all of the promising new products (Skype phones), and the product alliance with Avaya, NetGear is poised to continue strong growth. Earnings on 10.25.07: 3Q 2007 net revenue increased to Third quarter 2007 net revenue increased to $191.7 million, 26% year- over-year growth. Net income increased to $ 13.3 million, as compared to $8 million in the comparable prior year quarter, 66% year-over-year-growth. Net revenue by geography: North America, 38%; Europe, Middle-East and Africa, 52%; Asia Pacific, 10%. Accordng to Mr. Lo, "Revenue growth was ahead of our prior guidance led by robust back-to-school sales in North America, and strong demand in EMEA (Europe, Middle East and Africa) and Asia Pacific regions. Broadband penetration continues to increase at a steady pace worldwide among both homes and small businesses."

OSI Pharmaceuticals


2005 Company of the Year




$33.00 (4.1.07)




-28% &

+52%’s 2005 Company of the Year. Read vol. 1, iss. 56. Announced 3Q 2007 earnings on 10.25.07. Net income from continuing operations of $35.9 million (or $0.59 per share) for the three months ended September 30, 2007, compared with net income from continuing operations of $159,000 (or $0.00 per share) for the third quarter of 2006. Tarceva is the genetic based "cancer pill," and sales have been exploding. OSIP is a partner of Genentech (DNA) and Roche. OSIP is now testing Tarceva as an application for other cancers, including lung cancer. Industry sales data has placed the cancer drug market's value at more than $20 billion annually and it is growing fast. Institutional holdings of OSIP increased significantly on 11.22.07. Total worldwide net sales of Tarceva(R) (erlotinib) for the third quarter of 2007, as reported by the Company's collaborators for Tarceva, Genentech, Inc. and Roche, were approximately $226 million representing a 32% growth in global sales compared to the same period last year. For the nine months ended September 30, 2007 worldwide Tarceva net sales were approximately $635 million representing a 38% increase over the same period last year. The Company reported total revenues from continuing operations of $100 million for the third quarter of 2007 compared to revenues of $57 million for the third quarter of 2006, an increase of 77%.



Micro Cap









+25% & +49%

Read the article, "Golf Carts and Sports Cars," from vol. 4, iss. 6. Reported 3Q 2007 results on November 15, 2007. Who are SatCon’s customers? On June 27, 2007, SatCon announced that its PowerGate(R) commercial grade inverters had been installed as an integral part of Google's corporate headquarters in Mountain View, California. The 1.6MW system is the largest commercial photovoltaic system in the United States. Revenues increased 147% over last year to $21.0 million. Losses from Operations declined to $1.2 million from $3.5 million in 2006. Sales Order backlog was approximately $47 million at the end of the quarter, a 78% increase over last year. SATC expects to achieve annual revenues for 2007 on the order of $55 million compared to 2006 annual revenues of $34 million, an increase of over 60%.

Smith & Nephew

London, England










-4.5% &


Read the article in vol. 4, iss. 7. Announced earnings on 11.1.07. Smith and Nephew are the first movers in the fast-growing US hip resurfacing marketplace. The company is based out of London, England, and with a market cap of $10.57 billion is a good diversification strategy for your portfolio, in addition to having a piece of an exploding marketplace. Price-to-cash-flow ratio well below industry average on 9.16.07.

Withdrew 185 of its BIRMINGHAM HIP* Resurfacing System implants following a packaging error at a subcontractor on Aug. 16, 2007. Smith & Nephew's investigation confirms that this problem is confined to a small number of batches. A number of implants have already been recovered in their packaging. The devices have been distributed to a number of countries, including the UK and the US. Proactive notification is a good sign of the moral code of the executive suite, but bad products can be Lawsuit City if they were implanted. This is a developing story.

Sohu (Chinese Co. ADR)

Beijing, China

Small Cap









See ezines, vol. 3, issue 4 and vol. 2, issue 9 for feature articles on Sohu. Dr. Charles Zhang, the Chairman and CEO of, is one of our CEOs of the year in 2007. Read the articles in vol. 4, iss. 1. You can watch a Q&A with Dr. Charles Zhang in an exclusive interview I did on the Video Network. Sohu was selected as the official sponsor of Internet Content Service (ICS) for the Beijing 2008 Olympic Games. Could be some bumps in the road between now and Beijing Olympics 2008, which should ultimately be worth it. Share price jumped in early July 2007 and has been strong since! Don’t get sucked into buying at the high P/E of 82.

SunTech Holdings Co. Ltd (Green & Chinese Co. ADR)


2007 Company of the Year

Mainland China




$34.01 (1.1.07)




+242% & +160%

See vol. 4, iss. 1 for our Company of the Year article, which names SunTech the Company of 2007. Also, check out vol. 3, issue 10, and vol. 2, iss. 12 for our articles on solar energy. On February 21, 2007, Suntech’s CEO, Dr. Shi joined the Global Roundtable on Climate Change which is part of the Earth Institute of Columbia University in the City of New York. The Global Roundtable brings together more than 100 high-level, critical stakeholders from all regions of the world. Dr. Shi was named one of TIME magazine's 2007 "Heroes of the Environment," on October 22, 2007, and the share price has been a rocket ship ever since. Suntech will supply solar modules with an aggregate output of 23.2MW to Atersa for installation in the Photovoltaic Grid Connection Park in the Extremadura region of Spain, the world’s largest solar power plant. SunTech is also the official solar provider of the 2008 Beijing Olympics, so expect that it will enjoy a lot of buzz over the next 18 months. Dr. Shi is one of our Executives of the Year in 2007. Read the article in vol. 4, iss. 1. Suntech picked up more clients at the 2007 Solar Conference in Long Beach in August 2007, adding Irvine, Calif.'s Lumeta and Los Gatos, Calif.-based Akeena Solar. In June 2007, Suntech signed a 10 year supply deal for polysilicon from Hawaii's Hoku Scientific. Institutional holdings of STP increased significantly on November 22, 2007. High P/E Alert!

T. Rowe Price Em Eur & Mediterranean









See vol. 4, issue 3 and vol. 2, issue 8 for articles on why Eastern EU rocks, while Western EU stalls. Great way to diversify, as well as to add growth. Go global with the emerging countries. Avoid the countries in the EU that are stalling in economic growth, like Germany and France. International investing in the right sectors and countries pays off! Upgraded to top Morningstar return rating in its category on 7.27.07. Upgraded to Morningstar 5-star rating on 8.12.07. (We first featured this rock star mutual fund back in August of 2005!)

Trina Solar Limited

RISK: Medium

Chinese-based ADR



$44.08 &

$43.18 (6.15.07)




+22.5% & +25%

See vol. 4, iss. 4 for the article "Green Hits the Mainstream," and vol. 3, issue 10, and vol. 2, iss. 12 for other articles on solar energy. This is a profitable solar energy company, based out of China. The international management team is very strong, as are sales, growth and profitability. Share price jumped in early July 2007. Institutional holdings increased significantly on 9.12.07, per Announced 2Q 2007 earnings on 8.23.07. Net revenues increased 77% over the last quarter and 160% over the last year to $75.3 million. Net income increased 51.4% over the last quarter and 540% over the last year to $7.2 million.

UQM Technologies





$3.10 (12.5.07)




-21% &


Read the article, "Golf Carts and Sports Cars," from vol. 4, iss. 6. UQM Technologies, Inc. is a developer and manufacturer of power dense, high efficiency electric motors, generators and power electronic controllers for the automotive, aerospace, medical, military and industrial markets. A major emphasis of the Company is developing products for the alternative energy technologies sector including propulsion systems for electric, hybrid electric, plug-in hybrid electric and fuel cell electric vehicles, under-the-hood power accessories and other vehicle auxiliaries and distributed power generation applications. On November 5, 2007, received a $1,046,500 cost-share contract from the California Energy Commission's Public Interest Energy Research Program and the U.S. Department of Energy's National Renewable Energy Laboratory (NREL) to develop an advanced grid-connect inverter under its Advanced Power Electronics Interface (APEI) Initiative. UQM’s share was $439,000 (42%).

U.S. Gold

Colorado USA





$3.02 on





-33% &


Began trading on the AMEX stock exchange on 12.11.06. (Also trades on the Toronto Stock Exchange.) See the feature interview with CEO and Chairman Rob McEwen in vol. 3, iss. 2, and click to hear Natalie Pace’s Q&A with Rob McEwen on the Video Network. Note: U.S. Gold is not producing gold at this time; is it a gold exploration company, based in Nevada. Rob McEwen, Chairman and CEO, was awarded the "Most Innovative CEO" award in 2006 by Canadian Business magazine in its fifth annual "All-Star Execs roundup." Motley Fool added U.S. Gold to their "5 Low-Priced, High-Star Stocks" on 2.6.07. As more press comes on board, the price should reflect the wooing of Wall Street investors. (Now, if the company strikes gold, we’ll all be geniuses…) UXG is "continuing their aggressive drilling and exploration program at our top-priority targets: Keystone, Limousine Butte, Gold Bar, and Tonkin." Read the article above for more detailed info on this gold exploration company. Rob McEwen, Chairman and CEO, was appointed to the Order of Canada, the country's highest civilian honor on July 3, 2007. Rob is one of 71 new appointments announced by Her Excellency, the Right Honorable Michaelle Jean, Governor General of Canada. U.S. Gold was added to the Russell 3000 on July 3, 2007.

On October 4, 2007 UXG announced results from its recently expanded exploration portfolio in Nevada. At Tonkin, the best gold assay results were 0.147 opt (ounces per ton) over 55 ft. (feet) (5.030 gpt (grams per tonne) over 16.8 m (meters)) and 0.115 opt over 23.9 ft. (3.937 gpt over 7.3 m); and at our Limo Project 0.166 opt over 26 ft. (5.685 gpt over 7.9 m) and 0.052 opt over 184.5 ft. (1.781 gpt over 56.2 m).

"Since our last exploration release on June 12, 2007, assay results from 44 holes totaling 35,964 feet of drilling have been received. We haven't hit any home runs yet, but we are on base and it is early in the game. We have advanced our understanding of the geology and confirmed that we have encountered wide sections of the right rock types to host a Carlin style gold deposit. In addition, we are fortunate to have a large land holding in a prospective area and a healthy treasury to fund our objective of exploring aggressively for the next Cortez Hills discovery. I must emphasize that exploration is the research and development of the mining industry, and it is typically a frustratingly slow and expensive process with low odds of success. The results in this press release are positive and encouraging, but not thrilling," said Rob McEwen, Chairman and CEO.

Ann Carpenter, President, Chief Operating Officer and Director of the Company, resigned on 11.17.07. Rob McEwen, CEO AND Chairman, remains in charge and will provide an update on the status of their exploration in the near future, according to a spokesperson at the company. Rob McEwen, Chairman and CEO, increased his beneficial ownership in the Company to 21.5% (20,687,427 shares) from 19.8% (18,635,348 shares) on December 4, 2007, through the exercise of Warrants of US Gold Canadian Acquisition Corporation. This additional investment in US Gold totals $3,903,107.

World Water & Power


Trading off the boards








See vol. 4, iss. 4 for the article Green Hits the Mainstream, and vol. 3, issue 10, and vol. 2, iss. 12 for articles on solar energy. This is a very high-risk company in the solar-energy/water purification sector. CEO Quentin Kelly was invited by Governor Schwarzenegger to join him on the Governor’s tour of Canada, during the California-Canada Conference on Clean Technologies in Vancouver. Mr. Kelley was selected due to WWAT’s leading role in building prominent solar energy projects in California, including the recently-announced Fresno airport solar complex as well as the largest solar-powered agricultural system in the world and only self-sustaining water utility. Announced on August 9, 2007, that they would be delivering 10 Mobile MaxPure units for use in Darfur, Sudan. The portable solar driven water pumping and purifying units, purchased for an aggregate of $775,000, will provide approximately 30,000 gallons of safe drinking water daily at each of 10 sites across the ravaged desert region. Deliveries are scheduled for late September/October with installation in October/November. Financial terms of the contract were not disclosed. Financial results on 8.13.07: Revenue for the second quarter was $2.2 million, compared with $1.8 million reported in the second quarter of 2006. Net loss for the second quarter of 2007 was $2.8 million, or $(0.02) per share, compared to a loss of $2.0 million, or $(0.01) per share, in the second quarter of 2006. The 2007 second quarter reflects an increase in marketing and sales expense tied to the Company's aggressive growth goals. According to Quentin T. Kelly, Chairman and CEO, "We have a $200 million pipeline of potential contracts plus additional large, pending projects. We believe WorldWater has the unique, proprietary technology and resources to offer the most cost-efficient solutions to a world demanding clean, renewable energy."

On May 24, 2007 WorldWater & Solar Technologies Corp. announced the signing of a Strategic Memorandum of Understanding that is expected to lead to the expansion and increased efficiency of the marketing and sales forces of both companies. WorldWater is an international solar engineering and water management company with unique, high-powered solar technology providing solutions to power and water supply problems; Solargenix is in the business of maximizing patented solar collection technology and other patents and know-how to convert the sun’s light into a variety of temperature ranges for thermal heat, with worldwide experience in energy and environmental engineering, solar design and building construction. The Companies expect to offer a full spectrum of solar power capabilities for industrial, residential and commercial buildings -- from lighting to heating, from driving motors and pumps to hot water supply and HVAC. The companies believe that these collaborative applications of their respective technologies will contribute to increased marketing and sales with attendant increased revenues, profitability and market shares for both companies.

Wilderhill Clean Energy Portfolio (Green ETF)









See vol. 3, issue 10, and vol. 2, iss. 12 for articles on solar energy. This is a well-managed "smart" ETF, which updates its holdings regularly, but falls and rises on the good or bad news of alternative energy companies which it may not even hold in the portfolio. Fell earlier this year on bad news at Evergreen Solar, with regard to silicon supply, even though Evergreen Solar was not a major holding. Top holdings on 1.12.07: SunPower, OM Group, Ballard, Energy Conversion Devices, SunTech, Ormat, Evergreen, Ormat and MEMC Electronic Materials.












-67% &


See vol. 4, issue 3, "Money Grows on WisdomTrees." This is a well-managed "smart" ETF, which updates its holdings regularly, and trades on earnings instead of market cap. Trading off the boards with a war chest of capital and a former SEC chairman as one of the senior advisors. The company has had to delay its plans to re-list on NASDAQ, due to current "market conditions and a $5 minimum stock price requirement." According to a press release issued on Nov. 12, 2007, the Company does not expect to re-list until the second quarter of 2008, at the earliest. WisdomTree Trust launched the industry’s first small-cap dividend-weighted emerging markets ETF on Halloween under the ticker symbol DGS, and launched WisdomTree Emerging Markets High-Yielding Fund (DEM) in July. Wisdom Tree also offers an ETF 401(k) platform. Don’t underestimate this company. CEO Jono Steinberg is married to Maria Bartiromo and both have strong relationships on Wall Street, as do Chairman Michael Steinhardt and Senior Investment Strategy Advisor Professor Jeremy J. Siegel, the famous Wizard of Wharton.


Silicon Valley, USA










-13.5% &


Announced earnings on 1.29.08 at 5:00 p.m. ET. We just re-added Yahoo to the list effective 6.15.07. Terry Semel is coaching (as non-executive Chairman) and Jerry Wang is leading (as CEO), but can Yahoo jumpstart their stalled potential? Why do we believe them this time? eBay’s CEO Meg Whitman committed to a large block of ads on Yahoo, which were previously the exclusive domain of Google. 3Q earnings: "Moving forward, we are focused on three big, multi-year objectives: to become the starting point for the most consumers on the Internet; to be the 'must buy' for the most advertisers; and to deliver open, industry-leading platforms that attract the most developers," according to Yahoo co-founder & CEO Jerry Yang. Revenues were $1,768 million for the third quarter of 2007, a 12% higher than the same quarter last year. Net income for the third quarter of 2007 was $151 million or $0.11 per diluted share, roughly equal to last year. Cash and short term investments equal $2.7 billion. Corporate Buyback of company stock in the quarter was $350 million. Since Yahoo has so much free content, it could be the beneficiary of the writer’s strike, which is turning network tv watchers into IT entertainment lovers.










Read the article "Clean Energy Rolls Out Worldwide," in vol. 4, iss. 12. Annual report was issued on 12.7.07.

Sony (NYSE: SNE) and Sunoco (NYSE: SUN) both had great runs for the list! LifeCell (NASDAQ: LIFC) posted over 180% gains before being moved to the Cooling Off list. Bioteq Environmental (TSE: BQE) had 144% gains. Rio Tinto was removed on 11.15.2006 with 145% gains. Las Vegas Sands was removed on January 5, 2007 with 139% gains, Agilent on 2.1.07 with flat performance, and RELM Wireless was taken off with 3% gains on 2.1.07. Blockbuster ran up 82.5% in gains, which we cashed in on February 12, 2007. Intuit, deleted in June 2007, was a wash for us – up and down. Macerich posted 150% gains between May 2003 (when it was first featured) and September 2007 (when it was removed from the list). Jet Blue was removed on December 5, 2007 with losses of 24-45%. Still love the airline as a consumer, but oil prices are killing the industry. Disney (+31%), National Health Investors (flat), News Corp. (+33%), Opsware (+690%), Siri (mixed) and Time Warner (flat performance) were all deleted on December 26, 2007.

Recently Deleted from the Hot News List on (12.26.07):











CEO Bob Iger was one of our Executives of the Year in 2007. Read the article in vol. 4, iss. 1. Announced earnings on 11.8.07. Diluted earnings per share (EPS) for the year increased to $2.25, compared to $1.64 in the prior year.. Disney/Pixar/ABC, distributed by Apple iTunes. Hmmm… The most successful animation film company meets the most successful family media company meets the most successful new media device, the iPod. Sounds like the happiest place on Earth to us. The largest individual stockholder is Steve Jobs. According to the annual report, CEO Bob Iger received $22 million in compensation last year (not including stock options). His pay included $2 million salary and a $15 million cash bonus. The WGA contract was up on October 31, while the SAG and DGA contracts expire in June 2008. Although the studios have all ramped up production to stave off the effects of a strike by the unions, this strike could certainly parch the investor appetite in film companies, even if it doesn’t cripple profits. Though many believe the WGA union spokesperson has been too aggressive and the studios have been too recalcitrant about cutting writers in on a fair piece of new media, the strikers are out in full force and receiving a lot of support from the stars who speak their lines on hit shows. With millions of viewers turning to the Internet for their entertainment these days, million of dollars lost and former television writers and staff being let go, the economic fallout of the strike will likely impact the media companies now and going forward. And we still have the directors and actors to deal with in July. Decided to cut out with profits, and weight toward Internet media giants, like Google, eBay and Yahoo picking up the former network tv lovers.

National Health Investors









Get more information in vol. 4, iss. 9 in the REITs article and accompanying stock report card. This is a company that I featured in the April 2004 ezine at, believe it or not, $29.89. There are rumors of a merger. We’ll watch this in the next few months to see if the merger comes to fruition and/or if the Santa Rally pushes up the stock. While National Health Investors is in real estate, they are in the niche market of providing long term housing for the elderly – a large growing marketplace, with baby boomer money. We weighed in on the real estate decline and took this off the list effective December 26, 2007.

News Corp.

Vol. 2, iss. 10



MySpace: 2006 Company of the Year








Owns Fox TV and film studios, MySpace, and print publications. Sold DirecTV. News Corp. has completed $2.5 billion of a $3.0 billion buyback program initiated last June, and increased the stock buyback program to $6.0 billion. DVDs include: Ice Age: The Meltdown and X-Men. Theatrical hits include: Borat, The Devil Wears Prada, Little Miss Sunshine, Napoleon Dynamite, Die Hard and The Simpsons Movie. MySpace CEO Chris DeWolfe and President Tom Anderson were our Executives of the Year in 2006. Read the article in vol. 3, iss. 1. Spam issues have lead California teens to jump over to FaceBook. If Myspace were led by less capable, passionate executives, I’d be plenty worried right now. We’ll monitor, but with the addition of video and the strong music fan base, it’s hard to imagine MySpace imploding. According to Gabe, 17, from Santa Monica, "I use Facebook more. It’s become the easier thing. MySpace has been corrupted by aliens – all of these hackers who send people adverts." The WGA contract was up on October 31, and the writers began striking on Monday, November 5, 2007. The SAG and DGA contracts expire in June 2008. Although the studios have all ramped up production to stave off the effects of a strike by the unions, a strike could certainly parch the investor appetite in film companies, even if it doesn’t cripple profits. Many believe the studios have been too recalcitrant about cutting writers in on a fair piece of new media, the strikers are out in full force and receiving a lot of support from the stars who speak their lines on hit shows. With millions of viewers turning to the Internet for their entertainment these days, million of dollars lost and former television writers and staff being let go, the economic fallout of the strike will likely impact the media companies now and going forward. And we still have the directors and actors to deal with in July. Decided to cut out with profits, and weight toward Internet media giants, like Google, eBay and Yahoo picking up the former network tv lovers.



2004 Company of the Year



$1.80 (12.15.02)





Hewlett-Packard announced that they would be acquiring Opsware for $14.25/share on 7.23.07! Named to Deloitte and Touche's prestigious Technology Fast 50 Program for Silicon Valley on 10.26.06. Cisco distributes Opsware’s products worldwide. Opsware automates the complete IT lifecycle and enables IT to automatically discover, provision, patch, configure, secure, change, scale, audit, recover, consolidate, migrate, and reallocate servers, network devices and applications. Over 350 of the world's largest companies, outsourcers and government agencies use Opsware to deliver this new, automated model of IT. Read the 2004 Company of the Year article in vol. 1, iss. 44. Surpassed $100 million in revenue for full year 2006 ($101.7 million), up 67% over the prior year! (Don’t buy now. The price won’t get above $14.25, as that is the acquisition price.)






$2.90 (6.1.07)




-16% & +11%

Sirius and XM Satellite Radio issued a joint press release on February 20, 2007 saying that they will combine the companies. Mel Karmazin remains CEO of the combined company, while Gary Parsons, the CEO of XM-SR, will become the Chairman. The merger is being challenged in Congress. This story is developing and we will keep you posted. In the meantime, Sirius has launched backseat tv on Chrysler cars beginning in 2008, and is a factory installed option for Land Rovers and Mini hard tops. Institutional holdings of SIRI increased significantly on 11.22.07. Exceeded analyst earnings estimates for second straight quarter on 10.31.07. Shares rocketed on 11.30.07, after Bear Stearns analyst Robert Pek said that the Justice Department's junior staffers will attempt to block the deal, but senior members will likely rule in favor of the merger allowing Sirius to buy out its larger counterpart, XM. Competition is too tight and management is focused on the acquisition story more than the great products story. Impact of writer’s strike is not yet known, but there are many shows, like Howard Stern’s show, with writers on them.


(owns AOL)










See vol. 3, issue 9, "eBay’s Skype Outpaces News Corp.’s MySpace" for a report card that features Time-Warner. TWX’s The Departed won Best Picture of the Year! AOL and Time-Warner have finally figured out how to work together. Effective November 5, 2007, Former Chairman & CEO Richard D. Parsons has stepped down as CEO, but will remain chairman. Jeffrey Bewkes is the new CEO. From 2002-2005, Mr. Bewkes was chairman of the Time Warner entertainment and networks grop, and in 2006, he became President and COO, overseeing all of the divisions at Time Warner. Prior to his work at the corporate headquarters, he was the CEO of HBO. Under his leadership, HBO became the world's most profitable TV network, while securing its reputation for critically acclaimed original programming, movies, documentaries, concerts and sports, as well as leadership in new technologies such as HBO On Demand. Reported 3Q earnings on Nov. 7, 2007. Revenues are up 9% from $10.7 billion last year to $11.7 billion this year, operating income is up 29% to $2.1 billion from $1.6 billion. Free cash flow is $4 billion. Net debt is $35.3 billion, increasing $1.9 billion from the end of 2006 due to the stock repurchase program. Company has completed $2.2 billion of an announced $5 billion stock repurchase program, and is no track to complete ½ of the buyback by the end of 2007. The WGA contract was up on October 31, while the SAG and DGA contracts expire in June 2008. Many believe the studios have been too recalcitrant about cutting writers in on a fair piece of new media. The strikers are out in full force and receiving a lot of support from the stars who speak their lines on hit shows. With millions of viewers turning to the Internet for their entertainment these days, million of dollars lost and former television writers and staff being let go, the economic fallout of the strike will likely impact the media companies now and going forward. And we still have the directors and actors to deal with in July. Decided to cut out, and weight toward Internet media giants, like Google, eBay and Yahoo picking up the former network tv lovers.

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!  

Recent Additions (added on 12.05.07):
International Rectifier

Recent Deletions:
Advanced Micro Devices on 12.05.07


NP owns?


Price when featured



Year High

Year Low

Gains since original feature

Boston Properties








Get more information in vol. 4, iss. 9 in the REITs article. Boston Properties looks great. Think that the office building REITs may begin to come under pressure sometime in 2008. Will be monitoring cash flow, capital spending, productivity, salaries, GDP growth and other signs of the business economy, which are the customers of Boston Properties.









EMCORE Corp (EMCORE), is a provider of compound semiconductor-based components and subsystems for the broadband, fiber optic, satellite and terrestrial solar power markets. The Company operates in two segments: Fiber Optics and Photovoltaics. Missed earnings estimates on 12.18.07.

General Electric








See the article, "Green San Jose Company," in vol. 4, iss. 8.

General Motors









See the article "Faded Blue Chips" in vol. 3, issue 8. Almost every risk factor which GM listed in the annual report has occurred – prices for parts are higher due to the metals commodity crunch and gas prices have turned consumers to gas efficient vehicles. GM still has an enormous overhead that impedes its ability to be profitable in the global landscape. Investors got excited late Sept. 2007 about a tentative deal with the United Auto Workers Union, however, expenses are still too high and the cars are still too unpopular. I’ve not highlighted this company because the CEO is doing a spectacular job in an awfully challenging landscape. Want to check out the focus on new products, including the electric car, and will be doing a full report soon. Not a short, but certainly not a company that one would expect to be turned around overnight.

International Rectifier








International Rectifier Corporation is a designer, manufacturer and marketer of power management product devices, which use power semiconductors. The Company's products are used in a variety of end applications, including computers, communications networking, consumer electronics, energy-efficient appliances, lighting, satellites, launch vehicles, aircraft and automotive diesel injection.









Get more information in vol. 4, iss. 9 in the REITs article. We first featured Macerich in May of 2003, when it was trading at $33/share. In September, the signs were pointing toward a cooling off in retail shopping center REITs, so we removed the company from our Hot News list (meaning that we’re capping the performance at 150% gains). There is a good chance that the Santa Rally will enthrall investors, and push the MAC price up, even though it is in the decidedly unpopular REITs industry. We’ll look to putting MAC on the Cooling Off list in January 2008, or if interim news warrant it earlier.









World’s largest software company. $31 billion in cash. Launched Zune on Nov. 14, 2006 and Vista earlier this year. New products have not received "buzz" or outstanding sales. Great blue chip for your long term portfolio because with the war chest and talent at MSFT, even this year’s assembly line of flops shouldn’t bring the company down, although it may bring out the firing rod. Will pressure come down on Steve Ballmer, CEO? Trading near the 52-week high, so waiting for a better buy-in opportunity might yield better returns.

Cooling Off Stocks List (may be Poised for a Decline in Share Price).
Note: The companies listed in bold have recently been added to this cooling off list and/or may be currently poised for a decline in value. Investors who have them in their portfolio should read the recent news and consider whether it is time to sell and take profits, dump losses, short the position and/or simply weather the storms, while keeping the company in their long-term portfolio. At any rate, always consult your certified financial partner before making adjustments to your portfolio. (Again, note, that the stocks on this chart are expected to go DOWN in price.)

Highlighted Companies (Cooling Off List):
Wells Fargo


NP owns?


Price when added to Cooling Off List

Price 12.26.07

52-week High

52-week Low


Fannie Mae










-36% &


Spent $1 billion on accounting fees related to the accounting scandal. Investors are still in to the tune of $58.44 billion…. Are you? Better check your mutual funds. The recent subprime lending fallout doesn’t bode well for FNM. According to the AP, "Maintaining strong asset quality position will be a challenge for Fannie Mae, given the recent weakening of housing values from the very strong levels seen over the last few years." Standard and Poor’s has a negative outlook on Fannie Mae. December 14 annual meeting for shareholders will be held at 10:00 a.m., EST, at the Hilton Washington in Washington DC. Fannie Mae is chartered, but not funded or guaranteed, by the U.S. government. It’s funded completely with private capital, and is one of the top holdings in some of the most popular mutual funds. i.e. you might own it. 3rd quarter net income loss was $1.5 billion. FNM expects that the housing crunch and credit tightening will continue to adversely impact their financial results in 2007 and 2008, according to the 3rd quarter earnings report.

KB Home









CEO Bruce Karatz resigned under pressure Oct. 2006, after SEC investigation of backdating options. Read the article, "Rupert Murdoch, Nobel Laureates and Top Real Estate CEOs. Find Out Where They Are Investing," from volume 2, issue 5. In May 2005, we called REITs a burnout sector, and the fallout should continue, with high home prices, rising interest rates, people backing out of contracts and rising inventory. On June 28, 2007, KBH reported a loss from continuing operations of $174.2 million or $2.26 per diluted share in the second quarter of 2007, largely due to a pretax, non-cash charge of $308.2 million related to inventory and joint venture impairments and the abandonment of land option contracts. In the second quarter of 2006, the Company generated income from continuing operations of $184.4 million or $2.20 per diluted share. Revenues totaled $1.41 billion in the second quarter of 2007, down from $2.20 billion in the year-earlier quarter, due to a decline in housing revenues that was partly offset by an increase in land sale revenues.

Novastar Financial




$28.04 &

$36.53 (6.15.07)




-88% &


See the article (Sub) Prime Time in the May 2007 ezine, vol. 4, iss. 5, when we warned everyone should get out of subprime mortgage lenders. On July 27, 2007, Novastar announced a reverse stock split. As a result of the reverse stock split, every four shares of common stock were changed into one share of common stock. Scott Hartman, the company's chairman and chief executive officer, Chief Financial Officer Gregory Metz and General Counsel Jeff Ayers are leaving the company, effective Jan. 3, 2008. Lance Anderson, the current chief operating officer and president, was elected by the board to replace Hartman. In danger of being delisted by the NYSE due to the share price falling beneath $5.00/share. Has laid off 100s of employees, sold off most of its subprime loans and closed doors on most of its offices. What’s left to do? The paperwork? Don’t be fooled. Lance Anderson may be the only guy on the planet who would take this job. The former CEO and Chairman is reportedly getting $2.1 million in cash for leaving, according to BizJournal.

Toll Brothers









Robert Toll, CEO, and brother Bruce Toll have been on an insider selling spree, totaling hundreds of millions, since May 2005 (source: Read the article, "Rupert Murdoch, Nobel Laureates and Top Real Estate CEOs. Find Out Where They Are Investing," from volume 2, issue 5 in 2005, when we first reported on REITs as a burned out sector. There is a pending securities action complaint (but not a confirmed investigation), from June 2007, alleging that Toll Brothers "and one or more members of its senior management, violated federal securities laws by issuing various materially false and misleading statements that had the effect of artificially inflating the market price of the Company's securities and causing Class members to overpay for the securities." Reported a loss of $81.8 million, or 52 cents per share, in its fiscal fourth quarter, compared with net income of $173.8 million, or $1.07 per share, a year ago. According to Chairman and Chief Executive Officer Robert Toll, "By many measures, fiscal 2007 was the most challenging of the 40 years that Toll Brothers has been in business. 1974 was perhaps rougher, but the difficult times only lasted one year." You can access the call on their website at:

Wells Fargo








See Wells Fargo’s Great Depression, in vol. 4, iss. 12. The 3Q 2007 earnings release was issued on 10.16.07. Look for the 4Q report in the middle of January. (2006 was released on 1.16.07.)

The following companies were taken off of the Cooling Off list effective 10.16.06: Verisign (+15%). IMClone (-11%). Yahoo (-28%). LifeCell was removed on 7.2.07 with -4.5% overall performance. (The cooling off list anticipates that a company will lose share price value.) Google was added on 7.16.07 and then removed on 8.1.07 with losses of -6.7%. General Motors was removed on 10.01.07 with mixed performance.

Please note: does not act or operate like a broker. We are a publishing, media and information center. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.

IMPORTANT DISCLAIMER: Information has been obtained from sources believed to be reliable however 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. Calendar:

Don’t Miss the Get Rich and EnRich Retreat featuring Natalie Pace, Michael Bernard Beckwith and Dr. Rickie Byars Beckwith on January 2-5, 2008. You must be it, in order to do it. Experience the rich life with us and change your life now and forever.

The Calendar section features conferences, retreats, educational opportunities, cultural events, galas, market events and online chats with executives and VIPs. Stay plugged in! Visit our calendar section often.

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

Living the Rich Life Retreat, Santa Monica, CA
Wednesday, January 2-5, 2008
Attend this 4-day beachfront retreat and create a new Living the Rich Life plan, learn Natalie's trade-marked 3-ingredient recipe for cooking up profits and attend Reverend Michael Bernard Beckwith's Agape Sanctuary! Email Heather@NataliePace.

Transformative, Inspiring New Year’s Evening with Michael Bernard Beckwith, Dr. Rickie Byars Beckwith and Natalie Pace. Admission: FREE!
Thursday, January 3, 2008
Martin Luther King, Jr. Auditorium, located at the Santa Monica Public Library (Main branch). 601 Santa Monica Boulevard, Santa Monica, CA 90401.
(310) 458-8600
Seating is first come, first served and limited to just 140. Evening begins with a meditation at 6:30 p.m. and ends at 9:00 p.m.

Mid-Month Update: Hot News on Cool Stocks
Monday, January 14th, 2008
The mid-month update of the hot news on cool stocks report will be published on or before 5:00 p.m. PT. Check online before noon, just in case we get it out early!

Wagner's Tristan und Isolde at the Los Angeles Opera
Saturday, January 19th, 2008
David Hockney designs. Bold and fanciful, eye dazzling, creating a "tone of antic freshness, of fairy-tale legend filtered through adult (and adulterous) fantasy, according to the NY Times.

5th WSF World Spirit Forum: Zurich, Switzerland
Sunday, January 20th, 2008
WSF hosts spiritual and religious and political and social activists to gather and develop a plan for a unified humanity with equity and solutions for global concerns.

FOMC Meeting
Tuesday, January 29-30, 2008
The Federal Reserve Board governors meet to determine whether inflation is more of a factor than the housing pullback and subprime defaults. Will the Feds keep the rate where it is, raise it or lower it?

Invent Your Future Conference, Silicon Valley, CA
Tuesday, February 26th, 2008
Top speakers Sam Horn, Peggy Klaus, Maggie Neale and Liz Fetter address key topics like risk-taking, advanced negotiations and, hone your decision-making skills in the Business Challenge and enjoy non-stop networking.

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