Entries for January 2009

Richard Paul Evans, author of the new book The 5 Lessons a Millionaire Taught Me for Women, was on the Glen Beck Program today, and what he had to say was somewhat condescending. When asked why the lessons are different for women (The book is a new take on his previously published The 5 Lessons a Millionaire Taught Me), Evans said he realized that the vast majority of expenditures are now made by women, and yet "women have never been taught because they grow up with these mixed messages that, you know, good girls don't worry their pretty little heads about money."

I'm all for a book of financial tips aimed at women--in fact, one of my favorites is Janet Bodnar's Money Smart Women: Everything You Need to Know to Achieve a Lifetime of Financial Security (disclosure: she is a former editor of mine.) But Evans' assertion that women in general (or "good girls") are taught not to worry about money is way off base (and "pretty little heads"? Come on.) Women are making expenditures because women are more independent these days. And often, independence means they're making their own money. Plus, a lot of those women, like me, actually learned about money growing up.

In this recent interview, Evans explains why he thinks Men are from Mars and Women are from Venus when it comes to money. He says women are vulnerable to "the burnt-toast syndrome:"

You're having breakfast, and a slice gets burned--who gets it? Women do that with money, too," he says. "They trade their needs for somebody else's wants."

Doesn't everyone at one time or another trade their needs for somebody else's wants? It's called a relationship. I'm not quite sure what he means: he wants a monster truck, she wants a convertible? Please. Evans appears to be the king of overgeneralization.

If it turns out that pharmaceutical giant Pfizer buys its rival, Wyeth, Pfizer could profit in a big way from an expanded lineup of products that could help offset expiring patents and diversify its offerings.

But the deal might not be so great for shareholders. According to Harvard Business School professor Gary Pisano (via the WSJ): “The record of big mergers and acquisitions in Big Pharma has just not been good. There’s just been an enormous amount of shareholder wealth destroyed.”

However, the Journal notes that shareholders "haven’t exactly prospered in the absence of deals."

But according to this Boston Consulting Group study of acquisitions completed between 1992 and 2006, nearly 60 percent of the acquisitions reduced shareholder returns. The average deal produced a net gain to shareholders of 1.8 percent.

So far today, Wyeth shares are trading up 8 percent, and Pfizer's stock is down 2 percent.

Admittedly, I don't know much about coins. But it seems odd that the U.S. Mint today released a 24-karat, one-ounce gold coin that's currently selling for more than $1,000 in its online catalogue.

This Sacramento Bee story claims that's affordable. It is gold, after all, and in collectors' eyes, it may be a steal. One commenter writes: "That's a pretty low price since most are expecting the spot price of gold +40%."

Here are the details: The 2009 Ultra High Relief Double Eagle Gold Coin is a digitally reproduced version of an original piece minted in 1907. It features lady Liberty on one side, and a flying eagle on the other. According to the U.S. Mint, "it's considered by many to be the most beautiful coin ever produced in the United States."

It turns out that buying coins is becoming a popular way to invest in gold these days. According to this story, the demand for gold coins has been so high that in 2008, the Mint announced that all 2008 bullion coins--with the exception of two varieties--had been depleted.

With the announcement of nominations today and the kick-off of Oscars season, I couldn't help but wonder about the cost. Do the Oscars exist in a bubble, shielded from the recession?

Maybe not. According to Advertising Age, ABC is cutting the price of an advertisement during the Academy Awards to a low, low $1.4 million--down from $1.7 million--to lure more advertisers. And for the first time, the network will run movie ads, which were previously banned. The idea is to fill gaps left by big advertisers that dropped out last year (and presumably may not return), according to Ad Age. It might be hard to lure advertisers, though, considering that the number of viewers fell to 32 million last year, down from 40 million in 2007.

On another note, the price of the gold-plated Oscar statuettes hit a record $500 last year as gold prices skyrocketed to $950 an ounce. Gold isn't quite as high this year--it's traded between $800 and $890 since the beginning of the year--but those little statues will still be pretty steep.

Today, J. Crew today is milking the exposure it received yesterday when the first daughters wore its coats (periwinkle! guava pink!) to the swearing-in ceremony. The company Web site's front page today features not clothes, but gigantic, front-and-center type that reads "CONGRATULATIONS TO THE FIRST FAMILY" and "*Yes, the wore crewcuts! Find out more..." J. Crew even rushed out a press release yesterday.

The company pulled a similar move--and a lucrative one--when Michelle Obama appeared on Jay Leno's show and said she purchased the yellow outfit she was wearing online at J. Crew. The next day, the site's online traffic as a whole surged 64 percent, according to New York magazine.

It's most definitely a short-term boost, but every little bit helps. Especially given the bleak outlook for retailers. J. Crew's shares, which have slid from $50 in May 2008 to $9 yesterday, look like they'll close at $10 today.

So far this year, China stocks have taken a beating: According to Morningstar, the best-performing fund year-to-date is a China ultra-short fund. And that's on the heels of 2008's record 53 percent loss in the MSCI China index.

That aside, Money Morning is taking a contrarian stance with 11 reasons why it's actually a good time to buy China. Those reasons include: smart investors--including Mark Mobius--are loading up on Chinese stocks; the country's stocks are ridiculously cheap, as the average is trading at less than eight times earnings; earnings are growing; and the country has massive foreign reserves.

I recently spoke with ETF expert Jim Wiandt of IndexUniverse, who also favors China [see 9 ETFs for 2009].

Hedge funds are, like, totally 2006. Looks like millionaires are waking up to the fact that ridiculous fees and zero transparency just aren't worth it--especially when the average hedge fund lost 19 percent in 2008.

Meanwhile, a growing chorus on analysts and market watchers say Treasuries are so 2008. Marketwatch is advising investors to take their gains and "run for the hills." But Munis are still in.

At the same time, more investors are moving their 401(k) assets into money markets and missing out on a historic stock-buying opportunity.