New Money
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4 Ways to Profit From Pickens's Plan
Continue reading… 0 CommentsBlogger Tom Konrad, who writes about renewable energy, shares his strategies on how to profit from T. Boone Pickens's plan for reducing the nation's dependence on foreign oil, which includes building wind farms and transmission lines connecting these sites to power plants, as well as redirecting natural gas to replace imported gasoline and diesel. Here are Konrad's suggestions for profiting from the plan:
1. Invest in wind farms, including the makers of wind turbines and other wind-related stocks. These green investments include the source of Pickens's turbines, GE (symbol GE), Zoltek (ZOLT), which makes carbon fiber used in turbine blades, and two wind exchange-traded funds (First Trust ISE Global Wind Energy and PowerShares Global Wind Energy; tickers FAN and PWND, respectively).
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What Is Rich?
Continue reading… 5 CommentsHow much money does it take to be rich? Not surprisingly, definitions are all over the board. According to this Houston Chronicle story:
In a January telephone survey of 253 people with at least $500,000, 45 percent said it takes at least $5 million to qualify as rich. Another 25 percent said $25 million, and 8 percent picked $100 million, according to the Spectrem Group, a consulting firm that specializes on research about wealth.
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Why You Maybe Shouldn’t Trust Analysts
Continue reading… 0 CommentsMore analysts are missing the mark these days, according to Bloomberg: Their accuracy in predicting U.S. profits dropped to the lowest level in at least 16 years last quarter. Earnings estimates from analysts have matched results for only 6.7 percent of companies in the S&P 500 that have reported second-quarter earnings—the fewest since Bloomberg began tracking this information in 1992, the report said.
Accuracy peaked at 30 percent in the fourth quarter of 2000, the year Regulation Fair Disclosure, known as Reg FD, was adopted, and has fallen for six of the seven years since.
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15 More ETFs on Death March
Continue reading… 0 CommentsMore closures in the ETF industry: Earlier this month, PowerShares shuttered plans for six ETFs in registration, and now XShares is axing 15 of its HealthShares offerings. (The firm is leaving four open, and says it's redesigning the closing funds.) XShares told the Wall Street Journal that the ETFs didn't "resonate" with investors, and that it plans to roll out new HealthShares—including an Asian Health ETF—in the coming months.
The highly specialized funds on the chopping block include HealthShares Metabolic-Endocrine Disorders, HealthShares Orthopedic Repair, and HealthShares Dermatology & Wound Care.
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Is Merrill Trying to Bail on Tom Cruise's Movie Studio?
Continue reading… 0 CommentsStruggling investment bank Merrill Lynch (MER) is examining its contract with United Artists—Tom Cruise's production company—to determine whether it can revise the deal on better terms, reports the New York Post . Last year, United Artists secured $500 million in financing from Merrill to fund 15 to 18 movies over the next five years. The firm "is looking for any event that might trigger a default on the loan and open the door to renegotiations," according to the Post . (A potential loophole is the recent departure of United Artists' co-owner and CEO Paula Wagner.) To guard against any Merrill moves, United Artists has hired Goldman Sachs (GS) as a strategic adviser, the paper said.
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Bloggers on the Best Mutual Fund, Saving Tips
Continue reading… 1 CommentThis week, 20-something blogger Broke Grad Student published the 167th edition of the Carnival of Personal Finance, which highlights last week's top blog posts on topics ranging from budgeting to investing (including my post on 5 Ways to Track Your Stocks). My favorites are Everyday Finance's pick for the best mutual fund of 2008 (it's the Fairholme fund, which we've also written about), and the Beginner's Guide to Saving for Retirement, by My Retirement Blog.
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Bringing Snack Brands Back From the Dead
Continue reading… 2 CommentsNot only are snack makers scrimping on ingredients these days, they're also reviving left-for-dead brands in their product lines. Why? When the going gets tough, it's apparently more cost-efficient to resurrect an old brand than to develop a new product, reports the New York Times.
Last week, Kellogg reintroduced Hydrox cookies, Oreo-like knockoffs that were discontinued in 2003. (During the second quarter, the maker of Pop-Tarts and Keebler cookies managed to grow its North American snack sales by 6 percent.)
Eagle Snacks, the brand sold off by Anheuser-Busch and subsequently acquired by River West Brands, are also back. Another strategy companies use in a slumping economy includes launching new products associated with well-known brands. (The Times cites Alka-Seltzer Wake-Up Call, a hangover-relief tablet, as an example.)
So, how did these products become "ghost brands" in the first place? A number of factors could be responsible, says the Times: declining sales, stronger competitors, advertising budget cuts, or a company's desire to focus on newer brands.
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Do Stock Options Make You Loyal?
Continue reading… 1 CommentAccording to a recent Fidelity survey of 600 employees with company stock-purchase plans, 76 percent said those plans make them work harder. Other findings:
- About half of respondents said stock plans make them less likely to change jobs.
- 86 percent said they considered the plans to be a key part of their compensation package.
- More than two thirds said stock plans make them feel more invested in their company.
- Four in 10 employees surveyed said stock option plans are a must when shopping for a new job.
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The Highest-Paid and Most-Liked CEOs
Continue reading… 3 CommentsAs reported by the Associated Press, here is a list of the 10 highest-paid CEOs in 2007:
- Larry Ellison, Oracle Corp., $84.6 million
- John Thain, Merrill Lynch & Co., $83.1 million
- Leslie Moonves, CBS Corp., $67.6 million
- Richard Adkerson, Freeport-McMoran Copper & Gold Inc., $65.3 million
- Bob Simpson, XTO Energy Inc., $56.6 million
- Lloyd Blankfein, Goldman Sachs Group Inc., $54.0 million
- Kenneth Chenault, American Express Co., $51.7 million
- Eugene Isenberg, Nabors Industries Ltd., $44.6 million
- John Mack, Morgan Stanley, $41.7 million
- Glenn Murphy, Gap Inc., $39.1 million
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PowerShares Puts the Kibosh on 6 Oddly-Named ETFs
Continue reading… 1 CommentInvesco PowerShares is withdrawing plans for six ETFs in registration with the SEC, reports IndexUniverse. The firm's explanation is really a nonexplanation: They've simply "determined not to proceed with the registration," according to the filing.
Here are the six funds that will never be: PowerShares Dynamic Brand Name Products Portfolio, PowerShares REIT Preferred Portfolio, PowerShares Value Line 400 Portfolio, PowerShares Autonomic Allocation Research Affiliates Portfolio, PowerShares India Tiger Portfolio, and PowerShares NASDAQ Dividend Achievers Portfolio.
The names aren't too snappy. I like the sound of the India Tiger ETF, but Autonomic Allocation Research Affiliates? I doubt that would fly with investors. It turns out, PowerShares already has a fund covering the Indian market, reports IndexUniverse.
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Investing in the Olympics
Continue reading… 0 CommentsThe S&P 500 and the Dow have tumbled over the past year, but here's one unlikely index that's posting respectable returns: the Dow Jones 2008 Summer Games index.
The index, which tracks 37 stocks of companies that are official partners, sponsors, and suppliers of the Beijing 2008 Olympic Games, is up 8 percent over the 12-month period that ended June 30. From its December 31, 2006, inception, the index has gained an annualized 14 percent.
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Laid-Off Wall Streeters Bartending, Baking Cupcakes
Continue reading… 3 CommentsTough times on Wall Street mean more than 76,000 workers in the financial service industry—including traders, bankers, and analysts—are now out of a job. What are they doing now? Trying on new careers for far less pay, reports the International Herald Tribune.
Take 27-year-old Harvard graduate Jessica Walter, who lost her job as vice president for credit strategy at Bear Stearns. Now she's in the cupcake business. Or Jeff Salmon, who left a job investing in asset-backed securities to open a hair-salon franchise in New Jersey. According to the story, former traders and bond salesmen are also bartending and selling real estate. Other ex-traders are paying the bills by gambling (perhaps inspired by the movie Boiler Room?).
And while bankers with a financial cushion are buying ranches out West and moving to Dubai, laid-off investment banker Joshua Perksy is trolling Park Avenue wearing a sandwich board reading "Experienced MIT Grad for Hire."
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Investors Playing Russian Roulette
Continue reading… 1 CommentThanks to Russia's abundance of natural resources and growing consumer economy, funds that track the country have been on a tear for much of this decade.
Now, the outlook for Russian stocks is growing ominous. The WSJ's Return on Investment blog says the risks of investing in Russia "are far greater than most ordinary investors realize.... It isn't so much about the invasion of Georgia...as what that war, along with other recent events, says about the regime and the country." (At last count, according to ROI, Americans had more than $3 billion in Russia funds.)
Russia's risks go beyond the feud with Georgia: Half of the country's stock market is made up of oil and gas stocks, and natural-gas giant Gazprom accounts for a whopping 26 percent, says ROI.
Timothy Hubbard of ETF Trends reports that the Market Vectors Russia ETF (symbol RSX) is down 23 percent year-to-date and has dropped nearly 4 percent so far this week. Instead of focusing on Russia, Hubbard suggests that investors look to diversified exposure through the SPDR S&P Emerging Europe ETF (GUR), which includes a 35.6 percent weighting in Russia, 22.9 percent in the U.K., 12.2 percent in Poland, and 10.6 percent in Turkey.
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Job Hunting and 401(k)'s: No Match? Forget It
Continue reading… 1 CommentWhen you're surveying the benefits of a potential job, an employer 401(k) contribution match should be pretty much non-negotiable. The match should be a minimum requirement, but it's not necessarily a sign of a top-notch retirement plan, says ABC News columnist David McPherson. Here are two things he says to look out for when evaluating an employer contribution (the bold sections are mine):
First, any employer of a decent size should offer a contribution that amounts to at least 3 percent of your salary. This may be a stretch for some small employers or startups, but it should be the starting point for most companies...The most common formula is one in which the employer kicks in 50 cents for every dollar you contribute, up to 6 percent of your pay. Whatever the formula, your bottom line should be that the employer's contribution amounts to at least 3 percent of what you make. Anything less and I'd keep looking.
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The Angelina Jolie Stock Index, Decoded
Continue reading… 7 CommentsI'm loving Investopedia's (somewhat exhausting) list of investing buzzwords. A few of my favorites:
Angelina Jolie Stock Index: created by Fred Fuld of Stockerblog, this index is made up of companies linked to the actress. Think stocks of movie studios and producers: Sony, Viacom, and Time Warner. "Because Jolie's films usually earn large box-office revenues, the companies that produce these movies should have higher profits," says Investopedia. There may be something to this: According to Stockerblog (via Seeking Alpha), indexes that track three celebrities—Gisele Bündchen, Heidi Klum, and Angelina Jolie—have outperformed the Dow over the past six months.
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A Nifty Emergency Fund Calculator
Continue reading… 0 CommentsLast week, I told you about a formula from blogger Money Under 30 that helps you figure out how much to set aside for your emergency fund. Now, he has a handy calculator that does half the work for you; all you need to do is plug in the numbers (you'll have to download the file in Microsoft Excel).
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Effortlessly Invest Like Graham and Buffett
Continue reading… 1 CommentIndexUniverse reports that three exchange-traded notes based on the investing philosophy of Benjamin Graham are in the works. (A quick primer on ETNs: Like ETFs, they mimic the performance of an index and trade on exchanges. But instead of holding a portfolio of stocks, ETNs are typically filled with bonds that promise to repay the amount of your investment plus the return of the index, minus a management fee.)
According to this news release, the three ETNs (which focus, separately, on large-cap value, small-cap value, and total-market value) aim to "identify businesses with strong, liquid balance sheets that trade at a discount to their implied intrinsic value by implementing the investment principles of Benjamin Graham." Graham, the famed economist and value-investing pioneer, inspired many financial-world heavyweights, including protégé Warren Buffett.
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5 Ways to Track Your Stocks
Continue reading… 1 CommentWant to become a more informed shareholder? Sure you do. Fund investors can get away with checking their holdings semi-annually, but stocks require more attention. Here are five ways to stay on top of your stock investments:
1. Set up a free portfolio tracker. Several sites let you customize trackers with a list of your stock, fund, and ETF holdings. For example, Yahoo Finance and Google Finance both offer basic tools that let you insert the number of shares you bought, and at what price. The trackers also link to company information for stocks, such as recent news, historical share prices, and filings with the Securities and Exchange Commission. In Yahoo's case, you'll also find blog postings that mention your stock.
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An Easy Formula for an Emergency Fund
Continue reading… 1 CommentHow much money should you have in short-term savings in case you lose your job or some unforeseen disaster strikes? I've heard everything from a couple of thousand dollars to three or six months' living expenses—and I even know someone who, until recently, had $20,000 set aside for a rainy day.
Fellow blogger Money Under 30 shares his formula for figuring out how much money you should set aside in an emergency fund:
Calculate your minimum monthly expenses: These are fixed expenses, such as rent, utilities, auto and student loans, and groceries.
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Balances Down, but Savings Up in 401(k) Plans
Continue reading… 1 CommentDespite the ailing economy, 401(k) investors are saving more, according to a new study from Fidelity, which analyzed the 11.5 million participants it administers. In the first half of the year, investors who participated in the same plan both this year and last set $3,512 aside, on average, from their pretax earnings, up 7 percent from $3,283 in the first half of 2007.
Fidelity says the average retirement plan account balance dropped 7.5 percent in the first half of 2008, to $64,000, down from $69,200 in the first half of 2007. By comparison, Standard & Poor's 500 stock index dropped nearly 15 percent in the first half of this year. Surprisingly, the average balance for employees who stayed in their plans for both years fell less than 1 percent in the first half of 2008. Translation: 401(k) investors are diversifying!
Not surprisingly, Fidelity also found that few of us are contributing the annual maximum of $15,500 to our 401(k)'s: Just 3.8 percent of employees earning less than $100,000 contributed the max, although 28 percent of those making $100,000 or more did.
