| How to Spot Great Stocks
If you want to be a wildly successful investor, you'll need to invest in wildly successful companies. (Or mutual funds, or apartment buildings, etc.) But zeroing in on the most promising companies is easier said than done. Here's a favorite method of mine: Build a list of wonderful companies, and then watch for their stocks to fall to compelling prices. To help you determine whether the company you're looking at is a first-class operation you'd be proud to have in your portfolio, here are five hallmarks of great companies: 1. Powerful brands Think of well-known brand names in the United States -- or better yet, around the world. General Electric (NYSE: GE) and Microsoft (Nasdaq: MSFT) place among the top 10 brands in the world, as ranked by Interbrand. This kind of popular recognition can give these companies a leg up in their industries.
Clubs nurture investment savviness
CRANBERRY — Mike Berman got the bug about 15 years ago and since then, he's spent a lot of time helping others catch the fever: organizing and/or joining an investment club."I've started four clubs, been involved with six, just helped form one a couple weeks ago," said Berman, 48, of Cranberry. "Sometimes you can lose money in a club, but this also helps you learn about stocks, about investing."Berman's latest venture, the Absolut Club (named after the vodka maker) has three members, including Berman, his neighbor John Bowers and former fellow worker Dennis Pichette. The name was selected after the trio saw an Absolut poster in an Applebee's restaurant while discussing club formation and figured Absolut's a premium vodka; this, hopefully, will be a premium investment club.In late 1999, six friends from Ross and nearby decided they should be investing in what at the time was a booming, high-tech-driven market.
Student shares tips for stock trading
Samad Samana, a 21-year-old senior at Rhodes College in Memphis, Tenn., wants to be a millionaire. That's why he's already seriously trading stocks on the Internet. In middle school, Samana's father gave him a small sum of money to invest, and his interest in the stock market has grown, along with the diversity of his portfolio. "I grew up watching my dad and my older brother play the stock market. I learned a lot from them," Samana said. "I have to do my research, and choose wisely. I pick two or three sectors, and hope they perform. Patience is the key."- Samad Samana His strategy is simple. "I just want to have positive growth and outpace inflation for now," he said. "I want my returns to equal the Treasury bill plus five percent." The Treasury bill, which is hovering around five percent interest, is a bond issued by the U.S.
Shaping a path to higher ground
As the stock market struggles to advance, hardly a day goes by when the chief executive of a company doesn't announce that his firm's grand strategy can't be achieved while ownership rests in the public-equity market.
The stock market, it seems, is too emotional, too ignorant, too short-term-oriented and too laden with regulatory costs for the value to be realized.
So, the company is selling itself to a private-equity buyer and delisting its shares from stock exchanges. Goodbye, Jim Cramer. Hello, Henry Kravis.
Last year, 100 going-private deals were announced in the U.S., with a total value of $316 billion, according to CapitalIQ, a unit of Standard & Poor's. That was up from 45 deals, valued at $55 billion, in 2005. And through April 2 of this year, 41 deals have been announced, worth $149 billion.
Look beyond latest hot spot to maximize your returns
Citigroup market watcher Tobias Levkovich rolled out an amazing statistic the other day: 93 per cent of all the money put into equity mutual funds by Americans last year went into funds investing in foreign markets. Levkovich, Citigroup's chief U.S. equity strategist, explained this stampede away from the U.S. market by pointing to the seductive power of the China and India growth stories. One of the most important, but seemingly hardest, lessons to learn in investing is not to chase the latest hot growth story. .
Banking on better budgeting
What sort of organisations should help people with budgetary advice, and should banks be leading the charge to keep a lid on consumer spending? Westpac's Ann Sherry has been on a crusade that appears to turn conventional wisdom on its head. The former boss of New Zealand's second-biggest bank says institutions like hers have to play a bigger role in helping people micro-manage their money and avoid debt traps. Though the banking ombudsman and budgeting groups are behind bank moves to help improve spending patterns and restrain wasteful habits, they also point the finger at the banks for having been too open with their purse strings driving profligate spending and interest rate rises that might yet hurt the economy. Ms Sherry, who last month left her job as Westpac New Zealand chief executive, says Kiwi children and even some of their parents have lost the skills needed to budget for a family.
Don't Get Sick After You Retire
Here's another good reason to eat your leafy green vegetables and dig your running shoes out of the back of the closet. Fidelity Investments estimates that a 65-year-old couple who retires this year will need about $215,000 to cover medical costs in retirement. That's a pretty mind-boggling pile of cash. It's also lot more -- 7.5% more -- than last year's figure. In 2006, Fidelity calculated that retirees would need $200,000 to cover their post-retirement health costs. In the five years that the investment and mutual funds company has been calculating the size that your health-care nest egg needs to be in order to stretch through retirement, the amount has gone up an average of 6.1% every year. If you happen to be among the dwindling minority of people who have retiree health coverage through your employer, you won't need quite so much.
Business briefs, April 10
McDonald's Corp. has agreed to pay a penny more per pound for its Florida-grown tomatoes to boost wages for the migrant workers who harvest them. The announcement was made Monday by a Florida farmworker advocacy rights group and the nation's biggest fast-food restaurant chain. Florida pickers harvest about 90 percent of the nation's winter tomato supply. URANIUM RISES Uranium rose 18 percent to a record $113 a pound at a U.S. auction last week because of increasing demand for the fuel used in nuclear power plants, industry consultant TradeTech LLC said. Uranium prices have surged 57 percent this year, according to Denver-based TradeTech. That's more than any of the industrial metals traded on the London Metal Exchange, such as copper, or precious metals, including gold.
30 years of fraud, fraud and more fraud
It doesn't matter how many times a judge or securities regulator convicts him, the diminutive, blue-eyed fraud artist would get out of jail or prison and make an immediate comeback in crime. Sometimes, the irrepressible con man with a flair for figures and organization wouldn't even wait that long. He would be busy putting the final touches for his next scheme while on parole. "I'm coming out of retirement," he told a broker here a few years ago. He made the remark in the middle of hatching his latest big fraud in Markham while on statutory parole near the end of a four-year prison term for a major stock swindle in Vancouver. Mitton, a 48-year-old father of three, finally paid for the latest one in a downtown courtroom last week after pleading guilty to fraud and money laundering in the case of an obscure penny stock called Pender International Inc.
Cash flows East to West
Is the US current account deficit getting easy financing because of a lack of Asian debt issuances? It is an important question. Fitch Ratings estimates that China held US$350 billion (HK$2.73 trillion) worth of US Treasury securities at the end of 2006; it had an additional US$230 billion in US agency bonds. Large Asian holdings of US debt are usually attributed to the region's penchant for undervalued home currencies, which lead to chronic trade surpluses and a buildup of foreign reserves. Is Asian mercantilism the dominant force behind the easy financing of the US current account deficit, or is financial underdevelopment in Asia also playing a part? If the perceived Asian "savings glut" - as Federal Reserve chairman Ben Bernanke termed it - stems from a shortage of Asian bonds, then it explains why doomsday scenarios for the US currency may not materialize.
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