"Man’s estimate of woman is higher than woman’s own"
"Man’s estimate of woman is higher than woman’s own"
I was reading my Fortune magazine, as usual, and came across a wonderful article about Howard Schultz, The 2011 Business Person of the Year - No. 1 CEO. (Starbucks) I am an avid reader, however, I tend to stay away from most conversations about CEO’s and other egotistical persons. However, I chose to read this particular, because I am an investor and saw how well Starbucks was managed throughout the 2011 year.
Aside from Howard Schultz coming back as CEO for Starbucks and revitalizing the company’s consumer wealth and image, Mr. Schultz took a step towards political activism. Aside from revenue hitting $12 billion for the year and profits at $1.7 billion. (sales were up 10% domestically and 9% internationally from 2010) Mr. Schultz was disgusted with Washington’s dysfuncation and would cease making campaign contributions to incumbents in either party. Mr. Schultz mentioned Washtington was deploring a system that has “chosen to put partisan and ideological purity over the well-being of the people”. Mr. Schultz asked fellow corporate executives to join him in a boycott. More than 140 quickly did, including the CEO’s at Pepsi, Disney, Inuit, Whole Foods, J.Crew, AOL, the New York Stock Exchange, and Nasdaq.
What intrigued me the most was when I read how Mr. Schultz has joined the “Create Jobs for USA,” a grass-roots private fund that would make loans to small businesses in underserved markets across the country. Furthermore, Mr. Schultz implemented a program where Starbucks could get costumers to purchase special $5 red-white-and-blue wristbands with the message INDIVISIBLE on it. All the money would go to the nonprofit Opportunity Finance Network, which supports 180 community development financial institutions.
I, myself, have invested in the $5 wristband and will try to promote the unselfish deed of trying to create jobs for Americans. I truly hope everyone can try to join in and donate a little at a time. Americans helping Americans is the way of life and hopefully it can become contagious.
If the market is unstable, try applying some useful tools to evaluate whether the market is heading towards a complete meltdown or poised for a roaring rally.
The price difference between three-month futures contracts for U.S. Treasuries and three-month contracts for Eurodollars having identical expiration months.
I suppose the Eurodollar may refer to the London interbank offered rate or LIBOR. (the rate at which banks borrow from one another)
The Ted spread can be used as an indicator of credit risk. This is because U.S. T-bills are considered risk free while the rate associated with the Eurodollar (LIBOR) futures is thought to reflect the credit ratings of corporate borrowers. As the Ted spread increases, default risk is considered to be increasing, and investors will have a preference for safe investments. As the spreads decreases, the default risk is considered to be decreasing.
Gina Martin Adams, an equity strategist at Wells Fargo Securities stated, “right now, the TED spread is telling investors to tread lightly in stocks.
Difference between Yields on 10-Year U.S. government bonds and high-yield (junk) bonds.
It reflects the premium that investors demand for taking on the extra risk of default, and it has widened significantly of late. The average between the two should be around six points. If any higher, it would indicate that bond investors are anticipating a rise in defaults, which is not good for any investor.
Finally, Credit Default Swaps
The spread represents the annual cost paid by the buyer of the credit protection; the higher the spread, the more skeptical the market is of the debtor’s ability to repay.
Monitoring the heavily traded CDS Market for sovereign debt is a good way to gauge the prospects of struggling European economies. For example, France’s five-year CDS spread stood at 1.9 percentage points, meaning it costs an average of $190,000 a year to insure $10 million of debt. That’s almost double the cost investors paid for the same protection in January.
Until spreads tighten again, it makes sense to stay cautious and vigilant.
My answer is yes. An arts organization includes professional for-profit companies. For example, auction houses, art galleries, music presenting companies, etc and many small professional and nonprofessional 501 (c) not-for-profit arts related businesses. The general duties of an arts administrator can include staff management, marketing, managing budgets, public relations, fundraising, program development and evaluation and board relations.
For the concept of creating a nonprofit company with resemblance of the for-profit gain, I say, it depends”. You have to understand how for-profit companies manage their employees, businesses and networks. For profit companies establish a structure with regards to employee positions. For instance, the Wall Street Journal stated, “positions in consulting firms or banks have a clear trajectory for moving from associate to principle to managing director or partner, the line is often fuzzier at nonprofits”.
The business structure creates an indefinite goal/target as oppose to the nonprofit organization which creates missions. When the mission has been achieved, the nonprofit no longer exist. Please correct me if I am wrong.
The networking aspect works on so many levels. For-profit companies enact more than one network. There are clients, vendors, Federal Reserve, US Treasury, private associates and many more. The objective strive is profiting and helping each company build long and sustainable growth.
If a nonprofit can cover these more or less essential abstracts, then yes.
What is the equivalent?
I cogitate nonprofit’s may need to evaluate another exceptional nonprofit and try to analyze the company’s structure and increase improvements for long-term growth. For instance, take Lincoln Center, which may be the most prominent nonprofit company in New York City, a well established and known nonprofit. If one can evaluate Lincoln Center and the ins and outs of the company, you may have an opportunity, when moving forward, to build a sophisticated nonprofit organization.
Our lives have come to a stand still when reviewing our future retirement plans. People tend to say, “I have to make the house payment. I have to make the car payment”. “I know you’re supposed to save more for retirement but I haven’t even started saving for college for my kids.”
Americans planning to retire in five to ten years could see their golden years tarnished by a confluence of circumstances, including depressed housing prices, soaring health cost and a fitful stock market that has pummeled 401(K) plans. Social Security, which averages $14,000 a year, will eventually decrease. So it shouldn’t be surprising that 45% of American’s are still at risk.
If you’re at the age of retirement or near it, do not panic now, Smart Planning and aggressive saving – can go far to ensure a comfortable retirement. Whether you’re 29 or 59, put far more into your retirement accounts. Rule of thumb, set aside at least 10 percent of your income for saving/retirement.
There are strategies to help retired families. Annuities can ensure a steady income stream until the day you die, above and beyond Social Security. From the New York Times, “Some advisers recommend that people 62 and older consider reverse mortgages, though they often offer less money than several years ago because of the decline in housing.”
Another popular strategy is taking a part-time job or starting a small business to ensure an adequate income.
David Certner, the legislative policy director for AARP mentions, “No one wants to say longevity is a problem, but you have to finance your retirement for a longer period of time. We certainly encourage people to continue working that extra year or two. That means not only are you not drawing down for an extra year or two, but you’re building up your assets another year or two.”
Phylis Kaplayn, of Highland Park, Ill., mentions, “I realized I had to continue working because I can’t pay my bills. I have no pension, and I have to buy health insurance, and this job (working 10 days a month in a bead shop) is helping me develop more of a nest egg.” She noted that Social Security would cut her benefits if she worked more each month.
The average American family faces a 37 percent shortfall in the income they will need in retirement. Meaning, the average household will face a retirement savings shortfall of nearly $250,000 by the time of retirement. Even before the financial crisis that began in the fall of 2008, causing 401(k) plans to tumble, Americans were woefully unprepared for retirement.
Ages from 60-to-65, will face a 20 percent shortfall in the income need to maintain their living standards at retirement. Ages from 30 to 39, they have the greatest ability to recover by changing their behaviors. This age group must rely entirely on personal savings because the payouts from traditional defined-benefit pensions will provide one-tenth of the retirement of the parents’ generation.
There is still some hope
Peter Sonders, a retired lab technician at an Anheuser-Bush Brewery, states, “The strategy I would recommend is, you have to save ‘till it hurts, because even your regular pension plan can go up in smoke. So save as much as you can, well over 10 percent a year. And don’t speculate too much of what you’re investing. And if you ever get a raise, keep saving it and you usually won’t miss it.”
Whether you are wealthy or middle class, retirement specialist emphasize the importance of rebalancing your financial assets as you grow older, moving a higher percentage out of equities and into less volatile investments. Specialists recommend Target-date funds because the fund managers relocate the funds toward less risky investments as workers age. For moderate- and low-income Americans, retirement specialists emphasize the importance of saving as much as you can, although those Americans have the least ability to put money aside.
Advise from Professor Ghilarducci, “Ratchet down your living standards, so when you have less money during retirement you won’t be so disappointed.”
Something to think about….
Focus on the basics: revenues and earnings. Equally if not more important to me is combination of earnings and sales growth. So I screened for stocks with 50% or more year-over-year earnings growth (excluding special items that often distort earnings patterns). I also raised the revenue bar from last year’s 10% year-over-year growth requirement to 30%. Next, I exclude mircrocap stocks, setting $1 billion as the minimum market capitalization.
Look for value stocks by weeding out companies with forward price/earnings ratio that seem too high compared to the market’s average forward P/E of 14.
With caveat in mind, I select five companies that I find particularly appealing right now. Never buy when the market is hitting a new 52-week high. You may well wait for at least a modest correction.
Interest rate are on the floor, valued at 1.6%. Many household items are rising much faster and with raw materials costs booming - from copper to cotton - we can probably expect further rises ahead.
If you need income, here are six moves worth thinking about.
1: CD Ladders
CD Ladder will mature in stages. You can put some money in a CD Ladder that will mature over two years. As each one matures, roll the money over into a new longer-term CD. This way you’re earning a bit more interest, without losing liquidity. You can earn a one-year CD earning 1.35% and two years earning 1.6% (both from Metropolitan National Bank of New York)
2: Prepaying Expenses
If your costs are rising by 5% a year, and you’re only earning 1% in the bank, why not prepay some of tomorrow’s expenses at today’s prices?
That’s the equivalent of earning 5%, tax free. You can stock up on nonperishable foods and buy household goods in bulk. Maybe your landlord will cut you a deal: If your rent is going up each year, can you avoid a hike by paying next year’s early? A lot of companies really value getting cash flow early. In this environment it makes sense to ask.
Treasury inflation-protected securities, or TIPS, may be your “least bad” option.
TIPS pay a certain interest rate plus the official inflation rate each year. Longer-term TIPS currently offer inflation plus 2% a year. That’s 3.6% now, and if inflation were to go to, say, 5%, you’d get 7%. You can buy individual TIPS bonds or buy a basket through a mutual fund. PIMCO 15+ Year U.S. TIPS Index exchange-traded fund (LTPZ) holds only higher-yielding longer-term bonds. Bond income is highly taxable, so TIPS should be held in a tax sheltered account, like an IRA.
4: Blue-Chip Stocks
Solid companies like Campbell Soup (CPB), General Mills (GIS), Johnson & Johnson (JNJ), H.J. Heinz (HNZ), Chevron (CVX) and Huggies maker Kimberly-Clark (KMB) offer dividend yields over 3%. A few - including American Electric Power (AEP), Altria (MO), Bristol-Meyers Squibb (BMY) and AT&T (T) - top 5%.
Great deals in Europe, Royal Dutch Shell (RDS.A), Italian oil giant Eni (E) and Spanish telecom giant Telefonica (TEF). Dividends tend to rise in time and can offer some cushion against inflation and they are tax at a maximum rate of 15%, compared to a maximum of 35% on ordinary income.
Among low-cost ETF’s, the iShares Dow Jones Select Dividend Index fund (DVY) yields 3.5% and the International Select Dividend Index (IDV) 4.5%.
5: Selective Bonds
Thirty-year Treasury Bonds will pay you 4.7%. Funds that invest in high-yield corporate bonds and preferred stocks (which are a kind of perpetual bond) can pay more than 6%. Examples included the iBoxx $ High Yield Corporate Bond (HYG) and iShares S&P Preferred Stock Index (PFF) ETFs.
These incomes come with risk.
Bond investors may get a better deal in government bonds issued by emerging markets like Brazil and Malaysia, where faster economic growth means interest rates are already higher. The Wisdom Tree Emerging Markets Local Debt Fund (ELD) has a 5.3% yield. Such bond funds do involve risk, including fluctuating currencies.
6: Master limited partnership
These are specialized high-yielding stocks that let you invest in certain industries, particularly in oil and gas pipelines. They come with certain tax breaks and wrinkles.
The best known, Kinder Morgan Energy Partners (KMP), yields more than 6%. And there’s now a low-cost ETF, the Alerian MLP fund (AMLP), that will invest across the gamut of MLPs for you.