Issue #2500
- WEALTHY: 3 characteristics of a good investment (Andrew Gordon)
- HEALTHY: A potent weapon against Alzheimer’s (Shane Ellison)
- WISE: Peter Lynch on buying stock in a down market
ALSO IN THIS ISSUE:
- Could your profits be in serious trouble? (Suzanne Richardson)
- A fun and easy way to attract more traffic to your site (Edwin Huertas)
- It’s Good to Know… about a cure for photo-phobia
- Add “autodidact” to your vocabulary
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“I’ve found that when the market’s going down and you buy funds wisely, at some point in the future you will be happy.”
Peter Lynch
How to Uncover the No-Quit in Not-So-Quiet Companies
As I read the Financial Times on the flight from Baltimore to West Palm last week, my worst fears were confirmed. The market meltdown is truly global. And several countries – including Turkey, Iceland, and Argentina – can sell their bonds to investors only by paying out double-digit interest rates to make up for the added risk of investing in them. Amazingly, these countries – plus Pakistan, the Ukraine, and Kazakhstan – have an over 50 percent chance of going bankrupt (according to how much investors pay for insurance on the bonds they hold from them).
The only market I could find that is going up? The Baghdad stock exchange. Do you want to invest in Iraq? Hmph. Didn’t think so.
Formerly soaring markets like China, Brazil, and Russia are down the most. But even strong economies like Korea, Taiwan, and Canada are tanking.
If I ran a hedge fund, I’d be shorting Turkey, the Ukraine, and a couple of other countries that I think are in big trouble – like Hungary and Latvia.
Hedge funds have a lot more options on how to invest globally than you and I do, yet this has been a terrible couple of months for hedge funds too – the worst on record, as a matter of fact. Hedge funds, it seems, took huge losses as oil and commodities dropped, and got caught betting against banks when they rallied after the Freddie and Fannie bailout.
Funds and institutional investors must be in big trouble, because they’re getting out of gold at a time when the global economy is falling apart – and in times of panic, investors usually rush to buy gold. It can only mean one thing. They’re selling gold to raise money to fund margin calls they’re getting on losing positions.
Surely, if the smart people running hedge funds are losing money, what chance do you have?
People are resigned to losses. Many have come to me with the question, “How can I protect my retirement account?” Nobody has recently asked me how they can profit from their investments – as if that’s too much too ask of the market. (Or perhaps too much to ask of me?)
Listen, your losses are a done deal. I am really sorry. I’m sure you worked hard to save. You depended on being able to continue to grow your savings. And in the past couple of months, you’ve lost critical ground. It’s the worst feeling in the world. I wouldn’t wish it upon anyone. But now I want you to do something investors have the hardest time doing. I want you to stay calm and not panic.
On the ride home from the airport the other night, my driver was telling me what happened to his and his wife’s savings six years ago, when the Nasdaq lost nearly half its value.
“We had both lost a lot of money. My wife took the rest of hers out and began tinkering with her investments. She did the best she could, but within a half-year it was all gone. I left my money in there. I wouldn’t have known what to do with it if I had taken it out. What do I know? I’m no expert when it comes to investing. Five years later, my money had doubled. This time around, I’m not touching anything. And neither is my wife.”
That’s not a bad approach. You’d be selling when prices are very low. And while you may avoid another 10-20 percent dip as the market searches for a bottom, it’s likely you’d also miss the initial swing up – which could be as fast and as furious as the market’s recent drop was.
The one thing you should remember about the market’s fall from grace is this: It’s forcing down all companies – the good, bad, and ugly. By “good,” I mean those companies with a track record of growing profits… being judiciously opportunistic with their cash… and with products that are sellable (without seeing their margins disappear) even when people have less money in their pockets.
Let’s start with what’s not sellable: commodities, materials, all forms of energy (including alternative energy), houses, autos, and big-ticket items.
Now here’s what is sellable: food, staples, beverages, tobacco, medical products, and services.
Then there’s another category: what we don’t know is sellable. Case in point is cellphones. This is the first recession we’ve had since cellphones have become the constant companions of practically everybody. Will people upgrade less often? Use fewer minutes? We don’t know.
Clothes, we do know. People will buy less and will buy cheaper. And that goes for things like jewelry, tools, and footwear.
That, however, does not completely explain why some stores – like Wal-Mart – are doing well and others – like Target – aren’t.
Or why McDonald’s is doing better than Wendy’s.
Or why Coke continues to grow and Pepsi continues to flounder.
These are companies in the same sectors selling the same kinds of products to the same people.
Does Coke taste that much better than Pepsi? You don’t have to answer that. All you have to do is pay attention to the numbers and the words.
Coke: “Our brands and our business were built for times like these. We are winning in the marketplace.”
Pepsi is cutting jobs and closing factories: “This will enable our competitiveness and give us breathing room to respond. It is no news to you the economy is turbulent and there are uncertainties and volatility in every part of the environment.”
Gee. What does this tell you about why Coke is doing well… and why Pepsi is reeling from the global recession?
In the next few weeks, hundreds of beaten-down companies will be reporting their third-quarter results. They will have a chance to step up and tell us why they are facing the future with confidence. If they’re not, you will hear it in their words or see it in the profits they report and in the guidance they give (for future performance).
Some CEOs will try to put lipstick on some ugly numbers. Don’t fall for it. If there’s a disconnect between the numbers they give and the words they say, believe the numbers and ignore the words.
Coke’s numbers were pretty good. Its profits rose 14 percent despite poor demand in the U.S. They have practically no debt. Their margins are over 25 percent. All these numbers beat Pepsi’s.
Unfortunately, most companies will be practicing the fine art of spin control to disguise some pretty disgusting numbers. There won’t be many companies like Coke – with a strong record of growth, little debt/good cash position, and products that people continue to buy – that will also be reporting impressive profits.
The few there are have been dying to tell their story to investors, the same investors who have been throwing out the baby with the bathwater. Now they’re getting their chance to rise above the crowd.
[Ed. Note: You could be one of the few investors who make money in this terrible market. Besides paying attention to fundamentals, you can keep an eye on one of the "red flags" that many companies are displaying. Learn what these "red flags" mean... and how they can help you profit.]
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ETR Insider Report: Keep Your Averages in Mind
Your e-letter is pulling in plenty of new subscribers, your website is attracting more traffic, and you are selling tons of products via other companies’ newsletters. In fact, your return on investment (ROI) is well over 100 percent.
But your profits could be in serious trouble…
Fortunately, there’s an easy way to protect yourself and your company.
MaryEllen Tribby, ETR’s CEO and Publisher, has told our marketing team time and again: “When it comes to making money, ROI is the only number that really matters.”
And that’s true.
But today’s ROI is probably a lot different from what your ROI will be down the road. If you look at your ROI today, you’re only seeing your gross return. But what counts at the end of the year is your net ROI – what you have after all your cancellations, refunds, and marketing costs are in.
So you need to apply a little fortunetelling here…
“You should always know your averages,” MaryEllen told our marketing team. “And one of the most important averages to keep in mind is your average cancellation rate.”
If you know your average cancellation rate, you can figure it into your preliminary ROI. It won’t be exact – some months, more people will ask for refunds than other months. But it will give you a good idea of what your net ROI will look like.
Same holds true with media and mailing costs. Some months you might be in the mail more than others. And some months you may be more aggressive with online media buying (i.e., banner ads, e-mail list rentals, e-newsletter ads). Many variables outside your control will affect those tactical decisions – promotion performance, seasonality, product demand, and consumer behavior, for example.
But if you know, on average, how much your standard online monthly media cost is, what your typical direct-mail costs are (which would include list rental, print, production, and postage), as well as how often you plan to be in the mail – you can forecast your anticipated net ROI for each marketing effort. And if you anticipate a low ROI – i.e., under 100 percent – you know that you should be supercharging your marketing efforts.
[Ed. Note: MaryEllen Tribby and Michael Masterson have teamed up to write Changing the Channel: 12 Easy Ways to Make Millions for Your Business. Now you can benefit from their 60+ years of experience in growing businesses. You can read the book in an afternoon, and the 12 multimillion-dollar ideas you'll find inside could help you take your business to new heights. Buy your copy today.]
AdWords Expert Howie Jacobson on Changing the Channel: “Dozens of Strategies to Increase Your Bottom Line.”
“Changing the Channel is a valuable ally for any business owner willing to go beyond the ’same-old’ marketing in their industry. MaryEllen Tribby and Michael Masterson draw on their own experience at Agora, one of the direct-marketing giants of our age, to show you not only what to do but how to do it. They combine timeless principles with the latest technology and media to give you dozens of strategies to increase your bottom line.
“Get yourself a copy of Changing the Channel, a quiet corner, and a couple of highlighters. You’ll discover dozens of simple actions you can take to grow your business beyond what you thought possible.”
Howie Jacobson, PhD
Author, AdWords for Dummies
www.askHowie.com
[Ed. Note: In Changing the Channel: 12 Easy Ways to Make Millions for Your Business, Michael Masterson and MaryEllen Tribby reveal 12 of the most powerful, profit-accelerating marketing channels they know. Learn more right here.]
Widget Bait
How can you make your website more appealing to potential customers? One way is to install a “widget” on it.
Technically, a widget is a small add-on created for the popular WordPress website software. Many online marketers (including ETR) use WordPress to build out their blogs and websites. In fact, millions of people download WordPress every year. If yours is a WordPress site, you can host all sorts of widgets.
A WordPress widget can be a mortgage-rate calculator, a news article feed-box, a “quote of the day” – or anything else your webmaster can install to make your site more useful to your visitors.
Let’s say you run a real estate business. If you add a mortgage-rate calculator widget to your site, you automatically make it more useful to your potential clients. Offering tools like this is a good way to show your prospects that they can trust you to provide them with helpful information. And they will often take the time to see what else you have to offer.
You can find widgets at WordPress.org/extend/. This section of the WordPress site offers many links to tools that could increase the value of your site to your visitors.
[Ed. Note: Look for relevant, useful widgets. One that you might consider is ETR's own Learning Vocabulary Words widget. Our daily "Word to the Wise" is one of our most popular columns, and your site visitors will likely love it as much as you and your fellow ETR readers do. It's absolutely free - and you can add it to your site right here.]
Preserving Life’s Most Precious Moments
Whether it’s simple forgetfulness or the all-out scourge of Alzheimer’s, the loss of mental acuity as we age ruins quality of life. To the surprise of most, studies show that this decline can be slowed or even prevented with the energizing combo of alpha-lipoic acid (ALA) and acetyl-L-carnitine (ALCAR).
In addition to boosting ATP within the brain, ALCAR increases neurotransmitters like acetylcholine while protecting neurons from oxidative stress. This makes the ALA/ALCAR combo a potent weapon against Alzheimer’s induced memory loss. In fact, I’d choose it over the commonly used medications, which are known technically as acetylcholinesterase inhibitors (AChEs).
Little is known about what causes Alzheimer’s, but all sufferers appear to have low levels of acetylcholine. Using AChEs, the drug industry attempts to increase this essential brain chemical by preventing the breakdown of acetylcholine within the brain. Theoretically, this would enhance or preserve memory. But if there is little or no acetylcholine to preserve, the drugs are useless. Perhaps that is why they have only marginal benefits – benefits that do not outweigh their immense risks.
Believe it or not, AChEs are synthetic copycats of naturally occurring poisons and venoms! Their use is rationalized by the “a lot kills, a little cures” mentality. But evidence doesn’t support this. Research consistently shows users to suffer short-term side effects, including diarrhea, anorexia, vomiting, and tremors. Long-term side effects include kidney damage and even cancer.
Where these drugs fail, the energizing ALA/ALCAR combo succeeds.
Once ingested, both ALA and ALCAR pass the blood-brain barrier to nourish brain cells, thereby helping them manufacture more acetylcholine – to preserve and restore life’s most precious memories as we age.
Pure forms of ALA and ALCAR can be purchased from Wal-Mart for about $15 per month. About 200 mg of ALA with 2 to 3 grams of ALCAR daily have proven wildly effective.
[Ed. Note: Alzheimer's is a legitimate concern. But if you take a few simple measures, you can protect your health and live a longer, more satisfying life.
Most people are confused about whether those prescription drugs or supplements they're taking are REALLY good for their health. Author and organic chemist Shane Ellison can help you clear up your confusion with his Foundational Health Education program. Learn more here.]
It’s Good to Know: A Cure for Photo-Phobia
“Can’t you just Photoshop me in? The camera always catches me in a really awkward pose.”
“Me too! Either my eyes are closed or I look like I’m gritting my teeth.”
Just like last year, as soon as we started planning the photo shoot for our Early to Rise holiday card, the grumbling started.
But there is hope for these photophobes – and for you, too, if you always try to hide in the back row for group pictures. All you have to do is ask the photographer to count to three. Close your eyes and take a deep breath. When the count hits two, open your eyes, exhale, and smile. The result will be natural and relaxed.
(Source: PhotoJoJo)
== Highly Recommended ==
What Do Top Athletes, Best-Selling Authors, and the World’s Richest Share?
If you look around, you’ll see that almost everyone who’s achieved fame, wealth, or success has gotten there with the help of one thing…
“It” helped author Jonathan Safran Foer land landed a $500,000 deal for his first novel, Everything Is Illuminated.
“It” helped billionaire business magnate Richard Branson get Virgin Atlantic Airways off the ground and turn it into a success.
“It” helped real estate guru Dave Lindahl acquire 11 apartment buildings within 12 months… and create nearly $10,000 a month in positive cash flow!
This powerful success-accelerator is available to you, too…
What can “it” help YOU accomplish?
Word to the Wise: Autodidact
An “autodidact” (aw-toh-DYE-dakt) – from the Greek – is someone who is self-taught.
Example (as used by Kevin Baker in a New York Times article about Abraham Lincoln): “He is our ultimate autodidact, a man who made himself from nothing into a lawyer, a legislator – a president.”
[Ed. Note: Become a more persuasive writer and speaker ... build your self-confidence and intellect ... increase your attractiveness to others ... just by spending 10 VERY enjoyable minutes a day with ETR's new Words to the Wise CD Library.]
Copyright ETR, LLC, 2008
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OHH Adding this to my bookmarks. Thank You ^_^
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