* Highly Recommended *
“My wife and I live in Calabasas, California. At work they gave me my walking papers… Here's the good part! I took Ted Thomas' Foreclosure Real Estate Training; within 60 days I bought two houses, which were both foreclosures. I fixed them up and resold them for a profit of $22,250.”
- Curtis Harker
Ted Thomas is a twenty-year veteran of the Foreclosure real estate business. He’s an expert we trust, and he will be giving a seminar for Early To Rise readers interested in getting an introduction to the foreclosures market –please click here now if you’d like to sign up.
Pegging Down a Company's Profit
By Andrew Gordon
Top portfolio managers like Peter Lynch place a good deal of stock in the PEG (price-to-earnings-to-growth) ratio, which is supposed to tell you how fully valued a company's share price is.
Their reliance on this ratio is misplaced, however.
The PEG compares the company's price-to-earnings (P/E) ratio with its earnings-per-share (EPS). It tells you what investors are willing to pay for every dollar of earnings the company brings in. The EPS tells you how much of the company's profit is being budgeted to each share of outstanding stock and is thus a benchmark of company profitability.
A PEG higher than 3 is probably a sign that you should look elsewhere. A PEG below 1 could be telling you that the company is undervalued. You may be looking at a real gem ... OR NOT. Instead, you may be looking at a company that had a one-time event that spiked income (like the sale of an asset or a tax break) or a one-time event that dropped income (like the closing of a plant). Either way, net income can be very misleading.
I prefer looking at cash flow (CF). It mainly consists of cash generated from operations. There are no write-offs or phantom income in cash flow. If CF is more than 10 percent of what investors are willing to pay for the stock, you're looking at a company flush with money. Period.
You can punch up the PEG ratio on most stock screeners such as Yahoo! Finance. The price-to-cash-flow (P/CF) ratio is usually a no-show, but Reuters' finance section includes it. And it's worth paying attention to. This is the ratio that will give you a better insight into whether a company is a clunker or a potential big winner.
(Ed. Note: Andrew M. Gordon and his staff, along with Dr. Erik Epp, have created a new free e-letter called Money Insight: Useful Ideas for Growing Your Money Quickly and Safely. Every week, they decipher the best safe-money strategies from the deluge of mainstream financial news and uncover undervalued opportunities for quick profits. Check it out.)
"Negotiating techniques do not work all that well with kids, because in the middle of a negotiation, they will say something completely unrelated such as, 'You know what? I have a belly button!' and completely throw you off guard."
- Bo Bennett
How to Be a Successful Negotiator
By Michael Masterson
The first skill of a good negotiator is to know when to negotiate. Most of the deals I've made in my career have required little or no negotiating. I know what I want out of the arrangement. I find out what the others want by asking. Then I think about how everyone can have what they want, and I usually come up with a mutually beneficial answer.
Once you have an answer that appeals to all parties involved, you have the basis for a good and sustainable deal. But getting to that point often requires a good deal of thought and study, including a lot of attention to detail.
You have to know the issue inside and out if you're going to present a persuasive argument for your side. This includes knowing how your deal is unique and positioning those special characteristics to your advantage.
Richard Shell, a Wharton professor and author of Bargaining for Advantage, makes the case that successful negotiation is 10 percent technique and 90 percent attitude. He says that good negotiating is a mix of competition and cooperation - which means you don't have to sell your soul to get what you want.
I couldn't agree more.
The great negotiators I know are those who can see the big picture. They envision the most promising scenario and take action to bring it into being. They have a keen sense of the potential value to be created and understand how to get it.
For most people, these skills are not natural ... but every one of them can be learned.
There are many different techniques involved in negotiating. Below are those that have helped me the most. I think they'll help you, too.
Step 1: Assess All Interests
Focus on the full set of interests of all parties. To do this, you must learn as much as possible about who you're dealing with. This is very important. For example, if you're going to be negotiating with someone representing a business, pick up company brochures and the latest news articles and trade journal clips about the company. And if you're negotiating with an entrepreneur, talk to people who have dealt with him before.
The idea is to find common ground - deeper issues that both you and the other party can agree on. Those issues will be the basis for your negotiations.
Step 2: Set Your Bottom-Line Goal
Determine what Nation's Business magazine called your "bottom-line goal" - the one thing you must come away with. Ask yourself, "If I could walk away from the table with only one thing, what would it be?" That's your "bottom-line goal." Do enough thinking here to make sure this goal is realistic and attainable.
Step 3: Search for Value-Creating Differences
Look beyond common ground to find value-creating differences. What's unique about your position? What's unique about the position of the other side? Think about how you can use those differences to your advantage and make the acceptance of your position more valuable to both of you.
Step 4: Ask Yourself "What's the Worst That Could Happen?"
A very useful technique for negotiating differences is called BATNA - an acronym for "Best Alternative To a Negotiated Agreement." The phrase was coined years ago by Roger Fisher, Bill Ury, and Bruce Patton in their book Getting to Yes: Negotiating Agreement Without Giving In.
The basic idea of BATNA is to figure out what the consequences would be if you and the other party can't reach an agreement. This is your worst-case scenario. You then plan out the course of action you would take - your best alternative to a negotiated agreement. Going into negotiations armed with your BATNA will allow you to negotiate strongly without feeling anxious if things aren't moving forward well.
Step 5: Make Sure You've Met the Other Person
Don't let your first-ever meeting be at the bargaining table. If you don't know the person or people you'll be negotiating with, try to set up an initial "get-acquainted" meeting. This step is especially important when there's a lot riding on the outcome of the negotiation.
Step 6: Set an Agenda
Create a negotiating agenda - an outline of the issues that you plan to discuss. It should be flexible and agreed upon by both parties. The agenda is a way of making sure that the negotiations stay on course and that unrelated issues aren't brought in. I don't think it's necessary in all cases - but, again, if there's a lot at stake, an agenda can certainly help.
Step 7: Watch Out for Biases
Most people involved in negotiations understandably have a built-in bias toward their own position. Harvard Business Review writer James Sebenius says that despite the clear advantages of trying to reconcile deeper interests, most negotiating parties come to the table with a "My gain is your loss" type of thinking. In most situations, however, there is common ground - deeper issues that all parties can agree on. It's just a matter of finding them.
Step 8: Control Your Temper
Keep a level head when tempers flair. Lashing out during any negotiation is a big mistake, even if the other party started it. If the negotiation starts to get heated, the best thing to do is remain polite. Listen. Make it clear that you can be trusted. Acknowledge the other side's point of view. Then try, if you can, to steer the discussion to smaller, less-important issues that need to be agreed upon.
And by all means never, ever get personal. Never make any threats. They'll come back to haunt you ... and you'll have made an enemy you would have been better off without.
Step 10: Know How to Handle a Deadlock
When you're deadlocked, buy some time. Take a break. Walk away from the negotiating table for a while and clear your head. Set a time for all parties to return - 15 minutes, an hour, or even later in the week.
The main thing to remember when you're involved in any type of negotiation (and that includes ordinary, day-to-day negotiations with friends and family): Always keep in mind that the outcome must benefit both parties.
(Ed. Note: The above was adapted from Michael Masterson's book Power and Persuasion. For more invaluable information about how to become an effective leader, pick up a copy today.)
Reader Feedback: "Maybe this is a health tip you can pass along."
By Jon Herring
Spring is here and summer is right around the corner. And for millions of people, that means itchy, red eyes, a stuffy nose, sneezing, and a sore throat. My father has suffered from hay fever (an allergy to plant pollen) for years, so I know that it can be maddening ... even debilitating. If you have pollen allergies, here's an idea from an ETR reader that might help ...
After reading my health brief in Message #1689, DA wrote:
"I'm writing in response to your article on the topic of allergies (hay fever, in particular). Several years ago, my office-mate suggested I use locally produced honey in tea for several days to inoculate myself against hay fever. [Locally produced honey is more likely to contain the specific pollen allergens that you are exposed to.] In short, I tried it and - after suffering through a few days of intense hay fever - the last 7 years have been hay fever free. It worked for me. Maybe this is a health-tip you can pass along."
Though I'm not aware of studies, there is a lot of anecdotal evidence that DA's treatment works for some people. And in contrast to antihistamines and nasal sprays that only address symptoms, this natural remedy addresses the cause - your own immune response. Use raw (unheated and unfiltered) honey that is produced within 50 miles of where you live - and maybe this will be your last season of hay fever. If not, you'll still have a delicious, nutritious jar of honey.
* Highly Recommended *
Would You Like to $10 into over $500,000?
Perhaps this situation sounds familiar to you:
1) You have no technical knowledge about computers...
2) You don’t have any spare time to time to learn how to start a business...
3) But yet you realize there’s a ton of money to be made on the Internet and would like to get started.
If so, here’s an opportunity which really does work, that anyone can follow and put into practice quickly in just three hours of your spare time from home. One guy I know turned $10 into over $500,000 with this technique.
And here’s the most interesting part: It costs practically nothing to get started.
- Patrick Coffey
ETR Insider Report: Adding a Sunday Edition
By Suzanne Richardson
The topic was first raised two years ago ...
... then dismissed.
And now the idea's back on everyone's minds.
Should we have an edition of ETR on Sundays?
Since its inception, ETR has never gone out on Sunday. Everyone needs a break from the relentless inbox overflow of the work week. And that includes your issues of Early to Rise.
Two years ago, ETR Editorial Director Charlie Byrne suggested that we start sending out a special Sunday edition. "What if we started sending out ETR on Sunday?" Charlie wondered in an e-mail. "It could be full of techniques our readers can use during the coming week to change their lives in some small ways."
For one reason or another, the topic was dropped ...
Only to be raised again by Michael Masterson last week.
"What if we ran an ETR Week in Review on Sundays?" Michael asked. "We could list the headlines of that week's articles, with links to the articles themselves. That way, people too busy to read ETR every day can take one quick look at the entire week and pick and choose which articles they'd be most interested in."
It was Charlie, this time, who raised the objection: "Are seven days of e-mails too much?"
The Sunday edition is still under consideration. But we'd like to hear your thoughts on the matter.
Today's Action Plan
How would you feel about getting an ETR Week in Review on Sunday? Help us decide what to do by sharing your thoughts on the Speak Out Reader Forum SundayOrNoSunday@ETRFeedback.Com.
* Advertisement *
Do you love travel… crave adventure… enjoy shopping?
Then circle April 10 on your calendar. And that evening, at 4:00 p.m. EST, pick up your phone.
You're invited to join a special meeting of the minds… a live teleconference with a panel of import-export experts who are gathering to talk about just how easy it can be to turn a shopping habit into an entrepreneurial success… and fund a lifetime of travel on the taxman's dime.
Click here for full details.
Word to the Wise: Foment
To "foment" (foh-MENT) is to nurse to life or activity - often in a bad sense. It is derived from the Latin "fovere" ("to warm, to foster, to encourage").
Example (as used by Mark Pendergrast in Uncommon Grounds): "Here, over many cups of coffee and other brews, John Adams, James Otis, and Paul Revere met to foment rebellion, prompting Daniel Webster to call it 'the headquarters of the Revolution.'"
