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'The burnt customer certainly prefers to believe that he has been robbed rather than that he has been a fool on the advice of fools.' Where Are the Customers' Yachts? - Fred Schwed. 1940. Former Columbia University finance professor Louis Lowenstein provides a timeless warning: 'Wall Street gets paid for persuading people to change their minds. There are only a certain number of shares of GM and Wall Street gets paid for persuading some people to buy and other people to sell - to play a game of musical chairs.' (Tom Petruno, LA Times 5-4)
In practice, three-dimensional printing is fairly mundane. Many such machines use a computer-controlled stream of a chemical or laser light to bind a powdery material, layer by layer, into an object. Just as a modern printer uses billions of tiny dots to produce images, three-dimensional printers arrange billions of tiny flecks of plastic or metal to produce objects. Computers ensure that the billions of bits end up in the right place, a process that can take several hours or even a day. The machines are very expensive, costing tens of thousands of dollars or more, and are used by industrial designers or engineers to make prototypes of parts or other objects. Some machines guide a milling machine to cut the model from a block of raw plastic, wax or metal. 3D Systems uses a laser to bind the metal or plastic by heat. The machines from the Z Corporation spread a thin layer of powder that is bound into the right shape by a liquid that is sprayed from an ink-jet print head. The quality of the finished object varies. The Z Corporation machines, for instance, deliver a rougher, sandy surface at a relatively low price. The print heads can also color the material, producing objects with intricate patterns on the surface. Tools that rely on lasers usually offer more precision and a smoother surface at a price that may be several times greater. Some companies are considering the possibility of producing a lower-priced version that could eventually find its way into homes. Then, for example, a grandmother could e-mail a toy to her grandchild by sending a software file, or the angler in the family could prepare for a day of fishing by printing out a few lures, optimized for the season and the weather.
First, many of them view short sellers as the 'smart money.' That's because short sellers typically work at hedge funds, which often do more legwork to dig up company dirt that hasn't yet been unearthed for the public to see. A second camp takes a contrarian view. They prefer to bet against shorts by going long stocks with large short positions - especially when those stocks are in an upward trend. The theory here is simple. If lots of people are short a stock that's moving up, they're feeling pain, and at some point they may panic and try to buy back their shares all at once to 'cover' their short positions. Known as a 'short squeeze,' this dynamic can provide a nice pop in the price of a stock. 'The heavier the short interest, the more powerful the rally can be,' said Ralph Acampora, a technical analyst at Prudential Securities. Determining whether a short-interest ratio is big requires a little math and some good databases. First, you have to divide the short interest by the average daily volume. This gives you the 'days-to-cover' ratio - or the number of days of average volume it would take all shorts to cover. Then you have to compare that days-to-cover ratio to the historic range for the stock to determine whether it's at the high end. Officially, the NSYE and NASD say they still report short-interest numbers once a month in part because they simply have not received requests from the public or their member firms - the brokerage houses - to report the numbers more frequently. If they really wanted to provide transparent markets, you'd think they might take a little initiative. Second, the exchanges say it's still hard for the brokerages to compile the numbers daily and check them for errors. But at a time when clusters of complex software are used to report and slice and dice market data a thousand different ways every second, this excuse rings hollow. Traders and market commentators point to other possible reasons for the delay. For one thing, the exchanges might not be so sure they can make enough money selling the data to make it worthwhile to dig it up faster. More cynical explanations bubble to the surface. Market insiders no doubt enjoy the fact that they are privy to information about short selling before everyone else. Who are these insiders? Floor 'specialists' and Wall Street brokerages. To many market players, complaints about delays in the reporting of short interest are misplaced. For one thing, lots of investors have short positions on stocks as a hedge simply because they own convertible debt that can turn into stock if certain trigger events occur. Market-neutral funds use short positions as hedges against long positions in similar stocks in whatÌs known as 'pairs trades.' Shorts are also put on as hedges against long exposure taken on through stock options. As much as two-thirds of short positions are part of an arbitrage.
The yield boon on preferred stock won't last long, because preferred stock prices will likely rise as a result of the preferential tax treatment, experts said. These are not investment instruments for the lazy. Investors must ensure that a company's dividends are paid in after-tax dollars to be able to take the new, lower tax rate. The way the corporation treats the tax on the dividends they pay to investors will determine the tax rate investors pay. The first thing you do is read the prospectus. Then investors should send the prospectus to their tax accountant for review. Exempt Preferred's are Few Tom Petruno, LA Times 5-28 Most companies that have issued preferred stocks in recent years have structured those securities to pay interest rather than dividends - even though investors often have continued to think of the payments as dividends. Interest earnings will continue to be taxed at ordinary rates, as high as 35%. Richard Lehmann, a Miami-based investor who publishes newsletters for income-oriented investors, said the universe of outstanding preferred stock totals more than $400 billion. About 95% of the securities are "trust preferreds" - the income payments of which are considered interest rather than dividends, Lehmann said. That structure, widely adopted by companies in the 1990s, allowed firms issuing preferred stock to write off the payments they made, Lehmann said. "They wanted to get the tax deduction," he said. Because of the new tax law, many companies may try to refinance outstanding trust preferred securities, issuing new stock that pays true dividends, Lehmann said. "The change creates a definite incentive for companies to issue straight preferred stock," he said.
Recent studies show there is a much higher risk of having a stroke or heart attack between 6 am and noon than later in the day. Asthma symptoms tend to peak at 4 am, when hormones such as adrenaline and cortisol that help keep the airways relaxed are at very low levels. Ulcer pain and heart burn are worst at night, coinciding with the 10 pm to 2 am window when the stomach secretes two to three times more acid than at other times of the day. Hay-fever symptoms, such as sneezing, runny noses and itchy eyes, peak shortly after waking up, before cortisol levels start to surge. People with osteoarthritis tend to have less pain in the morning and more at night. To treat it, many doctors recommend taking anti-inflammatory medications like ibuprofen around noon or midafternoon, so the drug's effect will be greatest at night. Toothaches are worse between 3am and 8am because your sensitivity to pain is highest at this time. Pharmaceuticals companies are responding to the growing interest by developing new drugs, known as chronotherapies, that are carefully timed to circulate through the body when symptoms are likely to be the worst. Unlike, say, 12-hour time-released allergy capsules, these new drugs are designed to release in unequal amounts so that medicine circulates through the body at elevated levels when symptoms are known to be the most serious and at lesser levels during other times. Michael Smolensky, a professor of environmental physiology at the UT School of Public Health in Houston and the author of a book about the body clock, says his research has changed everything from when he takes medicine to what time of day he schedules doctor's appointments. He knows cold and flu symptoms are worse in the evening when the body's level of cortisol drops, so he takes higher doses of antihistamines then. His mother-in-law has glaucoma, so he tries to get her the first appointment in the morning, when studies indicate that the pressure in the inner eye is higher. "Otherwise the doctor may not realize how severe the problem is," he says. On the morning of his annual physical, he takes his own blood pressure upon waking up, when it is highest. If the doctor only checks blood pressure at an afternoon appointment, he may miss a brewing problem.
But if you have a fund portfolio littered with stinking funds - by which I mean funds that consistently lag their peer group - someone besides the fund manager and the bear market has to catch some of the blame. Chances are, it's you or the adviser you hired to pick the funds. Investors can learn a lot by examining their mistakes, figuring out how they wound up with stinkers in their holdings and deciding how to improve the portfolio, find a better investment adviser, or both. Setting proper expectations for a fund comes from several factors: * How well it represents an asset category. * How it performs compared to the competition within that category, from both the risk and reward perspectives. * How it fits in with the rest of the funds in the portfolio. You may own a specific fund to be diversified. But a lousy fund that is part of a diversified portfolio is still a lousy fund. And just because a portfolio is diversified doesn't mean it's not filled with slobs and laggards. A fund may have once put up superb numbers, so investors hold on hoping the good times can come back. But if there's no realistic promise that the good times are coming back, there's no reason to hang on. If you own a bad fund, you have some responsibility for it being in your portfolio, either because you picked it, you approved it, or you allowed it to stay there. People who are willing to overlook their own role - or their adviser's part - in the fund selection process are enabling bad funds to continue being bad. Related articles: Another "Sell" Criteria - Charles Jaffe, Boston Globe, Six Sell Signals - Glenn Curtis, Washington Post, Know When to Fold'em - Charles Jaffe, Boston Globe
Here are three findings from the study: * A spouse whose husband (or wife) earns $60,000 a year faces lifetime marginal net tax rates of more than 50% for earnings that range from $10,000 to $40,000. * A two-earner couple in which each person earns $30,000 faces a lifetime loss of Social Security benefits. The loss has a current value of $56,829. * A woman with a husband who earns only $20,000 a year faces an extraordinary lifetime tax burden if she opts to work. She loses Social Security benefits, Medicaid and other programs by working. If she earns $10,000 a year, her lifetime marginal tax rate is 121.6%. The rate declines to 80.6% if she earns $20,000 and 66.4% if she earns $30,000. The study is based on the discipline of generational accounting. Generational accounting works by taking the income a household will earn over its lifetime, adding the benefits it will receive and subtracting the taxes it will pay. All of this is done in dollars of current value. The net difference is calculated as the lifetime tax rate. In this study, every major social welfare and benefit program has been included. As a result, calculations can truly show the impact of both the decision to work and of different income levels on lifetime tax rates. Basically, the two-earner household increases government tax revenue with virtually no increase in future benefits. The study notes that many women, who have paid into Social Security over their work lives, find that when they reach retirement, their best option is to claim benefits on their husband's contributions. As a result, they get nothing in return for all the payroll taxes they paid. You can obtain the full study, "Does It Pay To Work?" - by visiting www.ncpa.org, and downloading publications 260.
Investors, who are getting more optimistic about the prospects for global economies, still expect growth to be limited, the survey shows. Sixty-two percent of the 300 fund managers surveyed between May 1 and May 8 foresee a stronger global economy in 12 months, up from 45% last month. Forty-three percent of fund managers said the U.S. has the best earnings prospects, up from 36% in April. The outlook was worst for Japan and the region of Europe that is tied to the euro currency.
To study whether things really happen that way, I consulted my Bloomberg for past periods of widening and narrowing budget deficits since 1974. Then I checked how a representative bond mutual fund, the Vanguard Long-Term Corporate Bond Fund, and the S&P 500 Index of stocks fared during those stretches. If there was any pattern of budget-deficit blues, I couldn't find it. The bond fund did better (!) when the deficit was worsening. The S&P 500 responded more as it was supposed to, but in an inconsistent way. Here's a quick summary of the numbers: The federal deficit worsened from 1974, when it totaled $6 billion, through 1992, when it reached $290 billion. Over the next eight years, it improved steadily and dramatically, swinging to surplus by 1998 and reaching a peak surplus of $237 billion in 2000. Since 2000, it has rapidly worsened, plunging back into deficit. The Vanguard bond fund returned 9.1% a year in the bad budget years of '74 to '92; 7.4% a year from '92 through '00; and 11.7% a year since, through the end of April. The S&P 500 soared 17% a year in the improving-budget years of the '90s. From 1974 through '92, however, it did almost as well, averaging a 15.3 percent annual gain. Since the end of '00, it has fallen 13.1% a year. This year, while the costly war in Iraq and tax-cut proposals have exacerbated talk about budget-deficit concerns, both bond prices and stock prices are up. Some interest rates have lately hit four-decade lows. So as far as I can see, news on the budget by itself is of no practical value in figuring out when to buy or sell fund shares.
Continental European corporate earnings are expected to increase 10% this year, according to the consensus of analyst forecasts. "You could see that figure in very low single digits if you get an overshoot of the euro" and oil prices don't decline further, Mr. Hartnett said. "If the currency keeps going like this, there's not going to be any upside left" for stocks, warned Janet Lear, a global equity strategist at Deutsche Bank in London. And many think the euro does have further to go. Currency strategists are increasingly raising their targets - to as high as $1.33 by June 2004, by Merrill Lynch's reckoning. European investors don't appear to have decided that the softening dollar and the rising euro have made U.S. stocks cheap enough to buy. "We haven't really seen any strong trans-Atlantic signals" from recent flow data, said Michael O'Sullivan, head of global equity strategy at State Street Global Markets. However, there have been declines in sectors full of European companies that export into the U.S. and buying of stocks in sectors that aren't as sensitive to currency movements. While the overall Euro Stoxx index is up since March 19, the auto sector, a big exporter, had slid 2.7% through Monday. But the retail sector, which is relatively immune to currency moves, was up 9.3%, although it has come off its highs in recent days. Euro & Stocks II Erin Schulte, WSJ 5-19 Equity funds overall saw net cash outflows of $5.9 billion in Q1-03, but funds investing in international securities saw net inflows of $2.2 billion, according to AMG Data Services. Those who were quick to move were amply rewarded. Since the S&P 500 Index hit its most recent bottom on March 11, Latin American funds are up 27% and European funds are up 21%, according to Lipper. That's compared with about a 18% increase in the S&P 500-stock index during the same time. Even as U.S. investors seek out European stocks, the economy there is faltering badly. Some fund managers see better opportunities in Asia. Martin Schulz, director of international equities for National City Investment Management puts the price-to-earnings ratio of European stocks at around 14 times this year's projected earnings, compared with the U.S. average of 17. Hong Kong stocks, meanwhile, trade at around 11 times earnings, and Singapore at around 13 times. Another way U.S. investors can take advantage of the falling dollar, analysts say, is by stocking up on multinational companies that export many of their goods overseas, where they'll have an easier time selling. Phil Dow, director of equity strategy at RBC Dain Rauscher, notes that currency moves accounted for about 22% of the upside earnings surprises in the first quarter. "That is probably not a theme that is going to end," he says. The Dollar & S.E. Asia Keith Bradsher, NY Times 5-20 China and most southeast Asian nations have linked their currencies to the dollar, so the dollar's slide has pulled down the value of their currencies in key markets. This has made their exports more competitive in Europe and even Japan. Even in the United States, their main export market, companies in China and southeast Asia have lost none of their competitiveness. Some currencies in east Asia, like the Hong Kong dollar and Malaysian ringgit, are officially pegged directly to the dollar, rising and falling in lockstep with it. Other regional currencies, like the Singapore dollar, Thai baht, Indonesian rupiah and new Taiwan dollar, are loosely pegged to the dollar and have crept up slightly against the dollar in recent months, but have fallen against other currencies because of the dollar's decline. In the first three months of this year, the United States ran a trade deficit with China of $24.67 billion, a deficit with Japan of $16.37 billion, and deficits with Taiwan, Thailand and Malaysia of $2 billion to $4 billion each. The American trade deficit with all countries using the euro totaled $16.41 billion, according to the Commerce Department. Andy Xie, an economist at Morgan Stanley, predicted that the dollar's slide against the euro would do little to help the American trade deficit. "It's deflating, against the wrong currency."
As a result, the USDA recommendation for six to 11 servings of grains or breads sounds like more food than anyone could eat. But six bread servings equal about six ounces; in the real world that translates to just one large bagel. The FDA says a "serving" of French fries is 2.5 ounces, but a serving of fries at a fast-food chain is typically more than twice that size. All this confusion means that people who are trying to eat right in order to lose weight and stay healthy are often making big mistakes in their food choices. The American Institute for Cancer Research, www.aicr.org, offers a simpler solution for figuring out serving sizes. They covering two-thirds of your plate with vegetables, fruits, whole grains and beans. The room left can be filled with meat, chicken or fish. Most dietitians now suggest splitting an entree or ordering only from the appetizer menu as a way to control ever-expanding portion sizes while dining out. Those portions may look too small, but it's likely that your perception has been skewed by years of supersizing. More info American Institute for Cancer Research ( www.aicr.org) Background stats: (1) USDA statistics show that American total daily caloric intake has risen from 1,854 kcal to 2,002 kcal over the last 20 years. That significant increase - 148 calories per day - theoretically works out to an extra 15 pounds every year. (2) Respondents to the AICR survey were asked to estimate the standard servings defined by the USDA Food Pyramid for eight different foods, including pasta, green salad, beans and mashed potatoes. Only 1% of respondents correctly answered all eight serving-size questions, while 63% missed five or more. A remarkable 31% managed to estimate only one serving size correctly.
The first index fund wasn't created until July 1971. That's when the Samsonite Luggage Co. put $6 million from its pension plan into an index fund established by Wells Fargo Bank. Five years later, John Bogle created the first retail index fund at Vanguard. The traditional Individual Retirement Account didn't exist until 1974. The opportunity to create 401(k) plans didn't exist until 1978. It would take until 2002 to expand the plans enough so that 90 percent of all workers could easily enjoy tax-benefited growth. State Street Global Advisors didn't launch the first exchange-traded fund, the SPDR (for Standard & Poors' Depositary Receipts), until 1993. The first fixed-income ETF didn't exist until Barclay's Global launched several in 2002. Using the tools of yesterday, a 25-year-old worker who saved 10% of his $25,000 salary each year could accumulate $1.53 million. This would happen if the money were invested in a 70/30 equity/fixed-income portfolio at a direct cost of 1.4 percentage point a year. Using the tools of today - major index mutual funds and ETFs that cost 0.2 percentage points a year or less - the same worker would accumulate $2.06 million. The difference in lifetime accumulation is $530,000, an increase of 35%.
A cheaper US dollar will be a big challenge for European corporate leaders, for public policymakers and for union leaders. Managers in the eurozone will face unprecedented pressures to cut costs, policymakers to save and create jobs and union leaders to protect the generous benefits. A strong euro could spur the creation of the coalitions needed to undertake long-awaited and so far postponed structural reforms. But the reform agenda is so daunting, and implies such wrenching social and political rearrangements, that European governments may be tempted to retreat behind subsidies and protectionist barriers. In the absence of reforms, some companies may be able to shift their manufacturing to cheaper and friendlier locations but most will have no option than to press their governments for more subsidies and greater protection. As job-lessness increases, political demands will intensify to save the domestic jobs lost to imports and industrial relocation and to stem the flow of immigrants. A weaker US dollar may also dim prospects for trade liberalisation. Sadly, the newly realigned currency may also undermine the significant progress that European agriculture ministers had recently achieved to overhaul the EU's agricultural subsidies. If Europe deals with the strong euro by relying on protectionist measures, it will lead to more frequent and more acrimonious trade disputes. All this suggests a paradox: that a weak currency is not always a sign of weakness. The U.S. seems well equipped to minimise the negative consequences of a sharp devaluation of its currency while taking immense advantage of the opportunities it creates. A big factor in this is the flexibility and adaptability of the US economy, particularly of a private sector that is less fettered by regulations and that must try to satisfy demanding shareholders.
Consider T. Rowe Price Tax-Free Intermediate Bond Fund. The fund's recent SEC yield is 2.39%. But the "annualized dividend" yield is a more substantial 3.79%. Similarly, the "distribution rate" for MFS Bond Fund is over 5% while the SEC yield is 3.97%. Many stockbrokers and other fund sellers focus on the figure they call the dividend yield or the distribution rate rather than on the SEC yield. The distribution yield is typically calculated by taking the fund's income dividends in the most recent month, multiplying by 12 and dividing by a recent fund share price. In essence, the figure assumes the distributions remain constant for a year, but that often won't be the case. The SEC yield is a much more complex calculation that aims to more accurately reflect the fund's potential income over time by looking at the "yield to maturity" of all the individual holdings in the portfolio. Bond managers never think in terms of current yield. The reason, with bonds selling sometimes at a premium [or sometimes at a discount] - the bond now trading at $105 is going to be redeemed at maturity at $100, so the price will sooner or later drift down to that level. You have to figure that loss [or gain] somewhere into your return expectation. The SEC yield and distribution yield numbers are sometimes quite similar, and either can be higher than the other. But with rates having fallen sharply, the SEC yield is often a much lower figure. The SEC yield calculation also includes some worst-case assumptions. In the case of a fund with a front-end sales charge, the yield is calculated as a percentage of the share price incorporating the highest possible load. And there is one more layer of potential confusion. The "distribution rate" can also go by the name of "annual distribution rate" [at American Century Funds], the "dividend yield" [at MainStay Funds], the "12-month yield" [Morningstar], "annualized dividend" [at T. Rowe Price] and there may be even more versions.
If funds list yields in ads, they are required by the SEC to report a standard figure: the annualized yield for the previous 30 days, minus fund expenses. This requirement ensures that all funds report the same type of information. The problem, though, is that the one-month yield often has little relationship to the actual yield of a bond fund over a full year - and for a simple reason. Bond prices fluctuate constantly, making it virtually impossible for managers to invest all their new money at past rates. "In years with significant interest rate moves, reinvestments can make the income look quite different," said Bradley Sweeney, the Morningstar analyst who conducted the study. "Dramatic inflows or outflows can only exaggerate this effect." His study compared the annualized yield figures as required by the S.E.C. at the beginning of each of the last six years with the income and total returns by the end of each year, looking at two of the most conservative bond fund categories, short-term bonds and short-term government bonds. During relatively calm years for the bond market, like 1997, funds that came into the year with higher annualized yields over the previous 30 days tended to outperform their peers, both in income and total return. But calm years are rare. In 2002, a turbulent year in the bond markets, many short-term bond funds that started the year with higher yields underperformed their peers over all. Some investors make the erroneous assumption that funds with the highest current yields will provide more income in the long run than other funds in their category. In reality, higher-than-average yields are usually a sign that the fund holds riskier bonds, Mr. Sweeney said. Even if that risk was rewarded in the recent past, it may be punished in the year to come. "Many investors mistakenly assume that all funds in a category have similar risk profiles," he said. Capital depreciation of riskier assets in a volatile year can more than offset higher yield. If investors are "really after consistency, going with a higher-yielding fund may be exactly the wrong thing to do," he said. To estimate the risk of a higher-yielding bond fund, investors should check the fund's Web site for a breakdown of its credit quality, sector allocation and average maturity, said Robert Auwaerter, head of fixed-income portfolio management at the Vanguard Group. "If they don't have that information there, I'd say don't buy it."
The value of the U.S. dollar has slid anew in recent weeks. From 2000 to the present, the dollar and stocks have moved in the same direction 90% of the time, according to John Roque of Natexis Bleichroeder. [So the pattern is broken again. And the falling dollar should be hurting bonds too.] Tom Sowanick, fixed-income strategist at Merrill Lynch, believes that the most important point is that both stocks and bonds remain range-bound. He perceives the 10-year T-note yield to be contained below 4.25% unless the S&P 500 breaks above its late August 2002 high of 965. That, he figures, would convince bond watchers that stocks have broken out and drive them to dump Treasuries. Although market precedent isn't very rich with instances when stock investors have sniffed out economic turns long before their bond counterparts do, there's a chance that the long equity bear market and the heavy outperformance of bonds have made the public a bit too comfortable in hanging on to Treasuries. And professionals are now betting on the so-called carry trade, which involves borrowing at low short-term rates and buying longer-dated notes to collect the yield spread. A broad consensus that short rates will stay low is perhaps making traders overconfident about this strategy. Another factor: 1%-ish money-market yields have driven institutions to opt for bonds as a cash substitute. Christine Callies, chief market strategist at Bessemer Trust, believes that the recent stock gains merely represent the removal of the market discount that arose from the prospect of a double-dip into recession, while government bonds have held steady for lack of clear economic acceleration. But Callies points to risks such as increased issuance of Treasuries with rising budget deficits, and the chance the dollar's drop will cause foreign holders of U.S. securities to become sellers.
"When I first moved out here, there were many days in the spring when you couldn't see across the street. It was on one of those occasions that the late Chas. A. Guy, a Texas legend in newspaper circles and the man who hired me, summed it up better than I ever could." "It was literally blowing rocks outside one day right after I came here," Pettit recalls, "and I walked into the newsroom griping and cussing the wind and dirt and tumbleweeds that almost knocked my VW off the Tech Freeway. " "Mr. Guy walked up to me and said, `Don't knock this weather - it's our Yankee repellent!' "
The dollar's weakness has both benefits and costs. It makes U.S.-made goods cheaper on world markets, and that should eventually help shrink the massive U.S. trade deficit. [Reuters 5-9: J.P. Morgan Chase said in a research note on Friday that a sustained decline in the dollar will add 0.75% to GDP growth in 2004.] But a tumble in the dollar risks prompting foreign investors to dump their holdings of U.S. stocks and bonds, which could drive interest rates up and choke off U.S. economic growth. As a country that imports far more than it exports, the United States needs roughly $500 billion a year of investment from abroad to balance the scales. A shift from U.S. securities to foreign ones, lowers the value of the dollar. [Reuters 5-9: There are fairly good indications that the capital inflows into the United States have slowed dramatically,' Mike Malpede, senior foreign exchange analyst at Refco Group in Chicago, said.] Yields in many overseas markets are higher than they are in this country, causing that shift. The dollars drop has become much more pronounced in recent days, in part because markets have perceived that the Fed is more likely to lower interest rates than other central banks, the European Central Bank in particular. The ECB announced yesterday that it was holding its benchmark rate unchanged at 2.5%, which is double the U.S. federal funds rate. Europe's Perspective Mark Landler, NY Times 5-9 The euro's rise has set off a new bout of hand-wringing by business executives, economists and politicians, who fear that a strong currency could stir up as many problems as the weak one did. Today, the European Central Bank resisted intense pressure to cut interest rates to offset the surging euro. The bank's president, Wim Duisenberg, said at a news briefing that "there's not yet anything excessive" about the currency's rise. It promptly jumped again in European trading, to $1.15. [Reuters 5-9: Daniel Katzive, currency strategist at UBS Warburg, wrote in a research note to clients: `While we can't rule out an odd comment warning about euro strength from government officials, we do not expect the ECB to be an obstacle to further euro gains.'] Companies like Volkswagen, Swatch and Henkel are contending that the situation has already dented sales, both through the conversion of dollar-based sales into euros and by making their goods more expensive for American consumers. With ballooning current-account and budget deficits, the United States these days is a less attractive place for investors to put their money, and other countries, like Japan, scarcely look better. So Europe, by virtue of its stability and relatively sturdier public finances, has soaked up a lot of global capital. "Europe's weak economies should not attract that much investment," said Michael Heise, chief economist at Allianz, the huge German insurer. "But investors expect a long-term period of deficits in the U.S. That is worrying." Some experts contend that the euro was growing in stature even before the recent tide of red ink in Washington. Niall Ferguson, a professor of financial history at NYU, said there had been a marked shift in the global bond market toward euro-denominated bonds. From 1995 to 1999, he said, 53% of all corporate and sovereign bonds were issued in dollars, and only 20% in the currencies of the 12 European countries that now use the euro. In the four years since the common currency began trading, Professor Ferguson said, 44% of new global bonds have been issued in euros, nearly equaling the 48% issued in dollars. European Economy Stuck Robert McCartney, Washington Post 5-13 Private economic forecasters are now expecting GDP in the 12 nations that use the euro to expand by 1% or less this year. That's about the same as last year but is down from forecasts for 2003 of 1.5% and higher at the start of this year. Germany, the largest economy in Europe, is estimated to have grown only 0.2% in Q1-03 after no growth in the preceding quarter. That means it is very close to recession. [James Glassman, Washington Post 5-11: Last week, the French government was announced that GDP had declined in Q4-02. French GDP is expected to grow just 1% this year, and that may be optimistic.] [Mark Landler, NY Times 5-18: Last week, Italy and the Netherlands reported that they were on the brink of recession.] Patrick Artus, chief economist at Caisse des Depots et Consignations, a French financial services company, predicted that a robust recovery in Europe will be delayed until six to nine months after one starts in the United States. He said that's partly because it will take time for European corporations to reduce high levels of debt that they took on during the late 1990s even while profitability was declining owing to rising labor costs. A gain of 10% in the euro's overall exchange rate reduces growth in the 12 eurozone countries by about one-half percentage point. But the euro has risen more than 20% against the dollar in the last 12 months. The ability of European governments to use budgetary policy to stimulate the economy is restricted by a European Union agreement to limit public budget deficits to 3% of GDP. Germany and France are set to exceed that limit this year, however. Euro Speculation Reuters 5-8 Throughout the euro zone, manufacturing and service sectors are in recession and business sentiment weak. Despite such data, Portuguese central bank chief Vitor Constancio was quoted on Wednesday as saying monetary conditions did not stand in the way of recovery, echoing comments last week by Bundesbank President Ernst Welteke and ECB board member Sirkka Hamalainen. But it seems only a matter of time before the next cut, as there is no evidence of a post-Iraq-war boom and euro zone inflation has fallen to within a whisker of the bank's two percent tolerance ceiling, analysts said. June Euribor interest rate futures (FEIM3), a gauge of rate expectations, were pricing for official rates at 2.32% or roughly a 70% chance of a quarter point cut by June. Blaim the Fed Michael Deibert, Dow Jones Newswires 5-9 Strategists said that much of the week's volatile market activity stemmed from the Federal Reserve's warning on Tuesday that falling prices could hinder economic growth, and the decision by the Federal Open Market Committee to keep already-low U.S. interest rates unchanged. "The fact that the Fed brought deflation front and center brings a whole range of new questions about Fed policy," said Ram Bhagavataula, chief economist with the Royal Bank of Scotland. "What you've seen in the foreign-exchange market is the extension of that: U.S. interest rates are unattractive and will continue to be so." Blaim the Muslims Mark Landler, NY Times 5-18 The dollar remains the world's default currency - the lingua franca of oil traders and bond dealers, and the bedrock of foreign reserves held by central banks from Brussels to Baghdad. But there is now anecdotal evidence that central banks, especially in some Asian countries, are beginning to diversify their reserves, to reduce dependence on the dollar. Bank Indonesia, the nation's central bank, has increased its holdings of euros, currency traders said. 'We are strongly tied to the dollar,' Rizal Ramli, the former finance minister of Indonesia, said in an interview. 'But with the dollar's decline, it is wise for Indonesia to diversify its reserves into euros.' In Muslim countries like his, Mr. Ramli said, there is a political dimension to the shift. The American-led war on Iraq was fiercely opposed by Indonesia. Vice President Hamzah Haz, an Islamic leader, has encouraged local investors to switch from dollars to euros. A similar switch has occurred in Saudi Arabia and other Middle Eastern countries, currency traders say, though accurate numbers are elusive. Some analysts caution that one should not jump to conclusions from anecdotal reports about central banks. According to the International Monetary Fund, 68% of the world's foreign exchange reserves were held in dollars in 2001, the latest year for which it has figures. That number has remained roughly constant since 1999, and rose from 55% in 1992. The 13% of reserves held in euros in 2001 also stayed constant from 1999. Blaim Snow Ed Crooks, Financial Times 5-18 Since the mid-1990s, the strong dollar policy has relied on rhetoric to support the exchange rate, rather than intervention or interest rate changes. The rhetoric provides reassurance that the US would not intentionally attempt to drive the dollar lower and might at some point be prepared to support it. US Treasury secretary John Snow has undermined that reassurance. Snow, speaking after meetings with Group of Seven, played down the dollar's recent fall as "a modest realignment." Euro May Keep Rising David McHugh, AP 5-10 The euro's rise has been so rapid in the past several weeks that it is outpacing economic fundamentals, said Dorothea Huttanus, a currency analyst at DZ Bank in Frankfurt. Traders are now buying the euro essentially because they think it will keep going up, which makes it go up more, she said. "There are reasons for euro appreciation, yes, but not this dynamic," Huttanus said. "The trend goes on and no one dares to fight the market." The euro has risen 34% against the dollar in the last 15 months. Huttanus predicts the euro will fall by the end of the year. Other economists, citing huge U.S. trade deficits that undermine the dollar, think it will keep going past the all-time high of $1.18 shortly after it was launched in January 1999. UBS Warburg and HSBC analysts predict the euro will reach $1.20. "The real driving force is the market's search for yield, and right now yield is not the U.S.' long suit," said Marcus Chandler, chief currency strategist at HSBC USA. [James Glassman, Washington Post 5-11: European stocks are cheap. For example, while the Dow average is down one-fourth from its all-time high, the Eurotop is still off by half and Germany's DAX by 63%.] Thank-You China? Peter Brimelow, CBS.MarketWatch 5-12 China has steadfastly refused to revalue its renminbi against the dollar, which prevents its Asian competitors from doing so also. This is artificially supporting the dollar, warms money manager John Mauldin - and it won't last. Mauldin adds this comforting thought: "By the way, the dollar dropping 20-30% is not the end of the world, as some would have you think. The dollar dropped by over 1/3 against all currencies in the 80's and early 90's, and the US seemed to move along just fine. Inflation dropped during that time and the economy grew. Higher Yields Draw Investors Elsewhere Heather Bandur Bloomberg 5-12 About two-thirds of the 38 traders, analysts and investors surveyed by Bloomberg News on Friday recommended selling the dollar for the euro. A net $418 million was taken out of U.S. stocks in the week ended May 2, according to an analysis by UBS Warburg LLC, the largest trader in the $1.2 trillion-a-day currency market. The outflow, the fourth in five weeks, compares with a $93 million net inflow to European stocks. For Europe, it was the sixth net inflow in seven. The relative strength index shows that the tumble in the dollar may end soon. The RSI for the dollar, as measured against six of its biggest trade partners, reached 23.436 on Friday from 37.198 two weeks ago. A reading below 30 on the RSI, which attempts to identify turning points in a currency, suggests it may rise. `The equity market isn't attracting the kind of attention it did in recent years, so people are looking for yield,' said John McCarthy, director of currency trading at ING Financial Markets LLC. `That's why they're buying the Australian dollar, the New Zealand dollar and the Canadian dollar - they all offer attractive yields.' Benchmark 10-year Australian notes yield 1.4 percentage points more than comparable U.S. Treasuries, helping the Australian dollar gain 14.9 percent against the dollar this year. Stats & What Would Cause a Recovery Jonathan Fuergringer, NY Times 5-13 While the dollar is down 9.1% against the euro this year and 27.5% since the dollar's recent peak in July 2001, it is down only 3.7% this year and 6.4% since July 2001 based on an index of the currencies of 37 countries compiled by the Federal Reserve. Against this broad index, the dollar is only at its lowest value since July 2000 and is 20.1% above its low in 1978. What could stop the decline? Larry Kantor, the global head of market strategy at Barclays Capital, said he did not think that a rebound in economic growth here would be enough to turn things around. He noted that despite the strong rally in stocks since the end of the main fighting in Iraq Ù something that should attract foreign investors Ù the dollar's decline has accelerated. What is needed to stop or slow the decline soon, he said, is protests from Europe about how the rising value of the euro is strangling an economic recovery there. And, he said, if that protest is backed up with cuts in interest rates by the European Central Bank, the dollar could find a bottom. No [Current] Signs of Flight Tom Petruno, LA Times 5-13 Government data show foreigners continued to be net investors in U.S. securities in 2002 even as the dollar fell. Foreigners bought a net $507 billion in long-term U.S. securities last year, down just marginally from $520 billion in 2001. Official data on foreign buying for the last two months aren't available. But the powerful rallies in stock and bond markets since mid-March suggest that foreigners either aren't huge sellers, despite the dollar, or that any selling has been met by strong domestic demand. A weak dollar becomes a problem "if you have some evidence of capital flight - if the dollar, bonds and stocks all are falling at the same time," said Craig Larimer, currency strategist at Banc One Capital Markets. But that isn't the story this year. For now, the U.S. economy overall may be enjoying the best possible dollar scenario, said Joseph Carson, economist at Alliance Capital in New York: The dollar is weakening against developed countries to which U.S. exporters sell a lot of goods, while it is remaining level against the currencies of China and other Asian nations from which the U.S. imports huge quantities of consumer goods. No Signs of Flight II BusinessWeek Online 5-16 As the dollar has dropped in recent weeks, both the stock and bond markets have risen strongly. While foreign investors are more nervous about new purchases of U.S. assets, they aren't selling off the stocks and bonds they have already bought. What seems to be happening, says former Federal Reserve official Edwin M. (Ted) Truman, is that foreign investors are keeping their money in U.S. stocks and bonds but hedging some of their exposure to the dollar by selling greenbacks in the global currency market. How High Can the Euro Go? Jonathan Fuergringer, NY Times 5-14 C. Fred Bergsten, director of the Institute for International Economics in Washington, believes a current account deficit around $250 billion is sustainable because it does not threaten to disrupt the economy. Each percentage point decline in the value of the dollar in the Federal Reserve's dollar index of the United States' major trading partners should reduce the current account deficit over time by about $10 billion to $15 billion. So over time, Mr. Bergsten said, the dollar would need to fall roughly 20 percent to 25 percent in value to reduce the current account deficit to a sustainable level. After factoring in the dollar decline that has already occurred, Mr. Bergsten said the dollar still needs to fall 10 percent to 15 percent more against the euro and to stay around that level. Such a move would bring the euro to a value of $1.2650 to $1.3225. And at the $1.3225 level for the euro, the dollar could be called weak as it would then be within striking distance of the post-1973 low of the dollar against the West German mark, at the time the leading European currency. The mark's level at that dollar low translates into a euro of $1.4450. Related articles: The Dollar Can Bounce Back - Gene Epstein, Barrons / others, Dollar Update - Vito Racanelli, Barrons / others, Euro vs Dollar - Michael Sesit, WSJ
The simple, and wrong, explanation for the dollar's weakness is that the United States is running a very large trade deficit. The trade deficit is large, approaching 5% of GDP. But the deficit was almost as large last year, and the dollar was strengthening. The second explanation would be that assets are earning more abroad than they are in the United States. There certainly is some substance to this explanation, but it begs the question of why the change has occurred recently. Are investment opportunities improving elsewhere or deteriorating in the United States? Most forecasters believe that economic growth has a better chance of improving this year in the United States than in most other countries. SARS is slowing Asian economies while monetary restraint is limiting economic growth in Europe. The rising value of the euro will slow the growth of European exports. Without domestic growth, some of euroland could fall into recession this year. That certainly is not a favorable condition for investors. However, interest rates are higher in Europe while inflation is not. If investors can be sure that the euro will not fall in value, they will exploit that higher rate. A year ago, uncertainties were so strong that investors wanted to be in assets that could easily be sold. This meant they wanted dollar-based assets. Now uncertainties are beginning to subside. Furthermore, interest rates have fallen so low that some money managers are having difficulty paying for administrative costs from the returns on short-term instruments. Therefore, they are searching for higher yields. Once investors became certain that the euro would not slip back below the buck, they began to buy European debt instruments. Higher interest rates and a rising currency became an unbeatable combination that led to further euro buying. The dollar weakness will continue until one of the following occurs: American producers become so competitive that trade deficits begin to fall sharply; the dollar becomes so cheap that investors no longer believe it can fall any further (these may be combined); or the interest rate differential vanishes after adjustment for inflation. Unfortunately, that last point is the most difficult to achieve. As the dollar falls in value, prices of imported goods begin to rise. This raises costs of production and adds to inflation (which is minimal at present). At prevailing interest rates, rising inflation would only add to the interest-rate differential. Thus, currency markets tend to overshoot the stable point, unless central banks intervene to stem the dollar's weakness through higher U.S. interest rates while the European central bank is stemming the euro's strength by lowering interest rates there. I am not waiting for interest rates to fall in Europe. Therefore, the dollar will become very weak, and American producers will begin to sell into Europe. The trade deficit will slowly narrow and economic activity will rebound here. Not all of the above is bad. But more coordinated activity by the world's central banks would make the currency adjustment much less dramatic.
How is cable accomplishing this move? (1) By positioning itself as edgier than the old guard and (2) exploiting a revenue structure that leaves it less dependent on finicky advertisers. Commercial cable networks get revenue not only from ads but also from the license fees that cable and satellite operators pay to carry their networks. These fees - which make the networks less dependent on advertisers - comprise roughly 55% of overall cable revenue. Cable networks are much less dependent on ad revenue - which gives them more leeway when producing shows. Also, cable networks don't need to fill all their prime-time slots [with new or competitive material] every week, and thus don't have to spend the millions of dollars the networks do every year developing a raft of new series. This in turn means cable networks can be more selective about the shows they put on the air, focusing on one or two strong contenders each season, rather than rolling out a bunch of so-so entries and hoping that one of them becomes a hit.
In some cases, management bonuses are made based on consistency, or performance within a certain peer range - say the top quarter of all funds, regardless of whether that beats the benchmark - and on other criteria. And investors know none of that. If we did know, we could pick funds where managers who seek to maximize their compensation must tailor their investment strategy to fit the needs of our own portfolios. We'd know for sure that the top fund companies were holding managers accountable for reaching the targets that are important to us.
In a recent study, however, two finance professors, Mark S. Grinblatt, of UCLA, and Bing Han, now of the University of Calgary in Alberta, demonstrate that momentum exists because of investors' tendency to sell their winners more rapidly than their losers. The research is online at papers.ssrn.com/sol3/papers.cfm?abstract-id=288466. Psychologists have long known that because people hate to acknowledge mistakes, they tend to hold on to losing stocks longer than they keep winners, a tendency known as the disposition effect. In their study, Grinblatt and Han linked the idea to momentum. They concluded that the disposition effect slows the pace of investor reaction to new information. Consider a company whose stock price rises in response to good news. This increases the number of investors who hold the stock at a profit, which leads to an increase in the proportion of owners who have an above-average predisposition to sell. The increased selling pressure puts a damper on the stock's reaction to the good news. A similar process occurs when a company reports bad news. As its stock declines, the number of investors who hold it at a loss starts to climb. Because these investors are relatively reluctant to sell a stock when it is down, the pressure on the stock will decline, mitigating the fall in its share price. To measure the impact of the disposition effect, the professors estimated investors' total unrealized gains in each stock. They devised a complex model that considered not only the difference between a stock's level and its price on all trading days over the previous five years, but also its daily trading volume. They studied all stocks on the NYSE and Amex from July 1962 to December 1996. The professors found that their gauge of unrealized gains provided more accurate forecasts of which stocks would outperform the market than the measurements traditionally used by momentum investors: the direction and magnitude of a stock's recent price changes. Among stocks whose prices increased at equal rates over the previous six months, those whose investors had the largest total unrealized gains performed better, on average, over the next year. Momentum investors can take advantage of the research by focusing on how often investors trade in a stock. Investors who hold a stock for a long time are likely to have more unrealized capital gains or losses than investors who trade often in that stock. Given two stocks whose prices have been rising, momentum investors should pick the one in which there has been less trading, as suggested by the ratio of trading volume to shares outstanding. Supporting Research for the Disposition Effect: Terrance Odean ('Are Investors Reluctant to realize Their Losses?' - Journal of Finance 1998) analyzed disposition behavior at a large brokerage house and found that there was a greater tendency to sell stocks with paper capital gains than those with paper losses. Mark Grinblatt and Matti Keloharju ('What Makes Investors Trade?' - Journal of Finance 2001) found a similar effect among all types of investors in Finland, even after controlling for a variety of variables that may determine trading. They also observed that the disposition behavior interacts with past returns in a multiplicative fashion and has a pronounced seasonality: it disappears in December. Using data from a major Israeli brokerage house during 1994, Zur Shapira and Itzhak Venezia ('Patterns of behavior of professionally managed and independent investors' - Journal of Banking and Finance 2001) show that both professional and independent investors exhibit the disposition effect, although the effect is stronger for independent investors. Peter Locke and Steven Mann ('Do Professional Traders Exhibit Loss Realization Aversion' 1999) present evidence for the existence of a disposition effect within a sample of professional futures traders. In their study, traders held losing trades longer than winning trades and average position sizes for losing trades were larger than for winners. Another Study by Grinblatt - 'What Makes Investors Trade? Mark Grinblatt and Matti Keloharju found, in a 1998 study 'What Makes Investors Trade?', evidence that investors are reluctant to realize losses, that they engage in tax-loss selling activity, and that past returns and historical price patterns, such as being at a monthly high or low, affect trading. There also is modest evidence that life cycle trading plays a role in the pattern of buys and sells. For all investor-types, the tendency to hold onto losers is exacerbated for losses exceeding 30%. Stocks with large positive returns in the recent past and with prices at their monthly highs are more likely to be sold. The paper also finds that the disposition effect interacts with past returns to modify the propensity to sell. Finally, regressions using all buys and sells indicate that life cycle considerations play a modest role in the buy-sell decision, that negative past returns affect the buy-sell decision more than positive past returns, and that having a stock price at a monthly high or low exacerbates an investor's existing contrarian or momentum trading style. Contrarian behavior is greatest for the household, government, and non-profit institution investor categories. By contrast, non-financial corporations and finance and insurance institutions, domestic groups that generally are more sophisticated than the other 3 investor-types, exhibit much less of this contrarian behavior with respect to recent stock price run ups. Foreign investors, by contrast, tend to be momentum investors. The study's finding that gender is unrelated to the propensity to sell is curious in that it tends to contradict the results in Barber and Odean (1999), who find that men trade more than women do. It is possible that specification differences account for the differences in results. Our regressions control for a number of variables that are correlated with gender (portfolio size, number of stocks in the portfolio) that Barber and Odean do not control for. Other studies cited in 'What Makes Investors Trade?' Hyuk Choe, Bong-Chan Kho, and Rene Stulz ['Do foreign investors destabilize stock markets?' (1999)] report that individual investors in Korea exhibit short-run contrarian behavior while foreign investors exhibit momentum behavior. John Nofsinger and Richard Sias ['Herding and feedback trading by institutional and individual investors' (1999)] find that institutional ownership of stocks is related to their lagged returns. Tax losses tend to be realized at the end of the year [see S. Badrinath and Wilber Lewellen 'Evidence on tax-motivated securities trading behavior' (1991) and Terrance Odean (1998)]. Chip Heath, Steven Huddardt, and Mark Lang ['Psychological factors and stock option exercise' (1999)] find that employee stock options tend to be exercised when stocks have attained their yearly high. Increases in volatility are positively related to trading volume [Jonathan Karpoff 'The relation between price changes and trading volume' (1987), Thomas Epps and Mary Lee Epps 'The stochastic dependence of security price changes and transaction volumes' (1976), and Bradford Cornell, 'The relationship between volume and price variability in futures markets' (1981)]. Each investor restricts the universe of stocks under consideration for purchase to a manageable size [Robert Merton, 'A simple model of capital market equilibrium' (1987)]. Related articles: Investing Psych 101 - Jonathan Clements, WSJ
Nowhere is this trend more prevalent than in supermarkets and large warehouse-type stores. A billion self-serve transactions were made in the United States last year, up from 520 million in 2001 and 320 million in 2000, according to industry analysts. Self-checkout systems, in only 6% of grocery stores as recently as 1999, are now in almost one-third of the 32,000 supermarkets in the country. A set of four self-service lanes costs about $100,000 to $200,000. Predictions of doom for cashiers may be overstated, if the experience of self-service automation in banking is a guide. The number of U.S. tellers has remained flat at roughly 85,000 since 1990, even while ATM transactions doubled, to 14 billion last year. ATMs altered behaviors and led customers to bank more often. But given the rise in transactions and middle-class wealth, it's also arguable that the machines, which have quadrupled in availability to nearly 350,000, kept financial institutions from having to hire tellers to keep up with the growth. One of the more intriguing self-serve experiments in the United States - CueSol's "Shopping Buddy" - is at a market owned by Stop & Shop Supermarket - owned a Ahold. At the store's entrance, a rack holds about 60 devices that look like industrial-strength Etch-A-Sketch toys. Shoppers mount it in specially designed handles on their carts. Customers swipe their "frequent shopper card" in the machine - or borrow a generic card from the service counter. What customers don't see is as remarkable as what they do. The tablets transmit a wireless signal to CueSol's computer servers. The connection moves over fiber-optic lines to Ahold's mainframe in Greenville, S.C., where the customer's shopping history and account is stored. The information then returns to Braintree via the Internet to the "Shopping Buddy" devices on the shopping cart. The process takes less than 2 seconds. Because of wireless transmitters affixed to the ceiling of the supermarket, the machine-equipped cart always "knows" its location in the store. If a customer's history indicates that she favors a certain brand of orange juice, the machine screen will alert her to a sale on it when she nears the refrigerated section. If she can't find a product, a quick computer search on her cart screen will locate the item and even display a store map to show how close she's getting as she walks toward the item. Users can order deli products with the "Shopping Buddy" touch screen and even specify whether they prefer their bologna thick or thin. A screen prompt alerts when the order is ready. And with a detachable scanner, smaller and lighter than most cell phones, shoppers can scan their items and get a running sum as they drop them in the cart. If they've already placed bags in the cart, they can check out with the scanner and pay for their items without removing anything from the basket. Most customers here aren't ready to play yet, however. Of roughly 15,000 shoppers in the store each week, about 3,000 are using the "Shopping Buddy" and maybe 2,000 of them are using it to check out at the end. CueSol is also working on a version that would allow wives to e-mail shopping lists to their husbands on "Shopping Buddy," although requiring the husband to buy only the listed items may be beyond technology's reach. More Stats Samantha Smith, NandO 5-11 There are at least 10,000 self-scanning machines in use throughout the country, and the industry expects the number to double in the next four years. The Food Marketing Institute estimates that this year 29% of grocers will implement some type of self-scanner in stores. That's up from 6% in 1999. Installing the scanners costs about $100,000 for four checkout lanes, double the cost of a traditional checkout system. But the savings usually make up for the extra cost in a little more than a year, according to industry studies. Self-scanners can save retailers more than 200 labor hours a week.
Of five proposals designed to improve governance and reduce executive loot, Tyco stock owners approved only one, by 58% - a measure requiring shareholder approval for executive golden parachutes above a specified level of obscenity. (Moderately obscene payouts are still OK.) And Tyco's board is not obligated to comply. The company "will take it under consideration," a Tyco flack says of the idea favored by 58 percent of Tyco's owners. A shareholder proposal to make Hewlett-Packard account for the expense of executive stock options - defeated. A proposal to let Citigroup shareholders, not just the board, nominate directors - barred from the ballot. A proposal to make SBC Communications executives outperform their peers before benefiting from stock options - defeated. At General Electric, where boss Jeffrey Immelt succeeded Jack Welch, who is legendary for pre-retirement management and post-retirement emoluments, shareholders rejected a proposal to limit executive severance pay. My view that shareholders are behaving like sheep at the wool factory is not well accepted. Many corporate governance experts see big progress in the mere fact that shareholder resolutions are getting on ballots, occasionally passing and often receiving more than 10% or 20% of the votes. And some losing measures are falling only slightly short. But outrage over corporate excesses will probably get no higher than it is now. If Jack Welch's retirement package isn't too much, what is? If company owners won't respond to injury by their own employees, who will?
Never use more than 50% of your limit on any single credit card - even if you pay off your balance every month. Find out what day your credit-card issuer reports to the credit bureaus. It's usually the day after your statement period ends. To run up your score temporarily, pay the balance off before that date. This creates a zero "balance-to-credit-limit ratio," a big score booster. Think twice before closing an account. Losing the line of credit will increase your overall credit usage ratio. [Kathy Kristof, LA Times 5-25: A consumer who cancels all old credit card accounts appears to have a shorter credit history, which hurts the score.] The older your average account, the better for your score. So if you have too many credit cards, close the newest accounts first. And to increase the score-boosting power of the older ones, use them at least once a year. Dormant accounts don't count for much. Hold off on applying for smaller loans or credit cards within a year of applying for a big loan, like a mortgage. Find a friend or family member willing to add you as an authorized user on an old credit-card account in good standing. The account will appear on your own report and boost your score. Avoid credit inquiries. Every time you shop for credit, the lender will peek at your credit file, creating an inquiry on your report. Multiple inquiries will hurt your score. The FICO formula rewards a diverse debt portfolio. It's far better to have a mortgage, an auto loan and several credit cards all in good standing than to have credit cards alone. And when it comes to cards, three to five is often hailed as the optimum number. Loans from finance companies, however, can drag down your score. So avoid them. [Liz Pulliam Weston, LA Times 5-18: For credit-scoring purposes, it's generally better to have smaller balances on a few cards than to max out a single card. That's according to Fair Isaac. The more you use any one line of credit, the more your credit score can be hurt.] More FICO Score Info Kathy Kristof, LA Times 5-25 Not having certain types of debt can hurt. To get a high enough score to rank as a preferred borrower, a consumer generally must have both credit card and installment loans. Consumers also should look for oversights on their credit reports, such as lenders failing to report the borrowing limits on their credit cards or lines of credit. Scoring programs compare the amount of credit available to the consumer with the level of overall debt. When accounts are posted without credit limits, the program assumes the loan has been charged to the maximum, which boosts the consumer's debt ratio and lowers the score. Another misconception is that to get a home loan, the consumer should pay off old collection accounts, such as the disputed $12 bill from the mail-order record company. Huge mistake, Warnken said. The reason: The score gives more weight to recent activity. A 6-year-old collection account, consequently, would have a relatively small weight in the overall credit score. But make a payment on that old account and it shows as current collection activity. That can shave dozens of points off a FICO score. Score higher than 700 and you not only get the best loan terms, but lenders also may make the loan without asking questions about your income and assets. So-called no-docs loans make the loan process faster and easier. Score 660 or better and you get the best rate from virtually all lenders, but you will have to provide documentation of your income, assets and debt. Score between 620 and 660 and you may get a preferred-rate loan, but you'll have fewer lenders competing for your business. Lenders consider anyone with a score of less than 620 to be a sub-prime borrower. Those borrowers pay at least 1 percentage point more in interest on a home loan. How important is getting the very best rate for a home loan? Just a one percentage-point difference in the interest rate will cost $23,410 for each $100,000 borrowed over 30 years.
Vanguard Group, a 401(k) provider, says about 5% of its 1,500 corporate clients have eliminated or reduced their matching contributions. Principal Financial Group, which provides 401(k) services, says that last year, for the 17 of its clients with 2,500 or more workers, the average company match declined to 33 cents per dollar contributed by employees. That's down from 43 cents per dollar a year earlier. Average matching contributions are slightly up for smaller clients. Despite falling stock prices, just 13% of participants made changes in their 401(k)s last year, according to Fidelity. That's good news if it keeps workers from abandoning their 401(k)s, but it also means that many employees don't rebalance their portfolios when market swings throw their asset allocations out of whack. Vanguard says that 17% of people who enrolled in its 401(k) plans last year are putting no money into stock funds. Even more problematic, cuts in employer matches could lead more workers to stop contributing altogether. When New York Life Investment Management surveyed eight of its clients that had dropped or cut matches, it found that participation rates had declined by an average of 9.45%. Employees are still keeping too much of their money in company stock. In a March survey of Hewitt's 401(k) clients, employees had invested 23% of assets in company stock, about the same percentage as in December 1999. Many companies also still match employee contributions with company shares. One reason employees aren't doing a better job is that it's hard to figure out just what to do. Companies offered workers an average of 15 investment options last year, up from just 4.2 in 1992, with some firms offering 60 or more different options. But the explosion of choices may be keeping people from saving. When faced with 60 investment options, just 60% of workers sign up for their 401(k) plans. In plans that give workers just two choices, enrollment jumps to 75%. Related articles: 401(k) Stats - Simon, WSJ / Forster, WSJ / Renberg, Minn Star Trib, Full-Service Accounts in 401(k) Grows - Donna Rosato, NY Times, The 401(k) Trap - Pamela Yip, Dallas Morning News, Companies to Offer Some 401k Education - Beth Healy, Boston Globe
The merchants argue that these fees - which generated an estimated $500 million in revenue for the card industry last year - eliminate much of the card companies' incentive to pursue fraud. Card companies often give online, telephone and mail-order merchants a cold shoulder when they ask for help in tracking down fraudsters, these merchants say. The problem could get worse as more and more transactions are conducted online. Such purchases now account for about 25% of all credit-card transactions, MasterCard says. The percentage of these transactions that are fraudulent is 2.1%, compared with 0.1% of all traditional card purchases, according to Celent Communications. Related articles: Consumers, Banks Clash on ATM Fraud - E. Scott Reckard, LA Times Web-Enabled ATMs - David Margulius, NY Times
Recently, Lipper reviewed 3,700 stock funds for which it had updated information on the funds' brokerage-commission payments. On average, Lipper found that the funds paid about 0.46% of their assets annually in brokerage commissions. That's on top of the average expense ratio of 1.3%, which doesn't include brokerage commissions. According to Morningstar, the average annual turnover for stock funds has fallen to about 102% from 109% at the peak of the bull market. But the figure is well above the 83% average turnover five years ago and the 69% figure 10 years ago. Just the Facts Store Brands [Grocery] stores across the nation have aggressively rolled out their own brands, but consumers often know little about from where these products come. Most retailers zealously guard the names of the manufacturers who make their products. Wal-Mart and Costco didn't return my calls. Other retailers returned my calls but were tight-lipped. Even though the prices of store brands tend to be lower than national brand products, the profit margins are usually higher because the marketing costs are so low. LiDestri Foods Inc. of Fairport, N.Y., is probably typical source. It makes Francesco Rinaldi pasta sauce and also makes, under contract and to varying specifications and recipes, Stop & Shop's pasta sauce, Newman's Own pasta sauce, and several other national brands of pasta sauce that the company wouldn't disclose. (Bruce Mohl, Boston Globe 5-25) About 24% of Kroger's total grocery sales come from its house brands; 41 company-owned manufacturing plants produce 7,500 Kroger products. (Callahan & Zimmerman, WSJ 5-27) Inflation Update The CPI has increased an average of just 2.5% annually over the past three years. In the same period, by some measures, cable-TV costs are up 9.1% annually. Auto insurance is up 7.6% a year. Car coverage now costs an average of $855 a year, versus $687 in 2000. The average worker now pays $2,088 a year for health-care premiums, up from $1,656 in 2000 - a 8.0% annual increase. Natural gas (per million BTUs) cost $3.17 in 2000 vs $5.67 now, a 21.4% annual increase. Fifteen states enacted significant tax increases in 2002, boosting tax revenues for fiscal 2003 by almost $6 billion, according to the Nelson A. Rockefeller Institute of Government. (Opdyke & Higgins, WSJ 5-8) Lack of Bond Reform Martin Weiss of Weiss Ratings Inc. notes: 'Bond ratings are bought and paid for by the companies that are being rated . . . `Bought and paid for' are the same words the regulators used to say what has been going wrong on the stocks side, but they haven't moved to make any changes when it comes to fixed income.' The new rules specify only that a 'significant portion' of a stock analyst's pay be connected to the accuracy of forecasts. There is no definition of how big a chunk is significant. (Charles Jaffe, Boston Globe 5-1) Social Security Shortfall Social Security has a 75-year revenue shortfall equal to 1.92% of current payroll. That's about $3.5 trillion in today's dollars. This year the Trustees Report includes two additional measures that are more accurate. They don't shove some liabilities beyond the 75-year horizon. Guess what happens? The revenue shortfall triples to a present value of $10.5 trillion. Does the extra $7 trillion make a difference? Here are some ways to think about it. The $7 trillion increase is about the same as our total home equity ($7.6 trillion). If we just surrender our homes to Washington today, they can make good on the promises that have been made. Toss in every dime we have in mutual funds, about $2.6 trillion, and we'll cover the entire $10.5 trillion shortfall. (Scott Burns, Dallas Morning News 5-4) Reduce Your Bond Portfolio's Risk If economic growth accelerates, inflation is likely to perk up, driving interest rates higher. That would be bad news for bond prices. Here are four ways to reduce your bond portfolio's risk, while still clocking decent gains. (1) Stable-value funds aim to maintain a fixed share price. They are currently yield an average 4.9%, according to Hueler. (2) Five-year CDs currently yield 3.4%. (3) Series I savings bonds are paying 4.08% and Series EE bonds are yielding 3.25%. (4) And do not forget TIPS - inflation-indexed bonds. They are made for times like these. [Gregory Zuckerman, WSJ 5-3: 10-year TIPS carry a 2.1% yield plus the future rate of inflation.] (Jonathan Clements, WSJ 4-30) More Bond Tips [If bond rates are about to rise, then you should] Get your debt under control. As bond yields rise, expect other interest rates to go up, too, especially for mortgages, auto loans and credit cards. Lighten up on Treasurys. If investors move out of bonds, super-safe Treasurys will be hurt most. Think shorter-term. Move out of long-term bond mutual funds and into medium- and short-term funds, which will be hurt less as rates climb. Go heavy on corporates and junk. These bonds, which depend on the strength of corporate balance sheets and earnings, will do better if the economy revives. (Gregory Zuckerman, WSJ 5-3) Back-loads Fees Top Front-loads at Some Funds From 1997 to 1999, investors paid about $5 billion to get into the funds [front-end loads] and $890 million to get out [Class C back-end loads], according to the research company FundExpenses.com in New York. But from 2000 to 2002, fees to buy equity funds rose only to $6 billion, while fees to sell stock funds more than doubled, to $2 billion. Last year, more was collected in exit fees than in entrance fees at 15 of the biggest 25 stock mutual funds with Class B shares, according to FundExpenses.com. Fidelity Investments, Merrill Lynch, Putnam Investments, John Hancock and Alliance Capital Management each managed at least one stock fund in which redemption fees exceeded upfront sales charges in 2002. The Alliance Premier Growth fund collected $12.7 million of redemption fees and only $3.8 million in upfront charges last year. (Eric Baum, NY Times 4-27) Quick Facts, Stats & Opinions The plunge in interest rates has encouraged an orgy of mortgage borrowing. Now the incentive to take on big mortgages has been slightly reduced. Got a home loan with a 6% interest rate? If you were in the 27% income-tax bracket before, your tax rate has just dropped to 25%. That reduces the value of your mortgage-tax deduction, so the after-tax cost of your mortgage climbs from 4.38% to 4.5%. Carrying a big mortgage has become a little less attractive. (Jonathan Clements, WSJ 5-28) Wal-Mart started selling food in 1988 and became the nation's largest grocer last year, with more than $53 billion in grocery sales. Consolidation among grocers since the late 1980s gave Wal-Mart an incentive to break into the sector. With less competition, the price of food sold at supermarkets nationwide grew at twice the rate of the producer-price index from 1991 through 2001, fattening profits. That meant Wal-Mart could come in, cut prices 10% to 15% and still make a profit. (Callahan & Zimmerman, WSJ 5-27) If you applied for a job with me and I called your former employers to check you out, what would they tell me? You have no idea? Most likely it's because you didn't ask. It's a mistake not to sit down with your human-resources representative and boss to agree on what information will be shared when potential employers call. (Andrea Kay, Gannett News Service 5-25) On balance, the poorer-performing newsletters are nearly as bullish on the stock market as the best performers. This legitimately does raise concern among contrarians, since the stock market rarely accommodates the majority. (Hulbert Financial Digest via Washington Post 5-25) Currently, the bond market and the stock market have two opposing views of the economy and the risk of deflation. If the stock market is right, the bond market is facing a huge selloff before long. But if the bond market is right, there is significant earnings risk that will have to be priced into stocks at some point. Real inconsistencies like this do not usually last very long. (Stephen Roach, Global Economics Morgan Stanley via Washington Post 5-25) Individual income-tax revenues for the seven months ended April 30 fell to $493.8 billion from $536.5 billion in the year-earlier period, according to a Treasury report. [That is a drop of almost 8%.] Corporate-tax revenues tumbled to $62.8 billion from $88.2 billion. [A 28.8% fall.] (Tom Herman, WSJ 5-22) Through late April, about 83% of taxpayers who wanted to talk to an IRS customer service representative got through, says Mark Everson, the IRS's new commissioner. That was up from around 70% last year, Mr. Everson says. But what about the accuracy of IRS responses? "The telephone correct-response rates for tax law and tax-account questions are about even with last year -- 82.5% and 87.7%, respectively, as compared to 83.4% and 89.4%," Mr. Everson says. (Tom Herman, WSJ 5-22) Proms are estimated to bring in $2.7 billion in revenue for purveyors of dresses, shoes, lingerie, beauty supplies, and salon services. Teens also rent limousines and hotel rooms and plan after-prom parties requiring beach gear and swimsuits. Almost 20 million students will attend proms this year, with the average 17-year-old spending $638, or more than $1,200 per couple, according to research by Conde Nast, which publishes Your Prom and Modern Bride magazine [I wonder if this is a skewed sample]. Your Prom says that of its 5.2 million readers, 55% have part-time jobs, earning them an average income of $4,651 a year. Overall, teens spent $172 billion in 2001, with nearly half going toward clothing, jewelry and beauty products. Teens spend $416 million a year for limousines, and $172 million on flowers, Conde Nast found. (Alexandra Polier, AP via Philadelphis Inquirer 5-22) While 87% of 1,000 employees surveyed at large companies agree that health-care costs are outpacing inflation, only 46% believe that employers are unable to absorb the increase, according to a recent poll by Towers Perrin. Benefits typically represent about 27% of labor costs, according to government statistics. (Carol Hymowitz, WSJ 5-20) Unlike the bulk of mutual funds, most hedge funds have made money in the three-year bear market. As the S&P 500 index fell at an annual rate of 16% a year in the three-year period ended March 31, the CSFB/Tremont index of hedge funds rose 3.46%. (Erin Arvedlund, Barrons 5-19) With almost all the companies in the S&P 500 reporting their first-quarter results, earnings were up about 12%, well above the 8.5% gain that was forecast, according to Thomson First Call. (E.S. Browning, WSJ 5-19) Personal bankruptcies hit a record 1.57 million in the year that ended March 31. According to the Administrative Office of the United States Courts, these filings are up 25% since 2000. In contrast, the number of businesses filing bankruptcy petitions fell 5.8% this year. (Gretchen Moregenson, NY Times 5-18) Never lose sight of the fact that the stock market is indeed a 'market'. On days when share prices drop sharply, you can easily get the impression that everybody is selling. But in fact, every share sold is bought by somebody. Planning to shovel more money into your stock funds, but feeling a tad nervous? To bolster your resolve, take a moment to think about all your fellow buyers. [Clements notes that automatically 'buying the dips' on diversified mutual funds makes more sense than doing so on individual stocks. The fundamentals could have changed on a specific stock, but that is unlikely the case with a 'fund'.](Jonathan Clements, WSJ 5-18) I continue to believe that this rally will carry further than most believe. My hunch is that it is not too late to play, because we may have traversed only half of it. The enthusiasm could grow. It's the old story. After a long decline, for prices to rise the news doesn't have to be good, much less great; it just has to be less bad than what has already been discounted. It is not inconceivable that investors could actually get some good news about the U.S. and world economies. A rising stock market is a powerful tonic for business and consumer confidence, and we may be transitioning, albeit temporarily, from a vicious downward economic spiral to an upward self-reinforcing virtuous cycle. (Barton Biggs, Global Strategy Morgan Stanley via The Washington Post 5-18) The breadth, depth and resiliency of the current market are sending a 'go' signal that we are in a new bull market - not a dead cat bounce the bears are pinning their hopes on. . . . Very bullish to us is the recent out-performance by small-cap stocks. Small-cap performance tends to go in cycles of five to seven years. The last bullish period was from 1991 to 1996 and prior to that from 1978 to 1983. During the bubble, bigger was better, and liquidity drove stock prices. (Michael Moe, ThinkThoughts ThinkEquity Partners via The Washington Post 5-18) The market's next move should be a vicious decline that brings the bear market back into full focus. Steve Hochberg and Pete Kendall, Elliott Wave Financial Forecast via The Washington Post 5-18) From the IRS's preliminary statistical data on income, deductions and credits on individual tax returns in the 2001 tax year: (1) taxpayers' capital losses in 2001 increased by a whopping 68.8% from 2000, while capital gains dropped by 44.5%, (2) the loss of thousands of jobs in the economy is evidenced by a 60.1% jump in unemployment compensation income, (3) the number of returns claiming itemized deductions was up 4.8% in 2001 over 2000 - this reflects the increase in homeowners - you have to itemize deductions in order to deduct home mortgage interest. (Pamela Yip, Dallas Morning News 5-11) Year-to-date gains in some tech funds have been eye-catching. All told, 375 tech, telecommunications and Internet funds have averaged a year-to-date gain of 13.1 percent, while stock funds of all types have posted a net gain of 6.2%. (Chet Currier, Bloomberg 5-9) A positive trigger [for the market] on the near horizon is a drop in the quoted P/E ratio of the S&P 500 from 30-plus to the lower 20s, when the first quarter's earnings are in." (William Ferree, Ferree Market Timer via The Washington Post 5-11) Once investors again focus on economic issues, the rally is likely to peter out and new lows later in the year or in 2004 should not be ruled out. In terms of sectors, we like stocks of oil, oil servicing, and mining companies. (Marc Faber Strategic Investment via The Washington Post 5-11) The financial sector is marching toward new all-time highs relative to the broad market. . . . Financials still have something to offer in a world where investors are starved for value. This sector should be a prime beneficiary if the dam holding back the sidelined cash from the overall equity market finally breaks. . . . Widespread fears that both consumer and corporate credit quality were deteriorating had fed the bearish camp on financial stocks in the early months of 2003, but these fears are misplaced and should slowly abate going forward. First-quarter earnings reports have surprised on the positive side, and there are good odds that this trend will persist."(U.S. Equity Sector Strategy, BCA Research via The Washington Post 5-11) A survey released in late April by the Ethics Resource Center and the Society for Human Resource Management said 49% of HR professionals believe ethical conduct is not rewarded in business today. Perhaps more disturbing, 24% of human resources professionals feel pressured to compromise ethical standards either all the time, fairly often or periodically. Only 13% felt that way in 1997. (Amy Joyce, Washington Post 5-10) Some good news: Earnings per share, excluding energy, according to First Call, were up 6.3%, and revenue gained 6.9% in Q1-03. While corporate debt levels remain high, interest expenses are down, as companies have refinanced. The number of debt downgrades by the rating agency Moody's is at a 2 1/2-year low. And in March, the default rate for junk bonds was half of what it was a year ago. (Steve Liesman, WSJ 5-8) One of the most encouraging signs is the increased appetite for corporate risk on the part of investors. The difference in interest rates between corporate debt and treasuries has come down by nearly 0.8 percentage points since October. Tim Hayes of Ned Davis Research studied similar times when corporate spreads relative to treasuries also appeared to bottom. In 10 of 13 instances, it signaled a stock-market bottom. "A continued decline in the spread would be consistent with a continued increase in the momentum of capital spending, which tends to be good for stocks," Mr. Hayes said in his research report. And, he added, "profit prospects would be likely to improve further." (Steve Liesman, WSJ 5-8) Soon it will become harder to believe in the coming of a strong second half. That's the fabled time when all the outlooks are strong. We are in danger of turning into a nation of ever-hopeful Cubs fans, observes Paul Kasriel, an economist at Northern Trust. "Course, the Cubs always fold in the second half," the Chicago economist points out. (Jesse Eisinger, WSJ 5-7) For the first time, a closely watched quality survey by J.D. Power revealed some of the dogs of the auto industry as well as its stars. At the bottom of this year's results: the Hummer, 225 problems per 100 vehicles. Land Rover: 190 problems per 100 vehicles. Kia: 168 problems per 100 vehicles. BMW's ultra compact Mini: 166 problems per 100 vehicles. Saab: 160 problems per 100. This year's top complaints: Wind noise and fuel consumption. At the top of the quality list, Lexus, Toyota, Porche, Honda, BMW and Nissan. (Karen Lundegaard, WSJ 5-7) You can't make any sense of asset-allocation without taking proper account of time - how long you reasonably expect to hold an investment, such as the number of months, years or decades until it's time to start paying tuition or to retire. That's the serious flaw with picking apart quarterly performance numbers for a mutual fund from which you seek long- term growth. It also defines the silliness of many a dispute between stock and bond partisans. (Chet Currier, Bloomberg 5-6) In over 90% of the last 75 calendar years, the difference in return between stocks and bonds has been greater than 5%. In nearly 70% of those years, the difference has been greater than 10%. (Chet Currier, Bloomberg 5-6) I know that for every piece of economic coverage in the Times that might be worth reading, there are at least two that are false or misleading. So on net, you'll be falsely mislead if you keep imbibing the stuff. (Gene Epstein, Barrons 5-5) A key measure of employment has been rising consistently for the past five months. And when that happens, it usually means that the conventional measure of employment - nonfarm payrolls - will also begin to rise. It's a measure of the total number of wage and salary workers in the private sector. It's part of the monthly employment report. The increase is good news in itself, and a reliable indicator of good news to come. (Gene Epstein, Barrons 5-5) As you hear the negative nabobs explain why nothing can improve and how much worse everything may become, assure yourself that this is normal and intensifies as bear markets end. Every stock, if held long enough, will enjoy periods when it is very expensive and endure periods when it is very inexpensive. Neither condition necessarily indicates problems with the company. Many mistakes are made by thinking short term. Most mistakes are made by selling. (Michael Farr, The Farr View - Farr, Miller & Washington via Washington Post 5-4) I know of no investment strategy that can insulate its followers against occasional setbacks. Even the stock of Berkshire Hathaway lost nearly half of its value between June 1998 and March 2000. It's a cliche, but true: There is no gain without pain." (John Buckingham, The Prudent Speculator via Washington Post 5-4) How eager will investors be to shift cash parked in money funds back into stocks once they notice money-fund yields on the rise? What happens to housing and consumer spending when the mortgage refinancing boom fades? (Chet Currier, Bloomberg 5-2) Tech Tips & News Printing Digital Photos It may be time to consider getting some of those digital images converted to prints. And thanks to improvements in digital cameras, printers, paper and ink, chances are you'll be thrilled with the quality. You can get an awesome print from digital, assuming you're using a camera that has at least 3 megapixels. In-home printing is also the most expensive approach, at least for the smaller photos. Expect to spend at least $1 to $3 a print, regardless of photo size. That wide range is based on the cost of the paper (50 cents to $2 a sheet), which varies by weight, finish and other factors, as well as the type of ink you choose. At industry leader Ofoto, a subsidiary of Eastman Kodak that claims 6 million users, prices are 49 cents for a single 4-by-6 print, rising to $3.99 for an 8-by-10. Shipping charges start at $1.49 for one to 10 prints, rise to $3.99 for 50 to 75 prints and continue on up. Overnight shipping is also available at $16. Even Wal-Mart offers online printing of digital (26 cents for 4-by-6 prints). For a 4- by 6-inch print, costs range from 29 cents at the local 'off-line' Wal-Mart to about 40 or 50 cents at higher-end photo labs. One reason digital prints cost more [than standard photos] is that their dot composition takes longer to produce than printing from exposures on negatives. (Mike Glynn, Kansas City Star 5-11) Google & Privacy Go to Google's regular search page, key in your area code and phone number, using hyphens, then click "Google Search." In most cases, almost immediately, that brings up your name, address and phone listing. But what disturbs some people struggling to keep their privacy private: Directly next to your name and address are links to "Yahoo Maps" and "MapQuest" that provide accurate street maps showing inquiring minds how to get to your house. Detailed driving directions are also available. Though businesses probably value such a listing, many people don't. Google offers what most of the other reverse directories don't - the option to remove your listing. Click on the small telephone icon next to your name. That brings up a page of PhoneBook instructions and a link at the end for removing residential or business phone numbers and addresses from the listings. That link connects to an online form. (You can also go directly to www.google.com/help/pbremoval.html.) Fill it the form and click the submit button. In seconds, Google will confirm it has received your removal request and tell you the process takes approximately 48 hours. (Don Oldenburg, Washington Post via Kansas City Star 5-4) Home Page Previous Factoid Top Sites
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