| Not in defense of Suze Orman
While I agree with BloggingStocks' Zac Bissonnette that Suze Orman certainly has a place in the financial advice world -- she is not equipped to advise the serious investor. Watching her show on CNBC on the weekends can be entertaining as the callers have unique and unusual problems. Ms. Orman is qualified to advise her callers and readers on insurance matters, home, life and auto. She is certainly qualified to advise her readers to not spend more than they make. Saving money is certainly an admirable quality of life. She has excellent insights into 401k plans and the various rules and regulations surrounding them. Her expertise on how to handle and retire credit card debt is legendary and hopefully many readers have followed her advise. But are you ever going to ask Suze Orman for a stock idea? Can she tell the difference between mutual fund portfolio managers and how they operate? Has she ever analyzed or discussed a company's balance sheet, free cash flow analysis or growth rate vs.
Ask the Fool Liquid, But Not Wet
A: It often refers to a company's cash, and assets that can be quickly converted into cash (such as money market funds and investments in stocks and bonds), minus its short-term debt. Companies with high liquidity can be less risky, but they might also grow more slowly, as assets that could be put to work growing the business are instead kept readily accessible. Liquidity also refers to the stock market's ability to handle a large volume of trading without big price swings. Major investors such as mutual fund managers care about this because if they want to buy a million shares of something, they don't want their purchases to drive up the stock price sharply. Imagine Scruffy's Chicken Shack (ticker: BUKBUK). If it has five million shares outstanding at $10 a share, there's only $50 million worth that the market can buy or sell.
Sector Snap: E-Brokers
A BMO Capital Markets analyst late Tuesday initiated coverage of Internet stock brokerages, saying they are benefiting from retail clients who want more tools for investing on their own. These "e-brokers" target mass affluent clients, or clients who are too rich to leave their money in a commercial bank but not quite rich enough to invest in a hedge fund or investment bank. BMO Capital Markets analyst Michael Vinciquerra initiated coverage of Omaha, Neb.-based TD Ameritrade Holding Corp. with an "Outperform" rating. He said TD Ameritrade is well positioned to benefit from investors' desire for help managing their own assets. Vinciquerra's price target of $23.50 is more than 50 percent higher than the stock's close at $15.31 Monday on the Nasdaq Stock Market.
FBI Opens Investigation into Economist Accused of Fraud
(Charleston) -- The FBI says it has opened its own investigation in a Charleston Southern University professor facing fraud charges.
Special Agent Steve Grimaldi says the probe will parallel the civil investigation into Al Parish already filed by the Securities Exchange commission.
Court documents show Parish, an economics professor known for his flamboyant suits and million-dollar pen collection, claimed amnesia after federal investigators discovered about $134 million missing from several investment funds he managed.
The SEC says Parish provided false statements to his 300 investors indicating the five funds were trading profitably when they were not.
The pools allowed investors to put money in commodities and securities futures products, bonds, stocks and hard assets like expensive watches, jewelry and fine art.
Uncle Sam takes a slice as mutual funds rise
Stocks averaged double-digit gains over the past four years. The downside: Funds' taxable capital-gains distributions are on the rise, eating away at the returns of investors who hold shares in taxable accounts. Last year's stock- and bond-fund distributions totaled nearly $260 billion, the highest since $325.8 billion was paid out in 2000, according to the Investment Company Institute trade group. When a mutual fund sells a stock, its bookkeepers note whether the manager sold it for more than he or she paid. Once a year, gains and losses are tallied. If there are more gains than losses (and losses can be carried forward from prior years with some restrictions), the fund pays them out to shareholders. More than half of the money in mutual funds is in tax-deferred accounts like 401(k)s, where taxes aren't owed on these payouts.
Beware: plastic money can lead to real trouble
I know I've recently been writing many columns on stocks and finance. You're probably asking me, "How am I going to invest? I don't have the money. And retirement is so far away." All of these comments are true, and this is why I am going to discuss more relevant personal finance issues that specifically concern college-age students.
So, the first personal finance issue I am going to discuss is credit cards. After all, the reason why many of you are so strapped for cash is because you have a big credit card bill lingering over your head, with large finance charges or interest expenses accruing.
Personally, I think it's a bad idea to get a credit card as a college student. While there are some positives to having a credit card, I believe the negatives outweigh them.
Clubs nurture investment savviness
CRANBERRY — Mike Berman got the bug about 15 years ago and since then, he's spent a lot of time helping others catch the fever: organizing and/or joining an investment club."I've started four clubs, been involved with six, just helped form one a couple weeks ago," said Berman, 48, of Cranberry. "Sometimes you can lose money in a club, but this also helps you learn about stocks, about investing."Berman's latest venture, the Absolut Club (named after the vodka maker) has three members, including Berman, his neighbor John Bowers and former fellow worker Dennis Pichette. The name was selected after the trio saw an Absolut poster in an Applebee's restaurant while discussing club formation and figured Absolut's a premium vodka; this, hopefully, will be a premium investment club.In late 1999, six friends from Ross and nearby decided they should be investing in what at the time was a booming, high-tech-driven market.
Make Serious Money in Stocks
There's serious money to be made in stocks, but it's not made in a matter of months, or even a few years. No, the real money to be made in stocks extends over a minimum period of 10 to 20 years. And superwealth -- measured in tens to hundreds of millions of dollars -- is built over 25- to 75-year periods. The origins of Oracle Let's put Oracle under the microscope, so that we might understand this core investing principle. Founded it 1977, Oracle has long been a leading marketer of database software. The company came public in 1986, priced at $15. Thanks to splits, however, folks who got in on that fateful March day have seen their cost basis reduced to $0.07 per share. Yet Oracle's early years were not without rough patches. Put a price on patience While the stock rose modestly following its 1986 IPO, slowing sales sent it crashing down in late 1990.
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