Tuesday, December 30, 2008

Bernie Madoff - What Really Happened?

The Bernard Madoff ponzi scheme and continuous news flow will be headline news throughout 2009. The complicated world of hedge funds coupled with his fraudulent activities will make for a fiasco of legal wranglings, shareholder lawsuits and speculation for quite some time.

But, what really happened?

This question may never be answered in our lifetimes. One thing that may provide clarity still remains to be discovered. How many people were involved in hiding the facts?

It's difficult to believe one person could shelter such an elaborate scheme from investors (retail & institutional) and various regulators. You can't simply fault the SEC and SIPC either. They're more reactive than proactive at best. We would all like to think they are the gate keepers, but this simply isn't true.

In many regards, this situation all boils down to 'greed & fear'. Everyone is a capitalist on the way up and a socialist on the way down. Investors have to take some form of responsibility for their actions and not simply blame the SEC.

Personally, I think Mr. Madoff was running a bona fide hedge fund for a number of years. In hindsight, you could argue his performance over the last 10 years was too consistent to be true - which we now acknowledge. But, I think he was running a genuine business none-the-less.

It's easy to make money in an up market. From 2003 to 2007, the indexes all made money. A quick look at the Vanguard 500 Index Adm Fund (courtesy of Morningstar) shows total returns of 29%, 11%, 5%, 15% and 6%, respectively. A passive investment strategy would have yielded positive returns.

I think the bear market of 2008 was the unravelling of Bernard L. Madoff, LLC. A dismal year coupled with shareholder redemption's is a bad combination for any money manager. Liquidating both winning/losing positions to meet redemption's is problematic at best. Toss in the fact you could be highly leveraged in a hedge fund and things become tenuous. With no new investors in site, Madoff was left naked when the tide went out.

He may have been enhancing investor returns with new client money. But, the bull market from 2003-2008 helped him to cover his tracks. Let's face it, shareholders who were taking annual redemption's for living expenses received real dollars. How much of this was bona fide gains & dividends is certainly questionable. But, real money was received and spent. The remaining principal (if any) is now the big question.

Friday, December 26, 2008

Predictions for 2009



The coming year should be full or surprises and disappointments. This never changes. Some things will catch us off guard and others will pleasantly surprise us. So it is with no fanfare, I present my predictions and/or expectations for 2009 (financial & non-financial).


  • A new President will be ushered into the White House in January.

  • Apple will continue it's tech dominance and gain computer market share.

  • "Marley & Me" will be a blockbuster film in 2009 (although it starts 12.25.08).

  • Big pharmaceutical companies will be in favor due to large dividend yields.

  • To prevent social security insolvency, the government announces people born after 1960 will be eligible for full retirement benefits at the age of 70 (currently 67).

  • Roger Clemens will formerly announce his retirement from baseball (although he didn't play at all in the 2008 season).

  • Thousands of NEW children will start college.

  • New SEC Chairman (or Chairwomen) Mary Schapiro reinstates the uptick rule.

  • CNBC Mad Money host Jim Cramer will have his show cancelled (or completely revamped).

  • Congressman Barney Frank of Massachusetts is forced to resign as Chairman of the Finance Committee due to his lack of oversight and the defacto bankruptcy of Fannie Mae (I'll be the first to admit, this may be more wishful thinking on my part).

  • The New York Yankees will open their season on April 16 against the Cleveland Indians at a new stadium in the Bronx, NY.

  • High quality corporate bonds will offer better risk adjusted returns than stocks.

  • Despite the recent press on Bernie Madoff, the demise of Hedge Funds is greatly overstated and they continue to attract high net worth money.

  • Individuals will continue to fund 401K and IRA accounts.

  • John Grisham will release 3 new books.

  • Alternative asset classes will start to attract new money again (i.e. real estate, commodities).

  • NFL legend, Brett Favre, retires after playing one season with the New York Jets.

    • Adults with young children will buy life insurance.

    • Two large mutual fund companies will merge.

    • Ford will sell more vehicles than any other US car manufacturer.

    • John Daly will officially retire from golf and become a Hooter's employee.

    • Oil finishes the year at $70 per barrel as the US dollar weakens against foreign currencies.

    • County Tyrone repeats as All Ireland Gaelic Football Champions.

    • After enhancing their bullpen in the off season, the New York Mets make it back to the post season, but fall short of winning the World Series.

    • Municipal bonds become attractive total return investments as President Obama continues to talk about raising taxes (income, capital gains & dividends).

      As you can tell, some things are mentioned with a little sarcasm. Nobody can accurately predict what's going to happen in 2009. We do now that some things are constant and everything else is perpetual motion. Several websites (CNN & Bloomberg to name two) have predictions for the capital markets next year. Are they correct? Who knows! Their guess is as good as yours. The only guarantee we do have for 2009.... a lot of things will change and some things won't. Such is life.








    • Tuesday, December 23, 2008

      Bernie Madoff - The Access International Hedge Fund Connection


      The New York Times reported this afternoon that a Bernie L. Madoff client has committed suicide. This is truly tragic. Unfortunately, I fear this may not be the last of these reports. Many of Mr. Madoff's clients seemed to have most, if not all, of their wealth invested in his company. In a previous blog, I referenced affinity fraud and the lack of due diligence that often occurs. This may be a similar issue.

      Rene-Thierry Magon de la Villehuchet (65), a founder of the hedge fund Access International Advisors, was found dead Tuesday in his office on Madison Avenue with injuries to his arms & wrists.

      His fund had invested as much as $1.4 billion (a sizable amount compared to other client accounts) with Mr. Madoff. Apparently, he tried to recover some of his European investor's money in recent weeks, but to no avail.

      When the news of Madoff's ponzi scheme first broke, Access International sent a note to investors stating the arrest was "a shocking development." Today's announcement is truly shocking in its own right.





      Unconventional Tax Savings Tips & Strategies 2008


      Today's commentary comes courtesy of Glover Davis. He is New York based Tax Accountant & Financial Advisor with 25 years of experience.

      If you believe, as I do, that income tax rates for you may be higher in the future; here are a couple of tax saving strategies that you may want to consider and implement. Most of this is extremely time-sensitive so you will need to act before December 31, 2008 to realize the full benefits:

      • Harvest your capital gains on securities (mutual funds, stocks, bonds & etc.) that you may have held for a number of years by selling them on or before December 31, 2008. Even though you will pay income taxes on the capital gains now – you probably will pay a lower income tax rate for 2008 than you will in 2009 and thereafter since it would appear that income tax rates on capital gains are going to move higher. The difference between paying taxes at the current rate of 15% rather than a future rate of say 25% or 28% is substantial and would result in tremendous savings on your income tax bill.

      • Harvest your tax losses in January 2009, rather than in December 2008 for the same reasons. If you use your harvested losses to offset future gains when the capital gains tax rate is higher, you maximize your tax savings since every dollar you reduce your capital gains taxes by produces a greater income tax saving for you.

        These are unconventional tax savings tips but they are absolutely valid since the numbers have been run to prove it. You may want to examine some numbers yourself to test these positions. Most other tax professionals advocate the opposite simply because they think in the conventional sense; that is why these are unconventional tips & strategies!

      • It is a great time for funding your ROTH IRA rather than adding to your 401(K) or funding your tax-deductible IRA and the reasoning is simple: When the time comes for you to start taking distributions from your traditional/rollover IRA or 401(K), you have no way of knowing whether your income tax rates on the distribution will be lower than the rate of saving that you are realizing while making the taxable saving/funding of these tax-deferred plans. If your actual tax rate is likely to be higher than it is today; then the ROTH will prove to be the better tax strategy. All distributions from your ROTH IRA, once you meet the qualifications – minimum age and or time in the ROTH IRA – you will be taking distributions “tax free” which is extremely beneficial in periods of rising income tax rates. Couple that with, the idea of investing these ROTH contributions a little more aggressively now or as soon as possible while security prices are extremely low and you should receive a substantial economic benefit down the road. You can then coordinate your retirement distribution dollar amounts between your taxable traditional IRA/401(K) and your tax-free ROTH IRA plans by electing to take a portion from both plans. This will yield additional tax savings while meeting your annual retirement income requirements.

        Look for additional income tax tips and strategies during the income tax filing season.

      Glover Davis - Tax Accountant & Financial Advisor






        Monday, December 22, 2008

        Holiday Book List 2008




        The upcoming holiday season is always a good time to reflect on the things we often take for granted - family, friends and good health. It is also a time to relax and start thinking about your New Year's Resolution(s). For some, this may include enhancing or learning a new skill. Reading a good book could be the easiest way to get started. If finance is on your agenda... here are a few books to get you started.

        So, whether you are in the giving or receiving mode this holiday season, here are a few books to consider (some old, some new). Remember, if the book is for personal use, you may want to check your local library first. If gift giving is the objective, there are many choices to consider. In no particular order, here are a few of my favorites:





        RECOMMENDED READING LIST:

      • "Who Moved My Cheese" by Spencer Johnson


      • "The Snowball: Warren Buffet and the Business of Life" by Alice Schroeder

      • "Hedge Hunters: Hedge Fund Masters on the Rewards, the Risk and the Reckoning " by Katherine Burton

      • "The Millionaire Next Door" by Thomas J. Stanley & William D. Danko


      • "Beating the Street" by Peter Lynch


      • "Market Wizards: Interviews with Top Traders" by Jack D. Schwage


      • "The 7 Habits of Highly Effective People" by Stephen R. Covey


      • "The First Billion is the Hardest: Reflections on a Life of Comebacks and America's Energy Future" by T. Boone Pickens


      • "How to Make Money In Stocks" by William J. O'Neil


      • "Ye$, You Can... Achieve Financial Independence" by James E. Stowers


      • "Rich Dad, Poor Dad" by Robert Kiyosaki


      • "How Charts Can Help You In the Stock Market" by William L. Jiller


      • "Pit Bull" by Martin 'Buzzy' Schwartz


      • "Total Money Makeover" by Dave Ramsey


      • "Technical Analysis of the Financial Markets" by John J. Murphy


      • "The Automatic Millionaire" by David Bache


      • "Your Money or Your Life" by Joe Dominguez & Vicki Robin


      • "When Genius Failed" by Roger Lowenstein





        • Saturday, December 20, 2008

          How to Avoid a Bernie Madoff Scenario

          Many questions will be answered in due time as to how high net worth investors, corporations and endowments were duped by Bernie Madoff. How did his ponzi scheme last for so long without being detected? Were investors naive, or was his firm simply that good at scamming the public? Nobody knows at this point. However, most people feel a $50 billion fraud could not have been pulled off by one person.

          Although it's too late to help these investors, there are certain safeguards everyone can take to avoid a future situation. Some are simply based on good old common sense and others require due diligence.



          1. Keep it Simple - Investing doesn't have to be complicated. Equity markets go up more than down over time. Fancy hedging techniques often aren't needed to make money. Long term objectives and an understanding of your risk tolerance is a great starting point. Simple everyday mutual funds or exchange traded funds that you can look up in the newspaper will suffice. You certainly don't need the 'exclusivity' of hedge funds to make money.


          2. Work with a Certified Financial Planner (CFP) - In several States, you can hang a shingle on your door that says 'Financial Advisor'. You don't have to have any accreditation's and do not need a license. This is downright scary. Unfortunately, the defacto financial capital, New York, is one of these States. Do yourself a favor - start with an accredited individual. The Certified Financial Planner (CFP) designation is the gold standard in the industry. Individuals go through a rigorous program (often several years) just to complete the prerequisites to sit for the Board of Standards national examination. These individuals are dedicated to both putting their clients needs first and improving the financial planning profession.


          3. Is your Financial Adviser Registered - Individuals managing over $25 million on a fee basis will have to register with the Securities and Exchange Commission (SEC). Under this amount, they are required to register in their state. A state-by-state list of regulators can be found at National American Securities Administration Association (NASAA). Most Advisers with a sizable client base will be registered with the SEC and the website is a great source of information for registrations and legal filings. Any filed complaints on an Advisor will appear here. It can also be found on the FINRA website as well. Years ago, several former NFL players (Simeon Rice, Eric Dickerson & Shannon Sharpe) were duped out of more than $10 million by a slick Chicago Financial Advisor by the name of Donald Lukens (now doing jail time). If any one of these investors would have taken the extra step to contact the SEC to verify registration status, they would have avoided this financial mess. A quick SEC scan for Lukens would have revealed the advisor was a fraud. There were no Advisers registered by that name.


          4. Hot Money - Be leery of firms reporting amazingly steady returns. If Warren Buffet can lose money on occasion, so can you. Nobody can show remarkably consistent steady returns year after year (as Madoff did) in good & bad markets. Portfolio Managers are human and believe it or not, make mistakes. This falls into the common sense category, 'If it's too good to be true', ... you know the rest.


          5. Quality of Quarterly Statements - Who's preparing your quarterly statements? If it's coming directly from the Advisor, this is a red flag. Everyone knows the hedge fund world is largely unregulated. The last thing you need is questionable financial statement showing up in your mailbox. Mutual funds, or wire houses (ie. Merrill Lynch, etc.) will generate their own statements and avoid this conflict of interest.


          6. Diversify Your Accounts - We all know about asset allocation. This takes it a step further. When you start accumulating assets of greater than $500,000, consider using more than one investment account. Spread the wealth. This doesn't necessarily mean use more than one Financial Advisor, but simply have your money invested with two different firms. Not only should it further diversify your holdings, it should add an additional layer of comfort knowing your assets are invested under roofs.


          7. Be Aware of Affinity Fraud - This may be a new one to most. Affinity fraud simply refers to homogeneous groups of people. Scams often occur when an individual claims to be of a similar background and thus has a following within this circle. This could be be ethnic, religious, elderly related or professional. Bernie Madoff had a religious following and somehow developed the nickname the 'Jewish Bond'. I'll be the first to admit, there is nothing wrong with a homogeneous group. It's often a source of comfort. However, due your homework. Don't assume what's good for one is good for another.

          This Bernie Madoff debacle is troubling. One bad apple is casting a shadow of doubt over an industry already wrestling with a trust issue. Many wonderful, long standing firms, and portfolio managers will struggle to raise money and retain clients because of this incident. Hopefully, the more main stream investments... mutual funds & ETF's... will continue to attract money - as they should. Transparency is a wonderful thing.

          Friday, December 19, 2008

          Ponzi Scheme - Bernie Madoff

          In my original post on Bernie Madoff, I simply referenced his arrest and made some general commentary about his alleged money management firm. Today, let's take a closer look at what exactly a ponzi scheme is considered.

          According to Wikipedia, A Ponzi scheme is a fraudulent investment operation that involves paying abnormally high returns to investors out of the money paid in by subsequent investors, rather than from the profit from any real business. It is named after Charles Ponzi. The term "Ponzi scheme" is used primarily in the United States, while other English-speaking countries do not distinguish in colloquial speech between this scheme and other forms of pyramid scheme.

          The scheme usually offers abnormally high short-term returns in order to entice new investors (Madoff seemed to consistently show annualized returns of 8%-12%). The perpetuation of the high returns that a Ponzi scheme advertises (and pays) requires an ever-increasing flow of money from investors in order to keep the scheme going.

          The system is destined to collapse because there are little or no underlying earnings from the money received by the promoter. However, the scheme is often interrupted by legal authorities before it collapses, because a Ponzi scheme is suspected and/or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases.

          The scheme is named after Charles Ponzi, who became notorious for using the technique after emigrating from Italy to the United States in 1903. Ponzi was not the first to invent such a scheme, but his operation took in so much money that it was the first to become known throughout the United States. His original scheme was in theory based on arbitraging international reply coupons for postage stamps, but soon diverted later investors' money to support payments to earlier investors and Ponzi's personal wealth. Today's schemes are often considerably more sophisticated than Ponzi's, although the underlying formula is quite similar and the principle behind every Ponzi scheme is to exploit investor naïveté. However, it has been shown that entering a Ponzi scheme can be rational even at the last round of the scheme if a government will likely bail out those participating in the Ponzi scheme.

          I think the 'Madoff Scheme' (as it now should be called) came crashing down after running into the current bear market. It's easy to generate decent returns in a bull market (makes me think of the expression 'don't confuse brains with a bull market'). Any shortfalls in investment returns were simply supplemented with new investor money. However, when new money became hard to obtain and the bear market cut into the portfolio principal, the house of Madoff came crashing down. There was simply not enough money to return to meet shareholder redemption's. How it lasted this long defies logic.


          Monday, December 15, 2008

          The Big Three - Flailing or Bailing?

          Well, it should come as no surprise, 'The Big Three' automakers are in dire straits. Working with outdated business models and unrealistic labor costs, Ford, General Motors and Chrysler are fighting for their collective lives.

          Once a prominent industry in American capitalism, the auto industry seems to have lost its way. The litany of arguments as to why are endless. But, it all boils down to competition and cost structure.

          The North American Peace Treaty et al allows corporations to compete in a more competitive manner. The evolution of barriers to trade has morphed itself into the 'global village' concept. One world = one market.

          Did US automakers miss this memo? The various trade treaties, tariffs, etc. were passed to help keep down labor costs and make for a more consumer friendly & affordable products. American ingenuity and sales should be in the forefront for the world to see. Ideally, lower costs should lead to more competitive pricing and hence, sales. However, this doesn't appear to be the case.

          The UAW continues to have a strangle hold on management. Yes, they have given concessions over the years and aren't the powerful regime of yesteryear. But, several key items still persist.

          One of the biggest taboo topics pertains to job banks. This UAW menagerie from 1980's allows workers to retain a salary, as opposed to being laid off. The original intention allowed for employees to be 'retooled' and implemented at a later date. But, retaining almost all of their salary during 'unemployment' simply increases manufacturing costs.



          Another embedded cost pertains to legacy costs. The cost of each retired worker adds to the unit cost of each vehicle. With retired workers living longer, this expense can only increase and not decrease. I'm all in favor of retirement pensions, benefits, etc., but you have to draw the line at some point.

          What exactly are lifestyle drugs? Viagra is costing General Motors $17 million dollars a year. Naturally, the cost is added to each and every car, truck & SUV. The blue wonder drug is considered a covered benefit for both retired and salaried employees.

          Apparently GM recently raised the copay for erectile dysfunction drugs to $18 under a new UAW agreement. But, the fact still remains... health care costs add about $1,500 to the price of each vehicle. GM provides coverage for roughly 1.1 million employees, retirees and dependants and continues to be the largest purchaser of Viagra.

          Let's cut to the chase: American automotive ingenuity still remains top shelf. The Ford Mustang and Chevrolet Corvette are two prime examples. Having an entire industry file bankruptcy would be chaotic to the already ailing US economy. However, something has to be done to make all three manufacturers more competitive in the global market. With all due respect to Ford who seems to stand head and shoulders above the other two, everyone has to become more competitive to survive.

          And let's be clear... executive management can curb their compensation packages as well. This is a three way street!

          Graph courtesy of Cato Institute.

          Friday, December 12, 2008

          Bernie Madoff Scandal



          On Thursday, December 11, 2008, former Nasdaq market Chairman Bernie Madoff was arrested by the FBI on fraud charges. The Securities and Exchange Commission called these charges 'stunning' and 'epic' in proportion. Accused of running a ponzi scheme with client money, Madoff, 70, apparently rang up losses approaching $50 billion.

          This continues to show why the hedge fund world needs more regulation. The good news - if there is one - is the so called firm of Bernard L. Madoff Investment Securities LLC catered to the affluent. Twenty five (25) individuals with assets totaling $17.1 billion (although actual number of clients seems to be growing by the day).

          As this story unfolds, wealthy investor names are being revealed. Some of the more prominent figures include New York Mets owner Fred Wilpon, GMAC Chairman J. Ezra Merkin and former Philadelphia Eagles owner Norman Braman.

          What ever happened to due diligence? Individual investors are responsible for making their own financial decisions in the end. Which firm do I invest with? Vanguard? How about Fidelity? Or wait... maybe I'll use a private money manager with little or no experience... Bernard Madoff and get the name brand cache at the same time.

          Madoff is best known for being a market maker. His firm simply cleared trades. A legitimate business. However, as technology emerged and profit margins shrunk, he parlayed his name into a new business model - Money Manager.

          Defense attorney Dan Horwitz called his client "a person of integrity".

          On behalf of his former clients and the general investment community, I think it's safe to say, "you're a thief".

          If convicted, it could cost the 70 year old Madoff 20 years in jail and $5 million in fines. How about simply confiscating everything he owns and return whatever there is to his former clients?


          Tuesday, December 9, 2008

          Economic Challenges: The Frugal Lifestyle




          Tightwad, cheap, thrifty and frugal seem to be interchangeable words. Before we get into it though, let's take a closer look at a few definitions. Being tight or cheap often pertains to having the money and simply not wanting to part with it. This is akin to the joke, 'Every time you take a quarter out of your pocket, George Washington squints from the light.' You get the point.

          On the other hand, a quick look in Webster's dictionary defines frugal as: economical in use or expenditure; prudently saving or sparing; not wasteful. So, don't be confused... there is a BIG difference in the two.

          Being frugal can be a good thing. It's become a lifestyle for many and seems to have origins rooted in the Great Depression. Parents pass down traits to their children and several generations later, we have frugal living as a lifestyle choice and no longer a necessity. Many books have been written on the topic which tout increasing your quality of life by simply not being wasteful. Two of the more popular titles are "The Ultimate Cheapskate's Road map To True Riches" by Jeff Yeager and "America's Cheapest Family Gets You Right On The Money" by Steve & Annette Economides.



          We're all creatures of habit and changing our routines is more mental than physical. Change doesn't have to come all at once though. Start small. Simple items such as using your banks ATM machine as opposed to mall kiosks will save you $2-3 per transaction. Clipping coupons and mailing in rebate forms is pretty straight forward. It will require a little of your time. But, the rewards add up.

          Unfortunately, it is during difficult economic times that we become more expense conscious. This is something we should be doing everyday - not just in good & bad times. Have a rainy day fund (i.e. emergency fund), don't spend money if you don't have it, save for an upcoming purchase and know where each paycheck is spent.

          Good financial planning starts with smart money decisions.


          Friday, December 5, 2008

          Unemployment - The Good, The Bad & The Silver Lining?

          Well, we anticipated a lousy unemployment number this morning and we got it. The new figures, released by the Labor Department, showed the employment market deteriorating faster than expected as we lost 533,000 non-farm positions. As a result, the unemployment rate increased from 6.5% to 6.7%. The number may seem alarming to some, but not to Mike Darda, Chief Economist of MKM Partners who made an appearance on CNBC's Fast Money yesterday. He expected the number to surpass 500,000 and was spot on. Kudos to Mike.

          All is not lost though. Remember, bad news isn't permanent. Things will get better at some point. As a leading indicator, the capital markets will look ahead and price equities accordingly. Yes, you can make the argument things weren't expected to be this bad and maybe there is some more pain ahead. But, you can also make the case that a 40% decrease in the US Equity markets in 2008 has indeed factored in the current turmoil. Capital markets will show signs of life long before the economy turns.

          As a Financial Advisor, I often walk a fine line between being proactive with clients in both a factual and informative manner. Being truthful is the best medicine and thus being forthright is always the 'high road'. Allowing clients emotions to enter the picture though can be complicated and cloud decision making process. Rational as opposed to emotional decisions should always prevail.

          The monumental structural changes to our economy do have a silver lining though. In many regards, we're reverting back to how business should have been conducted in recent years. Toss in some common sense as well and we have the following:
          1. Don't borrow what you can't afford.
          2. Spending and saving should have boundaries (i.e. live within your means).
          3. New leadership has emerged in Washington.
          4. World leaders are working together.
          5. Valuations are getting very attractive (bonds/stocks/real estate & commodities).

          Thus, all is not lost and some good will come from this debacle. When bad news gets a positive reaction from the stock market, we'll know good things are coming. Some of these silver linings are started to take hold and will shape a brighter future.




          Wednesday, December 3, 2008

          Let's Put Things In "Technical" Perspective

          Charts represent price movement and market psychology. They're simply a snapshot of where we've been a guide as to where we may be heading. The emotional response and volatility to news flow in recent weeks is certainly reflected in the charts below.

          First, let's take a look at the S&P500 on a weekly basis. The sell off starting in October was characterized by high volume with several days of dramatic volatility. The candlestick format will reveal where the market opened and closed for the week. Hollow or clear candlesticks represent weeks in which the market closed higher than it opened. On the other hand, closed or dark candlesticks reveal weeks in which the market closed below the opening (click charts to see enlarged version).

          One thing that catches my attention is the disparity or difference between the S&P500 and the 50-day moving average. The dramatic sell off on above average volume reflects an oversold condition (OS). Over the last few years, the S&P500 tended to drift above & below the moving average and touch the line periodically - a reversion to the mean. Present pricing would seem to indicate an OS rally is in the cards.

          A closer look at Apple (AAPL) on a daily basis indicates a floor or base may be developing at the $90 area. Having retreated from the $200 nose bleed section of the stock world, the stock seems to be finding some love once again after decreasing 55%. Barring a miserable holiday season (although the Apple stores are off to a good start), the stock looks to have enough buying power to move above the $100 level and thus its 50-day moving average.


          Finally, Prologis (PLD) may offer some attractive bottom fishing. The staggering volume as of late is typical of a sea change. Weak hands give up and new buyers come in. The company is certainly not immune to the real estate cycle and does carry a significant amount of debt. Current prices appear to have factored in all of this information. If the firm continues to stabilize at current price levels, it could move back to the 50-day moving average.


          Charts courtesy of Worden Bros. www.worden.com