Sunday, April 15, 2007

Blue Chips Hurt by Fund Flows and Speculation

Blue Chip companies. They are the financially strong companies the world does business with everyday. In several of our articles in the past year we have discussed the possible reasons why the investment performance of Blue Chip companies has lagged some other stock types when their underlying fundamentals -namely earnings--have done so well. Recognizing this in 2006, BusinessWeek carried a cover story about the huge divergence between the strong earnings growth of Blue Chips versus their meager stock price performance. Most likely, a large part of the explanation comes down to the most basic economic principle of supply and demand. While the supply of Blue Chips stocks has actually fallen due to corporate buybacks (discussed below) demand has fallen even more as investors have funneled capital into other less traditional, and often more speculative market areas (see chart). As we write this article, events taking place in the global markets suggest that changes may be in the works.

Institutional investors have been pouring record amounts of money into hedge funds and private equity styles that embrace small- and mid-cap securities. We're talking large sums of money: just last year private equity raised a record $404 billion, according to Private Equity Intelligence. At the same time, retail investors have gone wild for international stocks. The Investment Company Institute reports a remarkable 92% of all US equity fund inflows ($149 billion) went into international equities in 2006! The message is clear: demand for Blue Chip stocks is down, while demand for other asset classes is up, creating an opportunity for long-term investors. (Remember: buy low and sell high?).

Because of institutional and retail neglect, Blue Chip companies are experiencing a phenomenon that we have not seen in a long time: the combination of strong profits, record amounts of cash, and low valuations. Fortunately most of financially strong Blue Chip companies are taking advantage of this situation and buying back tons of stock which is building tremendous shareholder value.

Exxon Mobil saw earnings decrease by 5% in the fourth quarter but because of massive buy-backs earnings per share actual increased by 2%. BHP Billiton just announced a $10 billion buy-back which is equivalent to 9% of its market capitalization. Exxon trades for just 12x earnings while BHP is valued at a mere 10x earnings. Many other Blue Chip companies have reduced shares outstanding between 4%-9% since the bull market started, including Emerson, Aflac, Coca-Cola, Citigroup, ADP, Wal-Mart, Pepsi, American Express, and Colgate-Palmolive. Best of all, these companies are trading at their lowest earnings multiple in a decade. As an example, Pepsi's P/E valuation has fallen from 37 times to less than 20 times expected 2007 earnings while its shares outstanding has fallen from 1.7 Billion to 1.6 Billion shares since 2002. Clearly, Blue Chips offer a great value in today's market.

To this point asset flows have favored small-, mid-cap, and international stocks as we discussed above, but there are signs a transition may be afoot. Actions in the markets in the past week exhibit the high volatility that is present in speculative assets. For example, recently popular emerging market investments swooned on February 27th and again on March 1st. An actively traded emerging market ETF (exchange traded fund) that invests in emerging markets fell over 8% on the 27th.

The move to Blue Chips will likely occur when risk premiums in the market are on the rise. Risk in our economy is linked to and dependent on actions in the housing and finance sectors. We have written extensively about the dangers in the sub-prime mortgage market. This business has been melting down: several firms have recently filed for bankruptcy protection, the stocks of several large sub-prime mortgage companies have fallen more than 40%, and the sub-prime divisions of large integrated banks are in disarray. If the damage from the sub-prime mortgage business spreads into other areas of our economy, risk premiums will likely rise across all asset classes and investors may seek shelter in neglected Blue Chip stocks.

Bottom Line: Conservative investors have traditionally taken comfort in the consistent growth of Blue Chip stocks but today get the added benefit of low valuation.

James G. Tillar, CFA

To read more visit Tillar-Wenstrup Advisors on the web: www.twadvisors.com or send them an email at: info@twadvisors.com

Tillar-Wenstrup Advisors, LLC, may have ownership in stocks mentioned in the article above. There can be no guarantee of investment success made by Tillar-Wenstrup Advisors, LLC relative to these selections.

About the Author

James Tillar is a Principal with Tillar-Wenstrup Advisors, LLC, a registered investment advisor located in Dayton, Ohio.

Increasing Your AdSense Revenue Through Good Marketing

There are many ways to make money using ready to use web site templates which have been designed for use with the Google AdSense program, it is important to market your various web sites effectively in order to gain the most benefit from your campaign.

Without a savvy marketing campaign behind you it can be quite difficult for even the most powerful AdSense enabled web site to succeed and grow the traffic it will need to earn serious revenue from this program. Web site traffic is one of the most important parts of making money with AdSense, since it is this traffic that will help to power the click throughs and page impressions that will provide the bulk of your web site revenue.

One element of web site marketing that many web site owners underestimate is the power of keyword rich articles and quality content. These articles and other forms of content aid the web site owner in a number of powerful ways. For instance, the keyword rich articles found on your web site help tell Google which types of ads to serve on your site.

After all, if Google cannot properly categorize your site or tell what it is about, it will not know which ads are appropriate to serve on the site. In the event Google is unable to determine the subject of your web site it will serve public service ads instead of commercial ones. While these public service announcements can be a good idea, they do not pay any AdSense revenue, so it is important to give Google the information it needs to properly classify your site.

If your site is focused on helping people get a handle on their debt problems, adding a number of quality articles aimed at helping consumers will allow Google to properly determine what your web site is all about. This web site content will also help Google host the appropriate ads, which in this case may include ads from debt relief services, bankruptcy attorneys and other such businesses. It is easy to see how this strategy is such an important way to market your web site and grow your AdSense revenue.

Savvy marketing is one of the cornerstones of earning AdSense revenues, and it is important to use a number of different strategies to market your web site most effectively. In addition to adding high quality content, it is a good idea to add a link to the URL as part of your email signature line. This simple strategy is often overlooked, but it can be a very powerful way to increase the visibility of your web site, and therefore increase your AdSense earnings.

Adding the URL of your web site to your email signature can help you in many ways, since every time your emails are forwarded your URL can be forwarded as well. Many web site owners who have used this simple strategy have reported excellent results from this easy to execute change.

Another way to increase the exposure and value of any AdSense enabled sites you own is to build those sites simply and easily using web site templates which have been specially designed to make the most of AdSense revenue. The formatting and placement of AdSense ad blocks can have a significant impact on earnings, and using these templates can help to provide a great deal more flexibility when using Google AdSense.

To learn more about this innovative and powerful new approach to increasing your AdSense earnings, check out the information found at http://www.adsensetemplates.com.

About the Author

Cody Moya writes about Article Marketing in his Free Courses on Internet Marketing. You can sign up for his freeCourses and get additional information at his website: http://FreeInternetMarketingCourses.com

Business Consolidation Debt Information

Many company owners that are currently going through a financial problems, such as multiple debts, realize that the problem definitely cannot be fixed or faced without the help of a business consolidation debt information company. These businesses have teams of people that take each case separately and analyze it in order to define which solution or method to apply to them, that is why the business consolidation debt information process is so necessary because the information gathered in every business is different and so the solution.

James Morrison, current client at Commercial Debt Counseling is the owner and manager of his own business and is going trough the process of business consolidation debt information where the professional counselors take a close look at his business and they sketch up a settlement and payment plan his specific case. This method is highly successful but it takes a lot from the combined effort of both, the client and the creditor that communicate through our team of specialist in order to maintain a healthy relationship. We make the deals with the creditors and after that we let the client know which offers are good enough to be considered, that is what the clients get with business consolidation debt information.

James Morrison: The business consolidation debt information process will save me from bankruptcy?

James Banks: For sure, bankruptcy although it may be known by people as a way out of debt problems it is also known for bringing some interesting secondary effects, such as high interest rates, the entry for bankruptcy will remain for as long as 7 years and your company will not be well seen under the lenders eyes.

James Morrison: What should I have in mind when choosing a business consolidation debt information company?

James Banks: Out there, meaning the internet and the current market, there are lots of business consolidation debt information programs to choose from, you could confused along the way of seeking a program that will fulfill all your demands. But remember, that is worth the effort because after choosing well you will be assuring your future. Specially given that there are many scams that promise one thing and do not accomplish it, remember that many of these companies are merely garage businesses that hire all of the services with a third company that lends all of the services. Ask for advice with the business consolidation debt information counselor and you will know what to look for.

The business consolidation debt information program, must: - Sketch a payment plan that will fit your business needs - Lower your interest rates - Help you find ways to make up a budget that will help free your business from debt - Be sure that the company provides business consolidation debt information counseling

James Morrison: How can I start the business consolidation debt information program?

James Banks: Simply, but filling out the online form on our site you will get signed in the business consolidation debt information program, after that you will receive a call from one of our counselors and he will explain how our program works, the benefits and the damages that will bring. Also the counselor will explain how your business situation can be improved and how to stop that the situation gets worse.

Business debt is not something to take lightly, it is a serious matter that can bring your company to bankruptcy, so take it in your hands but let professional people deal with the debt matter. After applying for the business consolidation debt information program you can also use it to learn from the counselors in order to avoid future debt situation and stay free, although it may no be an easy task but with an organized budget and proper decisions you can maintain your business as a profitable one and avoid as much as possible.

We have different articles on interesting topics and current and former clients' experiences with our programs. Take a look at the different situations on Business Consolidation Debt Information and related topics that people can fall into and how to keep yourself a debt free person. Check these links to learn more:

http://www.commercialdebtcounseling.com/useful-resources.shtml

http://www.commercialdebtcounseling.com/testimonials.shtml

About the Author

James Banks is a contributing writer to http://www.commercialdebtcounseling.com and is currently writing some special articles to guide business on how to manage debt and avoid bankruptcy. For Free Information on Business Consolidation Debt Information and Debt Help Consultation, call toll-free 1-877-850-3328

Debt Negotiation. The Way to Eliminate Your Debts

not made payments in the last 3 months on their current loans or credit cards, they are currently delinquent, which is the name that creditors and banks use for those people who have stopped making payments. The debt negotiation process is the next step in order to start solving the debt and credit card problem.

Nowadays, People need to learn more about the process itself, and if debt negotiation is the proper way to go. Self-teaching about the pros and cons of debt negotiation is a good first step. One thing to know about "debt negotiation" is that is also known in the market as debt arbitration.

- Debt Negotiation benefits -
Once the counselor has received the power of attorney, the counselor takes the case to a negotiator in oder to see what your total debt is. Once the negotiator gathers all the information, he will start calling the creditors in order to stop all the collection efforts, calls and letters, after that he will tell the creditors that any communication will be made through him and any offered deal will also have to go through him as representative of the client.

The debt negotiation team will define a payment plan that fits the client's payment capacity and they will start renegotiating his debts to try and lower them as much as possible. One of the things that increases the debt by a lot is the interest charged to the current debt and that is one of the main problems that debt negotiation attacks.

After making a debt negotiation deal where the debt will be reduced, the negotiator or counselor advices the client to take a look at the different deals that creditors offer, once the client makes up his mind the reduction process is on track. You can receive a reduction in your debt between the ranges of 40 to 50 percent and that is a great help, your monthly payment will be highly reduced and if you can make use of savings the process will take no more than 12 to 18 months, it all depends on the amount of money owed.

Another benefit is that these debt negotiation companies after settling the accounts, they also invite the client to start a learning process where he can learn how to permanently avoid future debt and how to handle his finances in order to maintain himself out of debt.

- Debt Negotiation damages -
A downside of the debt negotiation program is that it lowers the client's credit score for as long as he stays in the program. However, most debt negotiation companies require the creditor to update the credit report as paid in full so it does not show up as a negative entry on your report once your account has been settled.

Some debt negotiation companies include a credit repair service that will remove the negative items caused by the debt negotiation program. You pay for this service as part of their program.

Debt negotiation will show in credit reports; and as long as you stay in the debt negotiation program, you will not be able to apply for new loans or credit lines. You will have to stay away from any kind of credit services. Then again, once you finish paying off your debts and successfully leaving the program your credit score will start picking up as long as you keep yourself away from debt.

Although debt negotiation is a great way to avoid bankruptcy and free yourself from delinquent debt, people have to consider that there are many debt relief solutions. It all depends on what type of debt you have and how bad it is. Take a look at curadebt.com and seek professional counseling.

We have different articles of interesting topics and current and former clients' experiences with our programs. Take a look at the different situations on Debt Negotiation and debt related topics that people can fall into and how to keep yourself a debt free person.


About the Author

Jennifer Siegel is a contributing writer to http://www.credit-card-debt-negotiation.com/ Is currently writing some special articles to guide business on how to manage debt and avoid bankruptcy. For Free Information on Debt Negotiation and Debt Help Consultation, call toll-free 1-877-850-3328