How to Avoid Getting Ripped Off Using Online Tools

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Often, the best way to avoid a rip-off is to know what others are paying for things. What did the guy sitting next to me on the plane pay for his ticket? How much did the neighbor pay for his kid's wedding? That emergency dental procedure? The water pump replacement on her late-model foreign car? Retailers use big data to maximize revenue -- that is, to take as much of your money as they can. Why shouldn't you have the same power? Increasingly, websites and apps are giving consumers access to incredibly detailed aggregate price information, holding out the promise that the scales of bargaining power might tip back their way. There are now hundreds of online tools -- most of them unbiased and data driven -- that tell consumers the prices others have paid for everything from flowers to bathroom renovations. Enter a ZIP code, select a few criteria and faster than a shopkeeper can say, "High profit margin," you can say, "Not so fast!" The price calculators -- many are called "cost estimators" -- are fun to play with, but they pack a real punch. None of these tools will prevent a bait-and-switch estimate, or keep you from getting nickel-and-dimed. But they do something just as important: They give you a reference point (what economists call an anchor) so you always know you are in the right ballpark, if not sitting in the right seat, when paying for something. I'll divide the tools into three categories: Regret tools, bargaining tools and anxiety tools. Let me explain. Regret Tools Data are always backward looking, and as we all know, the past is no guarantee of future performance. So it is with prices others paid. This is most obvious in airline tickets, where knowing your friend got a good deal on a flight to Ireland last week is almost useless as a predictor of your price, other than the near certainty that you will pay more. Still, longer trends offer some insights, and that's what I love about FlightAware's beta product, "Insight for Airlines." FlightAware is known for giving passengers and their loved ones up-to-the-moment geographic and speed data on planes in the air. But click around, and you'll find the Insight product, which tells users the median price paid for tickets on that route, by airline, during a 12-month period. It also includes the maximum and minimum prices for that route. If you're on the plane, you'll either feel smart or stupid, based on what you paid. Flightaware's director of software development, Jeffrey Lawson, notes that the data tool comes with a long list of qualifiers. For starters, the data, which are acquired from the airline industry, is about two years old. Second, it's not fair to compare cost of a ticket purchased the day before a flight with a ticket purchased 11 months prior to the trip. It's not even fair to compare a February ticket to a May ticket. But, if you fly a route frequently -- say, Seattle to New York -- you get a good idea if you are overpaying regularly. Insight also makes it easy to compare airlines, which is particularly useful. For example, on a Seattle to Newark run, United carries the most passengers, but Alaska charges about 10 percent less. Scheduling concerns aside, it sure looks like some of those United passengers should consider Alaska. Lawson, by the way, says FlightAware is considering an update to the product, which would be a boon to travelers. But since you can't use the FlightAware's data to bargain for lower fares, it's mostly a "regret tool," as in, "Wow, I'm kind of a sucker for paying that much." I'd put wedding cost calculators into the same category. One of the best I found is at CostOfWedding.com. It allows lovebirds to enter all kinds of specifics, such as what kind of table gifts they expect to buy, and how fancy the reception food will be. Still, weddings involve so many details and decisions that wedding calculators are really only useful for after-the-fact comparisons. For example, CostOfWedding.com says a 75-person affair in suburban Washington should cost $21,700. That won't save you money if you are planning an event there, but it probably will make you feel good or bad if you've done so recently. Another regret tool is the "Location Affordability Portal," released in the past week by the U.S. Department of Transportation. It's supposed to help homebuyers more accurately predict the real costs of moving by adding in transportation costs -- in other words, that "drive until you qualify" home in the exurbs might not be as much of a bargain as it seems, once you add in the price of gas. The tool is very hard to use, however, and requires a lot of specialized inputs from users. At the moment, it's more useful to inspire "what might have been" daydreaming. Bargaining Tools Calculators that predict near-term costs are far more practical. Most of us have no idea what installation of a home electric circuit panel should cost, so plugging your ZIP code and your preferences into a tool before getting bids is incredibly useful. Use it to throw out a bidder who's asking for the moon. I like both HomeAdvisor and Homewyse.com. (In Columbia, Mo., upgrading a panel costs $866-$1,224, Homewyse says.) RedBeacon.com offers an even wider range of cost calculators for home services like landscaping or housecleaning. The most useful estimator I found unmasks the mystery of the costs of auto repairs, offered by RepairPal.com. Not only does RepairPal offer ZIP-code level pricing -- a water pump replacement should cost between $263 and $368 in north-suburban Seattle -- it also offers additional necessary information, like this: Water pump repairs often require belt replacement, particularly if fluid leaked on the belts. Getting a repair cost estimate takes only a moment, and it can save you hundreds at a repair shop. "We have had consumers tell us that, after they showed a RepairPal estimate, a shop lowered their price," said Bret Bodas, director of RepairPal's automotive professional group. Not surprisingly, auto mechanics weren't thrilled about the tool when it was first made public several years ago. But Bodas says fair pricing information helps honest mechanics, and the industry has slowly warmed to the idea of transparency. Napa Auto Parts actually licenses data from RepairPal for its own tool now. With both home and auto repairs, the data behind the calculator come mostly from cost estimation tools already used by contractors and repair shops. For example, automakers publish a list of labor times required for various repair jobs. Shops use those for estimates; RepairPal uses the same data, then adjusts for labor rates by ZIP codes, Bodas said. Naturally, consumers with broken-down cars aren't always in a great bargaining position. Still, RepairPal can make sure you aren't being taken for a ride, and it can even suggest you might be better off paying to have a vehicle towed to another shop for a second opinion, if the first shop's quote price is wildly off the mark. Sick consumers have even less bargaining power; for that reason, health care cost calculators like the helpful one you'll find at FairHealthConsumer.org almost qualify as regret tools. Still, it's worth knowing what medical procedures should cost before having those conversations with your insurance company and your doctor's office. And there are times when knowing you overpaid the dentist for your last crown gives you the power to pick a new dentist, so we'll call this a bargaining tool. And it's sometimes possible to negotiate price after the fact with providers; price comparison tools are useful in those discussions. By the same logic, the various taxi price calculators are also helpful in real time. No, you can't get a cab driver to negotiate a metered trip. But before visiting any new city, it's worth visiting a site like TaxiFareFinder.com and plugging in various trips you expect to take. You'll get a map of your route and an expected cost, so you'll know if your driver makes an unexpected wrong turn, and you can demand an adjustment. Anxiety Tools Predicting long-term future costs is fraught with peril; still, it's a good idea to know what you will be up against in 2020 so you can plan for the future. Before clicking on any of these sites, however, you might want to pour a nice cup of hot tea. They are likely to make your blood pressure rise. There's plenty of tools for calculating the cost of children, in the near and far future. Let's start small, like they do. Uncle Sam offers his own tool at USDA.gov, where the first-year cost of a kid in the Northeast is pegged at about $14,000. Look further into the future, and you may think twice about having a baby. Or at least about training that baby to be a scholarship athlete. BabyCenter.com thinks a child born in the Northeast today will cost $400,000 if she or he attends a private college. If you dial up cost of college calculators, you will conclude that the BabyCenter number is low. At CollegeSavings.org, you'll get an even starker splash of reality. Assume 5 percent tuition inflation -- and why not, that's how much colleges raise tuition each year at the moment -- at a four-year private school will cost $316,000 by the time today's babies graduate. (That's just tuition -- with room and board, the cost is $430,000!) Speaking of anxiety, you'll find hundreds of tools on investment sites offering to guesstimate how much money you will have, or will need, at retirement. Among the assumptions you'll see: average 12 percent market returns, spending levels remain at 80 percent after retirement, etc. You're already anxious enough.

MannKind and Lime Energy: Two Almost-Great Trades (MNKD, LIME)

The trick to profitable trading (though few great traders would ever admit it) is being in the right place at the right time. To do that, however, requires a great deal of patience waiting on the market's best "would be" trades to begin that potential moves. Enter MannKind Corporation (NASDAQ:MNKD) and Lime Energy Co. (NASDAQ:LIME)... two of the market's almost-great ideas right now. Though neither is off and running, both LIME and MNKD are on the verge and worth putting on your watchlist. Here's what we need to see for both to become worth taking a swing on.

As a refresher, MannKind Corporation is the developer of the inhaled insulin product called AFREZZA. It's been a long and dramatic journey for AFREZZA, and MNKD shareholders. But, there's a light at t he end of the tunnel now, and that's helping the stock. Granted, it's helping the stock erratically, but there's enough of an occasional bullish undertow to make it worth keeping tabs on.

Yes, MNKD has had a miserable past few months, falling from a high of $8.06 in June to a low of $4.20 this month. But, since that low we've seen a strong, V-shaped reversal effort take shape, which says the tide's turned... almost. Already ripe for a reversal, if MannKind Corporation shares can just fight their way above the 50-day moving average line (purple) at $5.42, that should seal the deal and clinch the budding bullishness.

The budding Lime Energy rebound is similarly-shaped, with the bottom of the V forming in October, and followed by decided uptrend. What's even more convincing about the LIME rebound that we're not seeing with MannKind is a ton of volume on the way up....volume levels we sure didn't see on the way down. This tells us the uptrend has - and is gathering - lots of participants, which are needed to keep the rally going.

The clincher for the LIME rally that will turn it into a full-blown and trade-worthy uptrend is a move (and ideally, a close) above $3.85, which has been support as well as resistance of late. Lime Energy Co. shares are already above the 50-day moving average line, and just a tad more progress could really unlock the potential upside the market would be willing to provide for the stock.

Note that these bullish outlooks for Lime Energy Co. and MannKind Corporation have nothing to do with their fundamentals, and neither are long-term calls.

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A Zalicus Trade Looks Even More Compelling After Recent FDA News

Our Seeking Alpha followers know that one of our favorite times to buy and trade stocks is when they may have hit technical and fundamental bottoms. We are constantly scanning for "bottom bouncers" and historically have had particularly good fortune with healthcare stocks that have upcoming catalysts or news. We called our latest successful bottom bounce for CEL-SCI (CVM) in our last Seeking Alpha article after surviving a de-listing notice, a reverse stock split and a capital raise. That stock has traded more than +/- 8% higher since.

This week, we focus our sights on another biotech firm whose Risk/Reward profile has been getting some increased attention and volume despite similar adverse conditions: Zalicus Inc. (ZLCS), whose previously touted "Upcoming Catalyst With Huge Potential" analysis of the firm by Jason Napodano, CFA appears to have taken on even greater significance within the last 72 hours.

A news announcement proclaiming that the FDA is proposing new restrictions that would change regulations for some of the most commonly prescribed narcotic painkillers on the market in an effort to combat "misuse and abuse" is calling attention to ZLCS. The FDA's latest proposal would specifically affect hydrocodone combination pills, also known as opioids. Higher priced stocks for firms that make those pills like AbbVie Inc. (ABBV), Actavis plc (ACT), Teva (TEVA) and Mallinckrodt plc (MNK) felt just a small pinch after that regulatory news picked up very wide coverage, but it could have tremendous impact on the approval chances for some of the drugs in Zalicus' pipeline.

On Friday, shares of Zogenix (ZGNX) soared after the Food and Drug Administration approved Zohydro ER - an extended-release version of the same (hydrocodone) narcotic painkiller despite an earlier recommendation by its own advisory committee that the drug should be rejected because of its potential for abuse. Amarin (AMRN) followers took note of that approval which went against the committee's recommendation for sure.

The landscape of anticipation for ZLCS' upcoming PHASE IIa clinical data event has completely changed in scope given that Zalicus discovers and develops novel treatments for patients suffering from pain; all without the multiple, incredibly dangerous and negative side-effects which have become the target of vocal consumer groups, physicians and even politicians like Rep. William Keating (D., Mass.) who told the Wall Street Journal that, "Just as the FDA was making some steps forward in the fight to end prescription drug abuse, they take major steps back with the approval of Zohydro ER." Shares of ZGNX have begun to lose some of that value following their approval, but that is certainly not unusual given profit-taking after these types of events.

Although ZLCS has a portfolio of these proprietary clinical-stage product candidates targeting pain, the firm has also entered into multiple revenue-generating collaborations with large pharmaceutical companies relating to other products, but the two pending catalysts for its leading clinical candidate Z160 are what has been bringing attention and volume spikes to the stock.

Zalicus selected the most promising formulation for clinical use and advanced Z160 into two Phase IIa clinical trials for the treatment of neuropathic pain, including postherpetic neuralgia, or PHN, a painful neuropathic condition resulting from an outbreak of the herpes zoster virus, otherwise known as shingles, and lumbrosacral radiculopathy, or LSR, a common neuropathic back pain condition resulting from the compression or irritation of the nerves exiting the lumbar region of the spine. The trial in LSR began in August 2012, and the other one in PHN began in December 2012. Top-line results for these trials are an incredibly important binary event expected to be announced within the next couple of weeks.

Z160 is a first in class, oral, state dependent, selective N-type calcium channel blocker that has the potential to be used for a wide variety of chronic pain conditions. Interestingly, last month, Zalicus received Orphan Drug Status from the FDA for Z160 as a potential treatment for postherpetic neuralgia.

In his most recent analysis, the normally conservative CFA, Jason Napodano, has been jumping up and down about this being an undervalued biotech play with the added bonus of upcoming clinical data in several recent articles. He also points out that Z160 a "potentially an enormous drug if it works in both PHN and LSR." More specifically, Napodano says positive results from these two studies may point to a target price of around $14 after some discounting back to the present for Zalicus shares. The stock is currently trading just under $5. The analyst is looking for data "by the middle of November" and he should know after sitting down with Mark Corrigan, MD (Chief Executive Officer) and Justin Renz (Chief Financial Officer) of ZLCS to discuss the drug in detail.

Enhydris Private Equity, Inc. points out that "the current market leader in the neuropathic pain market is Pfizer's (PFE) Lyrica- which is on track to break the $2B mark this year and has shown steady growth since its 2005 launch. Moreover, sales of Eli Lilly's (LLY) Cymbalta for neuropathic pain are also expected to exceed $1B in 2013, showing the strength of this rapidly growing niche-market. Compared to Zalicus' market cap, Z160 thus offers investors a potentially outstanding reward going forward."

In fact, Zalicus has spent the past several years improving the formulation of a drug that "Did not demonstrate the ideal pharmaceutical characteristics considered necessary to advance the compound further into development" when Merck & Co. (MRK) walked away from the compound in 2007-- after they had licensed the compound (originally named NMED-160) for $25 million upfront and potentially as much as $450 million in milestones and royalties on sales.

From a technical standpoint, we see an interesting chart that has been spiking recently, but oddly enough, almost just as quickly giving back gains. It's not unusual to see this type of "nervous" activity - particularly since the firm had a delisting notice which forced management to pull the trigger on a 1-for-6 reverse stock split. That allowed Zalicus to regain compliance with the $1.00 per share minimum bid price requirement for continued listing on The Nasdaq Capital Market. But as seen time and again after these stock splits, many inexperienced or simply anxious investors wake up to see that the penny stock they were holding is now worth $5 and they tend to sell without thinking things through.

What does look promising as we look at the chart is that each time there has been a spike, we've seen higher highs-particularly with the pre-split spikes which occurred before early October. The "predictability" may continue and here is why:

This latest spike was a post-split spike that moved the stock very quickly given its now very low float. In fact, by some estimates, 25% of the new "small float" was traded within two sessions late last week. That points to a lot of new buyers who came in and accumulated oversold shares. This volume activity added new eyeballs and interest to ZLCS' upcoming binary catalyst, while relieving some of those inexperienced (or anxious) sellers of the shares who realize that a failure of both Phase II trials would undoubtedly be the end of Zalicus since that would sink the stock and make it nearly impossible to finance the remainder of its drug pipeline.

As the company states in their latest 10-Q, they only have enough money to keep operating until approximately February of next year. But just as Enhydris pointed out, even if Zalicus would have to rely heavily on its $25 M purchase agreement with Lincoln Park Capital to keep their doors open, that amount would not give the company nearly enough cash to perform a pivotal Phase III trial for Z160-assuming one or both of its current Phase IIa trials are successful.

So with the timing of this trade now building to a critical stage given the expected release of data, one has to wonder whether another sharp spike after positive clinical data news might not be a better time to raise capital at much higher prices (following positive data?) than after a devastating announcement that could set the company back to a share prices below $2.

Another factor that is interesting for experienced traders looking closely at the price action for hints about the upcoming catalysts is that companies usually cue up and execute reverse splits when will have enough good news lined up to support the stock "sell off" that occurs after a reverse split takes place. So far, the company has been relatively quiet and only announced the very positive Orphan Drug Status from the FDA for Z160 well before the split became official. Are they feeling so confident about the upcoming results that they haven't had to pad the post-reverse split sell-off with any news?

In speaking to other people who have followed this company for some time, they say that Zalicus management has not been known for playing games and that historically speaking, at least, they tend to be conservative and on-time with announcements about forward looking events. That history points to the data being delivered either on time- or even early.

Sure, we like Zalicus as a bottom bouncer at these levels for all of those fundamental and some technical reasons as well. In fact, the stock could attempt to make another push to $6 before data once again given that this is now a very low floater (with 5.47% held by Insiders and 10.90% held by Institutions) that can move up quickly on increased volume and buying pressure. It certainly has an increasing number of retail followers on both sides of the bet.

(click to enlarge)

Once the stock failed to break through the previous level of support at close to the $5.32 mark late last week, shorters poured in for a quick trade. They were right to do so when the action broke down, but many have already begun to cover (see chart below) as they fear a surge in price action might push them higher as the release of data gets increasingly closer. Since we are clearly now entering that catalyst window, stats show that the risk/benefit ratio has begun to push many of those shorts out.

Obviously, Zalicus's various approaches to drug discovery and development using their ion channel expertise or their cHTS technology platform are complex, but the mechanism of action for Z160 has been validated by ziconotide, marketed by Jazz Pharmaceuticals (JAZZ) as Prialt- which has well-documented clinical efficacy.

Still, for all the excitement building here, previously unrecognized or unexpected defects in or limitations to Zalicus's drug discovery technologies or drug development strategies may emerge from these or other future studies. Early stage drug development offers high risk of failure and no one can predict when or if any one of Zalicus's product candidates will receive regulatory approval, though we can all agree that such approval is years away.

One thing is clear, the future of ZLCS' success depends on the successful development of Z160 and the scientific evidence to support the feasibility of developing drugs that modulate ion channels to treat pain conditions is possible. Still, many companies have failed to successfully develop drugs that modulate ion channels to treat pain conditions.

That doesn't make the proposition offered by this next generation of drugs any less compelling and one video featuring Dr. Terrance Snutch, PhD, FRSC, discussing his research into understanding and treating chronic pain is certainly worth a look to those wishing to understand the mechanisms of action here. It is simply fascinating stuff if you're into medical biotechnology at all.

Remember, this is a short term trade for us. Zalicus's approach to drug discovery and development may not be successful but even if Zalicus' approach is theoretically viable, they will have obtain the financial resources required to further develop and advance this promising product candidates through the rest of the clinical trial process and obtain the regulatory approvals required for commercialization around the world and we don't want to stick around for that inevitable capital raise.

Remember also that we hedge our bets on these bottom bouncers by basing these picks on not only the fundamental factors and upcoming news, but also by using our advanced charting and market analytics formula which looks for trending factors on a stock chart, including an analysis of the firm's Weekly Williams %R (both one and two sessions ago) as well as the Stock's Weekly Relative Strength Index (also for the past several sessions), and other factors such as Bear Power (BEARP) and Bull Power (BULLP), technical analysts are able to set and apply various histograms. We are also tracking other specific points on the Moving Average Convergence Divergence of a stock and in the end, coming up with a mathematical formula which yields these specific results.

Best of luck and our best wishes for your continued success traders!

 

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in ZLCS over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

The Brookfield Group Looks Ready For M&A

I expect the Brookfield Group of Companies, which is composed of no fewer than 15 publicly traded entities, to be very active acquisitive in the near-term future. Here I focus my attention on three members of the Brookfield Group that are going to be the most active with M&A. While Brookfield Asset Management (BAM) will concentrate its M&A efforts into all geographies and all asset classes, Brookfield Renewable Energy Partners (BEP) and Brookfield Infrastructure Partners (BIP) will concentrate on their respective industries. Let's see whether you should go long on any of this separate -although related - entities.

Good Operational Performance

Brookfield Asset Management, held by Lou Simpson and Ron Baron, counts with a liquidity position of more than $5 billion at the parent and principal subsidiaries along with nearly $10 billion drawable private fund commitments. More importantly, the company has expressed its interest into using this liquidity to make acquisitions. Management clearly stated in its letter to shareholders:

"We have a robust pipeline of exceptional opportunities in front of us in all of our businesses (...). Today, we are being offered a variety of attractive opportunities to acquire assets and assist companies with capital needs, as companies refocus their core strategies, and governments reconsider how they will deliver critical infrastructure and services."

Brookfield Asset Management has reaffirmed its interest in European attractively priced assets. With this in mind, and given that the company is usually more price sensitive than most investors, I think Brookfield Asset Management is poised to deliver great performance through buying European high-quality assets. That said, the company's valuation seems rich at 2013 18.6 times P/E and 230% tangible book value. I would keep the company into my watch-list but I would not go long at current prices.

Trading at the Right Price

Brookfield Renewable Energy Partners, which has been very acquis! itive during the last few months adding new opportunities to its portfolio, looks now undervalued. The reason to explain the existing overhang on the stock is clearly related to the equity issuance launched in June, which was later pulled given "non-ideal" market conditions. That said, I believe the market shouldn't have reacted against the stock since the issuance was simply planned to build funds in order to increase M&A activity beyond the company's $1 billion current liquidity position.

Brookfield Renewable now offers a very attractive 5.6% distribution yield, above its 5% historical average. Selling for 8.8 times 2013 operating cash flow, I think Brookfield Renewable is a great way to get exposure to a globally diversified source of renewable projects. Moreover, I am not the only one thinking of Brookfield Renewable, successful funds such as the KBI Alternative Energy Strategy are also long on the name.

Eyes Set into the Future

Brookfield Infrastructure, which is also held by Ron Baron, has enviable liquidity. The company's current liquidity position is approximately $2.5 billion, out of which $1.1 billion is cash on a pro forma basis (after the closing of recent transactions). I think the company's value should be measured in terms of its future and the steady deployment of its existent capital.

Brookfield Infrastructure has a number of potentially profitable areas for investment around the world but, above all, in infrastructure hungry Emerging Markets (EM) such as Brazil. According to Credit Suisse analysts, in Brazil, funds can be invested at Funds From Operations (FFO) yields above 12%. Therefore, the company's ability to grow its distribution yield, whether through acquisitions or organically, is critical to evaluate the company's value. Moreover, the currently conservative dividend payout ratio should allow Brookfield Infrastructure to self-finance on going opportunities.

The company has targeted to growth its annual distributions by 3% to 7% with a FFO payout! ratio of! 70%. Hence, I believe the currently fair 4.75% dividend yield could go as high as 5.5% by the end of 2014. Trading at 11 times its operating cash flow, I think Brookfield Infrastructure is a solid investment for those looking for a good cash yield and EM exposure.

Conclusion

The Brookfield Group of Companies offer a great way to get into different markets in an efficient way. A proven management with a very strict acquisition criteria — they never pay too much — and ample sources of private and public capital make these companies ideal options for portfolios looking for diversification. That said, you should always be wary of not paying too much for the assets you are buying. I believe that Brookfield Renewable Energy Partners and Brookfield Infrastructure are good buys for those looking to get into renewable energy projects or global infrastructure. Brookfield Asset Management looks expensive at this point in time.

Investors opting for guaranteed return products: ICICI Pru

Until three years ago, funds were flowing into products that were majorly linked with equities. But now interest rates have risen, so traditional products with guaranteed returns have become more popular, he told CNBC-TV18 in an interview.

Also Read: How portfolio diversification helps to handle volatile mkt

Below is the edited transcript of Puneet Nanda's interview with CNBC-TV18

Q: How much have investments in equity, some of these equity products fallen in the last three- six months or so and what are the popular products that investors are blocking their money into nowadays?

A: Products that customers buy, depend on whole host of factors driven by their risk profile, their goals, their horizons, but macro environment plays a key role. Until maybe three years back a bulk of new flows were coming into linked products with equity being the major component. However, over the last two-three years, the risk appetite has fallen and important interest rates have risen.

The traditional products where there is some element of guaranteed returns have become more popular now. So, on and overall basis, if you have to look at it in terms of new flows, today for the overall industry about 65-70 percent would be in traditional products and about a third would be in unit linked products.

Q: What is your sense about your own preference as a fund manager? Do you have to be in equities over the next six months or would you prefer non-equity instrument if you had the choice?

A: It all depends on the horizon. However, for us it is not about asset management. For us it is about asset liability management. The nature of liability is very important so affectively it means what is the product that is being sold and accordingly the asset management strategy is put in place. So, from a short-term horizon given where interest rates are perhaps there will be higher weightage to that.

But from a longer term perspective and that is where most of our customers come in, we always says irrespective of market conditions actually from a longer term perspective some sort of a balanced asset mix is always good. Within that tactically one can chase, for example, if one is bullish on equity, one may want to keep 60-70 percent equity, if one is not that bullish then may keep 50-60 percent. But from a longer term perspective, you do need assets which can potentially beat inflation in the long run.

Q: At the moment since we are getting down at some points beaten on valuations and at some points stratospheric valuations what interests you, stocks or sectors?

A: It is a bit of a fact to say that it is a bottomup or topdown kind of a market, the reality is that any point of time one does have to look at from both perspectives. Today, the overall environment is clearly challenging; growth is slowing, financing cost is high, the input costs are high and all that is known and it is sort of to some extent already priced in. That is why you do see some sectors being expensive and some sectors which potentially do not deserve to have been beaten down that much are not doing so well. So, from our perspective it is a larger call in terms of where we think the valuations are today and more importantly where we think it is going to be.

The fact is that today we are sub-5 percent kind of economy but that is not the potential. If we get our act right and all that has been spoken and the steps that Governor, Raghuram Rajan has taken have given more elbow room to the government to take some good structural steps. So, if we are able to do something around that then from a longer term perspective it is still good to focus more on valuation and buy what one believes will deliver returns in the long run. Though honestly at this point of time, the short-term outlook does remain murky and one has to be brave to take those kind of calls.

Morgan Stanley Gets OK to Buy Rest of Smith Barney

Morgan Stanley (MS) has the government’s thumbs-up to buy the final 35% stake in its Morgan Stanley Smith Barney joint venture from Citigroup, the company said early Friday.

“This is a historic day for Morgan Stanley,” said Chairman and CEO James P. Gorman, in a press release. “Immediately upon closing, we expect to start seeing the benefits of 100% ownership—including an expanded deposit base, unique syndication and distribution capabilities and enhanced opportunities for both our wealth management and institutional clients.”  

Morgan Stanley says it will pay $4.7 billion in cash for this last slice of the joint venture and expects the deal to close by June 28.

The joint venture between Morgan Stanley and Smith Barney came together in 2009, when Morgan Stanley acquired a 51% share (for $2.7 billion) and Citigroup (C) 49%. At the time, the combined entity—Morgan Stanley Smith Barney—had some 18,500 advisors.

In September, the two parties clashed over the valuation of the deal, which was put at $13.5 billion, much lower that Citi’s estimated value of $22 billion. It included about 16,930 employee advisors as of June 30, 2012.

After an agreement was reached, Morgan Stanley bought an additional 14% stake in the venture and changed its name to Morgan Stanley Wealth Management, which had about 16,300 advisors as of March 31.

(As part of its second-quarter ’13 earnings, Morgan Stanley will record a negative capital adjustment of about $200 million, net of tax, which reflects the difference between the purchase price and its carrying value.)

“Today, the power of Morgan Stanley’s platform—a premier investment bank and one of the world’s pre-eminent wealth and asset management franchises—is clearer than ever before,” explained Gorman (right), in a statement. “With this milestone behind us, we have added momentum to carry out our full plan to achieve higher shareholder returns.”  

Rival broker-dealers have been recruiting Morgan Stanley advisors at a steady pace. But while the number of Morgan Stanley reps departing in 2011 and 2012 shot up due to IT-related issues, “It’s significantly better and stable in 2013,” said Rick Peterson, a Houston-based recruiter, in an interview. 

Plus, Peterson says, the wirehouse just seems to be having its fair share of departures, “and if these reps are replaced by those with bigger [asset and production] numbers, they really don’t mind.”

Last week, for instance, Morgan Stanley said it recruited three advisors from rival wirehouse firms with a total of $3.7 million in yearly fees and commissions. The broker-dealer says that attrition among the top two quintiles of advisors remains "very low."

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See where Morgan Stanley placed in 12 Best & Worst Broker-Dealers: Q1 Earnings, 2013 on AdvisorOne.

A Look At National Debt And Government Bonds

First established in 1789 by an act of Congress, the United States Department of the Treasury is responsible for federal finances. This department was created to manage the U.S. government's expenditures and revenue, and hence the means by which the state could raise money to function. Here we examine the Treasury's responsibilities and the reasons and means by which it takes on debt.

The Treasury's Responsibilities
The U.S. Treasury is divided into two divisions: departmental offices and operating bureaus. The departments are mainly in charge of policy making and managing the Treasury, while the bureaus' duties are to take care of specific operations. Bureaus such as the Internal Revenue Service (IRS), which is responsible for tax collection, and the Bureau of Engraving and Printing (BEP), in charge of printing and minting all U.S. money, take care of most Treasury work.

The Treasury's primary tasks include:

Collecting taxes and custom duties Paying all bills owed by the federal government Printing and minting U.S. notes and U.S. coinage and stamps Supervising state banks Enforcing government laws including taxation policies Advising the government on both national and international economic, financial, monetary, trade and tax legislation Investigating and federal prosecuting of tax evaders, counterfeiters and/or forgers Managing federal accounts and the national public debt The National Debt
A government creates budgets to determine how much it needs to spend to run a nation. Often, however, a government may run a budget deficit by spending more money than it receives in revenues from taxes (including customs duties and stamps). To finance the deficit, governments may seek to raise money by taking on debt, often by borrowing from the public.

The U.S. government first found itself in debt in 1790, after taking on the war debts following the Revolutionary War. Since then, the debt has been fueled by more war, economic recession and inflation. As such, the public debt is a result of accumulated budget deficits.

The Role of Congress
Up until World War I, the U.S. government needed approval from Congress every time it wanted to borrow money from the public. Congress would determine the number of securities that could be issued, their maturity date and the interest that would be paid on them.

With the Second Liberty Bond Act of 1917, however, the U.S. Treasury was given a debt limit expressed as a number, or a ceiling of how much it could borrow from the public without seeking Congress's consent. The Treasury was also given the discretion to decide maturity dates, interest rate levels and the type of instruments that would be offered. The total amount of money that can be borrowed by the government without further authorization by Congress is known as the total public debt subject to limit. Any amount above this level has to receive additional approval from the legislative branch.

Who Owns the Debt?
The debt is sold in the form of securities to both domestic and foreign investors, as well as corporations and other governments. U.S. securities issued include Treasury bills (T-bills), notes and bonds, as well as U.S. savings bonds. There are both short-term and long-term investment options, but short-term T-bills are offered regularly, as well as quarterly notes and bonds.

When the debt instrument has matured, the Treasury can either pay the cash owed (including interest) or issue new securities. Debt instruments issued by the U.S. government are considered to be the safest investments in the world because interest payments do not have to undergo yearly authorization by Congress. In fact, the money the Treasury uses to pay the interest is automatically made available by law.

The public debt is calculated daily. After receiving end-of-day reports from about 50 different sources (such as Federal Reserve Bank branches) regarding the amount of securities sold and redeemed that day, the Treasury calculates the total public debt outstanding, which is released the following morning. It represents the total marketable and non-marketable principal amount of securities outstanding (i.e. not including interest).

War Time
In times of war, a government needs more money to support the effort. To finance its needs, the U.S. government will often issue what are commonly known as war bonds. These bonds appeal to the nation's patriotism to raise money for a war effort.

Following Sept. 11, 2001, Congress passed the U.S.A. Patriot Act. Among other things, it authorized federal agencies to initiate ways to combat global terrorism. To raise money for the "war on terrorism," the U.S. Treasury issued war bonds known as Patriot Bonds. These Series EE savings bonds hold a five-year maturity. The U.S. Treasury has also become a key institution working with financial institutions to draft new policies aimed at battling counterfeiting and money laundering related to terrorism.

Conclusion
The public debt is a liability to the U.S. government, and the Bureau of Public Debt is responsible for the technical aspects of its financing. However, the only way to reduce debt is for the federal budget's expenditures to cease to exceed its revenues. Budget policy lies with the government's legislative branch. Thus, depending on the circumstances at the time of budget formulation, running a deficit may be the country's only choice.

Boeing Plane Deliveries Reach 15-Year High

Boeing (NYSE: BA  ) has been working hard to increase the production rates of its fast-selling commercial jets, and the company is beginning to see its efforts rewarded. On Wednesday, Boeing released figures for the second quarter of 2013, which show that the company has not only increased deliveries by 13% over the quarter, but also delivered more planes in a quarter than it has since 1998. For 2013 to-date, it has also beaten its chief competitor Airbus on deliveries. While the company has a lot of work yet to do in meeting its massive $322-billion commercial jet backlog, this successful uptick in production and deliveries is a very positive sign.

Boeing delivered 169 planes in the second quarter, making 306 complete deliveries for the year, so far. About 70% of these were Boeing's 737 Next Generation, a narrow-body jet due to be replaced by the 737 MAX in 2017. The 737 is already Boeing's highest-output program, and Boeing is in the process of boosting production 35 to 48 jets per month.

The second quarter also saw Boeing resume delivery of the flagship 787 Dreamliner, the company's most technologically advanced jet. The company delivered just one of the wide-body planes in the first quarter, as battery problems kept the global Dreamliner fleet grounded for nearly four months. Boeing delivered 16 more Dreamliners in the second quarter, each at a list price of over $200 million. The company is aggressively trying to raise production rates on the Dreamliner to 10 planes per month, an effort it will have to execute quickly if Boeing is going to hit its goal of delivering 60 Dreamliners in 2013.

For investors, this is good news. While Boeing has all the demand it can handle, the company doesn't get paid if it can't supply its planes, and the company has struggled in the past to successfully ramp up production. Careful, incremental increases in building rates, without more serious incidents like the 787 grounding, are exactly what Boeing needs to focus on to take advantage of its market opportunity.

Boeing's order backlog will only grow as the global economic recovery strengthens, as increased demand for air travel forces airliners to expand and upgrade their fleets. Air travel is just one of the key business areas that will inevitably improve with a  stronger recovery. A recent Motley Fool report, "3 Strong Buys for a Global Economic Recovery," outlines how Boeing, and two other key industrial companies, could take off when the global economy gains steam. Click here to read the full report!

Dollar jumps on October U.S. jobs surge

NEW YORK (MarketWatch) — The U.S. dollar jumped Friday after the U.S. created twice as many jobs in October than Wall Street had expected, sparking yet another round of discussion about when the Federal Reserve could slow its bond buys.

Bloomberg

The U.S. added 204,000 jobs last month, the Labor Department said Friday, and hiring for September and August were revised higher by 60,000 in total. But the unemployment rate inched up to 7.3% from 7.2%, which was likely due to the shutdown. Economists surveyed by MarketWatch expect October nonfarm payrolls to rise 100,000, with the unemployment rate ticking higher to 7.4% from 7.2%.

"This report comes as a pleasant surprise and to the extent that it corroborates the strength that has already been seen in other economic reports, it suggests that the risks has shifted more in favor of a January (versus a March) start to QE tapering - especially if this level of strength is sustained in the coming months," said Millan Mulraine, director of U.S. research and strategy at TD Securities.

Read: 'Dectaper' is back on the table.

The ICE dollar index (DXY) , which compares the U.S. currency with six top rivals, increased to 81.257 from 80.841 late Thursday in North America. The index, which is heavily skewed to the euro, was at 80.914 just before the report hit.

The WSJ Dollar Index (XX:BUXX)  , which uses a larger comparison basket, advanced to 73.41 from 72.99.

The euro (EURUSD)  fell to $1.3359 from $1.3417 late Thursday. A downgrade to France's credit rating by Standard & Poor's briefly weighed on the currency, which tumbled Thursday in the wake of a surprise interest-rate cut by the European Central Bank.

Click to Play Super typhoon hits the Philippines

A super typhoon makes landfall in the eastern Philippines, bringing wind and rain that could unleash landslides and flash floods.

The Australian dollar (AUDUSD)  took a hit early Friday in Asia after a statement from the Reserve Bank of Australia indicated another rate-cut was possible. But the currency later got a boost from Chinese trade data showing strong rises in both exports and imports in October.

In recent trade, the Aussie bought 93.84 U.S. cents, down from late Thursday's 94.45 U.S. cents

The British pound (GBPUSD)  fell to $1.6012 from $1.6076, while the dollar (USDJPY)  jumped to ¥98.74 from ¥97.96 late Thursday.

How to Get Out of Debt: 5 Ideas

If you're mired in debt, especially high-interest-rate credit card debt, it can seem impossible to dig yourself out. Take heart, though, because it can be done. Here at The Motley Fool, we've long heard inspiring stories about ordinary people paying off extraordinarily large amounts of debt.

There are many ways to go about it, but here are just a few thoughts on how to get out of debt that you might keep in mind:

Tackle your high-interest-rate debt first. That's because it's costing you the most in interest payments. If you're paying off lots of loans, it can be tempting to pay off and eliminate the smallest ones first, but you'll get more bang for your buck by retiring your costliest debt first. Don't make things worse. Once you've committed to paying off your debt, aim to not add to it. Rein in your spending, and only charge what you can afford. In order to do that, some people have cut up their cards, or have frozen them in water and kept them literally on ice, in the freezer. Negotiate a lower rate. As you stress out about your steep interest rates and how to get out of debt, you might not realize it, but you may be able to call your credit card company and ask for (and receive!) a lower rate. It will help if you've been a well-behaved longtime customer, but even if not, you can threaten to switch to a lower-interest-rate card. Consider some extreme measures, such as getting a part-time job. It won't be easy, but it won't be forever, either. And it can help you generate valuable extra dollars to pay down your debt faster and avoid a lot more interest expense. If you net $10 per hour at a side job for 10 hours per week, that's an extra $100 per week. Over six months, it's $2,600 -- a powerful debt-reduction help. Alternatively, you might just look for a new job, one that pays more -- and perhaps even offers better benefits. You might raise some more funds by decluttering your home via a yard sale, too.  Make a budget. Very often, people end up in debt because they don't have a good handle on how much they really bring in and how much they're spending. You can develop a better sense of how to get out of debt if you break out all your monthly expenses and inflows and see places where you can pare down spending or boost income. Perhaps you can get rid of premium channels on your cable subscription -- or ditch it altogether in favor of a streaming service.

Don't think you're doomed if you're stuck in deep debt. Once you're armed with some ideas for how to get out of debt, you can start taking steps toward a much healthier financial life.

The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

What a Republican Victory Means for Stocks

The Republicans seized control of the Senate–and in the end, it wasn’t even close.

Getty Images

As of this writing, Republicans had taken at least seven seats from the Democrats, including those in North Carolina and Colorado, and the stock market appears happy with the news.

The S&P 500 has gained 0.3% to 2,108.88 at 10:24 a.m. today, while the Dow Jones Industrial Average rose 0.3% to 17,430.56. The Nasdaq Composite has ticked up 0.1% to 4,628.73 and the small-company Russell 2000 has jumped 0.4% to 1,170.06.

Capital Economics economist Paul Dales doesn’t think the mid-term elections will have big impact the economy in the U.S.:

Although the midterm elections have tipped the balance of political power towards the Republicans and could kick start progress on some trade and energy policies, they don't alter the economic landscape much. Even a Republican party which is in control of both chambers of Congress is unlikely to refuse to raise the debt ceiling next year and trigger another Federal government shutdown.

Wolfe Research’s Chris Senyek thinks tax reform is “back on the agenda” following the Republican victory, even if it’s not a sure thing. He considers the impact. He explains why:

Overall, we estimate a corporate tax cut to a 25% rate could boost S&P 500 companies' earnings by ~$7-8 per share in the aggregate (we believe 'bottom up' 2014 consensus SPX earnings of $131/share incorporates a 28% tax rate)…the impact of corporate tax reform would not be shared equally across sectors and industries, and the impacts are multidimensional. On the one hand, a corporate tax cut would boost reported earnings for most companies except ones reporting low tax rates. On the other hand, the elimination of tax preference items such as accelerated depreciation would increase the cash taxes paid by companies reducing cash flow.

Companies that could be hurt by tax reform due to their already low tax rates include Broadcom (BRCM) and Celgene (CELG), while Best Buy (BBY),  Madison Square Garden (MSG) and Gap (GPS) could benefit, Senyek says.

Evercore ISI’s Dennis DeBusschere thinks the Republican victory is helping stocks today but thinks the market needs some positive economic data:

It was a decisive victory for the republicans last night and outside of commodity prices, which march relentlessly lower, risk assets are higher and the USD is stronger. Gold is being hit hard again on the election news as well. There is some hope, as is reflected in the stronger USD, that split control (Democratic White House and Republican Congress) will break some of the partisan gridlock that has kept congress from addressing a number of pressing issues. As Terry Haines, Evercore ISI’s political expert noted, “For their own reasons, congressional Republicans, congressional Democrats, and President Obama will work to achieve legislative success on many important issues in the next Congress in 2015 – 2016… we look for successful debt ceiling legislation and an extension of the budget deal beyond 2015. We also look for legislative success on corporate tax reform; energy policy reform; and European and Pacific trade deals.” The sample set of market reactions to mid-term elections is very small and the subset of times when control of congress has switched is even smaller, so we can’t objectively handicap the impact the election will have on stock prices. Our expectation is that trends in the outlook for global growth will continue to drive equity returns, but it does seem to favor the USD, which is a tailwind for U.S. focused risk…We will be keeping an eye on U.S. business confidence going forward to determine the lasting impact of the election.

Why Basic Energy Services, Inc Dropped Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of oil and gas industry service company Basic Energy Services, Inc (NYSE: BAS  ) fell as much as 12% after reporting earnings.

So what: Revenue was up 9%, to $359.7, and swung from a $4.2 million loss a year ago to a $2.4 million, or $0.06 per share, profit. Revenue topped the $357.4 million estimate from Wall Street, and adjusted earnings of $0.13, which exclude one-time items, were $0.04 better than estimates. The drop was strange given the solid results, but investors had clearly set their expectations even higher.

Now what: Demand for Basic Energy Services was up across the board, as oil and gas prices remained relatively high. The Permian Basin continues to be a strong point and, with drilling expanding there, it should be for the foreseeable future. Right now, the value is what's concerning because the company is barely back to profitability; but if momentum picks up, this could be a good value for investors.

Risk free for 30 days: The Motley Fool's flagship service
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'Poor' tweet by federal lender prompts backlash

NEW YORK (CNNMoney) For social media managers, reaching young audiences with irreverent memes and tweets is a dangerous endeavor.

The latest entity to end up with egg on its face is the Federal Student Aid office, which on Tuesday tweeted an image that many readers felt mocked the poor.

The image, a common meme derived from the 2011 comedy "Bridesmaids," features Kristen Wiig's character pouting about being sent back to her coach seat after sneaking her way into first class, with the caption "Help me. I'm poor."

It encouraged readers to fill out a Free Application for Federal Student Aid, or FAFSA, which gives students and would-be students access to the office's financial aid programs. FAFSA is also required by many colleges, universities and private financial aid providers.

"If this is you, then you better fill out your FAFSA," the tweet underneath the image said, according to screen shots that users took. (The tweet has since been taken down.)

Within minutes, almost universal condemnation of the tweet started spreading across the social networking site, calling it "offensive" and "tasteless" and mocking its attempts at outreach.

The Federal Student Aid office, which is part of the U.S. Department of Education, controls more than $150 billion in grants, loans and work-study money that is distributed to more than 15 million students each year.

Related story: These employers will pay for your tuition

It apologized for the tweet around ! 1 am on Wednesday morning.

In a statement, a spokeswoman for the Department of Education called the post "insensitive" and said it "flies in the face of our mission of opening doors of opportunity for every student."

"It was an ill-conceived attempt at reaching students through social media," the spokeswoman, Dorie Nolt, said. "We are reviewing our process for approving social media content to ensure it reflects the high standards we expect at the U.S. Department of Education."

The Federal Student Aid office is by no means alone in having goofed on social media recently.

On June 17, Delta Air Lines (DAL) posted images of the Statue of Liberty and a giraffe to celebrate the U.S. win over Ghana in the World Cup. Followers quickly pointed out that Ghana has no giraffes.

Back in March, a campaign launched on Twitter to cancel "The Colbert Report" after the show's verified account tweeted out a message that many felt was racist against Asians. The show's host, Stephen Colbert, denied involvement with the tweet.

The show survived the campaign, and despite the gaffe, Colbert was named as David Letterman's replacement a few weeks later.

GT Advanced Technologies

GT Advanced Technologies (GTAT) is marching aggressively toward its target of achieving $1 billion in revenue in 2015, and earnings of $1.50 per share in 2016, respectively, despite not-so-impressive first-quarter results. It posted loss of ($0.22) per share, which is in line with the Capital IQ consensus estimates.

Revenue for the quarter was at $22.5 million, 16.5% below the consensus estimate of $26.94 million. However, the results were the best fit to the circumstances as it is undergoing a transformation as its sapphire materials business ramps up. The results also were in line with its guidance to the end point of the range it expected at the binging of the quarter.

Good Moves

GT Advanced incurred non-GAAP operating expenses of $43.4 million, consisting of $23.5 million in research and $19.9 million in selling and general during the quarter. Also, the company is engaged in investing in new product offerings that will certainly supplement its growth in the future. It looks like to me as if the company is laying a strong foundation for 2015 and coming years as it considers 2014 a period of transition.

Also, it expects revenue of $600 million to $800 million and earnings of $0.02 to $0.18 a share. Analysts, on the other hand, expect revenue of $693.8 million and earnings of $0.10 a share, while its non-GAAP capital expenditure is expected to be in the range of $150 million to $160 million for the year. Therefore, it suggests that the company is quite upbeat about its long-term prospects and could be a strong performer in the long run.

Investments Ahead

In addition, the company is planning to invest nearly $600 million in capital expenses, weighted toward the first half of the year, which is an additional investment the company is making in Merrimack. These numbers along with strategic initiatives will certainly compensate the weak performance the stock had witnessed when the results were declared. Also, the sentiment on GT remains positive overall and many investors are seen rolling back on the stock of late that has created healthy volume in the market backed by strong relationship the company shares with Apple (AAPL).

Looking ahead, GT looks solid and confident in the future for couple of reasons, such as the continued positive trend it has experienced across its ASF, Polysilicon, HiCz and DSS solutions, which are at the moment skyrocketing. Second, the company is on the brink of bringing in several new game-changing technologies, which will certainly help the company to market its next generation solar product such as ASF 165, low-cost high-quality sapphire material that has huge potential for its addressable market and is expected to be available in the market at the beginning of third quarter of 2014.

The ASF (R) 165 will also be available for its new customers, targeting the LED and industrial markets. The production is in progress in the Arizona plant in the U.S. with a production furnace capable of producing high-quality 165 kilogram boules in high volume. The ASF 165 will definitely give its customers a competitive advantage and lower cost of ownership, by providing a sapphire furnace that will significantly increase capacity and reduce costs as it provides 40% increase in Boule size compared to the current ASF 115. In addition, the company is anticipating strong demand for this product category in the coming months.

Conclusion

As mentioned above, GT Advanced Technologies looks like an attractive investment for several reasons, such as its anticipated growth trajectory of its business and on the higher side because of its strong end-market prospects, its HICz and PV technologies experiencing greater momentum, expanded projects with Apple, and potential for its new polysilicon technology business. Also its HiCz solutions are now available commercially and the company has experienced high volume in this regard as customers have accepted the revolutionary Merlin solar interconnect technology.

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Hyundai will appeal $248.6M verdict in fatal crash

POLSON, Mont. — A Montana jury has ordered Hyundai to pay $240 million in punitive damages on top of $8.6 million in actual damages and lost earnings after finding that a manufacturing defect in a Hyundai Tiburon caused a crash that killed two Missoula cousins in July 2011.

The award handed down late Tuesday was to the families of 19-year-old Trevor Olson and 14-year-old Tanner Olson, who died when their 2005 Tiburon slammed head-on into another car.

Hyundai Motor America released a statement Wednesday saying it plans an immediate appeal. It said that it believes the jury's verdict is mistaken and a damage award of three times what was sought by the plaintiffs is "outrageous and should be overturned."

It's also unclear if the punitive damages will stand under state law. Montana has a $10 million cap on such damages, but that's being challenged after a District Court judge in Butte ruled it wasn't high enough to deter future wrongdoing by wealthy companies.

The lawsuit alleged that a defective steering knuckle in the Tiburon that Trevor Olson was driving caused the car to suddenly veer into an oncoming lane and crash into another car. A passenger in that car, 21-year-old Stephanie Nicole Parker-Shepherd of Arlee, was killed while her husband and two children were severely injured.

Hyundai issued a recall in 2005 for 111 Tiburons manufactured over a one-month period that year over a steering issue, but the problem was different than the one cited at trial and it's no known if the teens were driving one of those cars.

There have been relatively few complaints filed against the 2005 Hyundai Tiburon with the National Highway Transportation Safety Administration. Out of the 37 complaints filed, only two had to do with the vehicle's steering system, according to the agency's database.

Hyundai argued that something else — most likely a firecracker being set off in the Hyundai — caused the driver to suddenly react and caused the car to swerve.

"Eyewitness test! imony established — and experts for both sides agree — that fireworks exploded in the unbelted teenagers' vehicle immediately before the … accident," the Hyundai statement said.

Montana Highway Patrol Trooper Terrance Rosenbaum testified that he found no evidence that any fireworks had been ignited in the car and that the Montana State Crime Lab could find no evidence to prove or disprove that claim.

The damage to the steering knuckle was the result of, not the cause of, the head-on crash, Hyundai said. The company noted the steering knuckle in the other vehicle also was damaged.

A defense expert testified some of the damage to the Hyundai's steering knuckle existed before the crash.

Hyundai said District Judge Kim Christopher would not let the company present evidence that if the steering knuckle had failed, the car would have swerved to the right, not the left as happened in the crash.

Wolff: Publishers as beggars

Last week, a letter arrived from my friend Jacob Weisberg, who runs Slate, the venerable Web magazine. Weisberg's letter was not to me, specifically, but to friends of Slate, proposing — or really imploring — that we join a special category of loyalists and voluntarily contribute to the magazine. Like NPR or PBS. Or crowdfunding.

Such a plea seemed, on the face of it, alarming, an admission of flaws in the basic business. If Slate's virtues, intelligence and style didn't immediately move us, we should contribute $50 a year if for no other reason, the letter said, than as a personal favor to Jacob. (A variety of letters are going around from other Slate managers asking "friends" to subscribe as a personal favor to them. I have written my check.)

But the other detail in the letter that jumped out at me was Jacob saying he had been at Slate for 17 years. This is long enough to be a publishing epoch. During it, Slate has gone from one of the first indigenous Web publishing ventures to one competing with ever-more-indigenous players such as BuzzFeed, The Huffington Post and Upworthy, hardly recognizable in traditional publishing terms at all.

Slate has always been something of an experiment. It began as a way for Microsoft to help prove its Internet bona fides. Microsoft hired a noted editor, Michael Kinsley, and gave him free rein to translate best practices of intelligent magazines into a digital format. (This was successful enough for Slate to become, for many years, a leading source of talent for many prestigious mainstream publications.) When it outlived is usefulness to Microsoft, it was adopted by the Graham family, then-owner of The Washington Post. It is still owned by the Grahams after the sale of the Post last year to Amazon founder and CEO Jeff Bezos, but it likely has outlived its usefulness to them.

So the experiment is, in a sense, ongoing: Can Internet economics support a class publishing venture?

Perhaps this is an unfair test. After all, in any 17-year perio! d in my long magazine career, I have seen a wide variety of inspired magazines hit the dust. On the other hand, the analogue world, to give it its due, has certainly supported many literate and artful magazines, something that seems less true about the Internet. It disgorges information, useful and useless, but not taste or sensibility.

The new membership program at 'Slate.'(Photo: Slate)

Now, taste and sensibility have been things that advertisers paid a premium for — a model Slate thought could be transferred to the Internet. But either there is a paucity of taste and sensibility on the Internet, or it doesn't shine brightly enough to be a digital business. Hence, publishers have adjusted to the lack of premium advertising by becoming vast traffic funnels instead of exclusive harbors.

Some publishers are trying pay walls to help make up for lost advertising, but Weisberg, in his letter, said the obvious: Pay walls are difficult to implement, and you risk losing much of what you've gained.

Even The New York Times, which has a successful pay wall, is now resorting to a premium, pay-more-to-identify-more, plea.

In part, this is a hopeful new idea in publishing, that there might be something beyond advertising and circulation and, behaviorally, that there is something beyond reading (another imperiled part of the publishing model). That belonging is a business.

Or, as with NPR and PBS, that liberal guilt might become another revenue stream.

On the other hand, what also is suggested here, or what ought to be considered, is that the two pillars of conventional upscale publishing — brand advertising and discrete audiences — don't work very well on the Internet.

High-margin brand advertising is an amalgam of not only ! marketing! strategy but of corporate ego — it needs to make the advertiser as well as the audience feel good about themselves. Nobody has yet figured out quite how to do this among deficit-attention, low-margin, buy-this-product junk ads that populate the Internet.

As for discrete audiences, particularly ones not defined by interest, but by, well, taste and sensibility, that's a snobbery that's almost anti-digital, partly explaining the rise of such leveled, mass-market panderers as BuzzFeed. It used to be that the extraordinary accomplishment of a magazine was to not only bring together a specific audience but also to define it — often in a way that it did not even know itself — give it purpose, indeed, membership. But the vast new business of Internet middlemen now claim, quite convincingly, that they can, with all the Internet's data markers, identify and reproduce any audience at will, without the advertiser having to pay the publisher a premium price for reaching this unique audience.

Audiences are basic commodities, easily reproducible.

There remains a grit-their-teeth belief among high-end publishers that there will be a way to become self-sustaining and even figure out a growth model in the digital world, that it is a process of experimentation and that, even after 17 years or so, the Internet is still young, that if the audience is here, advertising — profitable advertising — must eventually follow. And subscriptions. And premium memberships. And… and…

But, too, maybe the experiment proves that print was better.

CEO Q&A: Vanguard's Bill McNabb

F. William McNabb III -- known as Bill at Vanguard -- has been CEO of the Malvern, Pa., mutual fund powerhouse since 2008. He oversees a company with more than $2 trillion in assets and 14,000 employees worldwide. USA TODAY's John Waggoner talked with McNabb about low costs, retirement and Jack Bogle, the company's founder.

Q: Which is more important for investors: Low fees or indexing?

A: The most important thing for investors is cost. Indexing is the purest expression of that. Low-cost actively managed funds can make sense; we offer a number of low-cost active funds.

The real issue in the market place is high-cost funds. All the data suggest that this is so counter intuitive to all consumer purchases. For most consumer goods, the sense is that the more I pay the more I get something in addition. In investments, the data do not suggest that. The best predictor of future performance is cost. Funds in the lowest quartile of cost have outperformed consistently over every time period. So we start with cost, and indexing the purest expression of that.

Q: Aside from high fees, what do you think is the biggest problems investors face in saving for retirement?

A: Two huge challenges are out there. One is access to retirement plans. Many small companies don't offer them because of the complexity of doing so. But given that a large part of growth in employment been in smaller companies, that, to me is, the No. 1 issue: Half of all employees don't have access to a retirement plan. They are forced to save through IRAs or the president's new proposed account. Those are fine, but they are not going to get it done. I think we actually need to do some things to simplify employer-sponsored plans so that it's easy and affordable to get those plans.

The other challenge is savings rates. For those employees who do have access to employer plans, the average savings is 9%. If you combine company contribution plus what employees are setting aside, the number needs to be in 12% to 15% rang! e, assuming you start young and work to 65.

You might say that seems high, but there are some really important things to remember. One is that expected returns for the next 10 years – this is purely Vanguard's opinion – are the low side vs. historical norms. We know roughly what bonds will return, and on the equity side, based on valuations, we come out lower than normal – the 6-9% range, a bit lower than normal. A balanced portfolio will give a little less return than the last 30 years.

The second factor is that people living longer. If you're 65 today, you have a 50% probability live to 90. Many people are going to spend almost as much time in retirement as they did working. And without a hefty amount saved, that gets tough. I presume Social Security will get fixed – it will not take a lot to take system to get reasonably strong for the next 50 years. It won't be politically fun, but can get done. The other option is to assume you're going to work a little longer. No one wants to address that head-on, but when Social Security was created, it was based on retirement age of 65, which was the expected lifespan. People expected to work until they died. The whole idea of retirement is something new in the last 50 years.

Q: Do you see much of Jack Bogle these days?

A: I see him periodically. He still keeps an office on the campus. I see him most frequently in the galley at lunchtime. But he's out doing a lot of writing and speeches. I see (former Vanguard CEO) Jack Brennan fairly frequently. He keeps an office here, he's very busy, doing a lot of work on non-profits corporate boards. He's still available for advice. We share a couple of similar passions: We're both very active in United Way, and we're both very interested in education. I taught first-year Latin – the Jesuits got me started in Rochester, N.Y., and I kept up with it and took ancient Greek in college. I'm a huge believer in the liberal arts. It's great preparation for the real world and gives you a broade! r perspec! tive on live. I went to business school at Wharton, but often find myself looking back at my undergrad and high-school background.

Q: Does Vanguard have any plans for fundamental indexes – i.e., equal-weighted, dividend-weighted, funds?

A: The short answer is no. We don't consider that indexing -- we consider it active management. For many traditional active managers, the big source of their returns are coming from those strategies. Fundamental indexing does it more on an automated basis. There's nothing wrong with the concept, if it's expressed as an active bet, but it's incorrect to say it's a substitute for indexing. It's expressing a bet against the market in one way, shape, or another.

I think that there's way too much product proliferation today, people equate proliferation with innovation, and that's not correct. They're taking the concept of indexing, slicing it thinner and thinner, and that's not good for investors. The real frontiers are around helping people put together building blocks to create diversified portfolio.

Q: Vanguard has been actively courting the adviser business. What percentage of your business is driven by advisers these days, and are there any drawbacks to that?

Probably 30% of our business is adviser-based, which makes us a big player in that market. All we're trying to do is take the low-cost message and say, it matters to your clients, too. We don't see a lot of drawbacks to that. We're not in the payment-for-distribution model, we're only in the fee-based model, and that base is growing rapidly. We love dealing with clients directly, we love dealing with clients through 401(k)s, and we love dealing with clients through advisers, where the goals and needs align.

Weyerhaeuser a Top Socially Responsible Dividend Stock

Weyerhaeuser (WY) has been named a Top 25 Socially Responsible Dividend Stock by Dividend Channel, signifying a stock with above-average ”DividendRank” statistics including a strong 3.1% yield, as well as being recognized by prominent asset managers as being a socially responsible investment, through analysis of social and environmental criteria.

Environmental criteria include considerations like the environmental impact of the company’s products and services, as well as the company’s efficiency in terms of its use of energy and resources. Social criteria include elements such as human rights, child labor, corporate diversity, and the company’s impact on society — for instance, taken into consideration would be business activities tied to weapons, gambling, tobacco, and alcohol.

According to the ETF Finder at ETF Channel, Weyerhaeuser Co. is a member of the iShares MSCI KLD 400 Social Index Fund ETF (DSI), making up 0.25% of the underlying holdings of the fund, which owns $861,262 worth of WY shares.

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Top 25 Socially Responsible Dividend Stocks — Income To Feel Good About »

 The annualized dividend paid by Weyerhaeuser Co. is $0.88/share, currently paid in quarterly installments, and its most recent dividend ex-date was on 05/07/2014. Below is a long-term dividend history chart for WY, which the DividendRank report stressed as being of key importance. Indeed, studying a company’s past dividend history can be of good help in judging whether the most recent dividend is likely to continue.

WY operates in the REITs sector, among companies like Simon Property Group, Inc. (SPG), and Public Storage (PSA).

Reports: Ford dumping Microsoft for BlackBerry

Ford is ditching Microsoft and going with a unit of BlackBerry for the software underlying its cars' Sync infotainment systems, says an industry source who asked not to be identified because they are not authorized to speak publicly about the move.

The next generation of the system, which allows people to control their smartphones and other devices by voice in the car, likely will be based on software from BlackBerry's QNX automotive unit.

A Ford statement did not confirm or deny the switch, saying: "Ford works with a variety of partners and suppliers to develop and continuously improve our in-car connectivity systems for customers. We do not discuss details of our work with others or speculate on future products for competitive reasons."

The move to QNX could save money over Ford's costs for its Microsoft licensing agreement. But it will also add more flexibility and speed for the next generation of Sync in the highly competitive in-car infotainment space.

QNX provides the base code for many different automakers — the automakers themselves then build their infotainment on it to meet their own needs and design goals.

Sync, and the touch-screen and voice system upgrade called MyFord Touch, has run into complaints from consumers, including that it didn't understand voice commands, was too complex, that the screen icons were too small, the view options too confusing, and more. That has led to a drop in Ford's overall quality scores in various industry surveys.

QNX would represent a major shift. Ford ballyhooed its original linkup with Microsoft when the Sync system rolled out, with CEO Alan Mulally going to the Consumer Electronics Show — the mega-trade show — to show it off.

While QNX may not be a household name, the company acquired by BlackBerry several years ago is a top-level auto supplier, with its software powering electronics systems for many major automakers.