A couple years ago, Jobs had a liver transplant and before that, he was treated for pancreas cancer. Apple was down 6.4% on the Frankfurt stock exchange today (Monday).

Mr. BHARARA said: “Todays truly historic settlement with the estate of Jeffry Picower is a game-changer for Madoffs victims. By returning every penny of the $7.2 billion her late husband received from BLMIS to help those who have suffered most, Barbara Picower has done the right thing. We will continue to work tirelessly with our partners from SIPC, the SIPA Trustee, the FBI, the IRS, and the U.S. Marshals Service to track down any and all proceeds of Madoffs Ponzi scheme and return them to victims.”

SIPC Chairman ORLAN JOHNSON said: “Since the discovery of the Madoff fraud, the United States Attorney, as well as the Trustee, Mr. Picard, his counsel, represented here by Mr. Sheehan, and SIPC personnel have worked relentlessly on the Madoff case. They have committed constant time, energy, and resources to benefit the victims of that fraud. The settlement announced today is an extraordinary achievement by all concerned. More than $7 billion dollars will be distributed to the victims. We will seek to distribute these proceeds as quickly as possible. This is by far the largest asset settlement in the 40 year history of SIPC. The result we see today shows that SIPC and the Securities Investor Protection Act can meet the challenges they face. Prior to today, SIPC had already advanced over $760 million to the Madoff victims. SIPC has also provided the financial wherewithal to conduct the research, investigation, and legal proceedings that led to this recovery, and, I am sure,
will lead to other recoveries in the future.”

SIPA Trustee IRVING PICARD said: “The importance of this settlement cannot be overstated, as it shows significant progress in our efforts to assemble the largest Customer Fund possible. Every penny of this $7.2 billion settlement will be distributed to BLMIS customers with valid claims.”

FBI Assistant Director-in-Charge JANICE K. FEDARCYK said: “Among the thousands of investors in the Bernard Madoff scheme were individuals so taken in by his confidence game that they invested the bulk of their net worth with him. The unprecedented settlement announced today means people who two years ago faced the devastating prospect of losing everything now stand to recover a significant portion of their investment.”

IRS Special Agent-in-Charge CHARLES R. PINE said: “IRS Criminal Investigation has a unique role in Ponzi scheme related investigations. Our Special Agents come to the table with specialized talent and the ability to pour through transactional records, such as bank and brokerage account statements, and trace illegally earned income to other assets, such as cars, real estate, jewelry, and other highly valued items. IRS Criminal Investigators and its law enforcement partners will continue to work diligently in recovering assets to their rightful owners in illegal financial schemes.”

According to the Stipulation and Order of Settlement, and accompanying civil forfeiture Complaint, filed in Manhattan federal court today:

The investment advisory business of BLMIS was operated as a massive Ponzi scheme from at least as early as the 1980s, defrauding investors of billions of dollars. Rather than use client funds to invest in securities, as promised, BLMIS diverted those funds to (a) pay other clients redemption requests; (b) fund transactions to disguise BLMISs fraud; and (c) enrich Madoff, his family, and his associates. In order to support the lie that BLMIS was operating a legitimate investment advisory business, BLMIS created and disseminated fictitious account statements that, among other things, showed trades that never actually took place. During the course of the fraud, MADOFFs clients lost approximately $20 billion in funds they invested with BLMIS.

Since at least the late 1970s, JEFFRY M. PICOWER was an investor in BLMIS, holding an account in his own name and controlling accounts held by various individuals and entities. Over the course of his 30-plus year relationship with BLMIS, PICOWER withdrew a net total of $7,206,157,717 in profits from BLMIS. When MADOFF was arrested in December 2008 and his fraud was revealed, it became clear that PICOWER – like all of BLMISs investors who withdrew more money than they invested – had profited at the expense of more recent BLMIS investors.

PICOWER died in October 2009. In his will, PICOWER sought to establish a charitable foundation, which was to receive the overwhelming majority of his fortune, and continue his lifelong dedication to philanthropy and to funding medical research. In order to resolve potential civil claims by the Government against PICOWERs estate, and to enable the creation of the foundation called for in PICOWERs will, the estate, through PICOWERs widow BARBARA PICOWER, has agreed to give up the entire net total of any and all funds that PICOWER or any related entity received from BLMIS. The Settlement contains no finding or admission of fault against PICOWER, and his estate has claimed that neither PICOWER nor any of the related entities participating in the settlement had any involvement in, or knowledge of, MADOFFs fraud.

The United States Attorneys Office will use funds forfeited in the settlement announced today to compensate victims of MADOFFs fraud. Last week, in connection with a $625 million settlement involving the Office, the SIPA Trustee, and CARL SHAPIRO and his family, MR. BHARARA announced that the Department of Justice had appointed IRVING H. PICARD as Special Master to oversee the process of remission or mitigation under the forfeiture laws. PICARD is already serving as the court-appointed trustee for BLMIS under SIPA. Under the terms of todays settlement, and a related settlement submitted to the United States Bankruptcy Court for the Southern District of New York, PICARD will administer $5.0 billion of the funds being returned to Madoffs victims by the PICOWER estate through the SIPA liquidation proceedings. He also will administer the remaining approximately $2,206,157,717 through the Department of Justices remission or mitigation process.

Mr. BHARARA praised the work of SIPC and the SIPA Trustee. He also thanked the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation Division, the Securities and Exchange Commission, and the United States Marshals Service. Mr. BHARARA also thanked the U.S. Department of Labors Employee Benefits Security Administration and Office of the Inspector General for their work in this matter. Finally, he thanked the Department of Justices Asset Forfeiture and Money Laundering Section for their assistance.

This case was brought in coordination with President BARACK OBAMAs Financial Fraud Enforcement Task Force, on which Mr. BHARARA serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President OBAMA established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for
victims of financial crimes.

Assistant United States Attorneys LISA A. BARONI, JULIAN J. MOORE, BARBARA A. WARD, and MATTHEW L. SCHWARTZ are in charge of the case.

Many stocks sell below book value for numerous reasons. The industry or sector could fall out of favor, tax selling, and a bearish stock market are just a few examples. WallStreetNewsNetwork.com has turned up a list of over 25 stocks selling at or below book value, most of which have yields above 3.5%. One example is Telecom Italia S.p.A. (TI), the large Italian telecom company which provides fixed-line and mobile telecommunications, Internet, and media services throughout the country. The Italian government may be suffering but Italians are still making phone calls. The stock is trading at two thirds of book value and pays a yield of 3.5%. Earnings for the latest quarter were up over 207% on flat revenues. The stock trades at 15 times forward earnings.

Great Plains Energy Incorporated (GXP) is another discounted stock. This electric utility, which serves Missouri and Kansas, is selling at 87% of book value and sports a yield of 4.3%. Earnings for the latest quarter were up 67% on a 24% revenue increase. It sports a forward price to earnings ratio of 12.

The shares of Brandywine Realty Trust (BDN) are trading at 77% of book and yield 5.5%. This REIT owns office and industrial properties. The stock trades at 8.5 times forward earnings.

To see the complete list of the major high yield stocks trading below book value, which can be downloaded, sorted, and updated, go to WallStreetNewsNetwork.com. Fourteen of the stocks have yields above 5% and four provide yields over 7%.

Disclosure: Author did not own any of the above at the time the article was written.

By Stockerblog.com

1. Warren Buffett’s father was a republican congressman.

2. Warren Buffett is of Huguenot ancestry.

3. His first stock purchase was three shares of Cities Service Preferred purchased when he was eleven years old.

4. When he was fourteen years old, he filed his first tax return, which listed his watch and bicycle as a tax deduction of $35 for his paper route.

5. He was a capitalist at a very young age, not only delivering newspapers, but selling magazine subscriptions door-to-door, selling golf balls, and selling Coca-Cola (KO).

6. He owned a chain of pinball machines in various barber shops when he was fifteen years old.

7. In his high school yearbook, under his picture, it says ‘likes math; a future stock broker.’

8. He received his B.S. in Economics from the University of NebraskaLincoln when he was only 19 years old.

9. He paid $31,500 for the Omaha house he lives in today (although he bought it 52 years ago).

10. He owns a house in Laguna Beach, California

If you want to see a list of all the high yield stocks that Warren Buffett has invested in through Berkshire Hathaway, go to WallStreetNewsNetwork.com.

Stay tuned for more Buffett trivia.

Incoming search terms:

• buffett warren $31500 omaha ne 68102

The FTD has become a hot topic; something that many investors track and trust as an indication that the overall market (as represented by the major market averages) has bottomed. We too track accumulation and distribution in the major averages and the FTD plays a role in our own risk model and market opinion.

As I pointed out in my most recent commentary (earlier today):

Even in the absence of a Follow-through Day (FTD) in the major averages, our Risk Model flashed a buy signal as of yesterday’s close We have been witnessing underlying strength in individual names for days. Going into today (Wednesday), we were already significantly invested in 24 names. With many stock set-ups working recently and the Risk Model on buy, it looks as if a FTD is imminent. Todays market action and how we close will be interesting as well as important to watch.

The market ended up closing strong however; volume fell short; clearly not enough to produce a valid FTD. I am encouraged however, by the above average volume on the NYSE and the NASDAQ Composite Indexes. Most encouraging has been the price action of individual names and that of the Russell 2000 and Value Line (geometric) Indexes.

If this market has indeed bottomed, a valid FTD will present itself relatively soon. Of course, it is not only possible that, in the absence of a FTD the market could reverse course and head back down, but this can and often does happen even after a FTD occurs. The key is to track how stocks in general behave, and if there is distribution in the face of what appears to be accumulation in the major averages around the time leaders are emerging.

Even after a FTD, its important to watch for distribution in the days going forward; distribution right on the heels of a FTD is a very negative sign. The coming days will be important to watch as we learn whether or not our pre-FTD entry turns out to be a blessing or a trap.

As always, we will maintain stop-loss levels and let the action of our portfolio be the final judge.

We are currently long the following 26 stocks: AIMC, ALSK, ARLP, CML, CLF, CPY, CSTR, DXPE, FELE, H, JCP, KNOL, LFUS, LULU, M, NEWP, NNBR, PKOH, QCOM, ROLL, SBGI, SNCR, TDSC, TWIN, TZOO and WYNN.

Mark Minervini

Many stocks sell below book value for numerous reasons. The industry or sector could fall out of favor, tax selling, and a bearish stock market are just a few examples. WallStreetNewsNetwork.com has turned up a list of over 25 stocks selling at or below book value, most of which have yields above 3.5%. One example is Telecom Italia S.p.A. (TI), the large Italian telecom company which provides fixed-line and mobile telecommunications, Internet, and media services throughout the country. The Italian government may be suffering but Italians are still making phone calls. The stock is trading at two thirds of book value and pays a yield of 3.5%. Earnings for the latest quarter were up over 207% on flat revenues. The stock trades at 15 times forward earnings.

Great Plains Energy Incorporated (GXP) is another discounted stock. This electric utility, which serves Missouri and Kansas, is selling at 87% of book value and sports a yield of 4.3%. Earnings for the latest quarter were up 67% on a 24% revenue increase. It sports a forward price to earnings ratio of 12.

The shares of Brandywine Realty Trust (BDN) are trading at 77% of book and yield 5.5%. This REIT owns office and industrial properties. The stock trades at 8.5 times forward earnings.

To see the complete list of the major high yield stocks trading below book value, which can be downloaded, sorted, and updated, go to WallStreetNewsNetwork.com. Fourteen of the stocks have yields above 5% and four provide yields over 7%.

Disclosure: Author did not own any of the above at the time the article was written.

By Stockerblog.com

If you want to get ready for travel during the Christmas season, you might want to check out the following:

Don’t Touch My Junk! Hands Off! T-Shirt

Lead-lined underwear

Don’t Touch My Junk TSA Pat Down Airport Pinback Button Badge

The book I Might As Well Be Naked: How to Survive Airport Screening With Your Clothes On

By the way, a friend told me about a possible money making idea. Apparently, there is some type of equipment that if located within the vicinity of the Backscatter X-ray machines, can pick up the signal of the images that those machines generate. (I haven’t yet verified this, but maybe one of my readers can find a link to such a device.) So someone sits in their car at the airport parking lot with one of those devices, then runs the X-ray image through Photoshop, converts it from a negative to a positive, emails the picture to a co-worker at the location that the passenger will be arriving, the co-worker prints it out on glossy paper, stands outside the luggage area, and sells the nude picture of the passenger for $20 as they exit so the traveler can have it as a personal souvenir of the travel experience, similar to what they do at the amusement parks. Any entrepreneurs out there that want to make some money during the Christmas travel season?

Ken Fisher Interview Part 4
Please note: Interview took place on Wednesday, October 27, 2010

Stockerblog: You discuss in your new book the new term, or relatively new term, ‘behavior finance,’ and how the brain works. Can you just describe what behavior finance is and how it applies to investing?

Fisher: Effectively, are brains are hardwired to engage in certain activities that are based on evolution. The people that exist today are descendants of those who were successful in that environment, and the people who weren’t successful in that environment didn’t have descendants. We have are brains programmed to deal with certain kinds of things, but capital markets are very different compared to those types of things, and are brains aren’t really set up to deal with that. So there are all kinds of things we do naturally that work really well in either or both of the hunter / gatherer world or more primitive agricultural world, but don’t relate to capital markets.

So for example, a standard feature, if you are out in the woods by a campfire, and you hear a loud noise, you turn and focus on the noise. But the way capital markets work, when you turn and focus on something, something hits you in the back of the head. The best procedure when you hear a loud noise in capital markets is to turn around and look away from it and see what’s coming at you, because the thing that’s coming at you is always a negative activity. That’s counter-intuitive to the way our minds work.

The brain has standard features that I talk about including confirmation bias, which is terribly basic to human tendency. You see evidence of things that confirm our prior biases, while not seeing or trying not to see the branching off things that contradict our prior biases. In that prior world that we evolved from, this was terribly important because it reinforced our propensity to keep trying. One of the things that’s unique about humans as animals, is our ‘trying’ function relative to what other animals do. We are tryers, tryers from the get-go. That’s partly because confirmation bias makes us see the evidence of things that confirm our prior biases and contradict the ones that don’t.

So when we have a mistake, we look at our mistake and think it is bad luck, and we keep going. The effect of that is it feeds ironically into the propensity to hang onto myths. Once a cultural myth evolves, that fit our prior bias, we look for evidence that confirms it and deny evidence that denies it and we keep hanging on to it. The whole book Debunkery has a foundation of confirmation bias under it.

There are all kings of other tendencies people have that are out of behavioral finance, that in the last thirty years, behavioral finance has uncovered, which is the tendency to move and react to new things and stimulus and forgot about longer term things. Anything that happens recently you think of as massively more important than anything that happened five or ten years ago, even though they all happened in the past.

So for example, this is the tendency that you see in investors right here who are trying to fight the last war, even though almost always the last war has come back or something else comes back to you again. In fact, the nature of markets is that when everybody tries to fight the last war, it’s not 100% true but it pretty much guarantees that the last war will come back on you. But with every darn cycle, people keep looking backward. It’s just natural. So behavioral finance is really just this process that looks through ‘where do our brains blindside us,’ and how are we not set up, tied to where are brains were wired for a different purpose once upon a time, and how are brains are not set up to deal with capital markets.

End of Part 4

Part five will cover Fisher’s opinion pf presidential and congressional term cycles on the stock market. Stay tuned.

The Debunkery book is available at Amazon.

Ken Fisher obviously doesn’t give individual stock recommendations in his interviews, but some stocks he likes that were mentioned in his recent Forbes columns, including high dividend stocks, are available in the form of a free Excel list at WallStreetNewsNetwork.com.

Part 1 of this interview is available HERE.

Part 2 of this interview is available HERE.

Part 3 of this interview is available HERE.

By Fred Fuld at Stockerblog.com

Disclosure: Interviewer doesn’t own any of the stocks mentioned in this interview series at the time the article was written.

Copyright 2010. All rights reserved. Reproduction of this interview prohibited without permission. All opinions are those of Ken Fisher, and do not represent the opinions of Stockerblog.com or the interviewer. Neither Stockerblog nor the interviewer nor the interviewee are rendering tax, legal, or investment advice in this interview. If you want tax, legal, or investment advice, contact the appropriate professional.

Ken Fisher Interview Part 3
Please note: Interview took place on Wednesday, October 27, 2010

Stockerblog: Let’s talk about Bunk number 11, A Good Con Artist is Hard to Spot. As a follow-up to your How to Smell a Rat book from last year, do you think things have change in terms of the government taking a look at possible rats, or individual investors being more alert and aware, or do you think nothing has really changed?

Fisher: I think there’s been a little bit of change on the part of the government but only a little bit, and let me address that. First, while my book How to Smell a Rat made the best sellers list, for the most part in today’s world, book sales are down anyway. You can make the New York Times best sellers list if your book sells 35,000 copies in the first year, which isn’t that much. My Only Three Questions book had to sell 125,000 copies in 2007 to do that. Today you can do it for about 35,000 copies. So that tells you 35,000 people bought the book, probably half of them never even opened it, and gave it to somebody as a gift or whatever, and people got it as a gift, and so on. So my point is not that many people as a percent of the investor world actually gets past the basic methodology.

There’s this notion that nobody could have figured out Bernard Madoff was Bernard Madoff. Bernard Madoff, as I wrote about it in the book, had ALL the classic signs of the con artist, every single one, straight on down the list, and the most telling about that was that he took custody. Now what the SEC is starting to do, which is very good in the aftermath of Madoff and as I prescribed in that book, not that they listen to me, they understand this, the SEC has accelerated their inspections of those who take custody and put more emphasis on them and less emphasis on those that don’t take custody, because they understand that this kind of thing happens 100% of the time where somebody’s taking custody. So if you are looking for Bernard Madoff’s, you look among the realm of those that take custody.

The dilemma unfortunately, is that you’ve got a lot of people that operate in realms that don’t require an SEC registration, and unless somebody complains about them, they’re not going to see them, smaller hedge funds and what have you. I think Bernard Madoffs will be harder to do at that size. If Madoff hadn’t existed, Stanford would have been the biggest one in history. Both of these were lots and lots of much smaller ones, and that world is still out there. That world, that I wrote about in How to Smell a Rat, every time you have a bear market, Ponzi scheme operators get uncovered. It’s kind of the Warren Buffett line that “you don’t know who’s swimming naked until the tide goes out.”

Whenever you have a bear market and sentiment falls drastically, Ponzi scheme operators that are dependent on raising new money from optimistic people to pay off redemptions, which is the game of the Ponzi operator, they can’t do it so they get uncovered for the first time. And guys that have successfully Ponzi schemed through a whole market, they get uncovered in a bear market and the consequences of a bear market. So the big ones for this cycle have been done. But that doesn’t mean there aren’t people out that are still doing it. There will be and the next cycle around there will be another raid.

Unfortunately, I don’t believe that this stuff ever goes away. It’s a little like the notion of mildew in a moist environment; you may clean it off here and clean it off there but once you wait, it just comes back. Or maybe Neil Young’s line in a song he did a long time ago that “rust never sleeps.”

End of Part 3

The Debunkery book is available at Amazon.

Ken Fisher obviously doesn’t give individual stock recommendations in his interviews, but some stocks he likes that were mentioned in his recent Forbes columns, including high dividend stocks, are available in the form of a free Excel list at WallStreetNewsNetwork.com.

Part 1 of this interview is available HERE.

Part 2 of this interview is available HERE.

By Fred Fuld at Stockerblog.com

Disclosure: Interviewer doesn’t own any of the stocks mentioned in this interview series at the time the article was written.

Copyright 2010. All rights reserved. Reproduction of this interview prohibited without permission. All opinions are those of Ken Fisher, and do not represent the opinions of Stockerblog.com or the interviewer. Neither Stockerblog nor the interviewer nor the interviewee are rendering tax, legal, or investment advice in this interview. If you want tax, legal, or investment advice, contact the appropriate professional.

In last months dividend income update, I said the following:

We might add more to our BNS position, maybe another $50 or $100 if we can but even if we dont, I bet our dividend income will increase again regardless of what Mr. Market does. I look forward to sharing that with you.

Well, Mr. Market had a decent run until today, but regardless of how Mr. Market feels today were happy – because our stocks are paying dividends and our dividends are buying more stock. Our dividend income has moved up.

This month alone, we had or will have in a matter of days, the following Canadian companies pay us: Bank of Nova Scotia, BCE, CIBC, TransAlta and TransCanada. Thats in addition to RioCan and H&R REITs who pay us every month

My post today reminds me what Tom Connolly has posted on his site, DividendGrowth.ca:

First you have to know about dividend growth investing and understand how dividend growth builds wealth. Second you have to believe it works. Third you have to resist the temptation of ‘story’ stocks, to control your behaviour and finally you need the patience to execute the strategy (to wait for the value buy price, and then wait for the dividends to grow). Nothing spectacular will happen in the short term. Good luck.

My portfolio doesnt have what many DIY investors might consider the best of the best dividend-payers, but I think its a decent start. Im working on it. Its a journey, not a get rich scheme I remind myself. Dividend investing is part of my retirement strategy, not the full-meal deal. I’ll make mistakes, and I’ll move on. I’ll learn from them…

Some stocks like TransAlta (TA) have very high payout ratios and run the slight risk of cutting dividends by a few cents if earnings dont keep pace. Until that happens, dividends are paid. Other stocks like Sun Life have been beaten up since the recession started and are having a hard time rebounding amongst some sector peers (such as Great-West Life Co.). In the meantime, dividends are paid. Until major dividend cuts happen we need to hold the line. I need to remind myself there will always be threats to the system; stories of better performers, analysts and skeptics that write-off many companies when signs financial trouble or takeovers arise. You shouldnt own those because you should own these they say. Thats fine. I wont sell anything until I’ve been handed a very significant reason to do so. If nothing more, risks of TA and SLF remind me that my small basket of stocks should be further diversified, not sold. My small basket needs to be more like a full shopping cart, and unlike a trip to WalMart on a weekend, I enjoy this type of shopping. Buying Emera (EMA), Fortis (FTS), and Crescent Point Energy (CPG) are some fine examples of shiny products I can see down my shopping aisle. We’ll save over the many months that follow and try to buy those payers when the time is right. Until the sky gets very dark, were going to enjoy our $4,200+ in dividend income this year, but only for a bit, because its quickly reinvested to buy more stock.

This year’s stars could be next year’s duds but in the end, dividends never lie. Companies can either to afford to pay their shareholders or they can’t. As long as my companies consistently pay, I think it pays to consistently own them. Overall, we just need to stick to the plan; buy and hold established companies that have a history of paying dividends. Simple plan, extraordinary results over time.

Cheers!
Financial Cents