Bill Gates Still The Richest Man In The World

Microsoft founder Bill Gates is the richest person in America for the 14th year in a row, followed by investor Warren Buffett, according to Forbes magazine's latest list of the wealthiest Americans.

The pair's fortunes each grew by $6 billion in the past year, Forbes said today, with Gates' fortune $59 billion and Buffett $52 billion.

Buffett has pledged 85 per cent of his net worth to the Bill and Melinda Gates Foundation and family charities.

Casino magnate Sheldon Adelson ($28 billion), head of Las Vegas Sands Corp, and software tycoon Larry Ellison ($26 billion), chief executive of Oracle Corp, remain at No 3 and No 4 on the 25th annual ranking of 400 rich Americans, which now requires a minimum net worth of $1.3 billion for inclusion.

"The collective net worth of those listed on the 400 this year rose $290 billion to $1.54 trillion," Forbes said. "Despite market jitters, nearly half of the 45 new members come from hedge fund and private equity investments."

For the first time since 1989 there are no members of the Walton family, descendants of Wal-Mart Stores Inc founder Sam Walton, in the top 10. Four members - Jim, Christy, Robson and Alice - slipped to 12th and 15th place.

The Waltons were displaced by Google co-founders Sergey Brin and Larry Page, who came in at No 5 with fortunes of $18.5 billion, and brothers Charles and David Koch, who run Koch Industries, the world's second largest private company, and are each valued at $17 billion, earning them 9th place.

Investor Kirk Kerkorian was the biggest gainer on the list, his fortune rising by more than $9 billion in the past year to $18 billion. He debuted in the top 10 at No 7 - up from No 26 last year.

Michael Dell, chief executive of Dell Inc, the world's second-largest PC maker, was No 8 on the list with a fortune of $17.2 billion.

Of the top 400 richest Americans, Forbes said 270 were entirely self-made, 74 inherited their wealth and 39 are women. There were 82 American billionaires who did not make the list.

The youngest member, and new to the list, is 33-year-old hedge fund manager John Arnold, who came in at No 317 with a $1.5 billion wealth, while the oldest is 98-year-old John Simplot, valued at $3.6 billion and No 214 on the list.

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3 Stretegies To By-The-Number-Stock-Picking

Harry Domash

Stock picking is a situation in which an analyst or investor uses a systematic form of analysis to conclude that a particular stock will make a good investment and, therefore, should be added to his or her portfolio. The position can be either long or short and will depend on the analyst or investor's outlook for the particular stock's price.

Martin Zweig's no-nonsense approach made him a legend in the financial services industry. We duplicate his disciplined strategy and come up with 18 stocks. Unless you're a longtime investor, Martin Zweig is probably the most famous guru that you've never heard of. He doesn't get much attention these days. Although his name still appears on several mutual funds, he discontinued his Zweig Forecast newsletter several years ago. That's too bad, because the newsletter was ranked No. 1 for risk-adjusted returns over the 15 years that it was monitored by Hulbert Financial Digest.

But Zweig, who has a Ph.D. in finance, is well-known to market professionals for his disciplined approach to the market. He has examined the relationship betweenstock market action and just about every conceivable economic or market indicator. In fact, he's credited with inventing the put/call ratio market-sentiment indicator.

Zweig described the results of much of his research in his best-selling book, "Martin Zweig's Winning on Wall Street."

Much of the book covers Zweig's market-timing indicators, but he also details how he picks individual stocks. By all accounts, those strategies are worth your attention. According to Street Stories Market Wizards Index, Zweig's top-rated stocks returned 25%, on average, over the 19-year period from May 1976 to March 1995.

Zweig on stocks
As with the market in general, when it comes to picking individual stocks, Zweig goes strictly by the numbers. As he puts it, "I don't get involved in the product being produced. If a company can show nice consistent earnings, I don't care if it makes broomsticks or computer parts." Zweig doesn't spend much time examining financial statements or meeting with management. Instead, he focuses on three main criteria to pinpoint potential winners:

* A history of consistently strong sales and earnings growth

* A reasonable price

* Strong price action relative to the market

Zweig also pays close attention to insider trading. He eliminates candidates with significant insider selling and gives preference to stocks with insider buying. He avoids stocks that have recently disappointed the market and frowns on companies carrying high debt.

Zweig doesn't try to catch a stock at its low. Instead, he wants to see a stock prove itself by "performing well" relative to the market before he jumps in. Says Zweig, "buying on strength gives you an edge. You must pay a premium, but you increase the probability of being right."

I'll explain more as I describe my screen for finding stocks meeting Zweig's criteria. Let's start with sales and earnings growth, arguably Zweig's most important criteria.
Long-term growth
Zweig doesn't look for hot initial public offerings (IPOs) or instant wonders. He insists on a history of consistent growth in both sales and earnings going back four or five years. He considers 15% annual growth acceptable, but he seems to prefer higher. In his book, he gives numerous examples of stocks with 30% to 50% historical growth rates.

In my screen, I specified a 15% minimum for both 5-year average annual revenue (sales) and 5-year annual EPS growth. But I'm sure that Zweig wouldn't mind if you increased those minimums if you get too many hits.

* Screening Parameter: (5-year) Annual EPS Growth Rate >= 15%

* Screening Parameter: 5-Year Revenue Growth >= 15%

Recent growth
Zweig looks for consistent or accelerating growth. The most recent quarter's year-over-year EPS growth rate should be in the same ballpark as the long-term rate and, in the best case, higher. However, he's not dogmatic and is willing to cut the stock a little slack depending on conditions.

I required the most recent quarter's year-over-year EPS growth to be at least 75% of the long-term growth rate. However, I'm sure Zweig would want you to check further if the recent growth rate was near that minimum.

* Screening Parameter: EPS Growth Qtr vs. Qtr >= 0.75* (5-year) Annual EPS Growth

Revenue growth vs. EPS growth
While they won't track every quarter, Zweig wants to see stocks with revenue and EPS long-term growth rates in the same ballpark. Revenues growing faster than earnings signal declining profit margins, which often indicates that the company is cutting prices to ward off increasing competition. Conversely, earnings growth without corresponding revenue growth also spells trouble. It means that the earnings growth is coming more from cost-cutting than organic growth. If that's the case, eventually, the company will run out of places to cut costs, and earnings growth will slow.

I insured that the long-term revenue and EPS growth rates reasonably tracked each other by requiring each to be at least 75% of the other.

* Screening Parameter: (5-year) Annual EPS Growth Rate >= 0.75*5-Year Revenue Growth

* Screening Parameter: 5-Year Revenue Growth + 0.75* (5-year) Annual EPS Growth Rate

Maximum valuation
Zweig avoids overpriced stocks. He uses P/E to measure valuation, but his definition of overvalued depends on the market. In his examples, Zweig accepts fast-growing companies with P/Es as much as 50% higher than the overall market. Based on those examples, I use the S&P 500 average P/E to represent the market and reject stocks trading with P/Es more than 50% above the S&P.

* Screening Parameter: P/E Ratio: Current <= 1.5*S&P 500 Average P/E Ratio: Current Minimum valuation In Zweig's view, a stock's P/E can be too low as well as too high. He says that very low P/Es signal problems and generally means that investors are abandoning ship. But he doesn't spend much time worrying about the reasons. He says he's looking for "stable and reasonable growth," and he sees little chance of finding such stocks in the low P/E arena. In his book, Zweig advised shunning stocks with P/Es below 5. Since his maximum P/E varies with the market, I took liberties with his definition and used that same criterion for the minimum P/E. When he wrote the book, a 5 P/E equated to roughly 40% of the market average, which translates to 7 or so in the current market. If you want to be a Zweig purist, change the minimum P/E to a fixed value of 5. * Screening Parameter: P/E Ratio: Current >= 0.4*S&P 5000 Average P/E Ratio Current

Strong price action
Zweig wants to put the odds in his favor by homing in on stocks that are already showing strong price action relative to the market. He avoids stocks near their lows or in a clear downtrend. He prefers stocks that are "acting better than the market," but will accept stocks "acting at least as well as the market."

Relative strength measures a stock's performance compared to the overall market over a specified timeframe. Zweig didn't mention any particular timeframe, but, from his descriptions, I guessed that six months would work. A 50 relative strength indicates a stock performing about even with the market, so I used that as my minimum. Try increasing the minimum to 55 or 60 if you get too many hits.

* Screening Parameter: 6-month Relative Strength >= 50

Insider trading
Zweig prefers stocks with insider buying and, at the very least, minimal insider selling. For him, one insider selling is no big deal, but seven or eight insiders selling is bad. MSN Money's stock screener doesn't offer a parameter for number of insiders buying or selling.

I approximated Zweig's requirement by eliminating stocks where the number of shares sold by insiders exceeded the number bought.

* Screening Parameter: Net Insider Transactions >= 0

Zweig says it's best to avoid companies with high debt, because companies with high fixed costs will suffer more in a downturn.

Zweig doesn't define high and low debt specifically, and acceptable debt levels vary by industry. Since Zweig isn't adamant about low debt, I simply ruled out companies with debt/equity ratios higher than their industry average.

* Screening Parameter: Debt to Equity Ratio <= Industry Average Debt to Equity Ratio No bad surprises Zweig avoids stocks that have recently disappointed the market by reporting earnings below forecasts. He says that "academic studies have shown conclusively that when earnings are significantly below expectations, such stocks, on average, will underperform the market over the next one to two quarters." With that in mind, I screened out stocks with recent negative earnings surprises. * Screening Parameter: Recent Qtr Surprise % >= 0

My screen turned up 18 stocks in a wide variety of industries. It included everything from software makers and banks to oil and gas equipment suppliers to insurance brokers. You name it! There were five banks or savings & loans, but that was the only industry with multiple names.

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US Federal Reserve Cuts Key Interest Rates By Half

Information gradually streaming in reveals that following popular speculations that the Federal Reserve will cut interest rates at the conclusion of its policy meeting, currently underway, the federal reserve cut the target on a key short-term interest rate by a half of a percentage point, from 5.25% to 4.75%, further acknowledgment from the central bank that the mortgage meltdown plaguing Wall Street and Main Street could have a negative impact on the economy

The cut to the federal funds rate, the first since June 2003, was widely anticipated by investors and followed a surprise cut to the Fed's discount rate on Aug. 17. The only question was whether the Fed would lower the federal funds rate by 25 basis points or 50 basis points. (There are 100 basis points in a full percentage point.)

The federal funds rate, an overnight lending rate that banks charge each other, is important since it influences the amount of interest consumers must pay for various types of debt, such as credit cards, home equity lines of credit and auto loans. The rate cut should help some beleaguered home borrowers who are set to see monthly payments on adjustable rate mortgages rise later this year.

In its statement, the Fed said that "the tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally" and that the rate cut "is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time."

The Fed also cut its largely symbolic discount rate by a half of a percentage point to 5.25 percent. The central bank lowered the discount rate for the first time in four years, which is what banks pay to borrow directly from the Federal Reserve, by 50 basis points on Aug. 17

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How To Plan For A Mid-Career Change

The key to making a mid-career transition is to understand that you don't have to do it in one big step. By taking a number of small steps, you'll get where you want your professional life to be without causing an income gap or wreaking havoc on your personal life.

The Starting Points
Here are some sound ways you can approach a big career transition.

Hollywood gifts!

Explore your network. It may be that you respect your company, and a new line of work within it would provide the change you crave. If you like the way you and your fellow employees are treated, that's a primary asset you're not guaranteed to get elsewhere.

Volunteering to improve on the way things are done -- even outside of your current position -- is often said to be the surest route to promotion. You may be unduly busy for a time, but having a goal you're working towards can provide you a lot of energy.

Go forth and conquer. If your current job is sapping your enthusiasm for life, then quitting outright may seem like the only choice. And it can be the right choice, provided that you A) are in a position to get by in the short term without a steady income, and B) can use your connections to explore your desired line of work.

Expand your own expertise. Your current job requires its own refined knowledge and core skills. One approach is to seek work in an industry where these can be put to use. Identify the strengths your experience gives you, write a resume that speaks to these traits in a broader context, and explore fields where your skills can be put to good use.

Go to school and learn. Gaining entrance to a new line of work often requires a higher degree or certificate. Whether you want to become an engineer, investor, nurse or chef, earning a degree is the premium means of gaining a foothold in your desired industry. Fortunately, in today's internet savvy world, all manner of degrees are available from reputable online colleges and universities.

The Education Advantage

One enormous advantage of studying online is that you can build your own class and study schedule, so that you don't have to worry about commuting to campus, and allowing you to keep your current job.

Many online schools offer degree programs that let you work at an accelerated rate -- many online business programs, for instance, let you earn your MBA in as little as 10 months. If you're searching for a truly fresh start in a line of work with lots of upward mobility, then take the time to explore. Discover if the degree you need is available online and look at potential schools. You may be pleasantly surprised.

Whatever challenges your path to a new career may hold, there are resources available to help you meet them. Don't hold back -- think actively about what's best for you. Get started toward your future today.

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