StockbrokerPro.com NOTESÖTuesday, May 13, 2003

-      There are some analysts saying that we can now expect stocks to go up 7% per year. Where do they get this number? We don't know what will happen this afternoon, let alone years to come. That's like global warmingÖjeezÖthis winter was brutal, this spring IS brutalÖwhere are the global warming prophets now? (I'm sure they'll be back in our faces come the first ninety degree day). The point is, it's tough to say with any surety what the weather or markets will do for years to come. The market will do what it's going to do. What we have to do is respond to it and take best advantage of the opportunities it gives us.

-      In Investors Business Daily 512/03:

"Aldous Huxley's notion that monkeys with typewriters could pound out Shakespeare given enough time was tested by England's Plymouth University. Six monkeys given a computer for a month produced five pages of mostly S'sóand a keyboard covered in feces and urine."

I imagine that the monkeys are now writing code at Microsoft, and those illustrious professors are now Wall Street economists and market strategists. Amazing!

-      Investment professionals should be taking advantage of the difficult investing environment (as if it is ever easy) by firming up their current client relationships. The better you serve your clients, the better the opportunity to grow your business. This isnt a prophesy, it's a cold, hard fact. Unfortunately, it's emotionally difficult to put one's professional ego on the line when things are tough. However, it's in tough times that one truly earns his or her stripes as a professional. NOW is THE best time to grow an investment business. The enemy in doing so lies in your own head. It's that little voice you hear giving you every excuse imaginable on why it is so difficult out there. Defeat that voice and you will succeed beyond your wildest imagination. Go to your current clients and marry them!!! Understand everything they are going through. Explore their fears and desires. Explore the financial events that they will be experiencing in the years to come (i.e., retirement, kids' education, inheritance, selling a business, Treasuries and CD's maturing, etc.). Do the discovery of your clients' total financial pictures. Solve their problems and address their concerns. This is not rocket science.

-      With almost all of the S&P having reported their first-quarter results, the year-over-year rise in earnings came in at 14.7%. Not bad! Barron's points out that the overall S&P numbers got a big boost from energy companies, whose profits grew by more than 200% over the prior year thanks to rising oil and natural gas prices (which have already begun to come down). Plus you have international companies getting an earnings boost from the sinking dollar. Net-net, this does not look like a booming-economy-kind of earnings recovery, nor one that is trend setting. Be careful out there. Maybe it's best to take some of your trading profits produced by this latest rally off the table.

-      The Asian SARS problem has its plus and minuses (I'm speaking purely from an economic standpointÖclearly any death is tragic). On the minus side, if it spirals out of control it could cause a meltdown of several Asian economies, and hence significantly effect the global economy. On the plus side, it is causing the Chinese people to rise up to their government and demand costly benefits which will make them less competitive; and it's causing more and more American CEO's to question their decision to export millions of American jobs overseas.

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From broker coach, David McKee [(603)598-3794; www.simpleintellection.com]:

Some feel that when I asked the question in the last NOTES: "Have you ever felt at some level you knew everything?" and answered "You do." That I was grossly exaggerating. I understand that feeling. ButÖ

When you look at something like a difficult client situation, or an unknown, which is to say, a situation that you don't know how to resolve, you will typically monitor and note the questions that come up. Questions are the last observable phenomena prior to knowing. Many of us confound ourselves by generating more and more questions, which removes us further from the resolution, or "knowing."

Opinions, or statements lead you no further toward resolution. You could say that they are your mind's attempt at keeping you diminished. The sensation your mind receives when you are angry, at a loss, or confounded, is its currency.

I invite you to send any questions you wish to ask (keeping it narrowed to your work) regarding the above (email: alidade@tellink.net).

How does your mind function? You know better than me. All it requires is some active observation.

Next week: Observation is not a passive activity; and there are actions which provide definitive outcomes.

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