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Show The Salt Lake Tribune E2 BUSINESS Sunday, November10, 2002 What Is This Thing Called The Motley Fool? . J The Motley Fool Math Matters beenwidthat to determine a npany value, | should check the relaonship of current assets t nt lables. With the lapse of Enron, what numbers should n financial stalements? current assets by its current habihties, you get its “current ratio,” whichtells youif it bas sufficient short-termassets (such as cash and expected payments) to coverits short School became sopopular over the past years that the Vanguard 500Index fund (bused on the S&P 500, Standard & Poor's index of ing the title away fromFidelity Invest guard 500 has been surpassed. Blame the economy andthe stock market's long bearish season. The largest mutual fund is now the Pimco Total Return fund, which focuses on government bonds. As of the end of September, Pimco sported $64.6 bil lion inassets, compared to $62.8 bil lion for the Vanguard 500. This shift at the topreflects widespread shifts in the market. The Investment Company Institute, the mutual fund industry’s trade organization, reported that in poured into bond funds, while $56 billion was yanked out ofstock funds. It happensall the time. When the renter’s insurance. It can protect Youdecide the total dollar value of policies will pay you enoughto cover the depreciated Value of various items at the timeof loss, while others will cover replacement costs. Thelatter is Renter's insurance cancost less than $100per year. Compared with the loses you might incur, it can be well worthit . ay opping customers somethingdifferent, somethingthat’s not going to be available at the m “Wehave Talk unique merchandise,” said Nancy Paley, ownerof Ed. wardDorian, upscale women's bou: who are actually optimistic. Theseretailers havehadthegood fortune and smarts tiques in Denver and Birmingham, Mich. “They're to target the right buying becauseit’s nichemarkets, different. open stores in the fun.” right locations and modify their busi nesses to adapt to custom Paleysaid busi ness at bothof her economy andthe Sept. 11 terror attacks : Five licteowners andman- percentloss in just 18 days, — W $438 million to $776 million. In July, ** President Bush also vowed to increase -~ SECfunding. . te on which 10- or 20- or 30-year period you're investing im. Overthe past 15 years, for example. bond prices have appreciated by an annual average of II percent, compared to about 9 per- Lloyd Fink, Escondido, Calif. year periods.) Ofcourse, it all depends But the White House is now urging Fool Responds: Ouch. You were likely focusing on just one of two important questions:Is this a Congress toprovide the agency with just $568 million, 27 percent less than cent for the S&P 500 (solid numbers in both cases). high-quality company?Is the stock priced right? A company may be cash-tich, debt-free, rapidly growing to bonds, learn more about them at and have many sustainable competitive advantages. But if it’s still priced dent and Congress aren't quickly allocating somebig bucksto the SEC. In Before you join the throng rushing “effectiveness will be seriously compromised” unlessit gets more money. too steeply, you shouldn’t buy. Also, its bard tounderstand wi the presi- 2001, national defense discretionary be wary, of stock gurus on TV. You'll www.bondsoaline.com or www.investinginbonds.com. Asinter- est rates rise, bond prices fall not an unlikely scenario in the coming usually have no idea what their investment philosophy or overall track record is. Worse still, they may profit if others buy the stocks they already own. spending totaled an estimated $292 billion, some 16 percentof our national budget. That’s 376 times more than the proposed $776million for the SEC. Recently, President Bush signed an a -ase inmilitary spending of more Doyou have an embarrassing lesson learned the hard way? Boil it down to 100 words (or less) and send it to The id MotleyFool c/o My Dumbest Investment. Got one that worked? Submit to My Smartest Investment. If we print yours, you'll wina Fool's cap! al defense is important — but so is our financial defense. markets and financial information we 7 can trust. If the SEC doesn’t have the + teeth it needs to enforce tougher rules _ and higher standards, then we're much |* less likely to see real improvement in corporate behavior. LAST WEEK’S TRIVIA ANSWER Based in Dallas, three folks founded me in 1907with $25,000,aiming to sell fine thes and offer top-notch service. An old tenet of mine: “i's never a good sale for (me) unless its a good buy for the customer.” | operate 35 stores bearing my name or the Bergdorf Goodman name, and a dozen clearree conten My Sscones reneeFeng neon segs Eo | este eee es Ne ‘Spade accessories Products cosmetics. I'm testing a small-store concept ce Woe nie elena catalogs, among many others. Who am I? (Answer: Neiman Marcus) It’s well ahead oflast holiday seasonto be strong. ind she’s expecting the Men's clothing retailers can be inasimilar position. At hundred dollars, forexample but co-owner Tom Pierce said business has been goodso far this season. little bit more promoting,” Santo said, explaining that Hubba Hubbahasbeen emailing customersto offer you find ina departmentstore themtoparties. And they have _area, and business isn’t guar- about small businessfor The * or online,” he said. Paley andPierce said buildings relationship with customers has also been part of their strategy. Paley talks to the beenresponding. anteed. Associated Press. “We'renotoffering things women whoare inherstore, helping themfind outfits for a big date or party, while Pierce themdiscountsandinvite Withthe holidays ap- proaching, “I think people seem readyto have a good time,” she said. At Stone Mountain General Store, a gift shop in clusterof more than60 boutiques and said, “Wethank them every time they leave the store, with restaurants in Stone Mountain, Ga., near Atlanta, owner or without packagesin their hands.” Pierce said his store also Jane Phillips has seen custom- makesit a point of not promot ing, or discounting,as otherre- visitors, shy awayfrom the bigger-ticket items. But the tailers do, so his customers can atrueprice. At Hubba Hubba, a ‘0 it has been insulated fromconsumers’reluctance to usinessis good, althou; Joyce Rosenberg writes STOCK MARKETS GOT YOU DOWNAND INSECURE? INVESTIN REAL ESTATE AND RECEIVE LONG TERM SECURITY AT LONG TERM YIELDS. CHECK OUT THESE RETURNS! 10.5% = buy. rycenarANS plus. Stone Mountain Village 5 Months 12 Months Michael Kehoe Ltd.,a Burling- scribed shoppers as “beinga _gofordining and entertain- is a destination,a place people FIRST NATIONAL INVESTMENTCO. LLC sociated Press talked about the pastyear, their prospects for the holidays and thestrategies can be high ton, Vt., store, the price points little bit more cautious” given the events of the past year. ment. Theyarrive in the mood to spend,to treat themselves, giving the General Store an ad- anid597-4145 (call 24 hrs. a day) APR RATES, MIN. INVESTMENT REQUIRED, OFFER /AILABLE UNTIL NOVEMBER30, 2002 cashmere sweaters selling for several managerJennifer Santo de- “It’s up to us to work hard to keep our customers,” she _ said : L = store is stocked with merchan dise at a varietyofprice tique on yarereaeioaiee store is in a highly competitive ers, whoincludelocal residents as wellas out-of-town believe they are being charged moderate-priced women’s bou- vantagethata similar store on a downtown streetor strip mall might nothave. ButPhillips also noted, her agers interviewed by The As- As result, “we've done a which aren't limited to the retail trade that havehelped FOR MORE INFORMATION them succeed. The Cat's Meow, a specialty toy storein Cedar Rapids, lowa, has seen somechangesin customers’ buying habits over the past year. Owner Kelli Biedenbachsai little mor vi they were a few years ago. “Rather than maybe buying things that aren't going to last or that kids are going to play with for oneseason, they want to buy something with a higherlevel of quality” that will hold children’s interest longer, Biedenbach said But Biedenbachalso said, “I think we'rehaving a better year this yearthan last year. We've done somethings that hadn't been donein the store VMhes in thepast to get our business going we've doneadditional lean advertising and we've launched a Website.” Likeothertoy retailers, The Cat's Meow expects to do most of its business during the fourth quarter. So far, Biedenbach reported, holiday busi ness has been strong, with many parents and grandpar. ents getting their shopping done early, The store, along with other toy retailers around the country, is still waiting for some of its merchandise to cone onalparts ate strife. labor ‘Thereis no shortageof clothing stores in this country, but independents whodowell ' seem to succeed by offering ~. the new law authorized. Sen. Paul Sarbanes, D-Md., wamed that the SEC's Write to Us! Send questions for Ask the Fool, Dumbest (or Smartest) 8 ° Investments (up to 100 words), and your Trivia entries to Fool@ fool.com or via regular mail c/o this newspaper, attn: The Motley «° Fool. Sorry; we can't provide individualfinancial advice. « ° eeeBYUNIVERSAL eeseecce Dist, Paes S¥spicaTe oe ccm cccccccccesccccccsscccccccsccssecsecscesssceeees ® ~ morecautious bya difficult Fortunately, the recently passed Sarbanes-Oxley Act boosts SEC funding from sank to $5 per share. (They're now around $20.) I ended up with a 45 you'll beenteredinto a drawingfor a nifty prize! N5 h R i] O SRA Ce IC, é efal é rs pt mis tl G Small stock started to drop and kept falling I bailed out at $75, and shareslater Know the answer? Send it to us with Foolish Trivia onthe top and see Write to Us proaches xi except for many indepen. dent storeowners about $135 each. The next day, the out that stocks outperform bonds in 82.4 percent ofall 10-year holding than 37 percent of my Ame rican owner/operators are women and minorities. Who am |? Got a question for the Fool? Send it Ap quale protection.Asit stands, the SEC is far outpaced by many companies’ legal coffers. sticks, too. | bought some shares for 95.4 percent for all 20-year holding periods, and 100 percent forall 30- ] my offerings. | use mor; than 3 million pounds of potatoes per day. My New Tastes Menu is Made for You. ly y spokesman’s shoes are size 14 1/2 and he helps sick kids. More muchbetter The Securities and. Exchange Cominvestors and maintain the erof the securities markets.” adequatefunding,it an > periods between 1871 and 2001. (It’s | have 30,000 restaurants in 121 countries, with about 13,000 in the United States. | serve more than 45 million people each day and employ 1.5 million. Moscow's Pushkin Square sports one of my busiest stores. Fortune Magazine named me No.1 for social responsibility. I'n busy cutting fat from property you want to insure. Some holiday > mission (SEC) aims “to and 2001, the average annual retumn. Name That Company youagainst theft of or damageto your personal property, cover someor all of your personal liability, and maybe evenpay for temporary housingif your apartmentis damaged. repidationis probably (McGraw-Hill, $29.95), between 1946. years. seececccccesccccccccccscesccces You should definitely consider the dominant emotion amongretailers as the show guest said that SanDisk looked good. It had landed a government contractfor military ID According to Jeremy Siegel's seminal “Stocksfor the Long Run’ www.sec.gov/answers/bonds.htm, July and August, $45billion was | rent an apartment. Do I need insurance? R.K.. Cincianati The SEC Fights for Funding Afew years ago,a financial TV tik in them, government bonds. He also points ment’s Magellan Fund. Now the Van www.better-investing.org and www.fool.com/school.htm. bir gi ool ais5 Boob Tube Advice for stocks was 11.6 percent, com mutual fund in Ame: over to WwwW.aaii.comvinybas, a eit wrongfor many. When stocks are at lows, that’s often. a good time to invest pared to 4.9 percent and 5.5 percent, respectively, for short- andlong-term 500premier American com. panies) became the competitive positionor valuation. de ally, you should examine a company from many different angles. crunching a lot of aumbers. To learn more about how to evaluate companies and invest, click 0 1 stocks, heading for bonds. That's the night move for some investors, but it’s invest in the stock market Index funds telling you nothing aboutits prof itability, long-term debt, growth rate Ms stock market sinks, urvestors flee We've long championedindex funds as a terrific way for most people to term obligations (such as payments and interest due). (The “quick ratio.” wries from cur which subtracts isn rent assets before div ing by current liabilities, 1s a bit more meaningful ) This is good to know,but it's just a uny piece of a company’s profile. 1g the truth tothe King or Queen. investing, and hopes you'll laugh all the way to the rpepscepepece The Fool Stocks vs. Bonds de a company’s or > “As You Like It”? The Motley Fooi tells the truth about Our Mission: To Inform, to Amuse, and to Help You Make Money dsicin, Lancaster, Pa. in Remember Shakespeare? 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