Georges Yared
- http://www.georgesyared.com

I began my career at Dean Witter Reynolds (now, Morgan Stanley) in 1979 as a broker. In the ensuing 11 years I went from a branch manager, to Midwest regional manager in charge of 1,200 broker in 11 states, to president and CEO of Dean Witter Canada. When we sold the firm to a large Canadian bank in 1990, I joined Wessels, Arnold and Henderson and was in charge of European sales. I worked with over 100 portfolio managers on their US stock holdings. I have also worked with over 150 world class research analysts and have advised and traveled with over 200 growth company managements. I joined ThinkEquity Partners in 2003 as senior partner, again in charge of European sales. I understand and love growth investing and growth stocks. I have authored two fun, easy-to-read insightful books, "Stop Losing Money Today" and "Baby Boomer Investing ... Where do we go from here?" I REFUSE TO WRITE DRY, BORING INVESTMENT BOOKS!! These are full of real-world examples and stories. I am also a financial columnist for Eons.com. For more info about me or my books, please visit my Web site: http://www.georgesyared.com. You can also find the books on Amazon.com.

Georges Yared
- http://www.georgesyared.com

I began my career at Dean Witter Reynolds (now, Morgan Stanley) in 1979 as a broker. In the ensuing 11 years I went from a branch manager, to Midwest regional manager in charge of 1,200 broker in 11 states, to president and CEO of Dean Witter Canada. When we sold the firm to a large Canadian bank in 1990, I joined Wessels, Arnold and Henderson and was in charge of European sales. I worked with over 100 portfolio managers on their US stock holdings. I have also worked with over 150 world class research analysts and have advised and traveled with over 200 growth company managements. I joined ThinkEquity Partners in 2003 as senior partner, again in charge of European sales. I understand and love growth investing and growth stocks. I have authored two fun, easy-to-read insightful books, "Stop Losing Money Today" and "Baby Boomer Investing ... Where do we go from here?" I REFUSE TO WRITE DRY, BORING INVESTMENT BOOKS!! These are full of real-world examples and stories. I am also a financial columnist for Eons.com. For more info about me or my books, please visit my Web site: http://www.georgesyared.com. You can also find the books on Amazon.com.

Gene Marcial has been writing the legendary column "Inside Wall Street" for Businessweek for the past 26 years. Gene has taken the collective wisdom and knowledge he has accumulated over the decades and written a brilliant book titled Gene Marcial's 7 Commandments of Stock Investing.

Gene brings the same sense of calm and logic to his book as he does to his weekly column. Having known Gene for a few years, the one characteristic that has always impressed me is his ability to separate the news from the noise. Gene doesn't go with the flow, in fact, as he aptly states in his book, it's when an investor goes contrary to the flow is when the best buying opportunities present themselves.

Gene has spoken with thousands of Wall Street insiders over the decades and has taken the very best of the many he respects. Gene's book is an easy read and full of real world experiences and examples. Investors can relate to real stories versus "theoretical "concepts that begin with company ABC.

General Electric (NYSE: GE) not only disappointed Wall Street investors this past Friday with its horrible results, but shocked investors as CEO Jeffrey Immelt gave the "all is alright" signal in mid-March. He should resign as he has had nearly 7 years to grow this once great company.

GE should also bite the bullet and spin off several segments into separately traded companies. I wrote about this extensively last year for AOL, but now the rationale is abundantly clear. This company--a major conglomerate--cannot deliver decent shareholder returns. Immelt took the reigns of GE on September 7,2001 when the stock was at $40. Nearly 7 years later the shares are at $32 and barely holding on. I find it amusing that some "value" investors think GE is interesting at this level. These were the same investors that found GE interesting and a value-play at $38 last year.

The problem with GE is not that it's too big: the problem is it is too complex. The largest industrial company in the world now is Exxon Mobil (NYSE: XOM) with expected revenues this year of $550 billion. This company however is strictly in the energy sector--it's measurable and quantifiable. GE is a mish-mash of businesses, from light bulbs to jet engines to appliances to consumer loans, whereby some segments are doing well and others horribly. How does any analyst assign a proper PE ratio expectation?

One segment, the infrastructure division grew its revenues by an admirable 23% this past March quarter and its profits by 17%. With this kind of growth and visibility into the next 18-24 months on revenues because of contractual commitments, this division alone could command a 25 + PE ratio. GE as a whole is now trading at 14 X 2008 EPS estimates of $2.20-2.30.

The GE Financial segment was woeful and provided the negative surprise. This segment on its own would trade at a PE ratio of between 9-11 times. The NBC-Universal division showed only 3% year-over-year growth, but cash flowed very well. This segment should command a 15-17 PE multiple.

General Electric (NYSE: GE) was a darling of Wall Street for a couple of decades under the tutelage of legendary CEO Jack Welch. Mr. Welch retired in September 2001 turning the reins over to hand-picked successor Jeffrey Immelt. Give Immelt a break for the first 18 months as he had to guide the company through the 9-11 tragedy and of course the normal honeymoon period. Since that grace period expired in early 2003, GE has severely under performed the market and time has come for Mr. Immelt to hand the reigns over to someone else.

It is very difficult following a "legend" as Jack Welch. Many business schools model a course or two on management based on Welch's methods of letting an executive run a division creatively and freely--just return the expected numbers and all is well. Jack Welch "raised" Jeffrey Immelt in this style and picked him as the CEO to replace himself. The styles however were not transferable. Times and the global landscape have changed since Welch's departure.

The coffee wars are starting to get interesting.

Lately, Starbucks (NASDAQ: SBUX) has felt a few sharp elbows from burger giant McDonald's (NYSE: MCD). Starbucks is a story "in transition," with any luck back to its growth and glory days. And with the return of Chairman and founder Howard Schultz to the CEO role, Starbucks is going back to the basics.

Effective immediately, Starbucks will be offering a regular cup of coffee aptly named Pike's Place Roast after the location of Starbucks' first store in Seattle. This blend of coffee will be offered every day for customers who don't want to try the flavors of the week and prefer on a standard, regular cup of coffee. Pike's Peak was blended after feedback from over 1,000 customers.

Microsoft (NASDAQ: MSFT) has issued an ultimatum to Yahoo! (NASDAQ: YHOO)'s board of directors and senior management that they have until April 26 to approve Microsoft's $41+ billion price tag or Microsoft will take it to the shareholders directly. This would amount to an unmitigated disaster. Tell me the last time a nasty takeover went well in the technology world. You can't because these things don't happen or work. I'd better explain.

In the world of takeovers, the sweetest scenario is to have the acquired happily march the employees right into the new firm. With industrial takeovers, the acquiring company is buying the physical assets and any intellectual property that exists within the acquired firm. With those assets and intellectual property comes an even more valuable list -- the customer list and relationships. In the tech world, however, a takeover operates quite differently.

The technology world fosters an environment of independence and delicate egos abound. Key personnel from Yahoo! are not going to sit idly by while Microsoft tenders directly to the shareholders in an aggressive fashion. These key people will have retained recruiters, if they haven't already, and will be on to the next opportunities. By the way, Google (NASDAQ: GOOG) is hiring!

My response to William is no way -- don't even think about it. Dell is NOT Apple.

Apple is a growth story with multiple legs to it. From the iPod to the iPhone, the new Mac and its attendant software, to, of course, the incredible retail store system that numbers more than 200 strong, globally, Apple is a true growth story for the next several years. Apple has another thing going for it: terrific and expanding margins.

Back on January 30, Yahoo! (NASDAQ: YHOO) shareholders were just treated to disappointing December 2007 quarterly results and quite frankly, a pretty dismal outlook for at least the first half of 2008. Co-founder Jerry Yang had taken over the CEO role back in early 2007 and his unabridged enthusiasm is both admirable and nearly believable. However, the short term reality was that the US was experiencing an economic slowdown and even the best of growth companies were bound for contraction.

Microsoft (NASDAQ: MSFT) entered the picture on January 31 with a $44.6 billion offer to buy Yahoo!. All in all, Microsoft was smart in waiting for an economic slowdown before pouncing on Yahoo!. Shareholders were witnessing the stock price dwindle back to teenage levels without the prospects of share growth for at least three to four quarters out. With Microsoft's offer, the stock rocketed back to $29, allowing for the usual $2 arbitrage delta.

I have friends who work at Bear Stearns (NYSE: BSC) and one of them in a very senior capacity. Believe me, they are not laughing and this is actually quite a sad moment for them and their colleagues. Bear Stearns had an 85-year history having come through the Great Depression and several recessions. Bear was a proud trading house and took great pride in its trading prowess. Sure, the naysayers will argue that Bear bit off more than it could chew and that Bear was a greedy Wall Street firm. But there is more to the story and it should be told.

Bear Stearns was the second-largest packager of mortgage backed securities only surpassed by Lehman Brothers (NYSE: LEH). As we saw these past couple of years, the quality scale on mortgage-backed securities slid down to lousy, risky sub-prime mortgages. But keep in mind that the $400 billion worth of securities that Bear Stearns underwrote and managed were not all lousy credit risks. The biggest part, more than $300 billion worth were of the highest quality. Bear Stearns facilitated a market that needed facilitating!

In the old days, only major banks underwrote mortgages and they typically kept and serviced the loans. But as the American population and economy expanded these past 20 years, mortgage companies were formed and needed to "sell the loans off" as they did not possess the capital base of say a Bank of America (NYSE: BAC) or a Wells Fargo (NYSE: WFC). Firms like Bear Stearns became adept at packaging these loans and re-selling them to major pension funds and hedge funds globally.

Wal-Mart (NYSE: WMT) has surprised some investors these past six months or so by putting up more than decent earnings results. After yesterday's huge rally, Wal-Mart has nudged up over $50 per share. At this level, the company's market cap has also just crossed over the $200 billion mark. But is the stock a buy here at $50 and a $200 billion cap and what are its near term prospects?

It has been hinted strongly that in this consumer-led slowdown that millions of Americans are "shopping down" on daily staples at Wal-Mart instead of going to pricier competitors. If this is a temporary phenomenon, Wal-Mart should see a good April 30th quarterly result with momentum building to the July 31st quarter.

Long term, however, Wal-Mart is more of a market performer than an out-performer. Consensus estimates for the fiscal year ending January 31, 2009 calls for revenue of $405 billion and EPS of $3.40 and for fiscal year 2010, revenues of $435 billion and EPS of $3.75. Barely 10% growth of earnings and less than 10% growth of revenues. With the stock trading at a 13 PE multiple of fiscal year 2009, many would say the shares are more than fairly valued. In a difficult market as we have experienced, Wal-Mart became a safe place to hide money. The shares are up 14% this year which is outstanding performance vis a vis the rest of the market.

Wal-Mart may trade up to the $53-55 level before the year is finished, but as I mentioned it is not the best long term story in the big box retail segment. If the economy improves in the second half of the year, consumers may begin to "shop up" again, which would leave Wal-Mart with its traditional shopping base. That base is not enough to propel strong same store sales which is the life blood of big box retailers.

Georges Yared write about great growth stocks today in Game On Investing

Apple (NASDAQ: AAPL) announced this week it would not use its $20 billion cash hoard for dividend or share buyback in the open market. Some thought this was a good move, some, a mistake. Let me add my voice to those who agree with Apple's management decision.

Apple has been a rocket ship these past three to four years, rising from $12 to over $200 on the strength of popular consumer products. Recently, the company guided to the low end of the Street expectations for the March 31t quarter, and the stock has sold off almost 35%. So, would a share buyback really help? No, I don't think so and here's why.

Like most superbly run companies, Apple is a victim to a slowing economy. There would have been no gain to Apple had it maintained its March quarterly estimates in tact. No gain from being gallant here in this environment. Apple took the occassion to re-set the already raised bar on its expecations. Apple had beaten expectations five of the last six quarters, and analysts were raising the bar habitually. With the share price having suffered in January from the market's selloff, Apple took the opportunity to re-set its own bar.

For those who are new to BloggingStocks, I wrote a series back in May-June of 2007 highlighting what I thought could be the top 25 stocks for the NEXT 25 years. The series was written and researched as an answer to a USA Today article that highlighted the best 25 stocks of the past 25 years.

I wrote about Chipotle Mexican Grill (NYSE: CMG) back on May 21. The stock was trading at $82 per share, although I had been recommending it in my advisory service back when the shares were trading at $40. I thought, and still do, that Chipotle has a chance to be the next major American fast food restaurant chain. In September 2007, the shares hit $114-115, and frankly, I thought the stock was ahead of itself and needed to take a breather. I wrote an update piece explaining that although I still believed Chipotle will be a major player for the NEXT 25 years, it seemed prudent to take the opportunity for short term profits. Commodity costs were rising and the chain was not about to raise its menu prices to offset.

The shares proceeded to go as high as $155 and I thought that maybe I misread this one. The numbers were strong and I thought the momentum in the name might actually keep it afloat. Phew, finally, this one has come back to earth. Chipolte has fessed up that higher commodity costs and a slower spending consumer have taken their toll. The shares are back down to $105, representing a 30 P/E multiple on 2009 earnings per share expectations of $3.40. Still expensive, but this is a very high growth rate company.

I would wait for the shares to trade back below $90 before putting a toe in the water. The concept is viable and very popular. The chain has room to quadruple its store base in the United States and will emerge as the best new concept in this decade and the next. I'd keep an eye on the share value and start accumulating on major dips.

Georges Yared write about great growth stocks today in Game On Investing

Yahoo!'s (NASDAQ: YHOO) board of directors officially rejected Microsoft"s (NASDAQ: MSFT) already generous bid of $44.6 billion for the company. Not a surprise, and Microsoft will actually pay up for the deal to occur. Microsoft has to and they are now over a barrel. Let's explore why.

Microsoft spent over $6 billion last year to acquire the best company in the on-line digital advertising/marketing space, aQuantive. To monetize this acquisition and effectively, or least try to compete with Google (NASDAQ: GOOG), Microsoft needs a much bigger platform in the search engine sector. No question, even with all of its might and brand name recognition, the best Microsoft could muster is a 3.9% market share for its MSN versus Google's massive 76%. Yahoo! has 15% share and combined with MSN, the share rises to just under 20%. Still a small player versus Google but a viable one.

The soap opera known as Microsoft (NASDAQ: MSFT) and Yahoo! (NASDAQ: YHOO) looks like it is going to continue as Yahoo!'s board of directors rejects Microsoft's $44.6 billion bid. This is part of the game that investment bankers affectionately call "posturing". There are no other bidders for Yahoo! currently, but Microsoft desperately wants Yahoo!. Actually, Microsoft desperately needs Yahoo!.

So, what in the heck is going on here? Yahoo! shares fell to $19.18 after it reported disappointing numbers for the December 2007 quarter and forward guidance was ugly. Yahoo! has been struggling for a few years as Google (NASDAQ: GOOG) has been eating its and all other competitors' lunch.

I spent 16 years in the investment banking world and when it came to valuing IPO's, mergers and / or acquisitions, the very first question all parties involved would ask is "what are the comparables?" If company A wants to offer its IPO, we valued the IPO based on current public values of competitors, including price-earnings ratio, price-to-book value, price-to-sales, operating margins vs. industry comps, etc. Picture yourself looking to buy a home. The first thing you look at is the square footage comparison, neighborhood and other vital pieces of information of homes sold in your price range. It's the comps. Same in the investing world.

Many of you may recall, last May and June I wrote a series of articles for AOL's BloggingStocks featuring the 25 stocks for the NEXT 25 years. The genesis of the series was a USA Today article that highlighted the best 25 stocks from the previous 25 years. Since the series ended in late June we have had three of out top 25 stocks acquired by larger companies. We now have a fourth company being acquired: Amazon.com (NASDAQ: AMZN) has offered $300 million for Audible (NASDAQ: ADBL).

Recall that the other three acquisitions are Kyphon acquired by Medtronic (NYSE: MDT), Opsware by Hewlett-Packard (NYSE: HPQ) and Color Kinetics by Philips of the Netherlands. All three on one level ticked me off as I would have loved to have seen them develop into large cap companies. On the other level, investors made quick returns of 50%+. Audible's return to those that bought based on the recommendation I wrote back on May 3, 2007, only made 20%. Still a very good return, especially in this present environment, but of course, I want more!

Howard Schultz is back in charge of Starbucks (NASDAQ: SBUX), and as expected lowered expectations for the current fiscal year. He took the opportunity with the mediocre December quarterly results to tamp down expectations and won't even issue guidance. A very smart and predictable move by the founder and visionary of Starbucks. This is a tough environment for Starbucks as well as many other retail concepts. Let's face it, theme concepts are competing for the consumers' shrinking wallet and need to stick to their core values and competitive advantages. Well, Howard, please read this and I think it may help your efforts.

Dear Howard,

I personally love Starbucks as a consumer of fine coffee and have bought its products from probably 250 different Starbucks stores around the world. To this day Howard, your Minnetonka, Minnesota, store should serve as your model for the other 11,000+ store. The manager of the Minnetonka store is Mario Macaruso and if enthusiasm and commitment could be bottled--Mario's is worth a billion.. His partners at the store are fabulous. Andrea Breen, a single mother of 3 growing and time-consuming kids, has an attitude that makes every customer feel special. Patty McGarrigle superbly handles every complicated drink order like a pro and always with a smile. When they are not busy with customers, they are looking for ways to make the store cleaner or more organized. They represent the type of partners every Starbucks store should strive for.