Forecast 2010 Will there be a recession?

Still with the practical purpose of making one million Euros in less than five years and surrounded with the white Finnish winter in Helsinki, my objective seems clearer than ever.

However as I have been deeply attached to all the positive thinking that requires this objective, some of my new acquaintances and advisors believe that my objective is useless and almost impossible, some others gave me some great insights and interesting ideas which I really appreciated and some of them wonder How I will make it in the middle of a recession? I have to say that we all know that the so called "recession" began: December 2007, according to the official arbiter of business cycles, the National Bureau of Economic Research (NBER), which made the announcement. So now the question is: when will it end, and how deep will it get?


There are good reasons to be worried about both of these measurements, as the headwinds facing the economy are powerful indeed. But it's best to resist the temptation to give in to predictions of unconditional gloom and take a cool-headed look at how this recession compares so far to the many other downturns we and our previous generations have survived in the past.

On the likely depth of the recession, it has been often said that this may be the most severe recession "in decades." This statement is almost certainly true but not particularly informative, as the two most recent recessions, in 1990-91 and 2001, turned out to be famously mild and short-lived by historical standards that is almost forgotten . So the real question remains: "the deepest recession" in exactly how many decades?

The most intuitive, and legitimate, reference is the 1981-82 recession, which lasted a longer-than-average 16 months and led to a peak of 10.8% in the unemployment rate - by all standards, a pretty serious affair. Still, it would take an extraordinary amount of additional severe damage to today's economy over a fairly long period to drive the unemployment rate from its current 6.5% to double-digit territory.

It is also important to remember that the 1981-82 recession was almost deliberately caused by sky-high interest rates, in the titanic fight of Fed chairman Paul Volcker to drive inflation out of the system. In contrast, the Fed's response now has been to pull out all the stops in the other direction, including the precipitous lowering of short-term interest rates and a barrage of other actions. A somewhat more plausible comparison to the current downturn is the 1973-75 recession, commonly attributed to the surge in oil prices at the time. That one lasted a longer-than-average 16 months and led to a 9% peak in the unemployment rate.

Direct comparisons to the Great Depression have become more common in recent months, given the collapse of the stock market and consumer spending. But those comparisons overlook many key facts. During the Great Depression, the unemployment rate surged to 25% and GDP contracted by 28% between 1930 and 1932, an unthinkable prospect in today's environment, thanks to a long list of underlying differences between then and now.

For example, the banking system collapsed in its entirety during the Great Depression and the absence of bank deposit insurance at the time caused catastrophic erosion to household wealth and consumption. Today, FDIC insurance (and its recently elevated limit to $250,000) and (100,000€ in Europe) provides a significant cushion; the response of economic policymakers is immeasurably faster and more aggressive now; and the coordinated actions among the major economies today to address the root causes of the current episode are both impressive and totally unprecedented.

How long will this one last? The prevailing view: probably through the end of 2009. Two points to highlight here:

First, such a prediction is not based on any particularly refined insight that economic forecasters have into the current recessionary dynamic. After all, economic forecasting has a well-deserved reputation for being a notoriously imperfect art (most definitely not a science).

The predictions about this recession lasting through the end of 2009 are mostly based on the following simple calculation: Until the NBER's announcement, the prevailing view was that the recession probably started at some point during 2007 and it was likely to be about average in length, by historical standards. Given that the average length of the ten recessions since World War II has been 10.4 months, with a range of 6 months in the 1980 recession to 16 months in the 1981-82 one, the natural "placeholder" time frame for the end of this recession would appear to be the end of 2009. (if we consider that this recession has been far more damaging than all the previous which I personally don't)

However, the fact that the recession is now already more than 2 years old, and clearly not approaching its trough yet, raises the distinct prospect that it will exceed the length of the 1973-75 and 1981-82 recessions (both at 16 months), making it the longest since the Great Depression (43 months, from August 1929 to March 1933). The crowd fond of making comparisons to the Great Depression will be quick to declare some kind of victory on this one.

The great depression:

Second, the prediction that this recession may end around the middle of 2009 is not unreasonable, but even if accurate it disguises the critical question: What kind of a recovery is likely to follow? The answer is: probably a gradual one, unlike the more typical (but not universal) pattern of the economy coming out of most past recessions roaring ahead, propelled by pent-up consumer demand.

The healing process of a deeply wounded banking system, that has already led to nearly $1 trillion of write-downs, will act as a weight around the neck of any economic recovery in the beggining of 2010. Banks will likely continue the slow process of recapitalization and cleaning up the mountains of toxic assets on their balance sheets for a period longer than just the next few quarters.

That task will become even more challenging in the months ahead, as the recession itself will tend to generate an additional amount of toxic assets in their portfolios, impairing their ability to resume a more normal pace of lending. So, even though the economy may technically emerge from the recession in the new 2010, the recovery may initially become more of an issue of semantics rather than a robust turnaround in economic activity.

To be sure, this is a major recession and its downside risks in the midst of a highly volatile financial market environment shouldn't be underestimated. There are reasons, though, to believe that its severity and length will ultimately be contained by an unprecedented array of economic policy measures, some already in place, others in the pipeline, but here comes my objective in hand, to make out of the worst moments... the best ones at least in the Investment sector.

And after a couple of the stormiest years in anyone’s memory, who can deny that a dose of even partial sunshine sounds pretty good?

Maybe 2009 was tough, but as a business survivor, you can congratulate yourself on your hardiness and take steps to capitalize on a rebound. “The weak have given up and the biggest have been humbled,” says Bob Phibbs a consultant in Coxsackie, New York. “It’s a new game for everyone.”

The best news is that some key economic data now signal a broad move to positive territory. I trully believe that the recession has ended and we are looking at a modest recovery in 2010.

So how can entrepeneurs position themselves for the rebound? Keep an eagle eye on your stockpile of merchandise, take a fresh look at your market and introduce new programs that excite the customer. More than ever, the tightening up of consumers and businesses have caused everyone to look at value. What we need to do more than anything is break out of the commodity trap stay positive keep networking. Be a partner to your customers and be more concerned with their success than making a quick Euro in a transaction.

Take steps to become more visible. That can mean providing content customers don’t have to buy. “Keep asking yourself, ‘What can I give away to get noticed?’ That may be a newsletter with helpful tips (you can get one if writing me an email), or a webinar with voice on your web site.” (Project), or some crazy ideas that work if working toguether.

In the next two or three months, we will be getting a more solid feel for how 2010 will shape up. I think we’ll know by no later than March the trajectory of the recovery, I think people will be surprised by how fast the recovery comes in 2010. Until then enjoy the Holliday season with your loved ones and keep writting me your positive feedback and ideas. As always so far this journey has already been a pleassure.

Investment Conference in Helsinki

The Name of the conference was SIJOITUS-INVEST and it was held on a nice old clasic building called WANHA SATAMA (old harbor) located in the relaxed suburb of Katajanokka, As I´m trying to acomplish the objective of this blog to be able to colect 1 Million Euros in less than 5 years, and with the increasing energy of finding out about any possible method to acomplish my purpose I received an Invitation to be a part of the event both days 11-12.11.2009.

I have to say that I was more than surprised when I find out that more than 50 Finnish companies were in the exhibition, important Finnish companies from the Banking sector to the Investment sector as well as construction, media, and pharmacy sector among others.

And as I promissed I have a detailed report on the companies that I believe will perform more than good in the near future (my personal portfolio includes some of them).

ALMA MEDIA

Alma Media is a profitably growing and internationally expanding company that invests in the future of newspapers and online media. The best known products of Alma Media in Finland are Aamulehti, Iltalehti, Kauppalehti, Etuovi.com and Monster.fi while City24 portals are widely spread in Eastern Central Europe. The profits of this company have been more than generous as the price per share over a year has increased more than 48% now the price per share is around 7.33€ per share, still very decent considering the economic turmoil that we experienced. When I aproached the stand to talk about investing in the company the person that was in the stand told me that when I loked at this image I was looking to more than 3 Million readers in Finland not bad for a company that is fighting for the best status head to head with the Sanomat group.



If that is not enought this company just aquired thousands of shares from a company called Talentum and already is making a bid to aquire the TALENTUM consortium so the bid is on and the cash flow is moving acording to the presentaion of the great speaker and CEO of Alma Media Mr. Kai Telane.

PANOSTAJA

Just a month ago a friend advise me to Invest in Panostaja, as I was considering the offer I was doing some research on the company and when I find out that they had a stand in the Conference I did not hesitate to find out more, Panostaja is a financially secure Finnish multi-field corporation that creates healthy companies and company entities. I got the pleasure to talk with Mr. Tero Luoma Panostaja´s Financial Analyst. He explained: that the company executes through acquisitions and development work. We bring a new, committed leadership and business and strategic know-how to the company that we buy. The goal is to elevate the company that we invest in into a strong actor in its field in 5-10 years, after which it will continue its operations independently. They cover logistics, environmental companies, value added services and technology the price per share is only 1.35€ and the profit during the last year has been up to 19.30%.




STORA ENSO

I have a diversified portfolio I believe is important to have the most of it with companies that can have a large margin of profits with a Low cap but I also believe that in the market it is important to have at least one or two big players with a large market cap with this idea I mean that it is important to have some shares of a company like Stora Enso.

Stora Enso is a global paper, packaging and forest products company producing newsprint and book paper, magazine paper, fine paper, consumer board, industrial packaging and wood products. Stora Enso’s sales totalled EUR 11.0 billion in 2008. The Group has some
29 000 employees in more than 35 countries worldwide.

I was amazed by the presentation of Stora´s CFO Mr. Markus Rauramo in which he explained that the Investment activities and the expansion of the company has reached places like Brasil and Uruguay in South America but also China. The price per share at the moment is € 7.28 and it has been increasing during this year 29%.




RAMIRENT

I have to make an special mention of the stand of Ramirent, Ramirent provides a broad product portfolio of high quality and unmanned reliable rental equipment in 13 countries in Northern, Central and Eastern Europe. Ramirent is the second largest rental company in Europe and the ninth largest worlwide. Ramirent is the leading company in the Nordic countries, and in Central and Eastern Europe in machinery and equipment rentals for construction and industry. The Group has 360 permanent outlets in thirteen European countries (Finland, Norway, Sweden, Denmark, Russia, Estonia, Latvia, Lithuania, Poland, Hungary, the Ukraine, the Czech Republic, and Slovakia). I had the pleassure to talk with Franciska Janzon She is the Director of Corporate Communications and Investor Relations, she gave me an insight into the company that is nothing but welcoming specially when we were drinking coffee toguether, I have to mention that it was the only stand in the hole event that offered coffee for the visitors, she told me that the share price was around 20€ before the crisis and then 2€ a few months ago putting the actual price per share into 7.15€ at the moment still a lot to recover making it a tasty opportunity.



The New CEO of the company Mr. Magnus Rosén explained in his presentation a number of positive and realistic factors that might improve the organisation of the company, the idea on cost saving and even sales of machinery seems all viable during this times. When I spoke with the CEO personally I sense a sincere aproach to tackle the actual situation of the company and I didn´t waste the opportunity to congratulate him to be the only one that gave a presentation in English.

BIG BANK

While talking here and there I got to know Mr. Maksim Melamed He is the Head of Cross Border Business of Bigbank

an Investment company from Estonia that has expanded into Sweden and Finland currently they are not trading However I was surprised to hear that the company can increase my deposit from 10,000€up to 50,000€ about 3% a year and in this times if you want to play safe and secure with more returns than any bank this can be an option. I was also surprised to hear that during that same week the new branch in Heslinki was open.


GOLD AND SILVER



I could never imagine how easy it was to Invest in Gold after hearing the process explained by Niklas Sundman the Product Manager of K.A.Rasmussen simple buy and sell gold 2 point above the brittish price if you want to buy and two points below the Brittish price if you want to sell also he explained me the diversified maket in Finland from Goldsmiths to dentist Gold has prove to be the Investment against crisis increasing it´s price even in difficult times.


HOPEA.FI

For the Silver I have to mention a company named HOPEA.FIAfter talking for a long time with Risto Pietilä And Olli Pakarinen I discovered the diversified marked of the Silver as well as the simple aproach to make profit with silver I was convinced to have my own personal security box to store my silver imagine...,



I was also surprised of the young and talented individuals that really knew what we were talking about then during our conversation I find out that in fact Risto Pietilä was the founder of the company.

Overall the Conference opened new ideas on Investing in Finland a market far away of the traditional US Stock market and far from the popular International scene of Investing. A stock market full of possibilities in a safe social economy.

Don´t hesitate to leave your comments and tips to reach the goal of One million Euros in less than 5 years... is it really possible? Thanks to all the participants of this conference.

Copyright http://millionairedad.blogspot.com/

How to make a million Euros new idea...

As the time limit for my purpose of making a Million Euros in less than 5 years keeps running I read about one popular method and a brilliant idea that I want to share with you:

1-To make a dollar in profit from each of a million people. Or a penny from a hundred million. This is the China strategy. I guess it might work under the circumstances of for example having a Million friends on let's say facebook and convince them on giving you one dollar, personally it seems an almost impossible task considering that my own facebook friend list is about 500 hundred friends until now.

It almost never works because the challenge of reaching that many people is just too great. It's too risky and too expensive. Doesn't matter that you're only hoping for a dollar or a penny. The price isn't the challenge, it's the difficulty in spreading your idea.

Far easier is to make a thousand dollars from each of a thousand people ( I might follow the objective of getting a thousand "friends" on facebook to start with), or even $10,000 from a hundred organizations in this case the paper work and the time consuming will worth the effort. You can focus on a small hive of people, a group that talks to itself. You can push through a smaller dip and reach a level of recommendation and dominance that makes incremental sales far easier.

And you can learn much earlier in the process if you've gotten it right or not. Because you're making more per sale, you can spend the time necessary to figure out what really sells and modify your offering sooner in the process and the new wave is the Internet I know I can feel it.

The irony is that many products and services that have reached huge masses of people actually have significant margins (Windows, for example, or a cup of Starbucks). They got the best of both worlds because first they focused on winning small communities over and that led to the larger market.

There are many ways that can get you to Rome and the diversity might be found in the unity of multiple ideas, I want to share a second idea a simple idea that worked

Alex Tew, a student from Wiltshire, England, conceived A Million Dollar Homepage in August 2005 when he was 21 years old. He was about to begin a three-year Business Management course at the university and was concerned that he would be left with a student loan that could take years to repay. As a money-raising idea, Tew decided to sell a million pixels on a website for $1 each; purchasers would add their own image, logo or advertisement, and have the option of including a link to their website. Pixels were sold for US dollars; the US has a larger online population than the UK, and Tew believed more people would relate to the concept if the pixels were sold in US currency

Because individual pixels are too small to be seen easily, Pixels were sold in 100-pixel "blocks" measuring 10 × 10 pixels; the minimum price was thus $100. The first sale, three days after the site began operating, was to an online music website operated by a friend of Tew's. He bought 400 pixels in a 20 × 20 block. After two weeks, Tew's friends and family members had purchased a total of 4,700 pixels. The site was initially marketed only through word of mouth however, after the site had made $1,000, a press release was sent out that was picked up by the BBC The technology news website featured two articles on The Million Dollar Homepage in September. By the end of the month, The Million Dollar Homepage had received $250,000 and was ranked Number 3 on a list of "Movers and Shakers"

On 6 October, Tew reported the site received 65,000 unique visitors; it received 1465 digs becoming one of the most Digged links that week. Eleven days later, the number had increased to 100,000 unique visitors. On 26 October, two months after the Million Dollar Homepage was launched, more than 500,900 pixels had been sold to 1,400 customers. By New Year's Eve, Tew reported that the site was receiving hits from 25,000 unique visitors every hour and that 999,000 of the 1,000,000 pixels had been sold.

On 1 January 2006, Tew announced that because the demand was so great for the last 1,000 pixels, "the most fair and logical thing" to do was auction them on e Bay rather than lose "the integrity and degree of exclusivity intrinsic to the million-pixel concept" by launching a second Million Dollar Homepage. The auction lasted ten days and received 99 legitimate bids. Although bids were received for amounts as high as $160,109.99, many were either retracted by the bidders or cancelled as hoaxes. "I actually contacted the people by phone and turns out they weren't serious, which is fairly frustrating, so I removed those bidders at the last minute", said Tew. The winning bid was $38,100, placed by MillionDollarWeightLoss.com, an online store selling diet-related products. Tew remarked that he had expected the final bid amount to be higher due to the media attention. The Million Dollar Homepage made a total of $1,037,100 in five months.




Thanks for the latest comments don't forget to share your comments ideas and donations I want to proof that it's possible best of luck JC.

Next week I will attend an Investment conference in Helsinki will post the best picks...

Some Ideas to get the Million.

If your goal is to make a million dollars, there are a couple of easy ways to reach your objective:

If you are looking for the easiest path to wealth, inheriting the money would have to be at the top of the list. Of course you have little control over this.

Marrying the money would probably be the next easiest, assuming you can find an appropriate spouse (Note that I did not take my own advice here and followed the path of "true love" instead).

You can buy lottery tickets or head for Vegas and hope for the best. It seems like there should be an easier way, and in fact there is...

If you want to make a million dollars, all ya gotta do is put $5 in a bank account every day. Just about anyone can come up with $5 a day. It is not a huge deal -- heck, a pack of cigarettes costs $5 in a lot of places these days. You put the money into an account, like a stock mutual fund, that gives you 10% per year interest on average and presto. In 42 years you have a million bucks. What could be easier than that?

The problem is, who wants to wait 42 years? It takes too long. What do you do if you want to short-circuit the process and make a million bucks in less than 5 years? There is only one way to accomplish that reliably...

Yes - you need to start a business. In America, starting a successful business is the surest, most controllable path available to you for making a million dollars in less than 42 years.

And really, this decision to start a business gets us to a key part of our conversation. There are two mentalities at work in our economy today. Either you can be someone else's employee, or you can be the one who hires the employees. You can work for a business, or you can own a business of your own.

Now please note that I am not saying that "being an employee" is a bad thing, Iam an employee as well. There are lots of good reasons to be an employee. For example, being an employee is a great way to learn how a business works so that you can open a business of your own. You simply need to become an employee with that approach in mind. In other words, you work so that you can learn the ropes. Go into the job with the intention of learning everything you possibly can while someone else pays you to get your education.

So let's assume that you have made the decision to start a business, and you have worked to learn the ropes. If you follow this "start your own business" path, then what people will call you is... An entrepreneur. The dictionary definition goes like this:

A person who organizes, operates, and assumes the risk for a business venture.

Here's another definition:
An entrepreneur is someone who starts successful businesses. People are not very kind to those who start unsuccessful businesses. The instant you are successful, however, you are a hero and they start calling you an entrepreneur. The instant you lose some money on the market some trust on you is lost as well.

The whole point of creating a successful business, of course, is to have it generate money. There are two ways to extract the money from a business you create. You can either take the money out as you go along, in the form of a salary and dividends. Or you can sell the business and take your reward in a lump sum. Or, in the ideal case, you do both.


In the ideal case, the money that you pull out of the business is being generated as passive income. For example, let's say you start a restaurant. You hire all of the staff, and then you hire someone to manage the staff so the restaurant "runs itself" without you ever having to actually be there. That is passive income. A house you own that generates steady rental income every month is another example.

Note that the dictionary definition of the word "entrepreneur" includes the word "risk." That is important. If you are starting a business, you are going to have to invest both your time and (in many cases) your money in getting the business going, There is some chance that the business will fail without generating anything. Businesses fail all the time. That's part of the game. There are three things that you should keep in mind...

Woody Allen's quote is so true: "Eighty percent of success is showing up." If you will simply take the first step toward starting a business, you improve your chances of success dramatically.

The first reason for that is obvious -- if you don't take the first step, then you will never start a business and you cannot possibly succeed at it.

The second reason is more important. If you ever listen to motivational speakers like Dennis Waitley, Tony Robbins and Zig Ziglar, one thing you will hear over and over again is this interesting fact about setting goals -- if you will simply take some time to create some goals for yourself and then write them down, the chances of reaching your goals goes up by a huge amount. It is huge. Putting your goals on an index card and taping them to your bathroom mirror so you see them first thing every morning is also a smart move. I do not know why this works so well, but I do know that it works.

So what you should do is write down on a piece of paper a few goals for yourself, and one of them should be, "get my xyz business going," and you should tape your goals to the bathroom mirror. I would do that today.

Churchill's quote is also right on target: "Success consists of going from failure to failure without loss of enthusiasm." What does that mean? It means that, whenever you stretch yourself and try to do something successful, there are going to be failures along the way I experienced some hard failures in fact It will take me a couple of months to recover. Sometimes lots of failures will come. All you can do after a failure is get up and try again. If you keep doing that, one of two things will happen -- either you will succeed eventually, or you will die. And if you die, then you won't care anymore. And at your funeral people will say, "You know, he never amounted to anything, but you sure have to give him credit for trying. The guy had a lot of heart." And the final objective is what matters.

Larry King's quote is amazing in its accuracy: "Those who have succeeded at anything and don't mention luck are kidding themselves." That is so true. The thing is, luck can only happen to you if you try something. If you will just take the first step toward starting a business, and then the second, and so on, you immediately open yourself up to the beneficial power of luck. If you don't, then luck cannot happen to you. Everyone who has ever succeeded has benefited from luck -- sometimes lots of luck. But you have to be playing the game in order for luck to find you.

"If you try, there is some chance of succeeding." If you don't try, obviously, there is not. You've got to be playing the game in order to win.

"Those who keep trying eventually do succeed." That is a fact of life. Luck favors the prepared, and it also favors the persistent.

You will hear people say, "Nine out of every 10 businesses fail, so why bother?" Here is another way to look at that -- the chance of success is 10 percent. You start nine businesses that fail and then the tenth one succeeds and you make a million bucks -- those are damn good odds. Compare that to a lottery, where, for example, 9,999,999 out of every 10,000,000 tickets fail. And tens of millions of people play the lottery even though the odds are that bad. Starting a business is not as easy as buying a lottery ticket, sure, but keep in mind that, "Anything you practice gets easier." Let me repeat that, because it is very important: "Anything you practice gets easier." The more you practice something, the easier it gets.

So the first business you start, it is going to be hard. You don't know anything. You will make mistakes. You will try things that don't work. Whatever. But the second business you start is a lot easier. And the next one is easier still. Right now you look at "starting a business" and it looks hard. That's because you've never done it before. You haven't practiced. Simply start practicing and it will become trivial eventually What I would suggest is that you get rid of your television. Take the music off your iPod.

Instead go get some audio books that talk about starting businesses. Put those on your iPod and listen to them over and over again. The first time you listen, they might not make much sense. That's because all of the material is new. The second time through the book it will make a lot more sense. And then the third time you will understand what is going on. Practice makes perfect.

Now you are starting to get somewhere. You have taken some steps. You are learning about starting a business from the books you are listening to. Let's look at the environment...

All that you need to do is to find something that people would find valuable...

So come up with an idea. Find something that you can do in the American economy that would make people's lives better and that they would be willing to pay money for. Build a simple business around it. Start making a profit.

What you have created is called a "cash cow." You have a business that generates excess cash. Now, either you milk the cow, or you sell the cow to someone else. That's it. Suddenly you have become an entrepreneur. Then either you go relax on your Caribbean island, or you try to start another one. And it will be a lot easier the second time because you have been practicing.

Start by putting some business books on your iPod and listening to them in every spare minute you have -- while driving, while walking between classes, while waiting in line, whatever. Most books now come on CD or as an MP3 file. Here are five books that I would start with. These are "mindset books" -- they get you into the right mindset to start a business:

Mindset books:

• Rich Dad Poor Dad by Robert T. Kiyosaki - A perfect book for getting you head in the right spot to start a business.
• The automatic Millioanaire, by David bach - Teaches you how to manage your finances. A basic guide to "saving $5 a day to become a millionaire in the future.
• The One minute Millionaire, by Victor Mark Hansen - a little over the top, but encourages you to think differently about starting companies and building wealth.
• How to be a Billionaire, by Martin Fridson - Really makes you look at the world differently.
• The Warren Buffet Way, by Robert Hagstrom - Not light reading, but helps you see how one of the richest men in the world thinks about the business world.
• Never Eat Alone, by Keith Ferrazzi - Helps you to think about business relationships differently.

That's it -- start reading these books and thinking about something you can do that other people will find valuable and let me know. We are on our way. We just have to take that first step...

And once you make your first million, please let me know by sending me an e mail.Or if you have some interesting idea to reach the goal of a Million in less than 5 years you are welcome to share it!

Best Regards.

JC.

Some basics to Invest, from Buffet

Warren Buffet became the world's richest person by adhering to simple but critical tenets. Here are his rules for smart living and savvy investing.

Last year's market madness didn't just flush away $7 trillion in wealth. It almost flush away my own idea of becoming a Millionaire in less than 5 years, but to defeat my objective the market will have to do more than that...

It also washed away a lot of investors' confidence and left them stumped about the best position to take now. "Somewhere between cash and fetal," quips one pessimist.

In such downbeat times, let's consider a dose of optimism, wisdom and insight: the basics as taught by that perennial investing Master, Warren Buffett.

For new investors or those now starting over, there's good news here because Buffett's investment success comes from some easy-to-grasp human qualities as much as sophisticated expertise in balance sheets.

Buffett would be the first to say his positive philosophy played a big role in his becoming the richest person in the world (before he gave most of his loot away).

Changing your basic psychology can be tough, so new investors may have a leg up here because they don't have ingrained bad habits. But for anyone, a psychological makeover is worth the effort if you hope to recover your losses in the market's next leg up -- and then make the right moves for the rest of your life.

My tour of the essence of Buffett's wisdom starts with the simple psychological lessons taught by the master, many of which are applicable in life outside investing.

Lesson No. 1: Be frugal

If the economic downturn is forcing you to live simply, look on the bright side: It's making you more like Buffett.

Buffett lives in the same modest house in Omaha, Neb., that he bought more than five decades ago.

How does this makes him a better investor? First, it gives him more to invest.

Second, a frugal investor will demand this quality from managers. Buffett is leery of corporate waste. Excessive executive pay or silly perks are red flags. Buffett once quipped that companies stack pay committees with "sedated Chihuahuas."

Third, frugal people don't need fast returns to support extravagant lifestyles. This leaves them free to think more clearly about when to buy and sell stocks, making them much better investors, believes Stephen Shueh, a Buffett expert and managing partner of Roundview Capital in Princeton, N.J.

Lesson No. 2: Wait for the 'fat pitch'

Resist the itch to constantly buy or sell stocks.

"Lethargy bordering on sloth remains the cornerstone of our investment style," quipped Buffett in his 1990 annual report to Berkshire Hathaway shareholders. Have the patience to wait a long time until some market turbulence brings the "fat pitch," as Buffett calls it, or stocks of great companies trading at really cheap valuations.

Lesson No. 3: Be a contrarian

A great way to make money is to go against the crowd. "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful," Buffett explained in a 1986 letter to shareholders.

So be skeptical of the conventional wisdom. Not because the crowd is always wrong but because the crowd's wisdom is probably already reflected in market prices.

When the investing public is extremely negative, it's usually a good time to buy stocks. When investors are confident, be careful.

Lesson No. 4: Stick with what you know

One of Buffett's basic rules is: If you don't understand a company's product or how it makes money, avoid it. He calls this "staying within your circle of confidence."

This isn't always easy. During the late 1990s boom, Buffett famously avoided tech companies, confessing that he could not understand what they did. He looked dumb until the bubble burst. "Ultimately, when it came full circle, he was proven right,". However in my case being part of a tech company myself (www.rahaxi.com) I sometimes put part of my trusted investements on it why? because of the simple reason that I undertand the sector and I´m a part of it.

Lesson No. 5: Don't depend on others to say you're right

If you are in need of constant affirmation about your investment decisions, particularly from the stock market, you won't be able to invest like Buffett, that's because Buffett makes outsized returns by purchasing disliked value stocks that are so beaten down they're often virtually ignored by the talking heads. They won't be on TV every week telling you that you made the right choice.

Lesson No. 6: Buy companies cheap

This is the essence of being a value investor. The first step involves calculating what Buffett calls an "intrinsic value" for a business -- either by examining what similar companies sell for or calculating the present value of all the cash that will be generated by a company in the future. For more details on how to do this, you'll have to consult books such as "The Warren Buffett Way" or "The Inteligent Investor.

Next, build in a "margin of safety" by purchasing a stock well below its intrinsic value.

Buffett doesn't pay much attention to earnings per share, a common measure of value. Instead, he likes to see companies with good return on equity, solid operating margins and reasonable or no debt. He also likes to see that companies generate a lot of cash and that they invest it well or return it to shareholders in the form of dividends or buybacks.

The key throughout this analysis is to look back over five years or more. Buffett wants to see a consistent operating history; he's not into startup companies. He also prefers to gauge how well a company does in different kinds of markets, not just the good times or the latest quarter.

Lesson No. 7: Look for companies with economic moats

A key characteristic supporting consistent operating history is a sustainable competitive advantage. In other words, a company should have a barrier to entry -- or a kind of moat -- that keeps potential competitors at bay.

This could be a patent protection on drugs, high costs to get into a business or simple brand power, fund manager Lowenstein says. "Franchise" businesses like these can do well because they have the power to raise prices. In contrast, companies in "commodity" businesses have to take whatever price is set by a competitive market -- which can crush profits during hard times.

BNSF Railway is a great example of a "franchise" business. It's pretty hard for anyone to lay enough track in North America to start a competing railroad. Coca-Cola, another long-term Buffett holding, has barriers to entry in the form of a strong global brand and distribution system that is hard to replicate.

Lesson No. 8: Buy big, concentrated positions

Most professional money managers protect against risk by diversifying. Buffett goes against the crowd here, too. When he finds a company he likes, he piles into it big time.

This is crucial to his success. Money manager Hagstrom calculates that if you eliminate a dozen of Buffett's best investment choices over his career, he's only an average performer. Buffett thinks his risk protection comes from understanding a business better than the market does and then being patient enough to buy it at the right price.

Lesson No. 9: Hold for life

Buffett quips that his favorite holding period is "forever." Embedded in this concept are two key Buffett tenets I've already alluded to. First, it's worth investing only in companies that are good enough to outperform for decades. Next, you have to think on your own and avoid the madness of the crowd.

"Buffett believes that unless you can watch your stock holdings decline by 50% without becoming panic-stricken, you should not be in the stock market," And believe me it feels hard, but then again I talked to a friend of mine and he said you know is not over you only lose when you sell so by keeping that position 6 months from the turmoil I can honestly tell you it is safe now.

This doesn't mean buy and forget. Buffett tracks his investments closely and gets out when he thinks that they are fully valued or that trouble is on the way, Buffett sold big positions in Fannie Mae and Freddie Mac the home mortgage companies that blew up last year.

Buffett is not infallible, however. He still owns big positions in Gannett and Washington Post even though he forecast at his 2004 annual meeting that the newspaper business would see nothing but trouble for decades.

The price of his company's stock -- always a major part of his wealth -- dropped 31% in 2008 and continued to follow the market down early this year. Lately, it and the market have been rallying back.

Lesson No. 10: Believe in you and In the world

Unlike most investors, Buffett doesn't tweak his portfolio depending on which party is coming into office or where we are in the economic cycle. This may make him seen naive. But it also has him putting money to work now, when many others have lost faith in the U.S. economic system. It's a move that will likely make him a winner down the road yet again, or if you are so diversified like I'm trying to be Invest in Mexico, Russia, Europe or Asia.

After all, the current fears about the long-term prosperity of the world Institutions and companies make no sense, Buffet wrote in an October op-ed column in The New York Times. That's why he was buying stocks before the current rally began.

"These businesses will indeed suffer earnings hiccups, as they always have," he wrote. "But most major companies will be setting new profit records five, 10 and 20 years from now."

So let's keep the right attitude for the right journey, I'am pleased to give e mail advises and comments to all of those that have dropped me a line I'm not yet there but I will keep in touch, to end this article I want to show you an inspiring event that involved Buffet and Gates not so long ago...and I guess the idea in all that you do is to be POSITIVE!!! Enjoy and comment.

Madoff sentenced ($50 billion fraud. )

Bernard Madoff, a former chairman of the Nasdaq stockmarket, a wall street legend, faces a sentence of 150 years in prision.

After all, the investors and finance advisors can and will be sentenced if they dare to commit fraud that's the message.

One of the most striking examples of an “extraordinarily fraud ”, one worthy of a staggering sentence for Madoff: 150 years behind bars.

The sentence went far beyond the 12 years suggested by Madoff’s lawyers and virtually guaranteed that, at age 71, the financier-turned-felon would die with a multibillion-dollar fraud that’s been called the largest in history.

“Here, the message must be sent that Mr. Madoff’s crimes were extraordinarily evil and that this kind of irresponsible manipulation of the system is not merely a bloodless financial crime that takes place just on paper, but it is instead ... one that takes a staggering human toll,” the judge said.

The sentence capped a 90-minute hearing in an ornate courtroom in Manhattan that turned into a tense showdown between a group of angry, tearful victims and Madoff, who sat silently at a defense table before apologizing with a mechanical calm.

“I will turn and face you,” he said. “I’m sorry. I know that doesn’t help you.”

More drama followed the sentencing when Madoff’s wife Ruth, often a target of victims’ scorn since her husband’s arrest, broke her silence by issuing a statement through her lawyer. She said she, too, had been misled.

“I am embarrassed and ashamed,” she said. “Like everyone else, I feel betrayed and confused.”

The sentencing concluded a stunning fall from grace for Madoff. Clients of the former Nasdaq chairman — from Florida retirees to celebrities such as Steven Spielberg, actor Kevin Bacon and Hall of Fame pitcher Sandy Koufax — for decades flocked to him seeking investment returns that defied market fluctuations.

But late last year, Madoff made a dramatic confession: Authorities say he pulled his sons aside and told them of a massive Ponzi scheme.

Madoff pleaded guilty in March to securities fraud and other charges, saying he was “deeply sorry and ashamed.” He insisted that he acted alone, describing a separate wholesale stock-trading firm run by his sons and brother as honest and legitimate.

Aside from an accountant accused of cooking Madoff’s books, no one else has been criminally charged. But the family, including his wife, and brokerage firms who recruited investors have come under intense scrutiny by the FBI, regulators and a court-appointed trustee overseeing the liquidation of Madoff’s assets.

The trustee and prosecutors have sought to go after assets to compensate thousands of victims who have filed claims against Madoff. How much is available to pay them remains unknown, though it’s expected to be only a fraction of the astronomical losses associated with the fraud.

The $171 billion forfeiture figure used by prosecutors merely mirrors the amount they estimate that, over decades, flowed into and out of the principal account to perpetrate the Ponzi scheme. The statements sent to investors showing their accounts were worth as much as $65 billion were fiction.

The investigation has found that in reality, Madoff never made any investments, instead using the money from new investors to pay returns to existing clients — and to finance a lavish lifestyle for his family. The actual loss so far has been put at $13.2 billion. But the judge said that was a conservative estimate and noted that even Madoff told his sons in December it was a $50 billion fraud.

He gave no noticeable reaction when the sentence was announced. He also showed no emotion though he looked down earlier in the hearing as he listened to nine victims spend nearly an hour labeling him a “monster,” “a true beast” and an “evil low-life.”

“Life has been a living hell. It feels like the nightmare we can’t wake from,” said Carla Hirshhorn.

“He stole from the rich. He stole from the poor. He stole from the in between. He had no values,” said Tom Fitzmaurice. “He cheated his victims out of their money so he and his wife Ruth could live a life of luxury beyond belief.”

When asked by the judge whether he had anything to say, Madoff slowly stood, leaned forward on the defense table and spoke in a monotone for about 10 minutes. At various times, he referred to his historic fraud as a “problem,” “an error of judgment” and “a tragic mistake.”

The jailed Madoff had already taken a severe financial hit: Last week, a judge issued a preliminary $171 billion forfeiture order stripping Madoff of all his personal property, including real estate, investments, and $80 million in assets his wife Ruth had claimed were hers. The order left her with $2.5 million.

The terms require the Madoffs to sell a $7 million Manhattan apartment where Ruth Madoff still lives. An $11 million estate in Palm Beach, Fla., a $4 million home in Montauk and a $2.2 million boat will be put on the market as well.

Anthony Sabino, a defense lawyer specializing in white collar criminal defense, said the decision against appealing the sentence was no surprise.

"This is his acknowledgment that he really has no chance," he said.

Sabino said that by not appealing, Madoff is showing he "is now going to keep his mouth shut, take his punishment, and he's willing to die in prison. To some extent, he acknowledges that this is the price he has to pay in order to protect others. Who are the others? We don't know."

The size of Madoff's fraud, Sabino said, has brought fresh meaning to "Ponzi scheme," named after Charles Ponzi, who was convicted of mail fraud and bilking thousands of people out of $10 million in 1919-20.

"Charles Ponzi is now a footnote. They're now Madoff schemes,". After all this road of becoming Millionaire is not easy if you... (like me), want to do it the right way. See more and comment!

Finally 150 years...

Investing Ways

After being appart from the most important project of my life which is to have one million € in less than 5 years, I´m finally back and happy because one of my short term projects was realized succesfully.

I won the Loosing weight competition. As you all might remember I started the competition of loosing weight weighting 79 kilos and I finished it after three months weighting 60 kilos. The prize from this sacrifice was of course some good cash that is already invested and a future trip to Sweden. see the videos of this crazy journey at the end of this post.

On the same monetary line I´m decided to start writing on How to invest wisely even better How to start INVESTING, a subject that on theory any educated person must know but on practice so complex that it seems to be out of the general knowledge.

Fisrt I have to share with you a NEW CONCEPT that I´m trying to develop as a theory, it might sound crazy but here is the idea: The best things in life are FREE. In this new world order the access to Internet and information has been showing that things that used to be "expensive"like books and music now with some reasearch you can have it all for free in the net. So the whole idea of Capitalism, profit and earnings is changing i predict that the ones that realize this simple idea will be the winners of this new model, if we see and undestand the market this way we will be able to undestand the collapse of the financial Institutions globally I will write more about it with some future extra research.

And then let´s get to undestand the process of Investing, there's more to successful portfolio building than picking good investments.

Putting together a portfolio of securities is like building a wardrobe. Even if your closet is filled with top-of-the-line attire, that may not be enough actually for me is never enough: All those components need to work together as outfits. Investment portfolios are the same way.

This track of the Investing lesson will show you how to design a successful portfolio of investments that work together to help you reach your goals. I will try to introduce the five essential steps to tailoring your portfolio and keeping it in good shape. I will expand on these steps in subsequent posts.

Design a pattern

Just as a tailor making a suit starts with a pattern, you need a pattern for your portfolio. The tailor's pattern fits an individual of a particular size and shape. Similarly, your portfolio should fit you.

A good fit starts with your investing goal. Maybe you're investing for retirement, for your child's education, or for a vacation home. Whatever your goal, it gives you vital information. It tells you how long you'll be investing (your time horizon) and how much of your investment you can put at risk. The closer your goal or the less you can afford to lose, the more you should focus on preserving what you've made rather than on generating additional gains (a good example could be learned by following this blog)

How much should you put into cash, bonds, and various types of stocks? One rule of thumb is to use your age as a guide. For instance, if you're 33 years old, put 33% of your portfolio into cash and bonds and the rest into stocks. Some of my latest picks as I live in Finland are of course Nordea, the strongest bank in Finland, Raisio V. A forerunner in the food Industry, Alma Media specialized in newspapers, online media and other internet services, leading the way in the industry. I have also a diversified portfolio of Mutual funds on the energy sector and east European economies that I prevent all are going up after the falldown. I ean there is not other way, I see a sea of opportunities on difficult times.

Some investors would find that portfolio awfully conservative, though. Others might find that it's too aggressive for their particular goal. Such rules are like a one-size-fits-all shirt: Sure, you can wear it, but does it really suit you? Probably not.

Organize what you already own

Maybe you can name all of your stocks and mutual funds off the top of your head and detail how each one performed last week. Good for you. But can you explain how they work together? Which are your core investments? Are you diversified? Do you have a lot of overlap? You must be able to answer those questions before you can see how (or even if) your portfolio fits your pattern.

To figure out exactly what you own, you could get a financial calculator or investing spreadsheet, haul out the latest shareholder reports for your funds and account statements for your stocks, and calculate how much you have in cash, bonds, and various types of stocks. What a job! No wonder people don't know what's in their portfolios see all this possibilities wihout paying any extra fee at your bank

Simply enter the tickers of all of your investments and how much you have invested in each, either in € or percentage terms. Then see if it is really profitable.

You'll discover your portfolio's asset mix, style-box breakdown, sector weightings, regional exposure, and much more.

One importan rule of Investing is Make your portfolio fit your Pattern.

Now that you know what you have, it's time to find out whether your current portfolio fits your pattern.

Begin by checking your portfolio's asset allocation. If that doesn't match your pattern, shift assets among funds and stocks to tailor the mix. If your investments are in taxable accounts, however, you might not want to sell any of them--the tax repercussions could be enormous, specially in Finland.

Next, weed out redundant investments. If you have three large-cap growth funds, for example, they probably aren't all equally good. Refer to some International Fund Reports like CNN, Wall steet, Kaupalehti to see which fund has the best category ratings and lowest expenses.

Be sure that your portfolio includes core holdings, those investments on which you're relying most to help you meet your goals. Core investments should be the biggest part of your portfolio. We'll discuss how to choose them later on.

Finally, fill any portfolio holes, such as a lack of value or foreign exposure, with new investments.

Schedule a time to rebalance

By following the first three steps, you've tailored a portfolio that suits you to a T. You'll want to make sure that it continues to fit, though. That requires occasionally rebalancing, or restoring the original pattern.

Stocks often gain more than bonds or cash. As a result, stocks will probably take up more of your portfolio over time than in your original pattern. Because stocks are riskier investments than bonds, your portfolio is becoming riskier as your stock position rises. That's why it's important to rebalance and restore your portfolio to its original pattern.

Similarly, not all stocks do well at the same time. Maybe your value stocks are outpacing your growth investments. If you don't restore your portfolio's original balance between the two styles, your investment success will become increasingly dependent on your value investments.

When you rebalance, keep your goal in mind. As you get closer to needing the money you've invested, the pattern you originally drew should change. Your portfolio should become more conservative as you approach your goal.

Follow your investments

In addition to rebalancing your portfolio, you'll want to keep tabs on your individual investments. You need to make sure they're still filling their original roles in your portfolio.

Let's say you're monitoring your mutual funds. What types of things should you look for? Make sure your funds stay in the same category; if a fund's style has changed dramatically, the fund may no longer meet your needs. Examine the fund's category rating. Is it still competitive? Watch out for manager changes, too.

With stocks, you'll want to keep tabs on price, and where that price is relative to the sell target you've established. Changes at the top also matter, as new management can mean a new strategy. Profitability, financial health and growth prospects are likewise important. Profitability, financial health, and growth prospects all matter, too.

And now that you read all my post you desrve to see my physical evolution