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Charlie Javice takes 'full responsibility,' asks for mercy ahead of JPMorgan Chase fraud sentencing - "There are no excuses, only regret," Javice wrote her judge Friday night, ahead of her sentencing for defrauding JPMorgan Chase out of $175 million
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Energy Secretary Expects Fusion to Power the World in 8-15 Years - From theory and small-scale tests to reality, will fusion ever scale?
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Wayfair Needs to Prove This Isn't as Good as It Gets - Earnings were encouraging, but questions remain about the online retailer's long-term viability.
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Hannity Promises To Expose CNN & NBC News In "EpicFail" - *"Tick tock."* In a mysterious tweet yesterday evening to his *3.19 million followers,* Fox News' Sean Hannity offered a preview of what is to come from ...
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Showing posts with label meltdown. Show all posts
Showing posts with label meltdown. Show all posts
Investor Psychology - Common Traps
APRIL 5, 2009, 8:04 P.M. ET FUNDAMENTALS OF INVESTING
Avoiding the Bear Traps
People's emotions lead them to make bad financial moves in chaotic times. Here's what to look out for.
Article
»By SUZANNE MCGEE
In a chaotic bear market like this one, it's easy for investors to fall into traps.
They might scramble to make trades based on the latest news reports. They might search for a miracle stock that will pay off big and let them recoup all their losses. Or they might go in the other direction -- and get so scared of the market that they don't make any moves at all.
I believe that the frequency of irrational investor behavior goes up along with market volatility," says Chris Blum, head of the U.S. behavioral-finance group for JP Morgan Funds in New York, which studies how people's emotions affect their financial decisions.
Fortunately, a bit of logic and common sense will keep you clear of these pitfalls. Here's a look at some common missteps -- and how to avoid them.
THE VALUE TRAP: A chaotic market makes it easier for investors to convince themselves that because a stock -- or a sector or a market -- is cheap, it's a great value. Sometimes, though, there's a good reason that a stock or sector is cheap: It's in trouble. You need to look past the share price or valuation and examine the fundamentals of the company, the industry and the economy before you decide that something is a bargain.
"Within industries, not all companies are created equal; some will fare better than others," says Mr. Blum. It's through research, not instinct or stock price, that investors discover the real values, he adds.
THE RISK TRAP: One reason investors are so vulnerable to the value trap is that another force is at work -- the urge to recoup losses. Investors who are desperate to make back some of what they have lost and return to "normal" are more willing to take outsize bets on individual stocks or narrowly focused exchange-traded funds.
But that approach is even more unlikely to work in this market environment; the combination of the credit crunch and the recession have made the stock market dangerously volatile. A concentrated portfolio is especially risky, advisers argue.
Investors can't accept that individual stocks, or stocks overall, aren't likely to deliver a reliable stream of double-digit profits each year as in the past, says Bill Schultheis, a partner at Soundmark Wealth Management LLC, a financial-planning firm in Kirkland, Washington.
To combat the risk trap, Mr. Schultheis spends a lot of time preaching the virtues of investment basics like diversification and building returns steadily through compound interest and dividends.
THE SCAPEGOAT TRAP: Like the children in humorist Garrison Keillor's Lake Wobegon, people believe they are all above average -- at investing. Overconfidence makes it easy to blame your financial adviser for your outsize losses last year, and to think you'd be better off making the big decisions yourself.
But that attitude ignores a basic fact: In this market, nearly everyone is in the same boat, more or less, regardless of who's managing their money. Ditching your professional help and going it alone is a bad idea.
"There are certainly some financial advisers out there who weren't good at what they did, but the worst mistake someone can make is to fire that individual and decide to do it all themselves instead of finding someone better," says Mr. Blum.
The reality, he says, is that few investors have the time, patience or expertise needed to develop asset-allocation plans and manage diversified portfolios. "Firing a specific adviser may be rational; deciding to be your own financial adviser probably isn't," he says.
THE PARALYSIS TRAP: The market debacle has left many investors too terrified to act at all, whether to sell portfolio holdings to limit losses or take advantage of what may be appealing long-term investment opportunities. Some advisers report clients in their 30s and early 40s shunning stocks altogether, when the real risk that they face is likely to be inflation -- which may eat up their money if they keep it out of riskier investments that are likely to trounce rising inflation rates over the next decade or two.
"The chance of suffering more pain is so intense that they can't imagine a world that will be better," says Joe Sheehan, a partner at Moneta Group, a wealth-management firm in St. Louis. "Two years ago, they would have jumped at the chance to buy more of stocks they already owned at these low prices; now they are frozen in place and won't respond."
Mr. Sheehan tries to persuade clients of a simple fact: The world hasn't changed dramatically enough to justify paralysis. "About 92% of Americans are still employed; the S&P 500 is not going to zero," he says.
Mr. Sheehan finds himself pointing to psychological studies showing that people tend to rely too heavily on what has happened in the recent past when it comes to predicting the future. "That's one reason we're in this mess in the first place," he says.
Among other things, he notes, investors and homeowners believed that housing prices could only go up -- leading to the bubble that got millions of homeowners in horrible financial trouble.
THE COMFORT TRAP: "When people are fearful, Wall Street comes out with a product that tries to make you feel good by promising you safety," says Andrew Mehalko, chief investment officer of GenSpring Family Offices LLC in Palm Beach Gardens, Florida.
For instance, Mr. Mehalko expects one of the hottest-selling products this year to be principal-protected notes, just as they were after the bear market of 2001-02. While these vehicles -- which promise to preserve your principal investment -- may provide reassurance, they often also come with hefty fees and can sharply limit your upside potential.
As a general rule, a low-risk strategy will produce minimal returns. So, while you may feel the urge to lock up all your capital in ultrasafe strategies, you need to be prepared to invest some of it in riskier products.
Meanwhile, Mr. Sheehan reports that some of his clients have even developed an aversion to mortgages. That may be rational for people with no nest egg or a job that's at risk, but it's not something that everyone should be worrying about.
"It's not logical at all," he says, because some have relatively little mortgage debt relative to home value, hold long-term fixed mortgages at the relatively low rate of 5% or so and gain from the tax deduction for mortgage interest.
Yet "all they want to do is pay off that mortgage," to get rid of "this toxic thing -- a mortgage," he says.
THE CHASING-THE-NEWS TRAP: If you're a financial-news junkie, it's tempting to try to react to each twist and turn of the market. But the best thing you can do is turn off the news, put the remote control down on the coffee table and step away from your television set.
In times like these -- an almost unbelievably volatile stock market, a distorted bond market and an economic meltdown -- newshounds can do tremendous damage to their portfolios. Trying to judge exactly the right moment to get into the market -- and then jump out again a day or two later -- is likely to leave you with big headaches and outsize trading expenses.
An "atmosphere of constant, breathless hysteria" isn't conducive to making smart investing moves, says Carol Clark, an investment principal at Lowry Hill, a wealth-management firm in Minneapolis. "That's not what long-term investing is all about.
"Many of those [300-point] interday moves simply don't make a lot of sense in the first place, so how can it be sensible to try and respond to them?" she asks.
Instead of acting on every new development, it's better to look past the noise and invest small amounts regularly, an approach known as dollar-cost averaging. A strategy based on a solid asset-allocation plan and dollar-cost averaging is more likely to lead to sustainable gains over the longer haul.
Ms. Clark offers one final observation. Usually, investors find themselves in traps "because your emotions have run away with your logical thinking," she says. "You need to find ways to start thinking logically again."
Sometimes it helps to do something as simple as making a list of your investment goals and putting it on the refrigerator. Whenever you're tempted to act impulsively in response to something you see on television or hear from a friend at a dinner party, you can go back to that list and remind yourself that yanking money out of the market may not be the best strategy.
"Then, when you feel an urge to turn on CNBC, you train yourself to look at the list instead," she says.
—Ms. McGee is a writer in New York. She can be reached at reports@wsj.com
Avoiding the Bear Traps
People's emotions lead them to make bad financial moves in chaotic times. Here's what to look out for.
Article
»By SUZANNE MCGEE
In a chaotic bear market like this one, it's easy for investors to fall into traps.
They might scramble to make trades based on the latest news reports. They might search for a miracle stock that will pay off big and let them recoup all their losses. Or they might go in the other direction -- and get so scared of the market that they don't make any moves at all.
I believe that the frequency of irrational investor behavior goes up along with market volatility," says Chris Blum, head of the U.S. behavioral-finance group for JP Morgan Funds in New York, which studies how people's emotions affect their financial decisions.
Fortunately, a bit of logic and common sense will keep you clear of these pitfalls. Here's a look at some common missteps -- and how to avoid them.
THE VALUE TRAP: A chaotic market makes it easier for investors to convince themselves that because a stock -- or a sector or a market -- is cheap, it's a great value. Sometimes, though, there's a good reason that a stock or sector is cheap: It's in trouble. You need to look past the share price or valuation and examine the fundamentals of the company, the industry and the economy before you decide that something is a bargain.
"Within industries, not all companies are created equal; some will fare better than others," says Mr. Blum. It's through research, not instinct or stock price, that investors discover the real values, he adds.
THE RISK TRAP: One reason investors are so vulnerable to the value trap is that another force is at work -- the urge to recoup losses. Investors who are desperate to make back some of what they have lost and return to "normal" are more willing to take outsize bets on individual stocks or narrowly focused exchange-traded funds.
But that approach is even more unlikely to work in this market environment; the combination of the credit crunch and the recession have made the stock market dangerously volatile. A concentrated portfolio is especially risky, advisers argue.
Investors can't accept that individual stocks, or stocks overall, aren't likely to deliver a reliable stream of double-digit profits each year as in the past, says Bill Schultheis, a partner at Soundmark Wealth Management LLC, a financial-planning firm in Kirkland, Washington.
To combat the risk trap, Mr. Schultheis spends a lot of time preaching the virtues of investment basics like diversification and building returns steadily through compound interest and dividends.
THE SCAPEGOAT TRAP: Like the children in humorist Garrison Keillor's Lake Wobegon, people believe they are all above average -- at investing. Overconfidence makes it easy to blame your financial adviser for your outsize losses last year, and to think you'd be better off making the big decisions yourself.
But that attitude ignores a basic fact: In this market, nearly everyone is in the same boat, more or less, regardless of who's managing their money. Ditching your professional help and going it alone is a bad idea.
"There are certainly some financial advisers out there who weren't good at what they did, but the worst mistake someone can make is to fire that individual and decide to do it all themselves instead of finding someone better," says Mr. Blum.
The reality, he says, is that few investors have the time, patience or expertise needed to develop asset-allocation plans and manage diversified portfolios. "Firing a specific adviser may be rational; deciding to be your own financial adviser probably isn't," he says.
THE PARALYSIS TRAP: The market debacle has left many investors too terrified to act at all, whether to sell portfolio holdings to limit losses or take advantage of what may be appealing long-term investment opportunities. Some advisers report clients in their 30s and early 40s shunning stocks altogether, when the real risk that they face is likely to be inflation -- which may eat up their money if they keep it out of riskier investments that are likely to trounce rising inflation rates over the next decade or two.
"The chance of suffering more pain is so intense that they can't imagine a world that will be better," says Joe Sheehan, a partner at Moneta Group, a wealth-management firm in St. Louis. "Two years ago, they would have jumped at the chance to buy more of stocks they already owned at these low prices; now they are frozen in place and won't respond."
Mr. Sheehan tries to persuade clients of a simple fact: The world hasn't changed dramatically enough to justify paralysis. "About 92% of Americans are still employed; the S&P 500 is not going to zero," he says.
Mr. Sheehan finds himself pointing to psychological studies showing that people tend to rely too heavily on what has happened in the recent past when it comes to predicting the future. "That's one reason we're in this mess in the first place," he says.
Among other things, he notes, investors and homeowners believed that housing prices could only go up -- leading to the bubble that got millions of homeowners in horrible financial trouble.
THE COMFORT TRAP: "When people are fearful, Wall Street comes out with a product that tries to make you feel good by promising you safety," says Andrew Mehalko, chief investment officer of GenSpring Family Offices LLC in Palm Beach Gardens, Florida.
For instance, Mr. Mehalko expects one of the hottest-selling products this year to be principal-protected notes, just as they were after the bear market of 2001-02. While these vehicles -- which promise to preserve your principal investment -- may provide reassurance, they often also come with hefty fees and can sharply limit your upside potential.
As a general rule, a low-risk strategy will produce minimal returns. So, while you may feel the urge to lock up all your capital in ultrasafe strategies, you need to be prepared to invest some of it in riskier products.
Meanwhile, Mr. Sheehan reports that some of his clients have even developed an aversion to mortgages. That may be rational for people with no nest egg or a job that's at risk, but it's not something that everyone should be worrying about.
"It's not logical at all," he says, because some have relatively little mortgage debt relative to home value, hold long-term fixed mortgages at the relatively low rate of 5% or so and gain from the tax deduction for mortgage interest.
Yet "all they want to do is pay off that mortgage," to get rid of "this toxic thing -- a mortgage," he says.
THE CHASING-THE-NEWS TRAP: If you're a financial-news junkie, it's tempting to try to react to each twist and turn of the market. But the best thing you can do is turn off the news, put the remote control down on the coffee table and step away from your television set.
In times like these -- an almost unbelievably volatile stock market, a distorted bond market and an economic meltdown -- newshounds can do tremendous damage to their portfolios. Trying to judge exactly the right moment to get into the market -- and then jump out again a day or two later -- is likely to leave you with big headaches and outsize trading expenses.
An "atmosphere of constant, breathless hysteria" isn't conducive to making smart investing moves, says Carol Clark, an investment principal at Lowry Hill, a wealth-management firm in Minneapolis. "That's not what long-term investing is all about.
"Many of those [300-point] interday moves simply don't make a lot of sense in the first place, so how can it be sensible to try and respond to them?" she asks.
Instead of acting on every new development, it's better to look past the noise and invest small amounts regularly, an approach known as dollar-cost averaging. A strategy based on a solid asset-allocation plan and dollar-cost averaging is more likely to lead to sustainable gains over the longer haul.
Ms. Clark offers one final observation. Usually, investors find themselves in traps "because your emotions have run away with your logical thinking," she says. "You need to find ways to start thinking logically again."
Sometimes it helps to do something as simple as making a list of your investment goals and putting it on the refrigerator. Whenever you're tempted to act impulsively in response to something you see on television or hear from a friend at a dinner party, you can go back to that list and remind yourself that yanking money out of the market may not be the best strategy.
"Then, when you feel an urge to turn on CNBC, you train yourself to look at the list instead," she says.
—Ms. McGee is a writer in New York. She can be reached at reports@wsj.com
from ZeroHedge.com: When Government Intervenes in the Banks
Nationalization. What happens to owners of bonds and preferred shares when government bails out a bank? It depends (see the table in ZeroHedge.com). For Government Sponsored Enterprises, Fannie Mae and Freddie Mac, preferred dividend deferral. For Lehman and Wamu, bond default.
"As one can see from the maze of policy reactions in the above 8 cases (which are not exhaustive, there have been many more failures), the only things that have been consistent is that absent an outright (semi) liquidation as was the case in Lehman and WaMu, the debtholders were never impaired. ..However, while this may be true for senior debt instruments, the fate of junior debt as well as Hybrid/Preferred layers is not so certain. All nationalization would really do, would be to eliminate certain junior capital tranches. Indicatively, Citi and BofA have about $100 billion in junior instruments (preferreds and hybrids), while the other too-big-to-fail banks have roughly $160 billion among them (Wells, JPM, Morgan Stanley and Goldman), implying there is a U.S. tranche of over $360 billion of non-debt securities that could potentially be eliminated before debt impairments would have to occur."
"As one can see from the maze of policy reactions in the above 8 cases (which are not exhaustive, there have been many more failures), the only things that have been consistent is that absent an outright (semi) liquidation as was the case in Lehman and WaMu, the debtholders were never impaired. ..However, while this may be true for senior debt instruments, the fate of junior debt as well as Hybrid/Preferred layers is not so certain. All nationalization would really do, would be to eliminate certain junior capital tranches. Indicatively, Citi and BofA have about $100 billion in junior instruments (preferreds and hybrids), while the other too-big-to-fail banks have roughly $160 billion among them (Wells, JPM, Morgan Stanley and Goldman), implying there is a U.S. tranche of over $360 billion of non-debt securities that could potentially be eliminated before debt impairments would have to occur."
Fitch downgrades Royal Bank of Scotland
PRESS RELEASE: Fitch Downgrades RBS Group Individual Rating1-19-09 1:02 PM EST
Fitch Ratings-London-19 January 2009: Fitch Ratings has today downgraded The Royal Bank of Scotland Group plc's (RBS Group) Individual rating and that of its main operating subsidiaries The Royal Bank of Scotland plc (RBS plc) and National Westminster Bank plc (NatWest) to 'E' from 'B/C'. NatWest's Individual rating has been subsequently withdrawn. Today's action follows RBS Group's announcement that it expects to report an attributable loss of between GBP7bn and GBP8bn for 2008, and that it has reached an agreement to replace GBP5bn of preference shares held by the UK government with new ordinary shares.
The three companies' Long-term Issuer Default Ratings (IDR) and Short-term IDRs are affirmed at 'AA-' (AA minus) and 'F1+' respectively. RBS Group's Support rating has been upgraded to '1' from '5' and its Support Floor has been revised to 'AA-' (AA minus) from 'No Floor'. The Outlook for the IDRs remains Stable, reflecting an expectation of continued strong government support for RBS Group.
Fitch has also downgraded RBS Group's and RBS plc's Tier 1 preference shares to 'BB-' (BB minus) from 'A+', and upper tier 2 hybrid capital instruments issued by group companies to 'BB' from 'A+' and placed all of these securities on Rating Watch Negative.
A full list of ratings actions is available at the end of this release.The loss will arise largely as a result of additional credit market write-downs, lower income in the group's Global Banking & Markets division, impairment provisions relating to Lyondell Basell Industries and Bernard L Madoff Investment Securities LLC, and rising credit impairments across a broad range of portfolios and exposures. In downgrading the Individual ratings, Fitch is signalling its concern over increasing risks and worsening operating outlooks for the group's main businesses, together with the unique challenges the group faces in integrating ABN AMRO businesses in increasingly difficult market conditions. RBS Group also announced that following completion of a review of the carrying value of goodwill, it expects to make a goodwill impairment charge of between GBP15bn and GBP20bn.
The agency views UK government actions to support RBS Group and the broader UK banking system as positive for creditors, but notes the potential for restricted operational flexibility as a result of conditions that could be imposed by the UK government, the group's controlling shareholder. Fitch expects to see some significant changes to the group's strategic direction and priorities following completion of a strategic review. The UK government has today announced fresh measures aimed at supporting the UK financial system and facilitating the availability of credit to UK borrowers. Fitch will comment separately on these particular initiatives but expects RBS Group to be an early user of the new schemes.
Following the announcement in October 2008 that the major UK banks would be recapitalised, underwritten by the UK government, the RBS Group is currently 58% owned by the UK government. The replacement of the government-subscribed preference shares with ordinary shares will increase the UK government's stake in RBS Group to close to 70%. This large government stake, together with ongoing official commitment to provide capital and funding support to the major UK banks, underpins Fitch's continued view of the very strong likelihood of support for the RBS Group, and supports the upgrade of RBS Group's Support rating and Support Floor, as well as a Stable Outlook on the group's IDRs.
The economic outlook for RBS Group's main operating markets (particularly the UK, US and Ireland) is negative over the short- to medium-term and there remains significant uncertainty over the depth and length of the current recession. Fitch expects to see steady pressure on the group's earnings and asset quality as these economies continue to weaken. In the UK, RBS Group has not been as aggressive as some competitors in the residential housing and consumer lending markets and this should offer some protection as these segments continue to weaken. The expected increase in loan impairment charges relating to the group's Regional Markets businesses is GBP0.4bn compared to its November interim management statement. However, its leading share of the UK SME market and significant commercial property and large corporate exposures, where some concentrations have arisen following the ABN AMRO acquisition, are likely to pose some problems. The outlook for commercial property in 2009 remains negative as economic developments continue to put pressure on asset values and rentals. Outside the UK, the group is likely to suffer from asset quality deterioration in the US and Ireland. In the US, Citizens has historically been a low-risk lender, but has an externally sourced portfolio of home equity loans that is showing rapid deterioration, and its core lending is unlikely to escape the problems being felt in the US housing market and by the broader US economy. In Ireland, Ulster Bank faces similar pressures to the UK; a deteriorating economic environment, an abrupt contraction in economic growth forecast, rising unemployment and a worsening outlook for commercial property. Fitch considers that this is likely to lead to weaker revenue generation, sharp rises in impaired loans and steep falls in operating profitability.
RBS Group's capitalisation currently appears adequate following the government's recapitalisation operations, but is expected to decline as problems relating to recessionary economies materialise. The replacement of government preference shares with common equity will add around 86bp to the group's core equity Tier 1 ratio, which is expected to be in the range of 6.9% to 7.4% at end-2008. The Tier 1 ratio is expected to be between 9.5% and 10%. The massive goodwill impairment will not impact regulatory capital, but confirms the huge destruction of shareholder value that came from the ABN AMRO deal. Fitch expects 2009 to be characterised by sharply declining asset quality and pressure on revenues, particularly in businesses more reliant on market activity, thereby impacting internal capital generation severely. The group's funding has stabilised following the implementation of UK government initiatives in October 2008. The RBS Group, as have other UK major banks, has become increasingly reliant on guarantee schemes for longer-term funding, and Fitch does not expect this to diminish in the near-term.
The downgrade of RBS Group's, RBS plc's and Natwest's Individual ratings to 'E' reflects Fitch's opinion that due to the scale of the problems, RBS Group and its main operating banks are clearly reliant on external support - and to a greater extent than most other banks. The future direction of the group's and operating subsidiaries' Individual ratings will depend upon the pace and severity of continued pressures in the operating environment, together with the group's success in integrating ABN AMRO, de-leveraging the group's balance sheet, and implementing a refocused, lower risk, strategy. An additional element of uncertainty is the potential for government pressure to be brought to bear on the group to increase lending volumes to specific economic segments within the UK and it remains to be seen how compatible the group's de-leveraging and de- risking strategy is with government objectives.
Fitch's downgrade of RBS Group's preference shares and upper tier 2 hybrid capital instruments reflects the agency's view that deferral risk has increased significantly for banks that are in receipt of public funds, as well as the group's weakened standalone coupon-servicing capacity, as reflected in its Individual rating. This risk is heightened by the recognition that there is significant capital and financial flexibility to be retained by deferring on such instruments as well as Fitch's opinion that the replacement of government preference shares with common equity will result in a significantly elevated risk that market investors in RBS Group hybrid capital could be expected to share this burden with the UK taxpayer. The upper tier 2 instruments have been rated one notch higher than preference shares at 'BB' to reflect their higher recovery prospects.
The following ratings actions have been taken today:
Royal Bank of Scotland Group plc:Long-term IDR: affirmed at 'AA-' (AA minus); Outlook remains StableSenior unsecured debt: affirmed at 'AA-' (AA minus) Subordinated debt: affirmed at 'A+' Upper Tier 2 instruments: downgraded to 'BB' from 'A+'; on Rating Watch NegativePreferred stock: downgraded to 'BB-' (BB minus) from 'A+'; on Rating Watch NegativeShort-term IDR: affirmed at 'F1+ 'Commercial paper: affirmed at 'F1+';Individual rating: downgraded to 'E' from 'B/C' Support rating: upgraded to '1' from '5'Support Rating Floor: revised to 'AA-' (AA minus) from 'No Floor'
Royal Bank of Scotland plc:Long-term IDR: affirmed at 'AA-('AA minus')' ; Outlook remains StableGuaranteed debt: affirmed at 'AAA' Senior unsecured debt: affirmed at 'AA-('AA minus')' Subordinated debt: affirmed at 'A+' Upper Tier 2 instruments: downgraded to 'BB' from 'A+'; on Rating Watch NegativePreferred stock: downgraded to 'BB-' (BB minus) from 'A+'; on Rating Watch NegativeShort- term IDR: affirmed at 'F1+'Commercial paper: affirmed at 'F1+';Individual rating: downgraded to 'E' from 'B/C' Support rating: affirmed at '1'Support Rating Floor: affirmed at 'AA-' (AA minus)
National Westminster Bank Plc:Long-term IDR: affirmed at 'AA-' (AA minus); Outlook remains StableSenior unsecured debt: affirmed at 'AA-' (AA minus) Subordinated debt: affirmed at 'A+' Upper Tier 2 instruments: downgraded to 'BB' from 'A+'; on Rating Watch NegativePreferred stock: downgraded to 'BB-' (BB minus) from 'A+'; on Rating Watch NegativeShort-term IDR: affirmed at 'F1+ 'Individual rating: downgraded to 'E' from 'B/C'; rating withdrawn Support rating: affirmed at '1'Support Rating Floor: affirmed at 'AA-' (AA minus)
Ulster Bank LtdLong-term IDR: affirmed at 'A+'; Outlook remains StableShort- term IDR: affirmed at 'F1+'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
Ulster Bank Finance plc:Commercial paper: affirmed at 'F1+'
Ulster Bank Ireland Limited:Long-term IDR: affirmed at 'A+'; Outlook remains StableSenior unsecured debt: affirmed at 'A+' Short-term IDR: affirmed at 'F1+ 'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
First Active Plc:Long-term IDR: affirmed at 'A+'; Outlook remains StableSenior unsecured debt: affirmed at 'A+' Short-term IDR: affirmed at 'F1+'Commercial paper: affirmed at 'F1+'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
Greenwich Capital Holdings Inc.:US commercial paper: affirmed at 'F1+'
Citizens Financial Group, Inc.: Long-term IDR: affirmed at 'A+'; Outlook remains StableShort-term IDR: affirmed at 'F1'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
RBS Citizens, NA (formerly Citizens Bank, NA): Long-term IDR: affirmed at 'A+ '; Outlook remains StableShort-term IDR: affirmed at 'F1'Long-term deposits: affirmed at 'AA-' (AA minus)Short-term deposits: affirmed at 'F1+'Senior unsecured debt: affirmed at 'A+'Subordinated debt: affirmed at 'A' Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
Citizens Bank of Pennsylvania: Long-term IDR: affirmed at 'A+'; Outlook remains StableShort-term IDR: affirmed at 'F1' Long-term deposits: affirmed at 'AA-' (AA minus)Short-term deposits: affirmed at 'F1+'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
Charter One Bank, NA: Senior unsecured debt: affirmed at 'A+' Subordinated debt: affirmed at 'A'
ABN AMRO Bank NVLong-term IDR: affirmed at 'AA-' (AA minus); Outlook remains StableSenior unsecured debt: affirmed at 'AA-' (AA minus)Subordinated debt: affirmed at 'A+'Upper Tier 2 instruments: downgraded to 'BB' from 'A+'; on RatingWatch NegativeShort-term IDR: affirmed at 'F1+'Commercial Paper and short- term debt: affirmed at 'F1+'Support rating: affirmed at '1'Support Rating Floor: affirmed at 'A-' (A minus)Mortgage covered bonds: remain unaffected by today's action
Contacts: Gordon Scott, +44 (0) 20 7417 4307; James Longsdon, + 44 (0)207 417 4309.
Media Relations: Julian Dennison, London, Tel: +44 020 7682 7480, Email: julian.dennison@fitchratings.com; Tyrene Frederick-Mack, New York, Tel: +1 212- 908-0540, Email: tyrene.frederick-mack@fitchratings.com; Sandro Scenga, New York, Tel: +1 212-908-0278, Email: sandro.scenga@fitchratings.com.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, http://www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
(END) Dow Jones Newswires
01-19-091302ET
Copyright (c) 2009 Dow Jones & Company, Inc.
Fitch Ratings-London-19 January 2009: Fitch Ratings has today downgraded The Royal Bank of Scotland Group plc's (RBS Group) Individual rating and that of its main operating subsidiaries The Royal Bank of Scotland plc (RBS plc) and National Westminster Bank plc (NatWest) to 'E' from 'B/C'. NatWest's Individual rating has been subsequently withdrawn. Today's action follows RBS Group's announcement that it expects to report an attributable loss of between GBP7bn and GBP8bn for 2008, and that it has reached an agreement to replace GBP5bn of preference shares held by the UK government with new ordinary shares.
The three companies' Long-term Issuer Default Ratings (IDR) and Short-term IDRs are affirmed at 'AA-' (AA minus) and 'F1+' respectively. RBS Group's Support rating has been upgraded to '1' from '5' and its Support Floor has been revised to 'AA-' (AA minus) from 'No Floor'. The Outlook for the IDRs remains Stable, reflecting an expectation of continued strong government support for RBS Group.
Fitch has also downgraded RBS Group's and RBS plc's Tier 1 preference shares to 'BB-' (BB minus) from 'A+', and upper tier 2 hybrid capital instruments issued by group companies to 'BB' from 'A+' and placed all of these securities on Rating Watch Negative.
A full list of ratings actions is available at the end of this release.The loss will arise largely as a result of additional credit market write-downs, lower income in the group's Global Banking & Markets division, impairment provisions relating to Lyondell Basell Industries and Bernard L Madoff Investment Securities LLC, and rising credit impairments across a broad range of portfolios and exposures. In downgrading the Individual ratings, Fitch is signalling its concern over increasing risks and worsening operating outlooks for the group's main businesses, together with the unique challenges the group faces in integrating ABN AMRO businesses in increasingly difficult market conditions. RBS Group also announced that following completion of a review of the carrying value of goodwill, it expects to make a goodwill impairment charge of between GBP15bn and GBP20bn.
The agency views UK government actions to support RBS Group and the broader UK banking system as positive for creditors, but notes the potential for restricted operational flexibility as a result of conditions that could be imposed by the UK government, the group's controlling shareholder. Fitch expects to see some significant changes to the group's strategic direction and priorities following completion of a strategic review. The UK government has today announced fresh measures aimed at supporting the UK financial system and facilitating the availability of credit to UK borrowers. Fitch will comment separately on these particular initiatives but expects RBS Group to be an early user of the new schemes.
Following the announcement in October 2008 that the major UK banks would be recapitalised, underwritten by the UK government, the RBS Group is currently 58% owned by the UK government. The replacement of the government-subscribed preference shares with ordinary shares will increase the UK government's stake in RBS Group to close to 70%. This large government stake, together with ongoing official commitment to provide capital and funding support to the major UK banks, underpins Fitch's continued view of the very strong likelihood of support for the RBS Group, and supports the upgrade of RBS Group's Support rating and Support Floor, as well as a Stable Outlook on the group's IDRs.
The economic outlook for RBS Group's main operating markets (particularly the UK, US and Ireland) is negative over the short- to medium-term and there remains significant uncertainty over the depth and length of the current recession. Fitch expects to see steady pressure on the group's earnings and asset quality as these economies continue to weaken. In the UK, RBS Group has not been as aggressive as some competitors in the residential housing and consumer lending markets and this should offer some protection as these segments continue to weaken. The expected increase in loan impairment charges relating to the group's Regional Markets businesses is GBP0.4bn compared to its November interim management statement. However, its leading share of the UK SME market and significant commercial property and large corporate exposures, where some concentrations have arisen following the ABN AMRO acquisition, are likely to pose some problems. The outlook for commercial property in 2009 remains negative as economic developments continue to put pressure on asset values and rentals. Outside the UK, the group is likely to suffer from asset quality deterioration in the US and Ireland. In the US, Citizens has historically been a low-risk lender, but has an externally sourced portfolio of home equity loans that is showing rapid deterioration, and its core lending is unlikely to escape the problems being felt in the US housing market and by the broader US economy. In Ireland, Ulster Bank faces similar pressures to the UK; a deteriorating economic environment, an abrupt contraction in economic growth forecast, rising unemployment and a worsening outlook for commercial property. Fitch considers that this is likely to lead to weaker revenue generation, sharp rises in impaired loans and steep falls in operating profitability.
RBS Group's capitalisation currently appears adequate following the government's recapitalisation operations, but is expected to decline as problems relating to recessionary economies materialise. The replacement of government preference shares with common equity will add around 86bp to the group's core equity Tier 1 ratio, which is expected to be in the range of 6.9% to 7.4% at end-2008. The Tier 1 ratio is expected to be between 9.5% and 10%. The massive goodwill impairment will not impact regulatory capital, but confirms the huge destruction of shareholder value that came from the ABN AMRO deal. Fitch expects 2009 to be characterised by sharply declining asset quality and pressure on revenues, particularly in businesses more reliant on market activity, thereby impacting internal capital generation severely. The group's funding has stabilised following the implementation of UK government initiatives in October 2008. The RBS Group, as have other UK major banks, has become increasingly reliant on guarantee schemes for longer-term funding, and Fitch does not expect this to diminish in the near-term.
The downgrade of RBS Group's, RBS plc's and Natwest's Individual ratings to 'E' reflects Fitch's opinion that due to the scale of the problems, RBS Group and its main operating banks are clearly reliant on external support - and to a greater extent than most other banks. The future direction of the group's and operating subsidiaries' Individual ratings will depend upon the pace and severity of continued pressures in the operating environment, together with the group's success in integrating ABN AMRO, de-leveraging the group's balance sheet, and implementing a refocused, lower risk, strategy. An additional element of uncertainty is the potential for government pressure to be brought to bear on the group to increase lending volumes to specific economic segments within the UK and it remains to be seen how compatible the group's de-leveraging and de- risking strategy is with government objectives.
Fitch's downgrade of RBS Group's preference shares and upper tier 2 hybrid capital instruments reflects the agency's view that deferral risk has increased significantly for banks that are in receipt of public funds, as well as the group's weakened standalone coupon-servicing capacity, as reflected in its Individual rating. This risk is heightened by the recognition that there is significant capital and financial flexibility to be retained by deferring on such instruments as well as Fitch's opinion that the replacement of government preference shares with common equity will result in a significantly elevated risk that market investors in RBS Group hybrid capital could be expected to share this burden with the UK taxpayer. The upper tier 2 instruments have been rated one notch higher than preference shares at 'BB' to reflect their higher recovery prospects.
The following ratings actions have been taken today:
Royal Bank of Scotland Group plc:Long-term IDR: affirmed at 'AA-' (AA minus); Outlook remains StableSenior unsecured debt: affirmed at 'AA-' (AA minus) Subordinated debt: affirmed at 'A+' Upper Tier 2 instruments: downgraded to 'BB' from 'A+'; on Rating Watch NegativePreferred stock: downgraded to 'BB-' (BB minus) from 'A+'; on Rating Watch NegativeShort-term IDR: affirmed at 'F1+ 'Commercial paper: affirmed at 'F1+';Individual rating: downgraded to 'E' from 'B/C' Support rating: upgraded to '1' from '5'Support Rating Floor: revised to 'AA-' (AA minus) from 'No Floor'
Royal Bank of Scotland plc:Long-term IDR: affirmed at 'AA-('AA minus')' ; Outlook remains StableGuaranteed debt: affirmed at 'AAA' Senior unsecured debt: affirmed at 'AA-('AA minus')' Subordinated debt: affirmed at 'A+' Upper Tier 2 instruments: downgraded to 'BB' from 'A+'; on Rating Watch NegativePreferred stock: downgraded to 'BB-' (BB minus) from 'A+'; on Rating Watch NegativeShort- term IDR: affirmed at 'F1+'Commercial paper: affirmed at 'F1+';Individual rating: downgraded to 'E' from 'B/C' Support rating: affirmed at '1'Support Rating Floor: affirmed at 'AA-' (AA minus)
National Westminster Bank Plc:Long-term IDR: affirmed at 'AA-' (AA minus); Outlook remains StableSenior unsecured debt: affirmed at 'AA-' (AA minus) Subordinated debt: affirmed at 'A+' Upper Tier 2 instruments: downgraded to 'BB' from 'A+'; on Rating Watch NegativePreferred stock: downgraded to 'BB-' (BB minus) from 'A+'; on Rating Watch NegativeShort-term IDR: affirmed at 'F1+ 'Individual rating: downgraded to 'E' from 'B/C'; rating withdrawn Support rating: affirmed at '1'Support Rating Floor: affirmed at 'AA-' (AA minus)
Ulster Bank LtdLong-term IDR: affirmed at 'A+'; Outlook remains StableShort- term IDR: affirmed at 'F1+'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
Ulster Bank Finance plc:Commercial paper: affirmed at 'F1+'
Ulster Bank Ireland Limited:Long-term IDR: affirmed at 'A+'; Outlook remains StableSenior unsecured debt: affirmed at 'A+' Short-term IDR: affirmed at 'F1+ 'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
First Active Plc:Long-term IDR: affirmed at 'A+'; Outlook remains StableSenior unsecured debt: affirmed at 'A+' Short-term IDR: affirmed at 'F1+'Commercial paper: affirmed at 'F1+'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
Greenwich Capital Holdings Inc.:US commercial paper: affirmed at 'F1+'
Citizens Financial Group, Inc.: Long-term IDR: affirmed at 'A+'; Outlook remains StableShort-term IDR: affirmed at 'F1'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
RBS Citizens, NA (formerly Citizens Bank, NA): Long-term IDR: affirmed at 'A+ '; Outlook remains StableShort-term IDR: affirmed at 'F1'Long-term deposits: affirmed at 'AA-' (AA minus)Short-term deposits: affirmed at 'F1+'Senior unsecured debt: affirmed at 'A+'Subordinated debt: affirmed at 'A' Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
Citizens Bank of Pennsylvania: Long-term IDR: affirmed at 'A+'; Outlook remains StableShort-term IDR: affirmed at 'F1' Long-term deposits: affirmed at 'AA-' (AA minus)Short-term deposits: affirmed at 'F1+'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
Charter One Bank, NA: Senior unsecured debt: affirmed at 'A+' Subordinated debt: affirmed at 'A'
ABN AMRO Bank NVLong-term IDR: affirmed at 'AA-' (AA minus); Outlook remains StableSenior unsecured debt: affirmed at 'AA-' (AA minus)Subordinated debt: affirmed at 'A+'Upper Tier 2 instruments: downgraded to 'BB' from 'A+'; on RatingWatch NegativeShort-term IDR: affirmed at 'F1+'Commercial Paper and short- term debt: affirmed at 'F1+'Support rating: affirmed at '1'Support Rating Floor: affirmed at 'A-' (A minus)Mortgage covered bonds: remain unaffected by today's action
Contacts: Gordon Scott, +44 (0) 20 7417 4307; James Longsdon, + 44 (0)207 417 4309.
Media Relations: Julian Dennison, London, Tel: +44 020 7682 7480, Email: julian.dennison@fitchratings.com; Tyrene Frederick-Mack, New York, Tel: +1 212- 908-0540, Email: tyrene.frederick-mack@fitchratings.com; Sandro Scenga, New York, Tel: +1 212-908-0278, Email: sandro.scenga@fitchratings.com.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, http://www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
(END) Dow Jones Newswires
01-19-091302ET
Copyright (c) 2009 Dow Jones & Company, Inc.
Forbes interviews Jeremy Grantham
THE GRANTHAM INTERVIEW
Intelligent Investing with Steve Forbes
[00:08 ] Welcome, I’m Steve Forbes. It's a privilege and a pleasure to introduce you to our featured guest, the great skeptic of Wall Street, Jeremy Grantham.
The bear
who called the stock bubble back in 1998 didn't jump back into U.S. Equities after
it burst the first time. Now, he finally sees opportunities in the equities markets.
[02:51] Grantham's Big Call
STEVE FORBES: Well, thank you Jeremy for joining us today. First, since you
have bragging rights in this situation, what made you a bear, great skeptic
between 1999 until about a couple of months ago you were saying, "Stay out?"
JEREMY GRANTHAM: Well, really very simple. Not rocket science, we take a
long-term view, which makes life, in our opinion, much easier.
STEVE FORBES: Well, everyone says it, but you certainly practiced it.
JEREMY GRANTHAM: We actually do it. Well, we tried the short-term stuff and
it was so hard, we thought we'd better do the long-term. We just assume that at
the end, in those days, of ten years, profit margins will be normal and price
earnings ratios will be normal. And that will create a normal, fair price. And more
recently, we've moved to seven years, because we've found, in our research that
financial series tend to mean revert a little bit faster than ten years, actually,
about six and a half years.So, we rounded to seven. And that's how we do it. And it just happened from
October '98 to October of '08, the ten-year forecast was right. Because, for one
second, in its flight path, the U.S. market and other markets flashed through
normal price. Normal price is about 950 on the S&P. It's a little bit below that
today.
And on my birthday, October the 6th, the U.S. market, ten years and four trading
days later, hit exactly our ten-year forecast of October '98, which is worth talking
about if only to enjoy spectacular luck. The P/E was a little bit lower than
average and the profit margins were a little bit higher, so they beautifully offset.
And given our methodology, that would mean that on October the 6th, the market
should have been fairly priced on our current approach. And indeed it was, that
was even more remarkable, 950, plus or minus a couple of percent.
STEVE FORBES: And what did you see during that ten-year period that made
you feel, other than your own models, that this was something highly abnormal,
that this couldn't last?
JEREMY GRANTHAM: Well, first of all, the magnitude of the overrun in 2000
was legendary. As historians, you know we've massaged the past until it begs
for mercy. And we saw that it was 21 times earnings in 1929, 21 times earnings
in 1965 and 35 times current earnings in 2000. And 35 is bigger than 21 by
enough that you'd expect everyone would see it. Indeed, it looks like a
Himalayan peak coming out of the plain.
And it begs the question, "Why didn't everybody see it?" And I think the answer
to that is, "Everybody did see it." But agency risk or career risk is so profound,
that even if you think the market is gloriously over-priced, you still have to get up
and dance. Because if you sit down too quickly--
STEVE FORBES: Famous words of Mister Prince.
JEREMY GRANTHAM: If you sit down too quickly, you're likely to get yourself
fired for being too conservative. And that's precisely what we did in '98 and '99.
We didn't dance long enough and got out of the growth stocks completely and
underperformed. We produced pretty good numbers, but they're way behind the
benchmark. And we were fired in droves.
I think our asset allocation, which is the division I'm now involved in, we lost 60
percent of our asset base in two and a half years for making the right bets for the
right reasons and winning them. But we still lost more money than any other
person in that field that we came across, which is a fitting reminder that career
risk runs the business.
STEVE FORBES: So, it's all right to be wrong as long as everyone else is
wrong.
JEREMY GRANTHAM: That's right. "I never saw it. Nobody saw it," that's what
they say about today's fiasco, which actually makes me quite disgusted because
almost everyone we talked to did see it coming. And I described it in June of last
year as the most widely-predicted surprise in the history of finance. And that's 18
months ago.
[07:24] A Whole New Bubble
STEVE FORBES: What was it about this bubble, do you think distinguished it, if
one can distinguish bubbles from past bubbles?
JEREMY GRANTHAM: Yeah, oh, I think this was distinguishable in many ways.
I described it, I think, accurately as the first truly global bubble. It had every
asset class, notably real estate, as well as stocks. But bonds were also
overpriced and fine arts, of course, were ridiculous. And secondly, it was global.
So, you know, Indian fine arts were going out of control. And Chinese modern
art --
- STEVE FORBES: But you still bought them, right? Indian fine arts, aren't you?
JEREMY GRANTHAM: I, perhaps, I participated too much in Indian antiquities,
which I have a soft spot for. But so, it was unique in breadth of asset class, in
breadth of reach, globally. Quite unlike anything else since the Depression and
even much broader than the bubble of 1929.
STEVE FORBES: You mentioned about career risk, that it's better to be with the
crowd than going against it and paying a price because people don't like what
you're saying. Did people really believe, do you think, their risk models that said
you can take this outsized risk but, 1) you've hedged it, and 2) if this goes up, this
goes down, and therefore, it's not-- as risky as it looks?
JEREMY GRANTHAM: Oh yes, I think they did. I think you should never
underestimate the ability of really serious quants to believe quant models. They
can really do faith big-time in those models. There's something about having a
PhD in some serious topic like particle physics or math that, when you've finished
a couple of years of hard work and you've produced a model, then your faith in it
can be intense. I think these people really did believe in that stuff.[09:24] Time To Buy
STEVE FORBES: And now that you feel the tide is turning, what should
investors do now? First of all, during that ten-year period, where did you invest
money when you saw this bubbly atmosphere? And what are you doing now?
JEREMY GRANTHAM: Most of our money is in specific funds for institutions.
So, we have an emerging market equity fund. And for institutions, they don't
want us messing around, moving up and down our cash balance. So, they're
fully invested in equities and we're trying to do the best job that we can. We have
an asset allocation group with about 40 percent of our money today.
And there, we are allowed to move around. but even there, we have a clear job
description so that in one account, for example, a fairly typical flavor, we are not
allowed to drop below 45 percent equity or go above 75. So, in the institutional
business, people are pretty hemmed in, most of the time, and we are. Most of
the last ten years, we have been promoting the idea of not taking a lot of
unnecessary risk and that's probably been the most constant theme.
The single exception to that, until quite recently, was emerging markets. We felt
that if you had this irresistible urge to take risk, you should exercise it on
emerging, because you'd get a better bang for your buck. And we were
overweighted for 12 years ending in this July. And we kind of blew the whistle in
July. We had been thinking that emerging was strong enough and fundamental
that we'd ride out the unpleasantness.
And then, on June the 26th, precisely, the penny dropped that I had been quite
optimistic on lots of little fundamentals. None of them, perhaps, profoundly
optimistic, but they accumulated to considerable optimism. And it was revealed
to me that I had just missed evaluated how bad things were going to be,
fundamentally. And one of the reasons was career risk. Because we were the
best, there was a kind of disinclination to wrack your brains to be even further off
the spectrum than you were already.
And since I was already considered a perma-bear, I thought, "Well, we're the
most bearish people around, let's leave it at that. Don't look for trouble." And
then, June the 26th, we had a Glaswegian arrive to kind of review the data with
us, an economic strategist. And he had this dour Glasgow accent. I think that
had something to do with it.
And I came out of the meeting thinking, "Holy cow, this is going to be really, really
awful." And I wrote a courtly letter immediately saying, "I recant on emerging.
Up until now, we'd been advising for two years, 'Take as little risk as you can,
except for emerging.' Our new advice is take as little risk as you can, period.'"
And we held up the letter for two weeks.
We did the biggest trade in our history. And for the first time in 12 years, we
went to underweight emerging across the board, which in some accounts meant
zero. And for the only time in my career, the emerging market immediately
nosedived. I mean, immediately, like the day after we did our trade it headed
south.
And three months later, it was down 40 percent. I mean, I've never seen
anything like that. So, we replaced it. We thought, "Well, 40 percent makes a lot
of difference to anybody." We were looking at 11, 12 percent imputed real
returns for seven years in emerging and we replaced the bet in October.
[13:20] Cheapest in 20 Years
STEVE FORBES: You went back in emerging markets.
JEREMY GRANTHAM: Back in emerging markets.
STEVE FORBES: And in terms of evaluating markets and stocks, in particular,
you have a pretty disciplined formula so you can say precisely 950 and--
JEREMY GRANTHAM: That's exactly right. It may be wrong, but it's precise.
And we've had a long history of doing it the way I described, that everything will
be normal in seven years. And it's turned out to be quite robust. And probably
pretty simple and straightforward-- an effective way of doing it. And right now,
what it says is that, since October, global equity markets have been cheap, not
dramatically cheap, not cheap like you and I have seen a couple of markets,
1982, 1974, that was very cheap, indeed.
This is merely ordinarily cheap. But it's the cheapest it's been for 20 years. For
20 years, we had this remarkable period when the markets were never cheap.
They got less expensive, you know, too, but they were never cheap. And so
now, you have this terrible creative tension between, on one hand, they're the
cheapest they've been for 20 years.
They're pretty decent numbers. For seven years, we expect seven and a half
real from the U.S., from the S&P. And perhaps nine and a half from EAFE and
emerging. These are not bad number for seven years. And on the other hand,
as historians, we all recognize that the great bubbles tend to overrun.
STEVE FORBES: Right.
JEREMY GRANTHAM: And they're not normally satisfied, you can't buy them
off by being slightly cheap. They insist on becoming very cheap. So, we've said
for several months that we thought this cycle would go to 600 or 800 on the S&P,
800 if it was a mild recession, ho-ho. Can throw that one away. And 600 would
be quite normal if it was a severe recession like '82, '74, which I think, I don't
know if you agree, is pretty well baked in the pie today. It may be worse, but it's
probably not going to be much less bad than '74 or '82.
STEVE FORBES: And so, in terms of the markets today, even though they're
cheap, you're going in gingerly or since it could theoretically go down to 600 and
given the emotions you get in these things.
JEREMY GRANTHAM: Yes, I would say two-to-one, by the way, my instinct
plus looking at the history books that it will go to a new low [in 2009]. So, this is
the problem. We're underweighted still, in an ordinary asset allocation account
that has 65 percent in equities, we have moved up to 55. So, we're still
underweight, even though they're cheaper than they've been and they're
reasonably cheap.
Now what happens? If we throw in the client's money and it goes down, indeed,
as I think it will [in 2009], they will complain quite bitterly that we weren't very
smart. We thought it was going down, and yet we threw their money in. So,
that's one kind of regret. And the other kind of regret is that we hang back and
the market runs away, the one-in-three comes up and they say, "You told us the
market was cheap. You told us that you had these nine or ten percent real return
opportunities and you're still underweight and the market's back up 200 points.
You're an idiot."
So, there's no way you can avoid some regret. You have to look at your own
personal balance sheet, how much pain can you stand? If you absolutely can't
stand a 20 percent hit, you'd better carry quite a lot of cash, because you're quite
likely to get it. If on the other hand, you're made of steel, you can concentrate on
the seven-year horizon and filter money in and having a lot of cash here is
probably a bit dangerous from the other point of view.
But in any case, it's a very personal judgment of risk avoidance and how tough
you are under stress. The worst situation that will befall probably quite a lot of
people is that they exaggerate their toughness. The market goes down 30
percent from here to 600 and they panic, dump their stocks and never get back.
And that's the worst outcome.
[17:45] Japan A Blue Chip?
STEVE FORBES: And one of the areas you seem to be interested in is
Japanese stocks?
JEREMY GRANTHAM: I think Japan may turn out, finally, in a curious way, to
be a blue chip here. They've been through a lot of the problems, their ordinary
corporations are no longer super-leveraged as they were, it took them 15 years,
but finally, they got there about three years ago. The banking system is not at
the cutting edge of all the problems, so they look relatively blue chip.
And yes, they're exposed to the global export problem, but when you look at
Japan, they are deceptively low exporting country. It's only 12 percent of their
GDP, it's much lower than most European countries, et cetera. So, I think they're
fundamentally a candidate for the blue chip and plus, they're stock prices, of
course, have been terrible.
STEVE FORBES: Right.
JEREMY GRANTHAM: It's taken them 17 years to lose 78 percent of their
money. This is what I say, that exhibit is called "stock for the very, very long
run." Aimed at Jeremy Siegel if you think that people are machines, then of
course you can tuck stocks away and hold them forever. But ordinary human
beings don't like to wait 17 years to lose 78 percent of their money or 28 years to
round trip in Japan.
They haven't made a penny in 28 years, including dividends, in real terms. And
people have dismissed that, "That's Japan, we're the U.S." And that is, in a way,
the most simple minded of logic. Of course, every country is different. But do
not think that we can't have terrible times. I sincerely hope we will not, and I
don't expect that we will. But you have to consider it a possibility.
[19:38] Emerging Markets- STEVE FORBES: Now, looking at emerging markets, what ones stand out as
particularly enticing right now, or do you try to emerge them all together?
JEREMY GRANTHAM: Merge the emerging, yes. We do, I think. Emerging
market is no longer at all monolithic. There is an exporting clutch, there is a
handful of eastern European that looks a little shaky. There are two or three that
have forgotten the rules of the Asian crisis and have accumulated some foreigndenominated
debt that leaves them very vulnerable. And increasingly, each one
looks separate. But in general, many of them have better finances than they had
in other crises.
STEVE FORBES: Any ones particularly stand out that you?
JEREMY GRANTHAM: Well, Brazil, of course, is much improved from the way it
used to be and has a nice position in natural resources. And on a very long
horizon, I like its style. I'm not making a recommendation based on today's price.
Indeed, I don't know today's price, they most so fast. We had one day the other
day when their entire fund and the index was up over 10 percent for the day. So,
the numbers change at bewildering speed these days.
[20:59] Buy Big US Stocks
STEVE FORBES: And U.S. blue chips, you--
JEREMY GRANTHAM: No, U.S. blue chips, I think is manna from heaven.
They're conservative in a risky world. The best companies on the face of Earth,
right? And from '02 to '07, they were considered boring and all the action was in
the racier, more leveraged stuff. They underperformed every single year from '02
onwards and five years in a row. So, when this trouble started to escalate, they
were about as cheap, on a relative basis, as they ever get.
They were not absolutely cheap, but they were relatively very cheap. And the
best bet, for my money, then and now, a year later, was to buy the great
franchise companies, the great quality companies and to go short the junkier,
more leveraged companies. That's been a very profitable strategy and one of the
few things that has been working this year. This year, of course, as you know,
has been the year from hell for money managers.
The value traps, the like of which we haven't seen since the 1930s, the great
value managers all made their reputation by being braver than the next guy, by
buying the WaMus of the world when they'd fallen to seven and they'd bounce
back to 28. And this time they went from seven to three and they doubled up
again and they went to zero.
It's been a nightmare. And the quants, who use momentum as well as value,
have had no better luck with momentum. And the quant techniques of balancing
- 28 -
risk have also failed, as we were discussing. So, this has been a dreadful year
for money management. And quality has been the one theme that has worked.
And interestingly, from our firm's point of view, it's not a theme that other people
seem to have adopted.
There are not quality funds, there are large cap and growth and value, but there
are no quality funds. And so, it's been hard for people to pick up that theme. But
it has been very, very good since September.
STEVE FORBES: What are a couple of examples of what you consider quality
companies?
JEREMY GRANTHAM: I'm not recommending these companies, except
generically.
STEVE FORBES: Right.
JEREMY GRANTHAM: But, no surprise is Coca-Cola, Microsoft, Proctor and
Gamble, Johnson & Johnson. These are the essence of the great franchise
companies. And collectively, they're not that dependable in bear markets, but
they're incredibly dependable when people's confidence in the fundamentals start
to go. In Japan, for example, the quality companies in Japan outperformed for
nine consecutive years when their troubles came.
They accumulated again against the Japanese market of 98 percent points.
They were brilliant in the Great Depression between '29 and '32. Even though
the Coca-Colas were relatively overpriced in '29, they still went down dramatically
less than the junky companies. But they're the great test of quality. So, you
wouldn't expect quality to be dependable unless we were having the kind of
environment that we seem to be having. And I think they will have legs, they will,
the high quality companies can outperform, handsomely still, from here.
[24:17] Stimulus!
STEVE FORBES: Commodities, you were short oil, your firm was short copper.
When do you go long, or is that just a sideshow?
JEREMY GRANTHAM: That's a very good question. I was thinking about that
in the taxi today. When you see oil breaking $40, I believe oil is the great
exception. I asked over 2,000 full-time professionals to find me a paradigm shift
in a major asset class and they never offered me one, so I was very pleased to
offer oil a couple of years ago. I thought it was the genuine paradigm shift. I
thought that after 100 years at $16 a barrel, it had jumped to maybe $36 or $37
in real terms. And I think it has probably jumped again. It will be revealed in 20
years to what level. But my guess is $60, $65, maybe even $70. But what
people underestimate, even in the oil industry, is how volatile the asset class is.
- 29 -
In other words, if the trend is $65, it is fairly routine for oil to sell below half, say
$30 and more than double, say $145.
And people never get that. So, you don't want to be too quick to buy into
weakness or sell into strength, necessarily. But it can go a long way. But below
40, I must say, I do get a bit interested. And below 30, I'm definitely a buyer.
STEVE FORBES: Wow.
JEREMY GRANTHAM: And copper, copper's done so brilliantly on the
downside, that you really begin to ask, it must be approaching cost of production
somewhere in the next ten or 15 percent, you have to say, "That was very nice,
thank you," and cover.
STEVE FORBES: Now, in terms of the U.S. economy, you've seemed to be
saying that the Fed is doing right, print all you can, and for the government, to
spend all you can.
JEREMY GRANTHAM: Yes, which I have to choke on, as I have no doubt, you
would. Because, normally, it's a terrible
STEVE FORBES: That's why I'm not drinking the water, I don't want to choke.
JEREMY GRANTHAM: It's normally terrible advice. It's only useful when it's the
real McCoy. And I think it is. And if there's unemployment, having the
government help reduce that unemployment, increase employment directly is a
pretty good idea. It's not driving out competition, it's not crowding out. As long
as there's excess unemployed people sitting around like the Great Depression,
you should do everything you can to get them employed and get the system
going again, just as a temporary stopgap, or I believe.
And I think by combining that with energy sufficiency, particularly labor-intensive
kind of energy avoidance, installing insulation, storm windows, very labor
intensive. Battering down solar cells on the roofs of Wal-Marts in California. I
think that will be some of the highest return investments that anyone ever makes.
Just return on capital is very, very high in efficient light bulbs. And therefore
should be done. And I don't mind the government accruing debts as long as
every dollar is spent effectively, with a high return. That works out fine. If you
accumulate debts and waste your money, that's, of course, a disaster. I know I'm
preaching to choir on that one.
STEVE FORBES: And what about tax rates? Isn't that the best stimulus?
Lowering tax rates, changing incentives?
- 30 -
JEREMY GRANTHAM: The trouble is, in these very rare occasions, that
sometimes does not work. Normally, of course, it's a lay-up. But if you give
Japanese corporations were the real crunch there. Here it's consumers.
Japanese corporations had so much debt, that as you threw money at them, they
paid down their debt. They didn't build new factories. They were waking up at
3:00 in the morning sweating that they were insolvent.
Of course, technically, they were insolvent. So, they paid down debt and they
paid down debt. Our consumers are so leveraged that you run the risk with a tax
cut that they're in the same boat. You write them a check, even, same thing as a
tax cut, really. Write then a check for $250 and they'll pay down their credit card
debt because they're getting desperate. They are hugely overstretched. So, it
doesn't necessarily work anymore, pushing on a string. And whereas, if you get
out there and spend money to employ people directly, bashing insulation into
your attic, that does work.
[28:53] Our Leaders Failed
STEVE FORBES: So, what is the one big misplaced assumption today when
you look around at this?
JEREMY GRANTHAM: Reviewing the last two years, of course, it's a misplaced
trust in the competence of our leadership, from the very top. But certainly,
notably, the Fed, the arch-villains of this piece, Treasury, little better, the SEC.
They were cheerleaders, all of them. And they encouraged reckless leverage
and low-quality debt, complicated, un-researched, generally disgraceful.
And they made no effort to resist it in any way. Even jawboning would have been
a great advantage over nothing. Greenspan encouraged, admired the ingenuity
of the new instruments for sub-prime. I mean, went out of his way to encourage
it. Some, as in Greenspan, beat back an attempt to do some regulating of
subprime markets. And I think it looked pretty bad.
Hank Paulson did not move fast enough to recognize that the impending decline
of house prices would create some problems. And Bernanke couldn't even see
the house bubble. On our data and Robert Shillers, it was a three-sigma, one-in-
100 year event. After 100 years of being flat, it soared after 2000. You could not
miss it. And right at the peak, October '06, Bernanke said, "The U.S. housing
market merely reflects a strong economy," unquote.
What was he looking at? Where were his statisticians? These are the guys we
picked out of millions to lead us in a crisis. And they can't see a three-sigma
bubble? Every single bubble of that kind has broken. Asset classes are
incredibly dangerous when they form a bubble and when the bubble breaks. And
Greenspan did not get that, and I've been screaming “abuse” forever. It seems
- 31 -
like as long as I can remember, but I wrote a piece in 2001 called “Feet of Clay,”
saying basically, "This bubble from 2000 will be hard to forgive."
And of course, it was the ancestor of the current problem and the housing
bubble. The housing bubble is even more dangerous because more people own
houses. It's more for the ordinary people. And borrowing is so much easier. So,
that is really the most dangerous. And to do two at once, this time around, and to
do it globally it to truly play with fire. We have lost, or will have lost, is my
estimate, at the bottom, $20 trillion of formerly perceived wealth, from $50 trillion
to $30 [trillion].
And at $50 trillion, we had $42 trillion of debt, of all kinds, which is a fairly
suspiciously high 80 percent ratio of assets. But at $30 [trillion], we will have $42
trillion of debt, which is much more than suspicious. And bankers, who always
get religion after the event, are now going to say that 60 percent ratio might look
better.
And 60 percent of $20 [trillion] is not going to make much of an impression on the
$42 trillion of debt that we have. So we have a lot of what I call "stranded debt,"
$15, $20 trillion. Even at fair price, which is, perhaps, $25 trillion. There's still a
lot of stranded debt. This is going to take years to work through the system, not
a year or two.
[32:37] Dysfunctional Markets
STEVE FORBES: So, what is the best financial lesson you've learned? You've
been in this business for decades.
JEREMY GRANTHAM: The market is incredibly inefficient and capable on rare
occasions of being utterly dysfunctional. And people have a really hard time
getting their brain around that fact. They want to believe that it's approximately
efficient almost all the time and it simply isn't true.
[33:07] China Bubble
STEVE FORBES: So, what is your bold prediction for the future, now?
JEREMY GRANTHAM: In the long run, things will be back to normal. In the
short run, I think China will be a bitter disappointment. I can't believe that the
hardest job in economic history, guiding a vast empire of people and assets,
growing at double-digit industrial production rates can be anything but difficult.
And they've had much less experience than most capitalist countries.
And they have been because of 20 years of wonderfully good luck and favorable
circumstances, we have all been seduced into believing that there walk on water.
- 32 -
And I don't think they do. I think they have a terrible situation, which will be under
stress from all sides.
They export 40 percent of their GDP. The global economy gives a passably
good impression of having run, head down, into a very thick cement wall. And I
can't imagine that their exports will be anything other than mildly disastrous. And
yet, two months ago, the official forecast was still that it wouldn't drop below nine.
I mean, that is at least faintly ludicrous.
STEVE FORBES: What are the other fault lines you see in China?
JEREMY GRANTHAM: I'm not a China expert, so I'd be happy to leave it.
STEVE FORBES: Well, the experts weren't, either.
JEREMY GRANTHAM: They have a very small consumer sector, so it's hard to
stimulate that. A very large capital spending sector, how low does an interest
rate have to get to build another steel mill when there are seven up the road
empty, not operating. It's not an easy situation, I think. Direct spending on roads
and so on is something that might work.
But can they do it big enough since they're already doing it at a dramatic level;
can they increase it enough to rev their economy? I don't think so. I think their
economy will be very flattish for a while. And that will be a bitter shock to
everybody who's learned to depend on them.
STEVE FORBES: And one last question on China, their financial sector, their
stock market, in your mind, is that still very primitive? Does it really provide
capital for genuine entrepreneurs, or is it still all still?
JEREMY GRANTHAM: I can't. I really am not an expert. You look back, and
what you do see about the Chinese market is that it was again, a classic bubble.
It's a beautiful shape, symmetrical, it rises, it peaks and it drops slightly faster
than it went up, which is actually quite typical. And it was a great opportunity that
I regret not having capitalized on more than I did.
STEVE FORBES: But now you're staying away.
JEREMY GRANTHAM: Well, now it's completed the obvious part of the bubble.
It's back to kind of trend line. It may not be, you know, on a long-term
perspective, particularly more vulnerable than others. Even though their
economy will be disappointing in the short-term, of course, it has enormous longterm
potential. I do think emerging is the place to be, in the long-run.
I think it has all the indicators that will be required for the next bubble. It has
wonderful top-lying growth relative to an increasingly sluggish developed world.
- 33 -
It has a very high savings rate and investment rate. And I think it will become a
cliché how passé we all are, the U.S., the U.K., Europe, Japan.
We're running out of people. The number of man-hours offered to the markets
have been dropping without anyone talking about it for ten or 12 years.
Collectively, the G7 is way off its old trend line. By next year, the U.S. will be 14,
15 points behind its long-term trend rates. It's never come close to since the
Great Depression.
STEVE FORBES: Trend line, meaning?
JEREMY GRANTHAM: Just to take the 100-year battleship trend line, which
never deviated at 3.4 or something like this. The Great Depression, it went back
to trend very quickly. And now, we have been drifting off for this is year 13 of
drifting blow trend. We're simply getting more mature and all the other developed
countries are doing the same thing. But emerging has not fallen off its trend line
and has a lot of people coming into the workforce and a huge savings rate.
I think it will do very well. Put it this way, it will appeal to investors. It may not
make any more earnings per share, in other words, I'm not talking about true
fundamental value. I'm talking about how people buy stocks. They love top-line
growth. If they're going to grow at four and a half and we're going to slow down
to two and a half, it's going to look like a no-brainer. So, I think the next big event
in emerging will be that they will sell it at a big P/E premium over us developed
countries, who are suffering from a terminal case of middle-aged spread, I think.
STEVE FORBES: Well, clearly, the way you look at life is anything but a nobrainer.
Thank you very much.
JEREMY GRANTHAM: Thank you. I enjoyed it.
Intelligent Investing with Steve Forbes
[00:08 ] Welcome, I’m Steve Forbes. It's a privilege and a pleasure to introduce you to our featured guest, the great skeptic of Wall Street, Jeremy Grantham.
The bear
who called the stock bubble back in 1998 didn't jump back into U.S. Equities after
it burst the first time. Now, he finally sees opportunities in the equities markets.
[02:51] Grantham's Big Call
STEVE FORBES: Well, thank you Jeremy for joining us today. First, since you
have bragging rights in this situation, what made you a bear, great skeptic
between 1999 until about a couple of months ago you were saying, "Stay out?"
JEREMY GRANTHAM: Well, really very simple. Not rocket science, we take a
long-term view, which makes life, in our opinion, much easier.
STEVE FORBES: Well, everyone says it, but you certainly practiced it.
JEREMY GRANTHAM: We actually do it. Well, we tried the short-term stuff and
it was so hard, we thought we'd better do the long-term. We just assume that at
the end, in those days, of ten years, profit margins will be normal and price
earnings ratios will be normal. And that will create a normal, fair price. And more
recently, we've moved to seven years, because we've found, in our research that
financial series tend to mean revert a little bit faster than ten years, actually,
about six and a half years.So, we rounded to seven. And that's how we do it. And it just happened from
October '98 to October of '08, the ten-year forecast was right. Because, for one
second, in its flight path, the U.S. market and other markets flashed through
normal price. Normal price is about 950 on the S&P. It's a little bit below that
today.
And on my birthday, October the 6th, the U.S. market, ten years and four trading
days later, hit exactly our ten-year forecast of October '98, which is worth talking
about if only to enjoy spectacular luck. The P/E was a little bit lower than
average and the profit margins were a little bit higher, so they beautifully offset.
And given our methodology, that would mean that on October the 6th, the market
should have been fairly priced on our current approach. And indeed it was, that
was even more remarkable, 950, plus or minus a couple of percent.
STEVE FORBES: And what did you see during that ten-year period that made
you feel, other than your own models, that this was something highly abnormal,
that this couldn't last?
JEREMY GRANTHAM: Well, first of all, the magnitude of the overrun in 2000
was legendary. As historians, you know we've massaged the past until it begs
for mercy. And we saw that it was 21 times earnings in 1929, 21 times earnings
in 1965 and 35 times current earnings in 2000. And 35 is bigger than 21 by
enough that you'd expect everyone would see it. Indeed, it looks like a
Himalayan peak coming out of the plain.
And it begs the question, "Why didn't everybody see it?" And I think the answer
to that is, "Everybody did see it." But agency risk or career risk is so profound,
that even if you think the market is gloriously over-priced, you still have to get up
and dance. Because if you sit down too quickly--
STEVE FORBES: Famous words of Mister Prince.
JEREMY GRANTHAM: If you sit down too quickly, you're likely to get yourself
fired for being too conservative. And that's precisely what we did in '98 and '99.
We didn't dance long enough and got out of the growth stocks completely and
underperformed. We produced pretty good numbers, but they're way behind the
benchmark. And we were fired in droves.
I think our asset allocation, which is the division I'm now involved in, we lost 60
percent of our asset base in two and a half years for making the right bets for the
right reasons and winning them. But we still lost more money than any other
person in that field that we came across, which is a fitting reminder that career
risk runs the business.
STEVE FORBES: So, it's all right to be wrong as long as everyone else is
wrong.
JEREMY GRANTHAM: That's right. "I never saw it. Nobody saw it," that's what
they say about today's fiasco, which actually makes me quite disgusted because
almost everyone we talked to did see it coming. And I described it in June of last
year as the most widely-predicted surprise in the history of finance. And that's 18
months ago.
[07:24] A Whole New Bubble
STEVE FORBES: What was it about this bubble, do you think distinguished it, if
one can distinguish bubbles from past bubbles?
JEREMY GRANTHAM: Yeah, oh, I think this was distinguishable in many ways.
I described it, I think, accurately as the first truly global bubble. It had every
asset class, notably real estate, as well as stocks. But bonds were also
overpriced and fine arts, of course, were ridiculous. And secondly, it was global.
So, you know, Indian fine arts were going out of control. And Chinese modern
art --
- STEVE FORBES: But you still bought them, right? Indian fine arts, aren't you?
JEREMY GRANTHAM: I, perhaps, I participated too much in Indian antiquities,
which I have a soft spot for. But so, it was unique in breadth of asset class, in
breadth of reach, globally. Quite unlike anything else since the Depression and
even much broader than the bubble of 1929.
STEVE FORBES: You mentioned about career risk, that it's better to be with the
crowd than going against it and paying a price because people don't like what
you're saying. Did people really believe, do you think, their risk models that said
you can take this outsized risk but, 1) you've hedged it, and 2) if this goes up, this
goes down, and therefore, it's not-- as risky as it looks?
JEREMY GRANTHAM: Oh yes, I think they did. I think you should never
underestimate the ability of really serious quants to believe quant models. They
can really do faith big-time in those models. There's something about having a
PhD in some serious topic like particle physics or math that, when you've finished
a couple of years of hard work and you've produced a model, then your faith in it
can be intense. I think these people really did believe in that stuff.[09:24] Time To Buy
STEVE FORBES: And now that you feel the tide is turning, what should
investors do now? First of all, during that ten-year period, where did you invest
money when you saw this bubbly atmosphere? And what are you doing now?
JEREMY GRANTHAM: Most of our money is in specific funds for institutions.
So, we have an emerging market equity fund. And for institutions, they don't
want us messing around, moving up and down our cash balance. So, they're
fully invested in equities and we're trying to do the best job that we can. We have
an asset allocation group with about 40 percent of our money today.
And there, we are allowed to move around. but even there, we have a clear job
description so that in one account, for example, a fairly typical flavor, we are not
allowed to drop below 45 percent equity or go above 75. So, in the institutional
business, people are pretty hemmed in, most of the time, and we are. Most of
the last ten years, we have been promoting the idea of not taking a lot of
unnecessary risk and that's probably been the most constant theme.
The single exception to that, until quite recently, was emerging markets. We felt
that if you had this irresistible urge to take risk, you should exercise it on
emerging, because you'd get a better bang for your buck. And we were
overweighted for 12 years ending in this July. And we kind of blew the whistle in
July. We had been thinking that emerging was strong enough and fundamental
that we'd ride out the unpleasantness.
And then, on June the 26th, precisely, the penny dropped that I had been quite
optimistic on lots of little fundamentals. None of them, perhaps, profoundly
optimistic, but they accumulated to considerable optimism. And it was revealed
to me that I had just missed evaluated how bad things were going to be,
fundamentally. And one of the reasons was career risk. Because we were the
best, there was a kind of disinclination to wrack your brains to be even further off
the spectrum than you were already.
And since I was already considered a perma-bear, I thought, "Well, we're the
most bearish people around, let's leave it at that. Don't look for trouble." And
then, June the 26th, we had a Glaswegian arrive to kind of review the data with
us, an economic strategist. And he had this dour Glasgow accent. I think that
had something to do with it.
And I came out of the meeting thinking, "Holy cow, this is going to be really, really
awful." And I wrote a courtly letter immediately saying, "I recant on emerging.
Up until now, we'd been advising for two years, 'Take as little risk as you can,
except for emerging.' Our new advice is take as little risk as you can, period.'"
And we held up the letter for two weeks.
We did the biggest trade in our history. And for the first time in 12 years, we
went to underweight emerging across the board, which in some accounts meant
zero. And for the only time in my career, the emerging market immediately
nosedived. I mean, immediately, like the day after we did our trade it headed
south.
And three months later, it was down 40 percent. I mean, I've never seen
anything like that. So, we replaced it. We thought, "Well, 40 percent makes a lot
of difference to anybody." We were looking at 11, 12 percent imputed real
returns for seven years in emerging and we replaced the bet in October.
[13:20] Cheapest in 20 Years
STEVE FORBES: You went back in emerging markets.
JEREMY GRANTHAM: Back in emerging markets.
STEVE FORBES: And in terms of evaluating markets and stocks, in particular,
you have a pretty disciplined formula so you can say precisely 950 and--
JEREMY GRANTHAM: That's exactly right. It may be wrong, but it's precise.
And we've had a long history of doing it the way I described, that everything will
be normal in seven years. And it's turned out to be quite robust. And probably
pretty simple and straightforward-- an effective way of doing it. And right now,
what it says is that, since October, global equity markets have been cheap, not
dramatically cheap, not cheap like you and I have seen a couple of markets,
1982, 1974, that was very cheap, indeed.
This is merely ordinarily cheap. But it's the cheapest it's been for 20 years. For
20 years, we had this remarkable period when the markets were never cheap.
They got less expensive, you know, too, but they were never cheap. And so
now, you have this terrible creative tension between, on one hand, they're the
cheapest they've been for 20 years.
They're pretty decent numbers. For seven years, we expect seven and a half
real from the U.S., from the S&P. And perhaps nine and a half from EAFE and
emerging. These are not bad number for seven years. And on the other hand,
as historians, we all recognize that the great bubbles tend to overrun.
STEVE FORBES: Right.
JEREMY GRANTHAM: And they're not normally satisfied, you can't buy them
off by being slightly cheap. They insist on becoming very cheap. So, we've said
for several months that we thought this cycle would go to 600 or 800 on the S&P,
800 if it was a mild recession, ho-ho. Can throw that one away. And 600 would
be quite normal if it was a severe recession like '82, '74, which I think, I don't
know if you agree, is pretty well baked in the pie today. It may be worse, but it's
probably not going to be much less bad than '74 or '82.
STEVE FORBES: And so, in terms of the markets today, even though they're
cheap, you're going in gingerly or since it could theoretically go down to 600 and
given the emotions you get in these things.
JEREMY GRANTHAM: Yes, I would say two-to-one, by the way, my instinct
plus looking at the history books that it will go to a new low [in 2009]. So, this is
the problem. We're underweighted still, in an ordinary asset allocation account
that has 65 percent in equities, we have moved up to 55. So, we're still
underweight, even though they're cheaper than they've been and they're
reasonably cheap.
Now what happens? If we throw in the client's money and it goes down, indeed,
as I think it will [in 2009], they will complain quite bitterly that we weren't very
smart. We thought it was going down, and yet we threw their money in. So,
that's one kind of regret. And the other kind of regret is that we hang back and
the market runs away, the one-in-three comes up and they say, "You told us the
market was cheap. You told us that you had these nine or ten percent real return
opportunities and you're still underweight and the market's back up 200 points.
You're an idiot."
So, there's no way you can avoid some regret. You have to look at your own
personal balance sheet, how much pain can you stand? If you absolutely can't
stand a 20 percent hit, you'd better carry quite a lot of cash, because you're quite
likely to get it. If on the other hand, you're made of steel, you can concentrate on
the seven-year horizon and filter money in and having a lot of cash here is
probably a bit dangerous from the other point of view.
But in any case, it's a very personal judgment of risk avoidance and how tough
you are under stress. The worst situation that will befall probably quite a lot of
people is that they exaggerate their toughness. The market goes down 30
percent from here to 600 and they panic, dump their stocks and never get back.
And that's the worst outcome.
[17:45] Japan A Blue Chip?
STEVE FORBES: And one of the areas you seem to be interested in is
Japanese stocks?
JEREMY GRANTHAM: I think Japan may turn out, finally, in a curious way, to
be a blue chip here. They've been through a lot of the problems, their ordinary
corporations are no longer super-leveraged as they were, it took them 15 years,
but finally, they got there about three years ago. The banking system is not at
the cutting edge of all the problems, so they look relatively blue chip.
And yes, they're exposed to the global export problem, but when you look at
Japan, they are deceptively low exporting country. It's only 12 percent of their
GDP, it's much lower than most European countries, et cetera. So, I think they're
fundamentally a candidate for the blue chip and plus, they're stock prices, of
course, have been terrible.
STEVE FORBES: Right.
JEREMY GRANTHAM: It's taken them 17 years to lose 78 percent of their
money. This is what I say, that exhibit is called "stock for the very, very long
run." Aimed at Jeremy Siegel if you think that people are machines, then of
course you can tuck stocks away and hold them forever. But ordinary human
beings don't like to wait 17 years to lose 78 percent of their money or 28 years to
round trip in Japan.
They haven't made a penny in 28 years, including dividends, in real terms. And
people have dismissed that, "That's Japan, we're the U.S." And that is, in a way,
the most simple minded of logic. Of course, every country is different. But do
not think that we can't have terrible times. I sincerely hope we will not, and I
don't expect that we will. But you have to consider it a possibility.
[19:38] Emerging Markets- STEVE FORBES: Now, looking at emerging markets, what ones stand out as
particularly enticing right now, or do you try to emerge them all together?
JEREMY GRANTHAM: Merge the emerging, yes. We do, I think. Emerging
market is no longer at all monolithic. There is an exporting clutch, there is a
handful of eastern European that looks a little shaky. There are two or three that
have forgotten the rules of the Asian crisis and have accumulated some foreigndenominated
debt that leaves them very vulnerable. And increasingly, each one
looks separate. But in general, many of them have better finances than they had
in other crises.
STEVE FORBES: Any ones particularly stand out that you?
JEREMY GRANTHAM: Well, Brazil, of course, is much improved from the way it
used to be and has a nice position in natural resources. And on a very long
horizon, I like its style. I'm not making a recommendation based on today's price.
Indeed, I don't know today's price, they most so fast. We had one day the other
day when their entire fund and the index was up over 10 percent for the day. So,
the numbers change at bewildering speed these days.
[20:59] Buy Big US Stocks
STEVE FORBES: And U.S. blue chips, you--
JEREMY GRANTHAM: No, U.S. blue chips, I think is manna from heaven.
They're conservative in a risky world. The best companies on the face of Earth,
right? And from '02 to '07, they were considered boring and all the action was in
the racier, more leveraged stuff. They underperformed every single year from '02
onwards and five years in a row. So, when this trouble started to escalate, they
were about as cheap, on a relative basis, as they ever get.
They were not absolutely cheap, but they were relatively very cheap. And the
best bet, for my money, then and now, a year later, was to buy the great
franchise companies, the great quality companies and to go short the junkier,
more leveraged companies. That's been a very profitable strategy and one of the
few things that has been working this year. This year, of course, as you know,
has been the year from hell for money managers.
The value traps, the like of which we haven't seen since the 1930s, the great
value managers all made their reputation by being braver than the next guy, by
buying the WaMus of the world when they'd fallen to seven and they'd bounce
back to 28. And this time they went from seven to three and they doubled up
again and they went to zero.
It's been a nightmare. And the quants, who use momentum as well as value,
have had no better luck with momentum. And the quant techniques of balancing
- 28 -
risk have also failed, as we were discussing. So, this has been a dreadful year
for money management. And quality has been the one theme that has worked.
And interestingly, from our firm's point of view, it's not a theme that other people
seem to have adopted.
There are not quality funds, there are large cap and growth and value, but there
are no quality funds. And so, it's been hard for people to pick up that theme. But
it has been very, very good since September.
STEVE FORBES: What are a couple of examples of what you consider quality
companies?
JEREMY GRANTHAM: I'm not recommending these companies, except
generically.
STEVE FORBES: Right.
JEREMY GRANTHAM: But, no surprise is Coca-Cola, Microsoft, Proctor and
Gamble, Johnson & Johnson. These are the essence of the great franchise
companies. And collectively, they're not that dependable in bear markets, but
they're incredibly dependable when people's confidence in the fundamentals start
to go. In Japan, for example, the quality companies in Japan outperformed for
nine consecutive years when their troubles came.
They accumulated again against the Japanese market of 98 percent points.
They were brilliant in the Great Depression between '29 and '32. Even though
the Coca-Colas were relatively overpriced in '29, they still went down dramatically
less than the junky companies. But they're the great test of quality. So, you
wouldn't expect quality to be dependable unless we were having the kind of
environment that we seem to be having. And I think they will have legs, they will,
the high quality companies can outperform, handsomely still, from here.
[24:17] Stimulus!
STEVE FORBES: Commodities, you were short oil, your firm was short copper.
When do you go long, or is that just a sideshow?
JEREMY GRANTHAM: That's a very good question. I was thinking about that
in the taxi today. When you see oil breaking $40, I believe oil is the great
exception. I asked over 2,000 full-time professionals to find me a paradigm shift
in a major asset class and they never offered me one, so I was very pleased to
offer oil a couple of years ago. I thought it was the genuine paradigm shift. I
thought that after 100 years at $16 a barrel, it had jumped to maybe $36 or $37
in real terms. And I think it has probably jumped again. It will be revealed in 20
years to what level. But my guess is $60, $65, maybe even $70. But what
people underestimate, even in the oil industry, is how volatile the asset class is.
- 29 -
In other words, if the trend is $65, it is fairly routine for oil to sell below half, say
$30 and more than double, say $145.
And people never get that. So, you don't want to be too quick to buy into
weakness or sell into strength, necessarily. But it can go a long way. But below
40, I must say, I do get a bit interested. And below 30, I'm definitely a buyer.
STEVE FORBES: Wow.
JEREMY GRANTHAM: And copper, copper's done so brilliantly on the
downside, that you really begin to ask, it must be approaching cost of production
somewhere in the next ten or 15 percent, you have to say, "That was very nice,
thank you," and cover.
STEVE FORBES: Now, in terms of the U.S. economy, you've seemed to be
saying that the Fed is doing right, print all you can, and for the government, to
spend all you can.
JEREMY GRANTHAM: Yes, which I have to choke on, as I have no doubt, you
would. Because, normally, it's a terrible
STEVE FORBES: That's why I'm not drinking the water, I don't want to choke.
JEREMY GRANTHAM: It's normally terrible advice. It's only useful when it's the
real McCoy. And I think it is. And if there's unemployment, having the
government help reduce that unemployment, increase employment directly is a
pretty good idea. It's not driving out competition, it's not crowding out. As long
as there's excess unemployed people sitting around like the Great Depression,
you should do everything you can to get them employed and get the system
going again, just as a temporary stopgap, or I believe.
And I think by combining that with energy sufficiency, particularly labor-intensive
kind of energy avoidance, installing insulation, storm windows, very labor
intensive. Battering down solar cells on the roofs of Wal-Marts in California. I
think that will be some of the highest return investments that anyone ever makes.
Just return on capital is very, very high in efficient light bulbs. And therefore
should be done. And I don't mind the government accruing debts as long as
every dollar is spent effectively, with a high return. That works out fine. If you
accumulate debts and waste your money, that's, of course, a disaster. I know I'm
preaching to choir on that one.
STEVE FORBES: And what about tax rates? Isn't that the best stimulus?
Lowering tax rates, changing incentives?
- 30 -
JEREMY GRANTHAM: The trouble is, in these very rare occasions, that
sometimes does not work. Normally, of course, it's a lay-up. But if you give
Japanese corporations were the real crunch there. Here it's consumers.
Japanese corporations had so much debt, that as you threw money at them, they
paid down their debt. They didn't build new factories. They were waking up at
3:00 in the morning sweating that they were insolvent.
Of course, technically, they were insolvent. So, they paid down debt and they
paid down debt. Our consumers are so leveraged that you run the risk with a tax
cut that they're in the same boat. You write them a check, even, same thing as a
tax cut, really. Write then a check for $250 and they'll pay down their credit card
debt because they're getting desperate. They are hugely overstretched. So, it
doesn't necessarily work anymore, pushing on a string. And whereas, if you get
out there and spend money to employ people directly, bashing insulation into
your attic, that does work.
[28:53] Our Leaders Failed
STEVE FORBES: So, what is the one big misplaced assumption today when
you look around at this?
JEREMY GRANTHAM: Reviewing the last two years, of course, it's a misplaced
trust in the competence of our leadership, from the very top. But certainly,
notably, the Fed, the arch-villains of this piece, Treasury, little better, the SEC.
They were cheerleaders, all of them. And they encouraged reckless leverage
and low-quality debt, complicated, un-researched, generally disgraceful.
And they made no effort to resist it in any way. Even jawboning would have been
a great advantage over nothing. Greenspan encouraged, admired the ingenuity
of the new instruments for sub-prime. I mean, went out of his way to encourage
it. Some, as in Greenspan, beat back an attempt to do some regulating of
subprime markets. And I think it looked pretty bad.
Hank Paulson did not move fast enough to recognize that the impending decline
of house prices would create some problems. And Bernanke couldn't even see
the house bubble. On our data and Robert Shillers, it was a three-sigma, one-in-
100 year event. After 100 years of being flat, it soared after 2000. You could not
miss it. And right at the peak, October '06, Bernanke said, "The U.S. housing
market merely reflects a strong economy," unquote.
What was he looking at? Where were his statisticians? These are the guys we
picked out of millions to lead us in a crisis. And they can't see a three-sigma
bubble? Every single bubble of that kind has broken. Asset classes are
incredibly dangerous when they form a bubble and when the bubble breaks. And
Greenspan did not get that, and I've been screaming “abuse” forever. It seems
- 31 -
like as long as I can remember, but I wrote a piece in 2001 called “Feet of Clay,”
saying basically, "This bubble from 2000 will be hard to forgive."
And of course, it was the ancestor of the current problem and the housing
bubble. The housing bubble is even more dangerous because more people own
houses. It's more for the ordinary people. And borrowing is so much easier. So,
that is really the most dangerous. And to do two at once, this time around, and to
do it globally it to truly play with fire. We have lost, or will have lost, is my
estimate, at the bottom, $20 trillion of formerly perceived wealth, from $50 trillion
to $30 [trillion].
And at $50 trillion, we had $42 trillion of debt, of all kinds, which is a fairly
suspiciously high 80 percent ratio of assets. But at $30 [trillion], we will have $42
trillion of debt, which is much more than suspicious. And bankers, who always
get religion after the event, are now going to say that 60 percent ratio might look
better.
And 60 percent of $20 [trillion] is not going to make much of an impression on the
$42 trillion of debt that we have. So we have a lot of what I call "stranded debt,"
$15, $20 trillion. Even at fair price, which is, perhaps, $25 trillion. There's still a
lot of stranded debt. This is going to take years to work through the system, not
a year or two.
[32:37] Dysfunctional Markets
STEVE FORBES: So, what is the best financial lesson you've learned? You've
been in this business for decades.
JEREMY GRANTHAM: The market is incredibly inefficient and capable on rare
occasions of being utterly dysfunctional. And people have a really hard time
getting their brain around that fact. They want to believe that it's approximately
efficient almost all the time and it simply isn't true.
[33:07] China Bubble
STEVE FORBES: So, what is your bold prediction for the future, now?
JEREMY GRANTHAM: In the long run, things will be back to normal. In the
short run, I think China will be a bitter disappointment. I can't believe that the
hardest job in economic history, guiding a vast empire of people and assets,
growing at double-digit industrial production rates can be anything but difficult.
And they've had much less experience than most capitalist countries.
And they have been because of 20 years of wonderfully good luck and favorable
circumstances, we have all been seduced into believing that there walk on water.
- 32 -
And I don't think they do. I think they have a terrible situation, which will be under
stress from all sides.
They export 40 percent of their GDP. The global economy gives a passably
good impression of having run, head down, into a very thick cement wall. And I
can't imagine that their exports will be anything other than mildly disastrous. And
yet, two months ago, the official forecast was still that it wouldn't drop below nine.
I mean, that is at least faintly ludicrous.
STEVE FORBES: What are the other fault lines you see in China?
JEREMY GRANTHAM: I'm not a China expert, so I'd be happy to leave it.
STEVE FORBES: Well, the experts weren't, either.
JEREMY GRANTHAM: They have a very small consumer sector, so it's hard to
stimulate that. A very large capital spending sector, how low does an interest
rate have to get to build another steel mill when there are seven up the road
empty, not operating. It's not an easy situation, I think. Direct spending on roads
and so on is something that might work.
But can they do it big enough since they're already doing it at a dramatic level;
can they increase it enough to rev their economy? I don't think so. I think their
economy will be very flattish for a while. And that will be a bitter shock to
everybody who's learned to depend on them.
STEVE FORBES: And one last question on China, their financial sector, their
stock market, in your mind, is that still very primitive? Does it really provide
capital for genuine entrepreneurs, or is it still all still?
JEREMY GRANTHAM: I can't. I really am not an expert. You look back, and
what you do see about the Chinese market is that it was again, a classic bubble.
It's a beautiful shape, symmetrical, it rises, it peaks and it drops slightly faster
than it went up, which is actually quite typical. And it was a great opportunity that
I regret not having capitalized on more than I did.
STEVE FORBES: But now you're staying away.
JEREMY GRANTHAM: Well, now it's completed the obvious part of the bubble.
It's back to kind of trend line. It may not be, you know, on a long-term
perspective, particularly more vulnerable than others. Even though their
economy will be disappointing in the short-term, of course, it has enormous longterm
potential. I do think emerging is the place to be, in the long-run.
I think it has all the indicators that will be required for the next bubble. It has
wonderful top-lying growth relative to an increasingly sluggish developed world.
- 33 -
It has a very high savings rate and investment rate. And I think it will become a
cliché how passé we all are, the U.S., the U.K., Europe, Japan.
We're running out of people. The number of man-hours offered to the markets
have been dropping without anyone talking about it for ten or 12 years.
Collectively, the G7 is way off its old trend line. By next year, the U.S. will be 14,
15 points behind its long-term trend rates. It's never come close to since the
Great Depression.
STEVE FORBES: Trend line, meaning?
JEREMY GRANTHAM: Just to take the 100-year battleship trend line, which
never deviated at 3.4 or something like this. The Great Depression, it went back
to trend very quickly. And now, we have been drifting off for this is year 13 of
drifting blow trend. We're simply getting more mature and all the other developed
countries are doing the same thing. But emerging has not fallen off its trend line
and has a lot of people coming into the workforce and a huge savings rate.
I think it will do very well. Put it this way, it will appeal to investors. It may not
make any more earnings per share, in other words, I'm not talking about true
fundamental value. I'm talking about how people buy stocks. They love top-line
growth. If they're going to grow at four and a half and we're going to slow down
to two and a half, it's going to look like a no-brainer. So, I think the next big event
in emerging will be that they will sell it at a big P/E premium over us developed
countries, who are suffering from a terminal case of middle-aged spread, I think.
STEVE FORBES: Well, clearly, the way you look at life is anything but a nobrainer.
Thank you very much.
JEREMY GRANTHAM: Thank you. I enjoyed it.
America's Banks (Financial Times)
America’s banks need to hold a yard sale
By Meredith Whitney
Published: January 21 2009 19:33 | Last updated: January 21 2009 19:33
A clear lesson learnt from this credit crisis has been to sell and sell early. However, it appears as if US banks are setting out to make some of the same mistakes of the past 18 months all over again. In many instances, those mistakes determined who survived and who did not.
Throughout 2007 and 2008, when I asked managements why they were not more aggressive in disposing of assets, the common answer I received was that they believed current prices were too distressed and did not reflect the true underlying value. Unfortunately, the longer they waited, the less these assets were in fact worth. Such a strategy cost Merrill Lynch and Citigroup more than half of their per share capital. In the case of Lehman Brothers and Bear Stearns, capital all but vaporised. These are just some examples but in reality this applies to too many financial institutions.
Throughout 2008, hundreds of billions of dollars were raised to recapitalise US financial institutions, but this money simply went to plug holes created by holding on to assets with declining values. Until the fourth quarter, monies were raised from willing investors. However, beginning in the fourth quarter with troubled asset relief programme capital created to recapitalise these institutions, US taxpayers became the default investors.
Now, when the average taxpayer finds him or herself overextended, he or she is forced to backtrack and, in situations of duress, sell stuff (otherwise known as a yard sale). In these cases, selling a set of snow skis for $15 or a prized record collection for $10 is not desirable but is necessary. Why should the US taxpayer be forced to fund behaviour that he or she would never have the luxury of indulging in?
Citigroup provides a prime illustration to support this argument. Last Friday, Vikram Pandit, Citigroup’s chief executive, stated: “We are not in a rush to sell assets.” This comes from a company that has incurred more than $51bn (€39bn, £36bn) in writedowns and has called upon more than $45bn in Tarp money from the taxpayer. At a minimum, this seems like a company currently operating under a different rule book from that used by taxpayers.
What is more, taxpayer dollars will have increasing demands on them. Thirty eight states are underfunded: already California and Arizona have begged for more than $10bn in federal dollars, while at least 36 more states have shortfalls in their 2009 budgets totalling more than $30bn. I believe they will be forced to sell assets such as toll roads and airports. It is worth noting that the US is well behind the rest of the world in terms of private ownership of such assets.
The fact is that there is money on the sidelines looking for opportunities to invest. One constant question I get from investors, who need somewhere to put their money, is: if I had to own something, what would it be? I am not very helpful to them at the moment as my answer is that I would own nothing. I do tell them that I believe that later in the year there will be fabulous opportunities to invest in new combinations of businesses that are currently “off the menu” to individuals. What I mean by this is that the system will eventually force disposals of assets: here I am just arguing that we need to get to it sooner rather than later.
Funding is the critical challenge to outsiders’ ability to bid more aggressively for assets. Many of these potential investors have clean balance sheets and, if provided with the appropriate funding concession (guarantees of long-term, low-cost capital from the government), could also more ably lubricate the financial system by making actual loans. These investors could be private-equity firms or existing public companies. The key here is government providing a funding concession and the banks being forced to sell assets that could raise capital and provide some tax relief to taxpayers.
No one doubts that losses will go higher, so asset sales are certain to be heavily discounted just as initial bids for collateralised debt obligations and retail mortgage-backed securities were. However, in retrospect, those “discounts” were far less than the writedowns companies took just months later. While it is never pleasant to sell one’s “crown jewels”, the strain of this credit crisis and the overextension of many bank balance sheets will require that they sell what they can and perhaps not what they would like. After all, that is what the average taxpayer would be forced to do.
The writer is managing director of Oppenheimer & Co
Copyright The Financial Times Limited 2009
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© Copyright The Financial Times Ltd 2009.
Marketwatch: Aflac Slumps on Preferred Impairment
Aflac slumps on concern about investments
Insurer may be exposed to hybrid securities issued by troubled financial firms
By Alistair Barr, MarketWatch
Last update: 6:44 p.m. EST Jan. 22, 2009
SAN FRANCISCO (MarketWatch) -- Shares of Aflac Inc. lost more than a third of their value Thursday on concern about exposures within the insurer's investment portfolio.
Aflac said it's "comfortable" with its current capital position and will provide more details about its investments when the company reports fourth-quarter results on Feb. 2.
The insurer may be exposed to investment losses stemming from a recent slump in the value of hybrid securities issued by European financial institutions such as Royal Bank of Scotland PLC, according to Morgan Stanley analyst Nigel Dally.
Aflac (AFL) has $7.9 billion of exposure to hybrid securities, Dally wrote to investors Thursday. He estimated, using the statutory filings, that roughly 80% of this exposure is to European financial-services firms, with U.K. banks including RBS , Barclays PLC , and HBOS among the holdings.
"The hybrid-security prices related to these institutions were already under pressure at the end of last year," Dally said. "However, those price declines pale in comparison to the sharp fall-offs we have seen in the past week, where the investor concerns over the possibility of nationalization of some institutions has led many of these securities to decline 30% or more."
If institutions are nationalized, holders of their hybrid and preferred securities could be wiped out, according to John Nadel, an analyst at Sterne, Agee & Leach.
When Fannie Mae (FNM ) and Freddie Mac (FRE) were seized by the U.S. government last year, the preferred securities of the mortgage giants became essentially worthless, he noted.
The PowerShares Financial Preferred Portfolio (PGF) , an exchange-traded fund that tracks preferred and hybrid securities issued by financial firms, has slumped 27% in the past week on concern about the potential nationalization of RBS and other banks. The ETF fell 7.2% on Thursday.
If even a small portion of the losses on Aflac's hybrid holdings are realized, the hit to the insurer's capital ratios could be "substantial," and its overall capital adequacy could be significantly less than most investors believe, Dally warned.
Aflac shares slumped 37% to close at $22.90 on Thursday. That's the lowest level for the stock since early 2000.
"We're comfortable with our current capital position and are constantly monitoring our investment portfolio," said Laura Kane, a spokeswoman at Aflac. "We will be issuing our earnings release on Feb. 2 and specific details will be available then."
Too big to fail
Aflac has long been considered among the most conservative insurers based on its investment portfolio and the amount of capital it keeps on hand to pay claims. The company avoided big investment losses from the subprime mortgage meltdown and has always bought investment-grade securities, Dally noted.
However, the credit crisis has hit so many parts of the financial sector that even companies like Aflac may now be affected.
Indeed, State Street Corp. (STT) , known as a steady, custodial bank where investors store their securities, lost almost 60% of its market value on Tuesday after disclosing $3 billion of mark-to-market investment losses from the fourth quarter. See full story on State Street.
Aflac invested roughly 80% of its $7.9 billion hybrid preferred securities portfolio in large European financial institutions because the insurer thought governments in the region would step in to prevent the companies failing, Morgan Stanley's Dally said on Thursday.
"This indeed has proved to be accurate," he wrote. "However, there is a question of what components of the capital structure the government will backstop."
"If some financial institutions are nationalized, there is the possibility that both the common stock, regular preferred stock, and callable preferred could be essentially wiped out," Dally added.
New capital?
If Aflac suffers a 10% loss on its overall hybrid securities exposure, the insurer would still have a relatively strong risk-based capital ratio of roughly 370%, Dally estimated.
The risk-based capital ratio, or RBC, measures the amount of capital an insurer has to support its operations and the risks it has taken on.
If Aflac suffers a 15% loss on its hybrid exposures, its RBC ratio could fall to about 339%, a level that could put the insurer's credit ratings at risk and force it to raise new capital, Dally said. End of Story
Alistair Barr is a reporter for MarketWatch in San Francisco.
Make Money in Down Markets with Inverse ETFs
This blog, crashmarketstocks.com, has a good description of the inverse ETFs (like SDS and QID) that you can use to make money in down markets and hedge the long positions in your portfolio.
Winners & (Mostly) Losers - Year To Date Performance of S&P 500 Stocks
November 19, 2008
Year-to-Date Performance Ranking of S&P 500 Stocks (11/19/2008)
Below is the Year-to-Date Performance Ranking of stocks in S&P 500 index.
Rank Company (Stock Symbol) Year-to-Date Change Current Price End of 2007
1 Family Dollar Stores, Inc. (NYSE:FDO) 37.7% 26.48 19.23
2 Rohm and Haas Company (NYSE:ROH) 35.1% 71.71 53.07
3 Anheuser-Busch Companies, Inc. (NYSE:BUD) 31.0% 68.58 52.34
4 UST Inc. (NYSE:UST) 24.9% 68.47 54.80
5 Barr Pharmaceuticals, Inc. (NYSE:BRL) 21.1% 64.29 53.10
6 Celgene Corporation (NASDAQ:CELG) 20.7% 55.76 46.21
7 Amgen, Inc. (NASDAQ:AMGN) 15.5% 53.64 46.44
8 General Mills, Inc. (NYSE:GIS) 9.3% 62.31 57.00
9 Southwestern Energy Company (NYSE:SWN) 9.0% 30.38 27.86
10 Hudson City Bancorp, Inc. (NASDAQ:HCBK) 7.6% 16.16 15.02
11 Wal-Mart Stores, Inc. (NYSE:WMT) 7.3% 51.00 47.53
12 Campbell Soup Company (NYSE:CPB) 3.4% 36.94 35.73
13 The Kroger Co. (NYSE:KR) -0.4% 26.60 26.71
14 Abbott Laboratories (NYSE:ABT) -2.9% 54.52 56.15
15 McDonald's Corporation (NYSE:MCD) -5.9% 55.44 58.91
16 Apollo Group, Inc. (NASDAQ:APOL) -6.0% 65.97 70.15
17 Gilead Sciences, Inc. (NASDAQ:GILD) -6.1% 43.20 46.01
18 Baxter International Inc. (NYSE:BAX) -8.1% 53.37 58.05
19 Genzyme Corporation (NASDAQ:GENZ) -8.6% 68.00 74.44
20 The Clorox Company (NYSE:CLX) -8.8% 59.42 65.17
21 Waste Management, Inc. (NYSE:WMI) -9.0% 29.73 32.67
22 Hasbro, Inc. (NYSE:HAS) -9.7% 23.10 25.58
23 Nicor Inc. (NYSE:GAS) -10.1% 38.08 42.35
24 Norfolk Southern Corp. (NYSE:NSC) -10.1% 45.33 50.44
25 Allied Waste Industries, Inc. (NYSE:AW) -10.2% 9.90 11.02
26 Aon Corporation (NYSE:AOC) -10.4% 42.74 47.69
27 H&R Block, Inc. (NYSE:HRB) -10.6% 16.61 18.57
28 Sherwin-Williams Company (NYSE:SHW) -11.0% 51.68 58.04
29 The Southern Company (NYSE:SO) -11.0% 34.47 38.75
30 Burlington Northern Santa Fe Corporation (NYSE:BNI) -11.4% 73.73 83.23
31 C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) -12.7% 47.25 54.12
32 Pactiv Corporation (NYSE:PTV) -12.8% 23.23 26.63
33 Johnson & Johnson (NYSE:JNJ) -12.9% 58.12 66.70
34 H.J. Heinz Company (NYSE:HNZ) -13.4% 40.43 46.68
35 EOG Resources, Inc. (NYSE:EOG) -13.4% 77.28 89.25
36 Big Lots, Inc. (NYSE:BIG) -13.6% 13.81 15.99
37 The Hershey Company (NYSE:HSY) -14.3% 33.78 39.40
38 King Pharmaceuticals, Inc. (NYSE:KG) -14.7% 8.73 10.24
39 PG&E Corporation (NYSE:PCG) -15.1% 36.59 43.09
40 The Procter & Gamble Company (NYSE:PG) -15.2% 62.27 73.42
41 Molson Coors Brewing Company (NYSE:TAP) -15.2% 43.76 51.62
42 Affiliated Computer Services, Inc. (NYSE:ACS) -15.6% 38.07 45.10
43 Marsh & McLennan Companies, Inc. (NYSE:MMC) -15.8% 22.30 26.47
44 Applied Biosystems Inc. (NYSE:ABI) -15.8% 28.55 33.92
45 Kellogg Company (NYSE:K) -15.8% 44.12 52.43
46 DaVita Inc. (NYSE:DVA) -16.5% 47.03 56.35
47 C.R. Bard, Inc. (NYSE:BCR) -16.6% 79.08 94.80
48 Quest Diagnostics Incorporated (NYSE:DGX) -16.9% 43.94 52.90
49 Integrys Energy Group, Inc. (NYSE:TEG) -17.9% 42.42 51.69
50 The DIRECTV Group, Inc. (NASDAQ:DTV) -17.9% 18.97 23.12
51 Bemis Company, Inc. (NYSE:BMS) -18.3% 22.36 27.38
52 Pulte Homes, Inc. (NYSE:PHM) -18.4% 8.60 10.54
53 Watson Pharmaceuticals, Inc. (NYSE:WPI) -18.4% 22.14 27.14
54 Union Pacific Corporation (NYSE:UNP) -18.9% 50.97 62.81
55 Kimberly-Clark Corporation (NYSE:KMB) -19.1% 56.08 69.34
56 Wells Fargo & Company (NYSE:WFC) -19.2% 24.40 30.19
57 Colgate-Palmolive Company (NYSE:CL) -19.2% 62.99 77.96
58 The Chubb Corporation (NYSE:CB) -19.9% 43.74 54.58
59 DTE Energy Company (NYSE:DTE) -19.9% 35.20 43.96
60 Laboratory Corp. of America Holdings (NYSE:LH) -20.1% 60.36 75.53
61 Lowe's Companies, Inc. (NYSE:LOW) -20.2% 18.04 22.62
62 Kraft Foods Inc. (NYSE:KFT) -20.3% 25.99 32.63
63 Covidien Ltd. (NYSE:COV) -20.4% 35.27 44.29
64 Consolidated Edison, Inc. (NYSE:ED) -21.1% 38.52 48.85
65 McCormick & Company, Incorporated (NYSE:MKC) -21.2% 29.87 37.91
66 AutoZone, Inc. (NYSE:AZO) -21.4% 94.25 119.91
67 Exxon Mobil Corporation (NYSE:XOM) -21.6% 73.42 93.69
68 Genuine Parts Company (NYSE:GPC) -21.7% 36.25 46.30
69 Public Storage (NYSE:PSA) -21.7% 57.47 73.41
70 Progress Energy, Inc. (NYSE:PGN) -22.0% 37.79 48.43
71 Xcel Energy Inc. (NYSE:XEL) -22.3% 17.53 22.57
72 Leggett & Platt, Inc. (NYSE:LEG) -22.7% 13.48 17.44
73 Devon Energy Corporation (NYSE:DVN) -22.9% 68.57 88.91
74 BB&T Corporation (NYSE:BBT) -23.1% 23.57 30.67
75 Automatic Data Processing (NYSE:ADP) -23.4% 34.11 44.53
76 Bristol Myers Squibb Co. (NYSE:BMY) -23.6% 20.27 26.52
77 QUALCOMM, Inc. (NASDAQ:QCOM) -23.7% 30.01 39.35
78 PNC Financial Services (NYSE:PNC) -24.1% 49.83 65.65
79 Chevron Corporation (NYSE:CVX) -24.3% 70.61 93.33
80 Raytheon Company (NYSE:RTN) -24.5% 45.85 60.70
81 Wyeth (NYSE:WYE) -24.6% 33.34 44.19
82 Comcast Corporation (NASDAQ:CMCSA) -24.6% 13.77 18.26
83 Range Resources Corp. (NYSE:RRC) -25.0% 38.53 51.36
84 Medco Health Solutions Inc. (NYSE:MHS) -25.2% 37.91 50.70
85 CSX Corporation (NYSE:CSX) -25.5% 32.76 43.98
86 U.S. Bancorp (NYSE:USB) -25.6% 23.62 31.74
87 Becton, Dickinson and Co. (NYSE:BDX) -25.9% 61.92 83.58
88 Duke Energy Corporation (NYSE:DUK) -26.1% 14.91 20.17
89 Dominion Resources, Inc. (NYSE:D) -26.3% 34.95 47.45
90 FirstEnergy Corp. (NYSE:FE) -26.6% 53.12 72.34
91 The Home Depot, Inc. (NYSE:HD) -26.7% 19.76 26.94
92 Express Scripts, Inc. (NASDAQ:ESRX) -27.3% 53.06 73.00
93 United Parcel Service, Inc. (NYSE:UPS) -27.4% 51.36 70.72
94 SYSCO Corporation (NYSE:SYY) -27.8% 22.52 31.21
95 Biogen Idec Inc. (NASDAQ:BIIB) -27.9% 41.06 56.92
96 Southwest Airlines Co. (NYSE:LUV) -28.9% 8.67 12.20
97 Oracle Corporation (NASDAQ:ORCL) -29.1% 16.00 22.58
98 Altria Group, Inc. (NYSE:MO) -29.2% 16.50 23.31
99 Altera Corporation (NASDAQ:ALTR) -29.7% 13.59 19.32
100 International Business Machines Corp. (NYSE:IBM) -29.7% 75.97 108.10
101 CVS Caremark Corporation (NYSE:CVS) -30.0% 27.84 39.75
102 Sigma-Aldrich Corporation (NASDAQ:SIAL) -30.1% 38.17 54.60
103 3M Company (NYSE:MMM) -30.3% 58.77 84.32
104 Symantec Corporation (NASDAQ:SYMC) -30.4% 11.24 16.14
105 Varian Medical Systems, Inc. (NYSE:VAR) -30.5% 36.27 52.16
106 QLogic Corporation (NASDAQ:QLGC) -30.5% 9.87 14.20
107 The Travelers Companies, Inc. (NYSE:TRV) -30.7% 37.29 53.80
108 The Coca-Cola Company (NYSE:KO) -31.1% 42.27 61.37
109 M&T Bank Corporation (NYSE:MTB) -31.2% 56.14 81.57
110 PepsiCo, Inc. (NYSE:PEP) -31.4% 52.10 75.90
111 The Progressive Corporation (NYSE:PGR) -31.4% 13.15 19.16
112 Plum Creek Timber Co. Inc. (NYSE:PCL) -31.4% 31.58 46.04
113 W.W. Grainger, Inc. (NYSE:GWW) -31.5% 59.92 87.52
114 Pfizer Inc. (NYSE:PFE) -31.5% 15.56 22.73
115 St. Jude Medical, Inc. (NYSE:STJ) -31.6% 27.80 40.64
116 Lexmark International, Inc. (NYSE:LXK) -31.8% 23.79 34.86
117 NIKE, Inc. (NYSE:NKE) -31.8% 43.84 64.24
118 Ball Corporation (NYSE:BLL) -32.0% 30.60 45.00
119 Paychex, Inc. (NASDAQ:PAYX) -32.0% 24.62 36.22
120 FedEx Corporation (NYSE:FDX) -32.1% 60.58 89.17
121 CenterPoint Energy, Inc. (NYSE:CNP) -32.7% 11.52 17.13
122 Apache Corporation (NYSE:APA) -32.9% 72.19 107.54
123 Xilinx, Inc. (NASDAQ:XLNX) -32.9% 14.67 21.87
124 Pinnacle West Capital Corporation (NYSE:PNW) -32.9% 28.44 42.41
125 Reynolds American, Inc. (NYSE:RAI) -33.0% 44.19 65.96
126 BMC Software, Inc. (NYSE:BMC) -33.2% 23.82 35.64
127 Staples, Inc. (NASDAQ:SPLS) -33.9% 15.26 23.07
128 AmerisourceBergen Corp. (NYSE:ABC) -34.0% 29.61 44.87
129 FPL Group, Inc. (NYSE:FPL) -34.1% 44.67 67.78
130 Lockheed Martin Corporation (NYSE:LMT) -34.1% 69.33 105.26
131 Millipore Corporation (NYSE:MIL) -34.5% 47.94 73.18
132 Entergy Corporation (NYSE:ETR) -34.5% 78.26 119.52
133 Hewlett-Packard Company (NYSE:HPQ) -34.6% 33.03 50.48
134 JPMorgan Chase & Co. (NYSE:JPM) -34.8% 28.47 43.65
135 Intuit Inc. (NASDAQ:INTU) -35.0% 20.55 31.61
136 Snap-on Incorporated (NYSE:SNA) -35.1% 31.32 48.24
137 Costco Wholesale Corporation (NASDAQ:COST) -35.1% 45.27 69.76
138 Robert Half International Inc. (NYSE:RHI) -35.1% 17.54 27.04
139 Sempra Energy (NYSE:SRE) -35.3% 40.03 61.88
140 TECO Energy, Inc. (NYSE:TE) -35.5% 11.10 17.21
141 Ryder System, Inc. (NYSE:R) -35.5% 30.31 47.01
142 The TJX Companies, Inc. (NYSE:TJX) -35.9% 18.42 28.73
143 The Estee Lauder Companies Inc. (NYSE:EL) -36.0% 27.92 43.61
144 XTO Energy Inc. (NYSE:XTO) -36.0% 32.86 51.36
145 Cincinnati Financial Corporation (NASDAQ:CINF) -36.1% 25.28 39.54
146 Yum! Brands, Inc. (NYSE:YUM) -36.1% 24.46 38.27
147 Hospira, Inc. (NYSE:HSP) -36.2% 27.19 42.64
148 Equity Residential (NYSE:EQR) -36.4% 23.21 36.47
149 Cabot Oil & Gas Corporation (NYSE:COG) -36.5% 25.64 40.37
150 American Electric Power Company, Inc. (NYSE:AEP) -36.9% 29.37 46.56
151 Brown-Forman Corporation (NYSE:BF.B) -37.0% 46.67 74.11
152 ConAgra Foods, Inc. (NYSE:CAG) -37.0% 14.98 23.79
153 Expeditors International of Washington (NASDAQ:EXPD) -37.1% 28.11 44.68
154 PerkinElmer, Inc. (NYSE:PKI) -37.2% 16.35 26.02
155 Monsanto Company (NYSE:MON) -37.3% 70.07 111.69
156 Ecolab Inc. (NYSE:ECL) -37.5% 32.01 51.21
157 Fidelity National Information Services (NYSE:FIS) -37.7% 14.44 23.17
158 Medtronic, Inc. (NYSE:MDT) -37.9% 31.20 50.27
159 Verizon Communications Inc. (NYSE:VZ) -38.1% 26.94 43.49
160 The Walt Disney Company (NYSE:DIS) -38.2% 19.94 32.28
161 L-3 Communications Holdings, Inc. (NYSE:LLL) -38.5% 65.16 105.94
162 Bed Bath & Beyond Inc. (NASDAQ:BBBY) -38.5% 18.07 29.39
163 CA, Inc. (NASDAQ:CA) -38.7% 15.30 24.95
164 Linear Technology Corporation (NASDAQ:LLTC) -39.0% 19.43 31.83
165 Sealed Air Corp. (NYSE:SEE) -39.3% 14.05 23.14
166 AT&T Inc. (NYSE:T) -39.3% 25.23 41.56
167 Compuware Corporation (NASDAQ:CPWR) -39.3% 5.39 8.88
168 Praxair, Inc. (NYSE:PX) -39.3% 53.84 88.71
169 Cintas Corporation (NASDAQ:CTAS) -39.4% 20.36 33.62
170 PPL Corporation (NYSE:PPL) -39.4% 31.54 52.09
171 Mattel, Inc. (NYSE:MAT) -39.5% 11.51 19.04
172 Walgreen Company (NYSE:WAG) -39.6% 23.01 38.08
173 Exelon Corporation (NYSE:EXC) -39.7% 49.23 81.64
174 Equifax Inc. (NYSE:EFX) -39.8% 21.89 36.36
175 MasterCard Incorporated (NYSE:MA) -39.8% 129.54 215.19
176 Frontier Communications Corp (NYSE:FTR) -39.8% 7.66 12.73
177 United Technologies Corporation (NYSE:UTX) -39.9% 45.99 76.54
178 Occidental Petroleum Corporation (NYSE:OXY) -40.1% 46.12 76.99
179 Pitney Bowes Inc. (NYSE:PBI) -40.3% 22.72 38.04
180 Ameren Corporation (NYSE:AEE) -40.3% 32.35 54.21
181 Windstream Corporation (NYSE:WIN) -40.4% 7.76 13.02
182 Zions Bancorporation (NASDAQ:ZION) -40.9% 27.57 46.69
183 Edison International (NYSE:EIX) -41.0% 31.49 53.37
184 Forest Laboratories, Inc. (NYSE:FRX) -41.0% 21.49 36.45
185 Eli Lilly & Co. (NYSE:LLY) -41.2% 31.41 53.39
186 NiSource Inc. (NYSE:NI) -41.3% 11.08 18.89
187 PPG Industries, Inc. (NYSE:PPG) -41.4% 41.19 70.23
188 Danaher Corporation (NYSE:DHR) -41.4% 51.45 87.74
189 Safeway Inc. (NYSE:SWY) -41.5% 20.01 34.21
190 V.F. Corporation (NYSE:VFC) -41.9% 39.88 68.66
191 Noble Energy, Inc. (NYSE:NBL) -42.0% 46.10 79.52
192 Patterson Companies, Inc. (NASDAQ:PDCO) -42.1% 19.67 33.95
193 Illinois Tool Works Inc. (NYSE:ITW) -42.1% 31.01 53.54
194 Spectra Energy Corp. (NYSE:SE) -42.1% 14.95 25.82
195 Schering-Plough Corporation (NYSE:SGP) -42.4% 15.35 26.64
196 Kohl's Corporation (NYSE:KSS) -42.4% 26.39 45.80
197 ITT Corporation (NYSE:ITT) -42.4% 38.04 66.04
198 CenturyTel, Inc. (NYSE:CTL) -42.4% 23.86 41.46
199 Dover Corporation (NYSE:DOV) -42.5% 26.51 46.09
200 Pall Corporation (NYSE:PLL) -42.6% 23.15 40.32
201 The Charles Schwab Corporation (NASDAQ:SCHW) -42.7% 14.65 25.55
202 AFLAC Incorporated (NYSE:AFL) -42.7% 35.91 62.63
203 Citrix Systems, Inc. (NASDAQ:CTXS) -42.7% 21.79 38.01
204 Pepco Holdings, Inc. (NYSE:POM) -42.8% 16.77 29.33
205 Vulcan Materials Company (NYSE:VMC) -42.9% 45.18 79.09
206 Public Service Enterprise Group Inc. (NYSE:PEG) -43.3% 27.84 49.12
207 Zimmer Holdings, Inc. (NYSE:ZMH) -43.4% 37.47 66.15
208 The Stanley Works (NYSE:SWK) -43.4% 27.43 48.48
209 Embarq Corporation (NYSE:EQ) -43.5% 27.99 49.53
210 Mylan Inc. (NYSE:MYL) -43.6% 7.93 14.06
211 CMS Energy Corporation (NYSE:CMS) -43.6% 9.80 17.38
212 Boston Scientific Corporation (NYSE:BSX) -43.7% 6.55 11.63
213 Capital One Financial Corp. (NYSE:COF) -43.9% 26.50 47.26
214 Emerson Electric Co. (NYSE:EMR) -44.2% 31.63 56.66
215 Microchip Technology Inc. (NASDAQ:MCHP) -44.3% 17.51 31.42
216 Cisco Systems, Inc. (NASDAQ:CSCO) -44.3% 15.08 27.07
217 Novell, Inc. (NASDAQ:NOVL) -44.4% 3.82 6.87
218 General Dynamics Corporation (NYSE:GD) -44.7% 49.25 88.99
219 Analog Devices, Inc. (NYSE:ADI) -44.7% 17.53 31.70
220 Cardinal Health, Inc. (NYSE:CAH) -44.7% 31.92 57.75
221 Thermo Fisher Scientific Inc. (NYSE:TMO) -45.0% 31.75 57.68
222 E.I. du Pont de Nemours & Company (NYSE:DD) -45.0% 24.26 44.09
223 Sara Lee Corp. (NYSE:SLE) -45.1% 8.82 16.06
224 Fiserv, Inc. (NASDAQ:FISV) -45.2% 30.42 55.49
225 Anadarko Petroleum Corporation (NYSE:APC) -45.3% 35.96 65.69
226 International Flavors & Fragrances Inc. (NYSE:IFF) -45.6% 26.17 48.13
227 Target Corporation (NYSE:TGT) -46.1% 26.96 50.00
228 Darden Restaurants, Inc. (NYSE:DRI) -46.1% 14.94 27.71
229 Vornado Realty Trust (NYSE:VNO) -46.4% 47.17 87.95
230 Tellabs, Inc. (NASDAQ:TLAB) -46.5% 3.50 6.54
231 Allergan, Inc. (NYSE:AGN) -46.9% 34.11 64.24
232 Polo Ralph Lauren Corporation (NYSE:RL) -46.9% 32.80 61.79
233 Computer Sciences Corporation (NYSE:CSC) -47.0% 26.21 49.47
234 EMC Corporation (NYSE:EMC) -47.1% 9.80 18.53
235 Avon Products, Inc. (NYSE:AVP) -47.2% 20.88 39.53
236 The Black & Decker Corporation (NYSE:BDK) -47.2% 36.78 69.65
237 Broadcom Corporation (NASDAQ:BRCM) -47.4% 13.76 26.14
238 Unum Group (NYSE:UNM) -47.5% 12.50 23.79
239 ConocoPhillips (NYSE:COP) -47.5% 46.34 88.30
240 Avery Dennison Corporation (NYSE:AVY) -47.8% 27.72 53.14
241 The Bank of New York Mellon Corporation (NYSE:BK) -47.9% 25.39 48.76
242 Stryker Corporation (NYSE:SYK) -48.0% 38.83 74.72
243 First Horizon National Corporation (NYSE:FHN) -48.2% 9.41 18.15
244 Dean Foods Company (NYSE:DF) -48.4% 13.34 25.86
245 Microsoft Corporation (NASDAQ:MSFT) -48.6% 18.29 35.60
246 Murphy Oil Corporation (NYSE:MUR) -48.6% 43.58 84.84
247 Eastman Chemical Company (NYSE:EMN) -49.3% 31.00 61.09
248 American Tower Corporation (NYSE:AMT) -49.3% 21.58 42.60
249 Adobe Systems Incorporated (NASDAQ:ADBE) -49.4% 21.63 42.73
250 HCP, Inc. (NYSE:HCP) -49.4% 17.60 34.78
251 Northern Trust Corporation (NASDAQ:NTRS) -49.5% 38.65 76.58
252 Torchmark Corporation (NYSE:TMK) -49.6% 30.49 60.53
253 Constellation Brands, Inc. (NYSE:STZ) -49.7% 11.88 23.64
254 RadioShack Corporation (NYSE:RSH) -49.8% 8.46 16.86
255 ENSCO International Incorporated (NYSE:ESV) -49.9% 29.85 59.62
256 Marshall & Ilsley Corporation (NYSE:MI) -50.2% 13.19 26.48
257 Questar Corporation (NYSE:STR) -50.4% 26.84 54.10
258 Time Warner Inc. (NYSE:TWX) -50.7% 8.14 16.51
259 Chesapeake Energy Corporation (NYSE:CHK) -50.8% 19.30 39.20
260 Discover Financial Services (NYSE:DFS) -50.9% 7.41 15.08
261 McKesson Corporation (NYSE:MCK) -51.2% 31.99 65.51
262 The Dow Chemical Company (NYSE:DOW) -51.4% 19.16 39.42
263 AvalonBay Communities, Inc. (NYSE:AVB) -51.4% 45.75 94.14
264 Verisign, Inc. (NASDAQ:VRSN) -51.5% 18.24 37.61
265 Cooper Industries, Ltd. (NYSE:CBE) -51.6% 25.59 52.88
266 Moody's Corporation (NYSE:MCO) -51.7% 17.25 35.70
267 Schlumberger Limited (NYSE:SLB) -51.9% 47.30 98.37
268 LSI Corporation (NYSE:LSI) -52.0% 2.55 5.31
269 Agilent Technologies Inc. (NYSE:A) -52.0% 17.64 36.74
270 Nucor Corporation (NYSE:NUE) -52.1% 28.34 59.22
271 Omnicom Group Inc. (NYSE:OMC) -52.3% 22.68 47.53
272 Fortune Brands, Inc. (NYSE:FO) -52.3% 34.52 72.36
273 Archer Daniels Midland Company (NYSE:ADM) -52.3% 22.14 46.43
274 Air Products & Chemicals, Inc. (NYSE:APD) -52.3% 47.01 98.63
275 Boston Properties, Inc. (NYSE:BXP) -52.5% 43.60 91.81
276 The Gap Inc. (NYSE:GPS) -52.6% 10.09 21.28
277 Applied Materials, Inc. (NASDAQ:AMAT) -52.6% 8.42 17.76
278 Simon Property Group, Inc (NYSE:SPG) -52.7% 41.07 86.86
279 Loews Corporation (NYSE:L) -52.9% 23.70 50.34
280 Nabors Industries Ltd. (NYSE:NBR) -52.9% 12.89 27.39
281 The Western Union Company (NYSE:WU) -53.0% 11.42 24.28
282 NetApp Inc. (NASDAQ:NTAP) -53.0% 11.72 24.96
283 Intel Corporation (NASDAQ:INTC) -53.2% 12.49 26.66
284 The Washington Post Company (NYSE:WPO) -53.2% 370.50 791.40
285 Northrop Grumman Corporation (NYSE:NOC) -53.2% 36.80 78.64
286 Transocean Inc. (NYSE:RIG) -53.2% 66.97 143.15
287 Caterpillar Inc. (NYSE:CAT) -53.3% 33.87 72.56
288 IMS Health, Inc. (NYSE:RX) -53.4% 10.73 23.04
289 Cognizant Technology Solutions Corp. (NASDAQ:CTSH) -53.8% 15.68 33.94
290 Hess Corp. (NYSE:HES) -53.9% 46.47 100.86
291 Newmont Mining Corporation (NYSE:NEM) -54.1% 22.40 48.83
292 Sunoco, Inc. (NYSE:SUN) -54.2% 33.20 72.44
293 The Pepsi Bottling Group, Inc. (NYSE:PBG) -54.2% 18.07 39.46
294 Waters Corporation (NYSE:WAT) -54.2% 36.18 79.07
295 Huntington Bancshares Incorporated (NASDAQ:HBAN) -54.3% 6.75 14.76
296 Coach, Inc. (NYSE:COH) -54.5% 13.91 30.58
297 KB Home (NYSE:KBH) -54.7% 9.78 21.60
298 SunTrust Banks, Inc. (NYSE:STI) -54.7% 28.29 62.49
299 Comerica Incorporated (NYSE:CMA) -55.0% 19.58 43.53
300 Parker-Hannifin Corporation (NYSE:PH) -55.1% 33.80 75.31
301 Allegheny Energy, Inc. (NYSE:AYE) -55.4% 28.40 63.61
302 Franklin Resources, Inc. (NYSE:BEN) -55.4% 50.98 114.43
303 The McGraw-Hill Companies, Inc. (NYSE:MHP) -55.6% 19.45 43.81
304 National Semiconductor Corporation (NYSE:NSM) -55.7% 10.04 22.64
305 Noble Corporation (NYSE:NE) -55.8% 24.95 56.51
306 Texas Instruments Incorporated (NYSE:TXN) -56.2% 14.63 33.40
307 Fluor Corporation (NEW) (NYSE:FLR) -56.2% 31.91 72.86
308 PACCAR Inc (NASDAQ:PCAR) -56.4% 23.76 54.48
309 Apple Inc. (NASDAQ:AAPL) -56.4% 86.29 198.08
310 Merck & Co., Inc. (NYSE:MRK) -56.4% 25.31 58.11
311 T. Rowe Price Group, Inc. (NASDAQ:TROW) -56.6% 26.40 60.88
312 Federated Investors, Inc. (NYSE:FII) -56.7% 17.82 41.16
313 BJ Services Company (NYSE:BJS) -56.8% 10.49 24.26
314 Molex Incorporated (NASDAQ:MOLX) -56.9% 11.78 27.30
315 Teradata Corporation (NYSE:TDC) -57.1% 11.77 27.41
316 The Boeing Company (NYSE:BA) -57.1% 37.48 87.46
317 Tyco International Ltd. (NYSE:TYC) -57.2% 16.95 39.65
318 Halliburton Company (NYSE:HAL) -57.3% 16.18 37.91
319 Juniper Networks, Inc. (NASDAQ:JNPR) -57.7% 14.04 33.20
320 Dell Inc. (NASDAQ:DELL) -57.8% 10.35 24.51
321 Newell Rubbermaid Inc. (NYSE:NWL) -58.2% 10.81 25.88
322 Whirlpool Corporation (NYSE:WHR) -58.3% 34.01 81.63
323 Total System Services, Inc. (NYSE:TSS) -58.6% 11.60 28.00
324 Eaton Corporation (NYSE:ETN) -58.9% 39.88 96.95
325 Weyerhaeuser Company (NYSE:WY) -59.0% 30.25 73.74
326 Rockwell Collins, Inc. (NYSE:COL) -59.3% 29.32 71.97
327 Williams Companies, Inc. (NYSE:WMB) -59.4% 14.53 35.78
328 Google Inc. (NASDAQ:GOOG) -59.5% 280.18 691.46
329 Cameron International Corporation (NYSE:CAM) -59.7% 19.41 48.13
330 Limited Brands, Inc. (NYSE:LTD) -60.0% 7.58 18.93
331 Marathon Oil Corporation (NYSE:MRO) -60.4% 24.11 60.86
332 Honeywell International Inc. (NYSE:HON) -60.4% 24.38 61.57
333 Goodrich Corporation (NYSE:GR) -60.6% 27.84 70.61
334 AutoNation, Inc. (NYSE:AN) -60.6% 6.17 15.66
335 Yahoo! Inc. (NASDAQ:YHOO) -60.7% 9.14 23.26
336 Johnson Controls, Inc. (NYSE:JCI) -61.0% 14.07 36.04
337 General Electric Company (NYSE:GE) -61.0% 14.45 37.07
338 Starbucks Corporation (NASDAQ:SBUX) -61.1% 7.97 20.47
339 Amazon.com, Inc. (NASDAQ:AMZN) -61.3% 35.84 92.64
340 Tiffany & Co. (NYSE:TIF) -61.5% 17.71 46.03
341 Marriott International, Inc. (NYSE:MAR) -61.6% 13.13 34.18
342 The Allstate Corporation (NYSE:ALL) -61.9% 19.90 52.23
343 Baker Hughes Incorporated (NYSE:BHI) -61.9% 30.89 81.10
344 Novellus Systems, Inc. (NASDAQ:NVLS) -62.1% 10.46 27.57
345 Tyco Electronics Ltd. (NYSE:TEL) -62.2% 14.02 37.13
346 Precision Castparts Corp. (NYSE:PCP) -62.3% 52.34 138.70
347 El Paso Corporation (NYSE:EP) -62.4% 6.49 17.24
348 Intuitive Surgical, Inc. (NASDAQ:ISRG) -62.5% 121.09 322.99
349 State Street Corporation (NYSE:STT) -62.6% 30.33 81.20
350 Qwest Communications International Inc. (NYSE:Q) -62.8% 2.61 7.01
351 Rowan Companies, Inc. (NYSE:RDC) -62.9% 14.62 39.46
352 Humana Inc. (NYSE:HUM) -63.0% 27.89 75.31
353 Carnival Corporation (NYSE:CCL) -63.0% 16.47 44.49
354 Regions Financial Corporation (NYSE:RF) -63.1% 8.72 23.65
355 Aetna Inc. (NYSE:AET) -63.2% 21.24 57.73
356 WellPoint, Inc. (NYSE:WLP) -63.4% 32.11 87.73
357 Rockwell Automation (NYSE:ROK) -63.5% 25.18 68.96
358 D.R. Horton, Inc. (NYSE:DHI) -63.7% 4.78 13.17
359 The New York Times Company (NYSE:NYT) -63.8% 6.35 17.53
360 American Express Company (NYSE:AXP) -64.0% 18.74 52.02
361 Autodesk, Inc. (NASDAQ:ADSK) -64.1% 17.86 49.76
362 Masco Corporation (NYSE:MAS) -64.2% 7.73 21.61
363 The AES Corporation (NYSE:AES) -64.7% 7.55 21.39
364 Best Buy Co., Inc. (NYSE:BBY) -64.7% 18.58 52.65
365 eBay Inc. (NASDAQ:EBAY) -64.8% 11.69 33.19
366 Corning Incorporated (NYSE:GLW) -64.9% 8.43 23.99
367 Kimco Realty Corporation (NYSE:KIM) -64.9% 12.77 36.40
368 International Paper Company (NYSE:IP) -65.4% 11.20 32.38
369 J.C. Penney Company, Inc. (NYSE:JCP) -65.4% 15.21 43.99
370 Jabil Circuit, Inc. (NYSE:JBL) -65.5% 5.27 15.27
371 Xerox Corporation (NYSE:XRX) -65.5% 5.58 16.19
372 Smith International, Inc. (NYSE:SII) -65.7% 25.34 73.85
373 MeadWestvaco Corp. (NYSE:MWV) -65.8% 10.70 31.30
374 Weatherford International Ltd. (NYSE:WFT) -66.1% 11.63 34.30
375 Peabody Energy Corporation (NYSE:BTU) -66.5% 20.64 61.64
376 Fifth Third Bancorp (NASDAQ:FITB) -66.5% 8.41 25.13
377 Deere & Company (NYSE:DE) -66.6% 31.08 93.12
378 GameStop Corp. (NYSE:GME) -66.9% 20.56 62.11
379 Massey Energy Company (NYSE:MEE) -67.0% 11.81 35.75
380 Tyson Foods, Inc. (NYSE:TSN) -67.1% 5.04 15.33
381 KeyCorp (NYSE:KEY) -67.2% 7.70 23.45
382 Coca-Cola Enterprises Inc. (NYSE:CCE) -67.4% 8.49 26.03
383 Host Hotels & Resorts, Inc. (NYSE:HST) -67.8% 5.49 17.04
384 Interpublic Group of Companies, Inc. (NYSE:IPG) -67.8% 2.61 8.11
385 Eastman Kodak Company (NYSE:EK) -67.9% 7.03 21.87
386 Bank of America Corporation (NYSE:BAC) -68.3% 13.06 41.26
387 KLA-Tencor Corporation (NASDAQ:KLAC) -68.4% 15.24 48.16
388 Teradyne, Inc. (NYSE:TER) -68.4% 3.27 10.34
389 Invesco Ltd. (NYSE:IVZ) -68.5% 9.89 31.38
390 National-Oilwell Varco, Inc. (NYSE:NOV) -69.1% 22.72 73.46
391 Cummins Inc. (NYSE:CMI) -69.1% 19.65 63.69
392 MetLife, Inc. (NYSE:MET) -69.2% 19.00 61.62
393 Viacom, Inc. (NYSE:VIA.B) -69.2% 13.51 43.92
394 Akamai Technologies, Inc. (NASDAQ:AKAM) -69.3% 10.63 34.60
395 UnitedHealth Group Inc. (NYSE:UNH) -69.5% 17.73 58.20
396 Leucadia National Corp. (NYSE:LUK) -69.6% 14.31 47.10
397 CONSOL Energy Inc. (NYSE:CNX) -69.7% 21.69 71.52
398 R.R. Donnelley & Sons Company (NYSE:RRD) -69.7% 11.44 37.74
399 IntercontinentalExchange, Inc. (NYSE:ICE) -69.7% 58.29 192.48
400 Jones Apparel Group, Inc. (NYSE:JNY) -69.8% 4.83 15.99
401 Ashland Inc. (NYSE:ASH) -69.8% 14.32 47.43
402 News Corporation (NYSE:NWS.A) -69.8% 6.18 20.49
403 Jacobs Engineering Group Inc. (NYSE:JEC) -69.9% 28.80 95.61
404 Ingersoll-Rand Company Limited (NYSE:IR) -70.4% 13.77 46.47
405 Electronic Arts Inc. (NASDAQ:ERTS) -70.7% 17.11 58.41
406 SUPERVALU INC. (NYSE:SVU) -71.0% 10.88 37.52
407 Harley-Davidson, Inc. (NYSE:HOG) -71.1% 13.49 46.71
408 SLM Corporation (NYSE:SLM) -71.2% 5.81 20.14
409 Tenet Healthcare Corporation (NYSE:THC) -71.3% 1.46 5.08
410 Micron Technology, Inc. (NYSE:MU) -71.4% 2.07 7.25
411 Monster Worldwide, Inc. (NASDAQ:MNST) -71.5% 9.23 32.40
412 Advanced Micro Devices, Inc. (NYSE:AMD) -71.7% 2.12 7.50
413 Centex Corporation (NYSE:CTX) -71.9% 7.09 25.26
414 Sears Holdings Corporation (NASDAQ:SHLD) -72.1% 28.50 102.05
415 Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT) -72.4% 12.17 44.03
416 E TRADE Financial Corporation (NASDAQ:ETFC) -72.4% 0.98 3.55
417 Convergys Corporation (NYSE:CVG) -72.5% 4.52 16.46
418 Lennar Corporation (NYSE:LEN) -73.3% 4.78 17.89
419 Meredith Corporation (NYSE:MDP) -74.0% 14.32 54.97
420 Dynegy Inc. (NYSE:DYN) -74.1% 1.85 7.14
421 Goldman Sachs Group, Inc. (NYSE:GS) -74.3% 55.18 215.06
422 Apartment Investment and Management Co. (NYSE:AIV) -74.4% 8.90 34.73
423 Ameriprise Financial, Inc. (NYSE:AMP) -74.7% 13.96 55.11
424 CME Group Inc. (NASDAQ:CME) -75.1% 170.88 685.96
425 Nordstrom, Inc. (NYSE:JWN) -75.6% 8.98 36.73
426 Assurant, Inc. (NYSE:AIZ) -76.2% 15.91 66.90
427 Titanium Metals Corporation (NYSE:TIE) -76.5% 6.22 26.45
428 Valero Energy Corporation (NYSE:VLO) -76.5% 16.45 70.02
429 Constellation Energy Group, Inc. (NYSE:CEG) -76.7% 23.91 102.53
430 NYSE Euronext (NYSE:NYX) -77.5% 19.72 87.77
431 Alcoa Inc. (NYSE:AA) -77.7% 8.16 36.55
432 Macy's, Inc. (NYSE:M) -78.0% 5.68 25.87
433 Citigroup Inc. (NYSE:C) -78.3% 6.40 29.44
434 Whole Foods Market, Inc. (NASDAQ:WFMI) -78.4% 8.82 40.80
435 Motorola, Inc. (NYSE:MOT) -78.6% 3.44 16.04
436 Expedia, Inc. (NASDAQ:EXPE) -78.7% 6.72 31.62
437 United States Steel Corporation (NYSE:X) -79.1% 25.21 120.91
438 MBIA Inc. (NYSE:MBI) -79.7% 3.79 18.63
439 CIGNA Corporation (NYSE:CI) -79.8% 10.88 53.73
440 International Game Technology (NYSE:IGT) -80.2% 8.69 43.93
441 CBS Corporation (NYSE:CBS) -80.2% 5.39 27.25
442 Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) -80.2% 20.24 102.44
443 JDS Uniphase Corporation (NASDAQ:JDSU) -80.6% 2.58 13.30
444 Allegheny Technologies Incorporated (NYSE:ATI) -80.7% 16.69 86.40
445 Morgan Stanley (NYSE:MS) -80.7% 10.25 53.11
446 Legg Mason, Inc. (NYSE:LM) -80.9% 14.00 73.15
447 Coventry Health Care, Inc. (NYSE:CVH) -80.9% 11.32 59.25
448 SanDisk Corporation (NASDAQ:SNDK) -81.0% 6.30 33.17
449 Ford Motor Company (NYSE:F) -81.3% 1.26 6.73
450 CB Richard Ellis Group, Inc. (NYSE:CBG) -81.3% 4.03 21.55
451 NVIDIA Corporation (NASDAQ:NVDA) -81.7% 6.23 34.02
452 Prudential Financial, Inc. (NYSE:PRU) -81.7% 17.01 93.04
453 Wyndham Worldwide Corporation (NYSE:WYN) -81.8% 4.29 23.56
454 Abercrombie & Fitch Co. (NYSE:ANF) -81.8% 14.55 79.97
455 Sun Microsystems, Inc. (NASDAQ:JAVA) -82.0% 3.27 18.13
456 Merrill Lynch & Co., Inc. (NYSE:MER) -82.1% 9.60 53.68
457 Tesoro Corporation (NYSE:TSO) -82.2% 8.49 47.70
458 Gannett Co., Inc. (NYSE:GCI) -82.5% 6.81 39.00
459 The Goodyear Tire & Rubber Company (NYSE:GT) -82.9% 4.83 28.22
460 Textron Inc. (NYSE:TXT) -82.9% 12.20 71.30
461 Principal Financial Group, Inc. (NYSE:PFG) -83.0% 11.67 68.84
462 Sovereign Bancorp, Inc. (NYSE:SOV) -83.2% 1.92 11.40
463 Dillard's, Inc. (NYSE:DDS) -83.3% 3.14 18.78
464 Ciena Corporation (NASDAQ:CIEN) -83.7% 5.55 34.11
465 American Capital Ltd. (NASDAQ:ACAS) -83.8% 5.35 32.96
466 Janus Capital Group Inc. (NYSE:JNS) -83.9% 5.28 32.85
467 Terex Corporation (NYSE:TEX) -84.4% 10.21 65.57
468 Harman International Industries Inc./DE/ (NYSE:HAR) -85.6% 10.65 73.72
469 Sprint Nextel Corporation (NYSE:S) -85.7% 1.88 13.13
470 AK Steel Holding Corporation (NYSE:AKS) -85.9% 6.51 46.24
471 MEMC Electronic Materials, Inc. (NYSE:WFR) -86.2% 12.20 88.50
472 Lincoln National Corporation (NYSE:LNC) -87.4% 7.31 58.22
473 Developers Diversified Realty Corp. (NYSE:DDR) -87.8% 4.69 38.29
474 Wachovia Corporation (NYSE:WB) -88.0% 4.57 38.03
475 Office Depot, Inc. (NYSE:ODP) -88.5% 1.60 13.91
476 General Motors Corporation (NYSE:GM) -88.8% 2.79 24.89
477 Manitowoc Company, Inc. (NYSE:MTW) -88.8% 5.47 48.83
478 National City Corporation (NYSE:NCC) -89.2% 1.78 16.46
479 Liz Claiborne, Inc. (NYSE:LIZ) -89.5% 2.13 20.35
480 XL Capital Ltd. (NYSE:XL) -89.8% 5.11 50.31
481 CIT Group Inc. (NYSE:CIT) -90.6% 2.25 24.03
482 MGIC Investment Corp. (NYSE:MTG) -90.9% 2.05 22.43
483 Unisys Corporation (NYSE:UIS) -91.5% 0.40 4.73
484 Hartford Financial Services (NYSE:HIG) -92.1% 6.88 87.19
485 ProLogis (NYSE:PLD) -94.5% 3.46 63.38
486 Genworth Financial, Inc. (NYSE:GNW) -96.0% 1.02 25.45
487 American International Group, Inc. (NYSE:AIG) -97.3% 1.56 58.30
488 Freddie Mac (NYSE:FRE) -98.4% 0.56 34.06
489 General Growth Properties, Inc (NYSE:GGP) -99.0% 0.40 41.18
490 Fannie Mae (NYSE:FNM) -99.0% 0.38 39.97
491 Washington Mutual, Inc. (NYSE:WM) -99.7% 0.04 13.61
492 Lehman Brothers Holdings Inc. (NYSE:LEH) -99.9% 0.04 65.44
493 Hercules Incorporated (NYSE:HPC) N/A N/A 19.35
494 Electronic Data Systems Corporation (NYSE:EDS) N/A N/A 20.73
495 Lorillard Inc. (NYSE:LO) N/A 60.69 N/A
496 Philip Morris International Inc. (NYSE:PM) N/A 36.64 N/A
497 SAFECO Corporation (NYSE:SAF) N/A N/A 55.68
498 Scripps Networks Interactive, Inc. (NYSE:SNI) N/A 24.40 N/A
499 Wendy's International (NYSE:WEN) N/A N/A 25.84
500 Wm. Wrigley Jr. Company (NYSE:WWY) N/A N/A 58.55
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Year-to-Date Performance Ranking of S&P 500 Stocks (11/19/2008)
Below is the Year-to-Date Performance Ranking of stocks in S&P 500 index.
Rank Company (Stock Symbol) Year-to-Date Change Current Price End of 2007
1 Family Dollar Stores, Inc. (NYSE:FDO) 37.7% 26.48 19.23
2 Rohm and Haas Company (NYSE:ROH) 35.1% 71.71 53.07
3 Anheuser-Busch Companies, Inc. (NYSE:BUD) 31.0% 68.58 52.34
4 UST Inc. (NYSE:UST) 24.9% 68.47 54.80
5 Barr Pharmaceuticals, Inc. (NYSE:BRL) 21.1% 64.29 53.10
6 Celgene Corporation (NASDAQ:CELG) 20.7% 55.76 46.21
7 Amgen, Inc. (NASDAQ:AMGN) 15.5% 53.64 46.44
8 General Mills, Inc. (NYSE:GIS) 9.3% 62.31 57.00
9 Southwestern Energy Company (NYSE:SWN) 9.0% 30.38 27.86
10 Hudson City Bancorp, Inc. (NASDAQ:HCBK) 7.6% 16.16 15.02
11 Wal-Mart Stores, Inc. (NYSE:WMT) 7.3% 51.00 47.53
12 Campbell Soup Company (NYSE:CPB) 3.4% 36.94 35.73
13 The Kroger Co. (NYSE:KR) -0.4% 26.60 26.71
14 Abbott Laboratories (NYSE:ABT) -2.9% 54.52 56.15
15 McDonald's Corporation (NYSE:MCD) -5.9% 55.44 58.91
16 Apollo Group, Inc. (NASDAQ:APOL) -6.0% 65.97 70.15
17 Gilead Sciences, Inc. (NASDAQ:GILD) -6.1% 43.20 46.01
18 Baxter International Inc. (NYSE:BAX) -8.1% 53.37 58.05
19 Genzyme Corporation (NASDAQ:GENZ) -8.6% 68.00 74.44
20 The Clorox Company (NYSE:CLX) -8.8% 59.42 65.17
21 Waste Management, Inc. (NYSE:WMI) -9.0% 29.73 32.67
22 Hasbro, Inc. (NYSE:HAS) -9.7% 23.10 25.58
23 Nicor Inc. (NYSE:GAS) -10.1% 38.08 42.35
24 Norfolk Southern Corp. (NYSE:NSC) -10.1% 45.33 50.44
25 Allied Waste Industries, Inc. (NYSE:AW) -10.2% 9.90 11.02
26 Aon Corporation (NYSE:AOC) -10.4% 42.74 47.69
27 H&R Block, Inc. (NYSE:HRB) -10.6% 16.61 18.57
28 Sherwin-Williams Company (NYSE:SHW) -11.0% 51.68 58.04
29 The Southern Company (NYSE:SO) -11.0% 34.47 38.75
30 Burlington Northern Santa Fe Corporation (NYSE:BNI) -11.4% 73.73 83.23
31 C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) -12.7% 47.25 54.12
32 Pactiv Corporation (NYSE:PTV) -12.8% 23.23 26.63
33 Johnson & Johnson (NYSE:JNJ) -12.9% 58.12 66.70
34 H.J. Heinz Company (NYSE:HNZ) -13.4% 40.43 46.68
35 EOG Resources, Inc. (NYSE:EOG) -13.4% 77.28 89.25
36 Big Lots, Inc. (NYSE:BIG) -13.6% 13.81 15.99
37 The Hershey Company (NYSE:HSY) -14.3% 33.78 39.40
38 King Pharmaceuticals, Inc. (NYSE:KG) -14.7% 8.73 10.24
39 PG&E Corporation (NYSE:PCG) -15.1% 36.59 43.09
40 The Procter & Gamble Company (NYSE:PG) -15.2% 62.27 73.42
41 Molson Coors Brewing Company (NYSE:TAP) -15.2% 43.76 51.62
42 Affiliated Computer Services, Inc. (NYSE:ACS) -15.6% 38.07 45.10
43 Marsh & McLennan Companies, Inc. (NYSE:MMC) -15.8% 22.30 26.47
44 Applied Biosystems Inc. (NYSE:ABI) -15.8% 28.55 33.92
45 Kellogg Company (NYSE:K) -15.8% 44.12 52.43
46 DaVita Inc. (NYSE:DVA) -16.5% 47.03 56.35
47 C.R. Bard, Inc. (NYSE:BCR) -16.6% 79.08 94.80
48 Quest Diagnostics Incorporated (NYSE:DGX) -16.9% 43.94 52.90
49 Integrys Energy Group, Inc. (NYSE:TEG) -17.9% 42.42 51.69
50 The DIRECTV Group, Inc. (NASDAQ:DTV) -17.9% 18.97 23.12
51 Bemis Company, Inc. (NYSE:BMS) -18.3% 22.36 27.38
52 Pulte Homes, Inc. (NYSE:PHM) -18.4% 8.60 10.54
53 Watson Pharmaceuticals, Inc. (NYSE:WPI) -18.4% 22.14 27.14
54 Union Pacific Corporation (NYSE:UNP) -18.9% 50.97 62.81
55 Kimberly-Clark Corporation (NYSE:KMB) -19.1% 56.08 69.34
56 Wells Fargo & Company (NYSE:WFC) -19.2% 24.40 30.19
57 Colgate-Palmolive Company (NYSE:CL) -19.2% 62.99 77.96
58 The Chubb Corporation (NYSE:CB) -19.9% 43.74 54.58
59 DTE Energy Company (NYSE:DTE) -19.9% 35.20 43.96
60 Laboratory Corp. of America Holdings (NYSE:LH) -20.1% 60.36 75.53
61 Lowe's Companies, Inc. (NYSE:LOW) -20.2% 18.04 22.62
62 Kraft Foods Inc. (NYSE:KFT) -20.3% 25.99 32.63
63 Covidien Ltd. (NYSE:COV) -20.4% 35.27 44.29
64 Consolidated Edison, Inc. (NYSE:ED) -21.1% 38.52 48.85
65 McCormick & Company, Incorporated (NYSE:MKC) -21.2% 29.87 37.91
66 AutoZone, Inc. (NYSE:AZO) -21.4% 94.25 119.91
67 Exxon Mobil Corporation (NYSE:XOM) -21.6% 73.42 93.69
68 Genuine Parts Company (NYSE:GPC) -21.7% 36.25 46.30
69 Public Storage (NYSE:PSA) -21.7% 57.47 73.41
70 Progress Energy, Inc. (NYSE:PGN) -22.0% 37.79 48.43
71 Xcel Energy Inc. (NYSE:XEL) -22.3% 17.53 22.57
72 Leggett & Platt, Inc. (NYSE:LEG) -22.7% 13.48 17.44
73 Devon Energy Corporation (NYSE:DVN) -22.9% 68.57 88.91
74 BB&T Corporation (NYSE:BBT) -23.1% 23.57 30.67
75 Automatic Data Processing (NYSE:ADP) -23.4% 34.11 44.53
76 Bristol Myers Squibb Co. (NYSE:BMY) -23.6% 20.27 26.52
77 QUALCOMM, Inc. (NASDAQ:QCOM) -23.7% 30.01 39.35
78 PNC Financial Services (NYSE:PNC) -24.1% 49.83 65.65
79 Chevron Corporation (NYSE:CVX) -24.3% 70.61 93.33
80 Raytheon Company (NYSE:RTN) -24.5% 45.85 60.70
81 Wyeth (NYSE:WYE) -24.6% 33.34 44.19
82 Comcast Corporation (NASDAQ:CMCSA) -24.6% 13.77 18.26
83 Range Resources Corp. (NYSE:RRC) -25.0% 38.53 51.36
84 Medco Health Solutions Inc. (NYSE:MHS) -25.2% 37.91 50.70
85 CSX Corporation (NYSE:CSX) -25.5% 32.76 43.98
86 U.S. Bancorp (NYSE:USB) -25.6% 23.62 31.74
87 Becton, Dickinson and Co. (NYSE:BDX) -25.9% 61.92 83.58
88 Duke Energy Corporation (NYSE:DUK) -26.1% 14.91 20.17
89 Dominion Resources, Inc. (NYSE:D) -26.3% 34.95 47.45
90 FirstEnergy Corp. (NYSE:FE) -26.6% 53.12 72.34
91 The Home Depot, Inc. (NYSE:HD) -26.7% 19.76 26.94
92 Express Scripts, Inc. (NASDAQ:ESRX) -27.3% 53.06 73.00
93 United Parcel Service, Inc. (NYSE:UPS) -27.4% 51.36 70.72
94 SYSCO Corporation (NYSE:SYY) -27.8% 22.52 31.21
95 Biogen Idec Inc. (NASDAQ:BIIB) -27.9% 41.06 56.92
96 Southwest Airlines Co. (NYSE:LUV) -28.9% 8.67 12.20
97 Oracle Corporation (NASDAQ:ORCL) -29.1% 16.00 22.58
98 Altria Group, Inc. (NYSE:MO) -29.2% 16.50 23.31
99 Altera Corporation (NASDAQ:ALTR) -29.7% 13.59 19.32
100 International Business Machines Corp. (NYSE:IBM) -29.7% 75.97 108.10
101 CVS Caremark Corporation (NYSE:CVS) -30.0% 27.84 39.75
102 Sigma-Aldrich Corporation (NASDAQ:SIAL) -30.1% 38.17 54.60
103 3M Company (NYSE:MMM) -30.3% 58.77 84.32
104 Symantec Corporation (NASDAQ:SYMC) -30.4% 11.24 16.14
105 Varian Medical Systems, Inc. (NYSE:VAR) -30.5% 36.27 52.16
106 QLogic Corporation (NASDAQ:QLGC) -30.5% 9.87 14.20
107 The Travelers Companies, Inc. (NYSE:TRV) -30.7% 37.29 53.80
108 The Coca-Cola Company (NYSE:KO) -31.1% 42.27 61.37
109 M&T Bank Corporation (NYSE:MTB) -31.2% 56.14 81.57
110 PepsiCo, Inc. (NYSE:PEP) -31.4% 52.10 75.90
111 The Progressive Corporation (NYSE:PGR) -31.4% 13.15 19.16
112 Plum Creek Timber Co. Inc. (NYSE:PCL) -31.4% 31.58 46.04
113 W.W. Grainger, Inc. (NYSE:GWW) -31.5% 59.92 87.52
114 Pfizer Inc. (NYSE:PFE) -31.5% 15.56 22.73
115 St. Jude Medical, Inc. (NYSE:STJ) -31.6% 27.80 40.64
116 Lexmark International, Inc. (NYSE:LXK) -31.8% 23.79 34.86
117 NIKE, Inc. (NYSE:NKE) -31.8% 43.84 64.24
118 Ball Corporation (NYSE:BLL) -32.0% 30.60 45.00
119 Paychex, Inc. (NASDAQ:PAYX) -32.0% 24.62 36.22
120 FedEx Corporation (NYSE:FDX) -32.1% 60.58 89.17
121 CenterPoint Energy, Inc. (NYSE:CNP) -32.7% 11.52 17.13
122 Apache Corporation (NYSE:APA) -32.9% 72.19 107.54
123 Xilinx, Inc. (NASDAQ:XLNX) -32.9% 14.67 21.87
124 Pinnacle West Capital Corporation (NYSE:PNW) -32.9% 28.44 42.41
125 Reynolds American, Inc. (NYSE:RAI) -33.0% 44.19 65.96
126 BMC Software, Inc. (NYSE:BMC) -33.2% 23.82 35.64
127 Staples, Inc. (NASDAQ:SPLS) -33.9% 15.26 23.07
128 AmerisourceBergen Corp. (NYSE:ABC) -34.0% 29.61 44.87
129 FPL Group, Inc. (NYSE:FPL) -34.1% 44.67 67.78
130 Lockheed Martin Corporation (NYSE:LMT) -34.1% 69.33 105.26
131 Millipore Corporation (NYSE:MIL) -34.5% 47.94 73.18
132 Entergy Corporation (NYSE:ETR) -34.5% 78.26 119.52
133 Hewlett-Packard Company (NYSE:HPQ) -34.6% 33.03 50.48
134 JPMorgan Chase & Co. (NYSE:JPM) -34.8% 28.47 43.65
135 Intuit Inc. (NASDAQ:INTU) -35.0% 20.55 31.61
136 Snap-on Incorporated (NYSE:SNA) -35.1% 31.32 48.24
137 Costco Wholesale Corporation (NASDAQ:COST) -35.1% 45.27 69.76
138 Robert Half International Inc. (NYSE:RHI) -35.1% 17.54 27.04
139 Sempra Energy (NYSE:SRE) -35.3% 40.03 61.88
140 TECO Energy, Inc. (NYSE:TE) -35.5% 11.10 17.21
141 Ryder System, Inc. (NYSE:R) -35.5% 30.31 47.01
142 The TJX Companies, Inc. (NYSE:TJX) -35.9% 18.42 28.73
143 The Estee Lauder Companies Inc. (NYSE:EL) -36.0% 27.92 43.61
144 XTO Energy Inc. (NYSE:XTO) -36.0% 32.86 51.36
145 Cincinnati Financial Corporation (NASDAQ:CINF) -36.1% 25.28 39.54
146 Yum! Brands, Inc. (NYSE:YUM) -36.1% 24.46 38.27
147 Hospira, Inc. (NYSE:HSP) -36.2% 27.19 42.64
148 Equity Residential (NYSE:EQR) -36.4% 23.21 36.47
149 Cabot Oil & Gas Corporation (NYSE:COG) -36.5% 25.64 40.37
150 American Electric Power Company, Inc. (NYSE:AEP) -36.9% 29.37 46.56
151 Brown-Forman Corporation (NYSE:BF.B) -37.0% 46.67 74.11
152 ConAgra Foods, Inc. (NYSE:CAG) -37.0% 14.98 23.79
153 Expeditors International of Washington (NASDAQ:EXPD) -37.1% 28.11 44.68
154 PerkinElmer, Inc. (NYSE:PKI) -37.2% 16.35 26.02
155 Monsanto Company (NYSE:MON) -37.3% 70.07 111.69
156 Ecolab Inc. (NYSE:ECL) -37.5% 32.01 51.21
157 Fidelity National Information Services (NYSE:FIS) -37.7% 14.44 23.17
158 Medtronic, Inc. (NYSE:MDT) -37.9% 31.20 50.27
159 Verizon Communications Inc. (NYSE:VZ) -38.1% 26.94 43.49
160 The Walt Disney Company (NYSE:DIS) -38.2% 19.94 32.28
161 L-3 Communications Holdings, Inc. (NYSE:LLL) -38.5% 65.16 105.94
162 Bed Bath & Beyond Inc. (NASDAQ:BBBY) -38.5% 18.07 29.39
163 CA, Inc. (NASDAQ:CA) -38.7% 15.30 24.95
164 Linear Technology Corporation (NASDAQ:LLTC) -39.0% 19.43 31.83
165 Sealed Air Corp. (NYSE:SEE) -39.3% 14.05 23.14
166 AT&T Inc. (NYSE:T) -39.3% 25.23 41.56
167 Compuware Corporation (NASDAQ:CPWR) -39.3% 5.39 8.88
168 Praxair, Inc. (NYSE:PX) -39.3% 53.84 88.71
169 Cintas Corporation (NASDAQ:CTAS) -39.4% 20.36 33.62
170 PPL Corporation (NYSE:PPL) -39.4% 31.54 52.09
171 Mattel, Inc. (NYSE:MAT) -39.5% 11.51 19.04
172 Walgreen Company (NYSE:WAG) -39.6% 23.01 38.08
173 Exelon Corporation (NYSE:EXC) -39.7% 49.23 81.64
174 Equifax Inc. (NYSE:EFX) -39.8% 21.89 36.36
175 MasterCard Incorporated (NYSE:MA) -39.8% 129.54 215.19
176 Frontier Communications Corp (NYSE:FTR) -39.8% 7.66 12.73
177 United Technologies Corporation (NYSE:UTX) -39.9% 45.99 76.54
178 Occidental Petroleum Corporation (NYSE:OXY) -40.1% 46.12 76.99
179 Pitney Bowes Inc. (NYSE:PBI) -40.3% 22.72 38.04
180 Ameren Corporation (NYSE:AEE) -40.3% 32.35 54.21
181 Windstream Corporation (NYSE:WIN) -40.4% 7.76 13.02
182 Zions Bancorporation (NASDAQ:ZION) -40.9% 27.57 46.69
183 Edison International (NYSE:EIX) -41.0% 31.49 53.37
184 Forest Laboratories, Inc. (NYSE:FRX) -41.0% 21.49 36.45
185 Eli Lilly & Co. (NYSE:LLY) -41.2% 31.41 53.39
186 NiSource Inc. (NYSE:NI) -41.3% 11.08 18.89
187 PPG Industries, Inc. (NYSE:PPG) -41.4% 41.19 70.23
188 Danaher Corporation (NYSE:DHR) -41.4% 51.45 87.74
189 Safeway Inc. (NYSE:SWY) -41.5% 20.01 34.21
190 V.F. Corporation (NYSE:VFC) -41.9% 39.88 68.66
191 Noble Energy, Inc. (NYSE:NBL) -42.0% 46.10 79.52
192 Patterson Companies, Inc. (NASDAQ:PDCO) -42.1% 19.67 33.95
193 Illinois Tool Works Inc. (NYSE:ITW) -42.1% 31.01 53.54
194 Spectra Energy Corp. (NYSE:SE) -42.1% 14.95 25.82
195 Schering-Plough Corporation (NYSE:SGP) -42.4% 15.35 26.64
196 Kohl's Corporation (NYSE:KSS) -42.4% 26.39 45.80
197 ITT Corporation (NYSE:ITT) -42.4% 38.04 66.04
198 CenturyTel, Inc. (NYSE:CTL) -42.4% 23.86 41.46
199 Dover Corporation (NYSE:DOV) -42.5% 26.51 46.09
200 Pall Corporation (NYSE:PLL) -42.6% 23.15 40.32
201 The Charles Schwab Corporation (NASDAQ:SCHW) -42.7% 14.65 25.55
202 AFLAC Incorporated (NYSE:AFL) -42.7% 35.91 62.63
203 Citrix Systems, Inc. (NASDAQ:CTXS) -42.7% 21.79 38.01
204 Pepco Holdings, Inc. (NYSE:POM) -42.8% 16.77 29.33
205 Vulcan Materials Company (NYSE:VMC) -42.9% 45.18 79.09
206 Public Service Enterprise Group Inc. (NYSE:PEG) -43.3% 27.84 49.12
207 Zimmer Holdings, Inc. (NYSE:ZMH) -43.4% 37.47 66.15
208 The Stanley Works (NYSE:SWK) -43.4% 27.43 48.48
209 Embarq Corporation (NYSE:EQ) -43.5% 27.99 49.53
210 Mylan Inc. (NYSE:MYL) -43.6% 7.93 14.06
211 CMS Energy Corporation (NYSE:CMS) -43.6% 9.80 17.38
212 Boston Scientific Corporation (NYSE:BSX) -43.7% 6.55 11.63
213 Capital One Financial Corp. (NYSE:COF) -43.9% 26.50 47.26
214 Emerson Electric Co. (NYSE:EMR) -44.2% 31.63 56.66
215 Microchip Technology Inc. (NASDAQ:MCHP) -44.3% 17.51 31.42
216 Cisco Systems, Inc. (NASDAQ:CSCO) -44.3% 15.08 27.07
217 Novell, Inc. (NASDAQ:NOVL) -44.4% 3.82 6.87
218 General Dynamics Corporation (NYSE:GD) -44.7% 49.25 88.99
219 Analog Devices, Inc. (NYSE:ADI) -44.7% 17.53 31.70
220 Cardinal Health, Inc. (NYSE:CAH) -44.7% 31.92 57.75
221 Thermo Fisher Scientific Inc. (NYSE:TMO) -45.0% 31.75 57.68
222 E.I. du Pont de Nemours & Company (NYSE:DD) -45.0% 24.26 44.09
223 Sara Lee Corp. (NYSE:SLE) -45.1% 8.82 16.06
224 Fiserv, Inc. (NASDAQ:FISV) -45.2% 30.42 55.49
225 Anadarko Petroleum Corporation (NYSE:APC) -45.3% 35.96 65.69
226 International Flavors & Fragrances Inc. (NYSE:IFF) -45.6% 26.17 48.13
227 Target Corporation (NYSE:TGT) -46.1% 26.96 50.00
228 Darden Restaurants, Inc. (NYSE:DRI) -46.1% 14.94 27.71
229 Vornado Realty Trust (NYSE:VNO) -46.4% 47.17 87.95
230 Tellabs, Inc. (NASDAQ:TLAB) -46.5% 3.50 6.54
231 Allergan, Inc. (NYSE:AGN) -46.9% 34.11 64.24
232 Polo Ralph Lauren Corporation (NYSE:RL) -46.9% 32.80 61.79
233 Computer Sciences Corporation (NYSE:CSC) -47.0% 26.21 49.47
234 EMC Corporation (NYSE:EMC) -47.1% 9.80 18.53
235 Avon Products, Inc. (NYSE:AVP) -47.2% 20.88 39.53
236 The Black & Decker Corporation (NYSE:BDK) -47.2% 36.78 69.65
237 Broadcom Corporation (NASDAQ:BRCM) -47.4% 13.76 26.14
238 Unum Group (NYSE:UNM) -47.5% 12.50 23.79
239 ConocoPhillips (NYSE:COP) -47.5% 46.34 88.30
240 Avery Dennison Corporation (NYSE:AVY) -47.8% 27.72 53.14
241 The Bank of New York Mellon Corporation (NYSE:BK) -47.9% 25.39 48.76
242 Stryker Corporation (NYSE:SYK) -48.0% 38.83 74.72
243 First Horizon National Corporation (NYSE:FHN) -48.2% 9.41 18.15
244 Dean Foods Company (NYSE:DF) -48.4% 13.34 25.86
245 Microsoft Corporation (NASDAQ:MSFT) -48.6% 18.29 35.60
246 Murphy Oil Corporation (NYSE:MUR) -48.6% 43.58 84.84
247 Eastman Chemical Company (NYSE:EMN) -49.3% 31.00 61.09
248 American Tower Corporation (NYSE:AMT) -49.3% 21.58 42.60
249 Adobe Systems Incorporated (NASDAQ:ADBE) -49.4% 21.63 42.73
250 HCP, Inc. (NYSE:HCP) -49.4% 17.60 34.78
251 Northern Trust Corporation (NASDAQ:NTRS) -49.5% 38.65 76.58
252 Torchmark Corporation (NYSE:TMK) -49.6% 30.49 60.53
253 Constellation Brands, Inc. (NYSE:STZ) -49.7% 11.88 23.64
254 RadioShack Corporation (NYSE:RSH) -49.8% 8.46 16.86
255 ENSCO International Incorporated (NYSE:ESV) -49.9% 29.85 59.62
256 Marshall & Ilsley Corporation (NYSE:MI) -50.2% 13.19 26.48
257 Questar Corporation (NYSE:STR) -50.4% 26.84 54.10
258 Time Warner Inc. (NYSE:TWX) -50.7% 8.14 16.51
259 Chesapeake Energy Corporation (NYSE:CHK) -50.8% 19.30 39.20
260 Discover Financial Services (NYSE:DFS) -50.9% 7.41 15.08
261 McKesson Corporation (NYSE:MCK) -51.2% 31.99 65.51
262 The Dow Chemical Company (NYSE:DOW) -51.4% 19.16 39.42
263 AvalonBay Communities, Inc. (NYSE:AVB) -51.4% 45.75 94.14
264 Verisign, Inc. (NASDAQ:VRSN) -51.5% 18.24 37.61
265 Cooper Industries, Ltd. (NYSE:CBE) -51.6% 25.59 52.88
266 Moody's Corporation (NYSE:MCO) -51.7% 17.25 35.70
267 Schlumberger Limited (NYSE:SLB) -51.9% 47.30 98.37
268 LSI Corporation (NYSE:LSI) -52.0% 2.55 5.31
269 Agilent Technologies Inc. (NYSE:A) -52.0% 17.64 36.74
270 Nucor Corporation (NYSE:NUE) -52.1% 28.34 59.22
271 Omnicom Group Inc. (NYSE:OMC) -52.3% 22.68 47.53
272 Fortune Brands, Inc. (NYSE:FO) -52.3% 34.52 72.36
273 Archer Daniels Midland Company (NYSE:ADM) -52.3% 22.14 46.43
274 Air Products & Chemicals, Inc. (NYSE:APD) -52.3% 47.01 98.63
275 Boston Properties, Inc. (NYSE:BXP) -52.5% 43.60 91.81
276 The Gap Inc. (NYSE:GPS) -52.6% 10.09 21.28
277 Applied Materials, Inc. (NASDAQ:AMAT) -52.6% 8.42 17.76
278 Simon Property Group, Inc (NYSE:SPG) -52.7% 41.07 86.86
279 Loews Corporation (NYSE:L) -52.9% 23.70 50.34
280 Nabors Industries Ltd. (NYSE:NBR) -52.9% 12.89 27.39
281 The Western Union Company (NYSE:WU) -53.0% 11.42 24.28
282 NetApp Inc. (NASDAQ:NTAP) -53.0% 11.72 24.96
283 Intel Corporation (NASDAQ:INTC) -53.2% 12.49 26.66
284 The Washington Post Company (NYSE:WPO) -53.2% 370.50 791.40
285 Northrop Grumman Corporation (NYSE:NOC) -53.2% 36.80 78.64
286 Transocean Inc. (NYSE:RIG) -53.2% 66.97 143.15
287 Caterpillar Inc. (NYSE:CAT) -53.3% 33.87 72.56
288 IMS Health, Inc. (NYSE:RX) -53.4% 10.73 23.04
289 Cognizant Technology Solutions Corp. (NASDAQ:CTSH) -53.8% 15.68 33.94
290 Hess Corp. (NYSE:HES) -53.9% 46.47 100.86
291 Newmont Mining Corporation (NYSE:NEM) -54.1% 22.40 48.83
292 Sunoco, Inc. (NYSE:SUN) -54.2% 33.20 72.44
293 The Pepsi Bottling Group, Inc. (NYSE:PBG) -54.2% 18.07 39.46
294 Waters Corporation (NYSE:WAT) -54.2% 36.18 79.07
295 Huntington Bancshares Incorporated (NASDAQ:HBAN) -54.3% 6.75 14.76
296 Coach, Inc. (NYSE:COH) -54.5% 13.91 30.58
297 KB Home (NYSE:KBH) -54.7% 9.78 21.60
298 SunTrust Banks, Inc. (NYSE:STI) -54.7% 28.29 62.49
299 Comerica Incorporated (NYSE:CMA) -55.0% 19.58 43.53
300 Parker-Hannifin Corporation (NYSE:PH) -55.1% 33.80 75.31
301 Allegheny Energy, Inc. (NYSE:AYE) -55.4% 28.40 63.61
302 Franklin Resources, Inc. (NYSE:BEN) -55.4% 50.98 114.43
303 The McGraw-Hill Companies, Inc. (NYSE:MHP) -55.6% 19.45 43.81
304 National Semiconductor Corporation (NYSE:NSM) -55.7% 10.04 22.64
305 Noble Corporation (NYSE:NE) -55.8% 24.95 56.51
306 Texas Instruments Incorporated (NYSE:TXN) -56.2% 14.63 33.40
307 Fluor Corporation (NEW) (NYSE:FLR) -56.2% 31.91 72.86
308 PACCAR Inc (NASDAQ:PCAR) -56.4% 23.76 54.48
309 Apple Inc. (NASDAQ:AAPL) -56.4% 86.29 198.08
310 Merck & Co., Inc. (NYSE:MRK) -56.4% 25.31 58.11
311 T. Rowe Price Group, Inc. (NASDAQ:TROW) -56.6% 26.40 60.88
312 Federated Investors, Inc. (NYSE:FII) -56.7% 17.82 41.16
313 BJ Services Company (NYSE:BJS) -56.8% 10.49 24.26
314 Molex Incorporated (NASDAQ:MOLX) -56.9% 11.78 27.30
315 Teradata Corporation (NYSE:TDC) -57.1% 11.77 27.41
316 The Boeing Company (NYSE:BA) -57.1% 37.48 87.46
317 Tyco International Ltd. (NYSE:TYC) -57.2% 16.95 39.65
318 Halliburton Company (NYSE:HAL) -57.3% 16.18 37.91
319 Juniper Networks, Inc. (NASDAQ:JNPR) -57.7% 14.04 33.20
320 Dell Inc. (NASDAQ:DELL) -57.8% 10.35 24.51
321 Newell Rubbermaid Inc. (NYSE:NWL) -58.2% 10.81 25.88
322 Whirlpool Corporation (NYSE:WHR) -58.3% 34.01 81.63
323 Total System Services, Inc. (NYSE:TSS) -58.6% 11.60 28.00
324 Eaton Corporation (NYSE:ETN) -58.9% 39.88 96.95
325 Weyerhaeuser Company (NYSE:WY) -59.0% 30.25 73.74
326 Rockwell Collins, Inc. (NYSE:COL) -59.3% 29.32 71.97
327 Williams Companies, Inc. (NYSE:WMB) -59.4% 14.53 35.78
328 Google Inc. (NASDAQ:GOOG) -59.5% 280.18 691.46
329 Cameron International Corporation (NYSE:CAM) -59.7% 19.41 48.13
330 Limited Brands, Inc. (NYSE:LTD) -60.0% 7.58 18.93
331 Marathon Oil Corporation (NYSE:MRO) -60.4% 24.11 60.86
332 Honeywell International Inc. (NYSE:HON) -60.4% 24.38 61.57
333 Goodrich Corporation (NYSE:GR) -60.6% 27.84 70.61
334 AutoNation, Inc. (NYSE:AN) -60.6% 6.17 15.66
335 Yahoo! Inc. (NASDAQ:YHOO) -60.7% 9.14 23.26
336 Johnson Controls, Inc. (NYSE:JCI) -61.0% 14.07 36.04
337 General Electric Company (NYSE:GE) -61.0% 14.45 37.07
338 Starbucks Corporation (NASDAQ:SBUX) -61.1% 7.97 20.47
339 Amazon.com, Inc. (NASDAQ:AMZN) -61.3% 35.84 92.64
340 Tiffany & Co. (NYSE:TIF) -61.5% 17.71 46.03
341 Marriott International, Inc. (NYSE:MAR) -61.6% 13.13 34.18
342 The Allstate Corporation (NYSE:ALL) -61.9% 19.90 52.23
343 Baker Hughes Incorporated (NYSE:BHI) -61.9% 30.89 81.10
344 Novellus Systems, Inc. (NASDAQ:NVLS) -62.1% 10.46 27.57
345 Tyco Electronics Ltd. (NYSE:TEL) -62.2% 14.02 37.13
346 Precision Castparts Corp. (NYSE:PCP) -62.3% 52.34 138.70
347 El Paso Corporation (NYSE:EP) -62.4% 6.49 17.24
348 Intuitive Surgical, Inc. (NASDAQ:ISRG) -62.5% 121.09 322.99
349 State Street Corporation (NYSE:STT) -62.6% 30.33 81.20
350 Qwest Communications International Inc. (NYSE:Q) -62.8% 2.61 7.01
351 Rowan Companies, Inc. (NYSE:RDC) -62.9% 14.62 39.46
352 Humana Inc. (NYSE:HUM) -63.0% 27.89 75.31
353 Carnival Corporation (NYSE:CCL) -63.0% 16.47 44.49
354 Regions Financial Corporation (NYSE:RF) -63.1% 8.72 23.65
355 Aetna Inc. (NYSE:AET) -63.2% 21.24 57.73
356 WellPoint, Inc. (NYSE:WLP) -63.4% 32.11 87.73
357 Rockwell Automation (NYSE:ROK) -63.5% 25.18 68.96
358 D.R. Horton, Inc. (NYSE:DHI) -63.7% 4.78 13.17
359 The New York Times Company (NYSE:NYT) -63.8% 6.35 17.53
360 American Express Company (NYSE:AXP) -64.0% 18.74 52.02
361 Autodesk, Inc. (NASDAQ:ADSK) -64.1% 17.86 49.76
362 Masco Corporation (NYSE:MAS) -64.2% 7.73 21.61
363 The AES Corporation (NYSE:AES) -64.7% 7.55 21.39
364 Best Buy Co., Inc. (NYSE:BBY) -64.7% 18.58 52.65
365 eBay Inc. (NASDAQ:EBAY) -64.8% 11.69 33.19
366 Corning Incorporated (NYSE:GLW) -64.9% 8.43 23.99
367 Kimco Realty Corporation (NYSE:KIM) -64.9% 12.77 36.40
368 International Paper Company (NYSE:IP) -65.4% 11.20 32.38
369 J.C. Penney Company, Inc. (NYSE:JCP) -65.4% 15.21 43.99
370 Jabil Circuit, Inc. (NYSE:JBL) -65.5% 5.27 15.27
371 Xerox Corporation (NYSE:XRX) -65.5% 5.58 16.19
372 Smith International, Inc. (NYSE:SII) -65.7% 25.34 73.85
373 MeadWestvaco Corp. (NYSE:MWV) -65.8% 10.70 31.30
374 Weatherford International Ltd. (NYSE:WFT) -66.1% 11.63 34.30
375 Peabody Energy Corporation (NYSE:BTU) -66.5% 20.64 61.64
376 Fifth Third Bancorp (NASDAQ:FITB) -66.5% 8.41 25.13
377 Deere & Company (NYSE:DE) -66.6% 31.08 93.12
378 GameStop Corp. (NYSE:GME) -66.9% 20.56 62.11
379 Massey Energy Company (NYSE:MEE) -67.0% 11.81 35.75
380 Tyson Foods, Inc. (NYSE:TSN) -67.1% 5.04 15.33
381 KeyCorp (NYSE:KEY) -67.2% 7.70 23.45
382 Coca-Cola Enterprises Inc. (NYSE:CCE) -67.4% 8.49 26.03
383 Host Hotels & Resorts, Inc. (NYSE:HST) -67.8% 5.49 17.04
384 Interpublic Group of Companies, Inc. (NYSE:IPG) -67.8% 2.61 8.11
385 Eastman Kodak Company (NYSE:EK) -67.9% 7.03 21.87
386 Bank of America Corporation (NYSE:BAC) -68.3% 13.06 41.26
387 KLA-Tencor Corporation (NASDAQ:KLAC) -68.4% 15.24 48.16
388 Teradyne, Inc. (NYSE:TER) -68.4% 3.27 10.34
389 Invesco Ltd. (NYSE:IVZ) -68.5% 9.89 31.38
390 National-Oilwell Varco, Inc. (NYSE:NOV) -69.1% 22.72 73.46
391 Cummins Inc. (NYSE:CMI) -69.1% 19.65 63.69
392 MetLife, Inc. (NYSE:MET) -69.2% 19.00 61.62
393 Viacom, Inc. (NYSE:VIA.B) -69.2% 13.51 43.92
394 Akamai Technologies, Inc. (NASDAQ:AKAM) -69.3% 10.63 34.60
395 UnitedHealth Group Inc. (NYSE:UNH) -69.5% 17.73 58.20
396 Leucadia National Corp. (NYSE:LUK) -69.6% 14.31 47.10
397 CONSOL Energy Inc. (NYSE:CNX) -69.7% 21.69 71.52
398 R.R. Donnelley & Sons Company (NYSE:RRD) -69.7% 11.44 37.74
399 IntercontinentalExchange, Inc. (NYSE:ICE) -69.7% 58.29 192.48
400 Jones Apparel Group, Inc. (NYSE:JNY) -69.8% 4.83 15.99
401 Ashland Inc. (NYSE:ASH) -69.8% 14.32 47.43
402 News Corporation (NYSE:NWS.A) -69.8% 6.18 20.49
403 Jacobs Engineering Group Inc. (NYSE:JEC) -69.9% 28.80 95.61
404 Ingersoll-Rand Company Limited (NYSE:IR) -70.4% 13.77 46.47
405 Electronic Arts Inc. (NASDAQ:ERTS) -70.7% 17.11 58.41
406 SUPERVALU INC. (NYSE:SVU) -71.0% 10.88 37.52
407 Harley-Davidson, Inc. (NYSE:HOG) -71.1% 13.49 46.71
408 SLM Corporation (NYSE:SLM) -71.2% 5.81 20.14
409 Tenet Healthcare Corporation (NYSE:THC) -71.3% 1.46 5.08
410 Micron Technology, Inc. (NYSE:MU) -71.4% 2.07 7.25
411 Monster Worldwide, Inc. (NASDAQ:MNST) -71.5% 9.23 32.40
412 Advanced Micro Devices, Inc. (NYSE:AMD) -71.7% 2.12 7.50
413 Centex Corporation (NYSE:CTX) -71.9% 7.09 25.26
414 Sears Holdings Corporation (NASDAQ:SHLD) -72.1% 28.50 102.05
415 Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT) -72.4% 12.17 44.03
416 E TRADE Financial Corporation (NASDAQ:ETFC) -72.4% 0.98 3.55
417 Convergys Corporation (NYSE:CVG) -72.5% 4.52 16.46
418 Lennar Corporation (NYSE:LEN) -73.3% 4.78 17.89
419 Meredith Corporation (NYSE:MDP) -74.0% 14.32 54.97
420 Dynegy Inc. (NYSE:DYN) -74.1% 1.85 7.14
421 Goldman Sachs Group, Inc. (NYSE:GS) -74.3% 55.18 215.06
422 Apartment Investment and Management Co. (NYSE:AIV) -74.4% 8.90 34.73
423 Ameriprise Financial, Inc. (NYSE:AMP) -74.7% 13.96 55.11
424 CME Group Inc. (NASDAQ:CME) -75.1% 170.88 685.96
425 Nordstrom, Inc. (NYSE:JWN) -75.6% 8.98 36.73
426 Assurant, Inc. (NYSE:AIZ) -76.2% 15.91 66.90
427 Titanium Metals Corporation (NYSE:TIE) -76.5% 6.22 26.45
428 Valero Energy Corporation (NYSE:VLO) -76.5% 16.45 70.02
429 Constellation Energy Group, Inc. (NYSE:CEG) -76.7% 23.91 102.53
430 NYSE Euronext (NYSE:NYX) -77.5% 19.72 87.77
431 Alcoa Inc. (NYSE:AA) -77.7% 8.16 36.55
432 Macy's, Inc. (NYSE:M) -78.0% 5.68 25.87
433 Citigroup Inc. (NYSE:C) -78.3% 6.40 29.44
434 Whole Foods Market, Inc. (NASDAQ:WFMI) -78.4% 8.82 40.80
435 Motorola, Inc. (NYSE:MOT) -78.6% 3.44 16.04
436 Expedia, Inc. (NASDAQ:EXPE) -78.7% 6.72 31.62
437 United States Steel Corporation (NYSE:X) -79.1% 25.21 120.91
438 MBIA Inc. (NYSE:MBI) -79.7% 3.79 18.63
439 CIGNA Corporation (NYSE:CI) -79.8% 10.88 53.73
440 International Game Technology (NYSE:IGT) -80.2% 8.69 43.93
441 CBS Corporation (NYSE:CBS) -80.2% 5.39 27.25
442 Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) -80.2% 20.24 102.44
443 JDS Uniphase Corporation (NASDAQ:JDSU) -80.6% 2.58 13.30
444 Allegheny Technologies Incorporated (NYSE:ATI) -80.7% 16.69 86.40
445 Morgan Stanley (NYSE:MS) -80.7% 10.25 53.11
446 Legg Mason, Inc. (NYSE:LM) -80.9% 14.00 73.15
447 Coventry Health Care, Inc. (NYSE:CVH) -80.9% 11.32 59.25
448 SanDisk Corporation (NASDAQ:SNDK) -81.0% 6.30 33.17
449 Ford Motor Company (NYSE:F) -81.3% 1.26 6.73
450 CB Richard Ellis Group, Inc. (NYSE:CBG) -81.3% 4.03 21.55
451 NVIDIA Corporation (NASDAQ:NVDA) -81.7% 6.23 34.02
452 Prudential Financial, Inc. (NYSE:PRU) -81.7% 17.01 93.04
453 Wyndham Worldwide Corporation (NYSE:WYN) -81.8% 4.29 23.56
454 Abercrombie & Fitch Co. (NYSE:ANF) -81.8% 14.55 79.97
455 Sun Microsystems, Inc. (NASDAQ:JAVA) -82.0% 3.27 18.13
456 Merrill Lynch & Co., Inc. (NYSE:MER) -82.1% 9.60 53.68
457 Tesoro Corporation (NYSE:TSO) -82.2% 8.49 47.70
458 Gannett Co., Inc. (NYSE:GCI) -82.5% 6.81 39.00
459 The Goodyear Tire & Rubber Company (NYSE:GT) -82.9% 4.83 28.22
460 Textron Inc. (NYSE:TXT) -82.9% 12.20 71.30
461 Principal Financial Group, Inc. (NYSE:PFG) -83.0% 11.67 68.84
462 Sovereign Bancorp, Inc. (NYSE:SOV) -83.2% 1.92 11.40
463 Dillard's, Inc. (NYSE:DDS) -83.3% 3.14 18.78
464 Ciena Corporation (NASDAQ:CIEN) -83.7% 5.55 34.11
465 American Capital Ltd. (NASDAQ:ACAS) -83.8% 5.35 32.96
466 Janus Capital Group Inc. (NYSE:JNS) -83.9% 5.28 32.85
467 Terex Corporation (NYSE:TEX) -84.4% 10.21 65.57
468 Harman International Industries Inc./DE/ (NYSE:HAR) -85.6% 10.65 73.72
469 Sprint Nextel Corporation (NYSE:S) -85.7% 1.88 13.13
470 AK Steel Holding Corporation (NYSE:AKS) -85.9% 6.51 46.24
471 MEMC Electronic Materials, Inc. (NYSE:WFR) -86.2% 12.20 88.50
472 Lincoln National Corporation (NYSE:LNC) -87.4% 7.31 58.22
473 Developers Diversified Realty Corp. (NYSE:DDR) -87.8% 4.69 38.29
474 Wachovia Corporation (NYSE:WB) -88.0% 4.57 38.03
475 Office Depot, Inc. (NYSE:ODP) -88.5% 1.60 13.91
476 General Motors Corporation (NYSE:GM) -88.8% 2.79 24.89
477 Manitowoc Company, Inc. (NYSE:MTW) -88.8% 5.47 48.83
478 National City Corporation (NYSE:NCC) -89.2% 1.78 16.46
479 Liz Claiborne, Inc. (NYSE:LIZ) -89.5% 2.13 20.35
480 XL Capital Ltd. (NYSE:XL) -89.8% 5.11 50.31
481 CIT Group Inc. (NYSE:CIT) -90.6% 2.25 24.03
482 MGIC Investment Corp. (NYSE:MTG) -90.9% 2.05 22.43
483 Unisys Corporation (NYSE:UIS) -91.5% 0.40 4.73
484 Hartford Financial Services (NYSE:HIG) -92.1% 6.88 87.19
485 ProLogis (NYSE:PLD) -94.5% 3.46 63.38
486 Genworth Financial, Inc. (NYSE:GNW) -96.0% 1.02 25.45
487 American International Group, Inc. (NYSE:AIG) -97.3% 1.56 58.30
488 Freddie Mac (NYSE:FRE) -98.4% 0.56 34.06
489 General Growth Properties, Inc (NYSE:GGP) -99.0% 0.40 41.18
490 Fannie Mae (NYSE:FNM) -99.0% 0.38 39.97
491 Washington Mutual, Inc. (NYSE:WM) -99.7% 0.04 13.61
492 Lehman Brothers Holdings Inc. (NYSE:LEH) -99.9% 0.04 65.44
493 Hercules Incorporated (NYSE:HPC) N/A N/A 19.35
494 Electronic Data Systems Corporation (NYSE:EDS) N/A N/A 20.73
495 Lorillard Inc. (NYSE:LO) N/A 60.69 N/A
496 Philip Morris International Inc. (NYSE:PM) N/A 36.64 N/A
497 SAFECO Corporation (NYSE:SAF) N/A N/A 55.68
498 Scripps Networks Interactive, Inc. (NYSE:SNI) N/A 24.40 N/A
499 Wendy's International (NYSE:WEN) N/A N/A 25.84
500 Wm. Wrigley Jr. Company (NYSE:WWY) N/A N/A 58.55
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