Slow and steady choices build a credit score

Driving back from the grocery store the other day, I spotted one of those clear-up-your-credit-score-quick signs that dot the corners of major roads.

As eye catching as the brightly colored signs are, of course, grabbing financial advice off the street is one way to pay high fees for something you can find for free. Or you might pay outlandish sums for services that you can do yourself.

The good news for consumers is that extra help regarding credit scores and credit reports is now available from a variety of sources. Unfortunately, many consumers still aren't sure where to look or they don't want to be bothered.

More than half of consumers surveyed — 58% — didn't even know their credit score, according to a report the American Bankers Association released last fall.

Many times, consumers start caring about a score when a lender tells us that we don't qualify for a low rate on a major loan because of a low score. Unlike what signs on the road imply, there isn't a quick fix for boosting a credit score. But educational information can offer a realistic plan of attack.

"Everybody wants the 'What Next?' button," said Ian Cohen, CEO of Credit.com.

So Credit.com has new "personalized action plans" to help consumers figure out what they can do to raise their credit scores. One strategy? Start paying more than the minimum required payment on credit cards to lead to lower balances and possibly raise the score.

Detroit-based Quizzle.com, a provider of free credit reports and scores, offers free tools that used to be part of a premium package. No purchase or credit card is required.

"We provide credit comparison, credit trending, a score analysis, and a credit time line that shows how your personal credit was built over time," said Todd Albery, CEO of Quizzle.

In January, Quizzle started a partnership with Equifax, Vantage Score and ReasonCode.org. Now, Quizzle offers a completely free credit report from Equifax and a Vantage 3.0 Credit Score.

"A sc! ore alone does not give consumers a full understanding of their credit health," Albery said. And that's where online advice can help.

Albery compares seeing one's credit score to being in high school and finding out you got a 76% on a geometry test. But what if you never saw what questions you got wrong on the actual test? How would you find ways to improve?

Finding out your credit score wasn't always as easy or simply as free as seeing a grade on a test. Now, though, some consumers are finding access to free credit scores via their credit card statements and online accounts, too.

Discover rolled out free, three-digit FICO scores on monthly statements for its card members after a test run last year. Barclays is offering free FICO scores to its cardholders, too, via their online accounts.

The Consumer Financial Protection Bureau is turning up the heat on card issuers to release more credit score information.

The push for free credit scores is leading some online outfits to boost their offerings, as well.

Cohen, of Credit.com, said the goal of the personal action plan is to help consumers solve real problems by learning strategies in as few clicks as possible.

Cohen walked me through the new program online and showed how a consumer can easily slide gadgets on the computer screen to figure out what's driving down their score. Is it their payment history? High debt? Mix of accounts?

"It's enough to get people to act," Cohen said.

Sometimes, the strategy could involve taking steps to pay down more credit card debt and other debt to drive up the score.

Take a consumer who owes $2,562 on their credit card bills. It might not seem like a horrible amount of credit card debt. But if the credit limits on those cards is around $6,000 all that debt is driving down the score. The consumer in this example is using nearly 43% of their available credit — when a better score could be reached if one used only 10% of available credit.

Paying an extra $175 ! to $300 a! month toward that credit card balance could drive up some scores 20 points to 35 points soon.

Other consumers could end up being warned that they don't want to apply for more credit right now. They might want an on-the-spot discount in a store but they could be driving up the cost of their overall borrowing on other loans because they've applied for too much credit lately.

Driving a credit score higher, of course, can lead to lower interest rates when one does take out a loan and then push down the cost of borrowing over the long run.

Credit.com notes that even a so-so credit score can cost some consumers more than $103,000 in extra financing costs over a lifetime.

"The data we pull on you is all yours. Here take it," Cohen said.

Follow Susan Tompor on Twitter @Tompor.

Higher tax rates fail to dent economic growth

Bloomberg News

As the political fight over raising taxes for high-income Americans fades away, so are predictions for negative economic fallout.

The bill for President Barack Obama's 2013 tax increases comes due April 15, and the first boost in marginal income rates in 20 years is already reducing the U.S. budget deficit without tipping the economy into recession.

“In advance one always hears the squeals of the oxen who would like everyone to think they are about to be gored,” said James Galbraith, an economist at the University of Texas at Austin. “Then it turns out that they are only nicked, and life goes on.”

(Don't miss: 6 last-minute tax filing tips)

The U.S. government is projected to collect more than $3 trillion for the first time in the fiscal year ending Sept. 30, a 9.2% increase over last year, according to the Congressional Budget Office. CBO forecasts another 9% rise in 2015 and estimates that more than half of the increases in revenue stem from tax law changes.

Because of tax increases, spending cuts and economic growth, the federal budget deficit is projected to be 3% of gross domestic product this year. That's less than half its 2012 level and the smallest budget deficit since 2007.

In January 2013, just after President George W. Bush's tax cuts expired, Congress reset the top marginal income tax rate at 39.6%, the same level it reached under President Bill Clinton.

ADDITIONAL LEVIES

High-income taxpayers face additional levies, effective in 2013, to help pay for Mr. Obama's health-care plan. That means those at the very top of the U.S. income scale face higher marginal tax rates than at any time since 1986.

The increases started generating revenue for the government in late 2012, when taxpayers began accelerating capital gains and bonus income to avoid paying at the higher rates.

The high-income tax increase sapped 0.25 percentage points from GDP in 2013, estimates Mark Zandi, chief economist at Moody's Analytics Inc. in West Chester, Pa. That slight economic drag, he said, shouldn't continue.

“For the most part, by summertime, the negative effects on the economy will have abated,” he said. “Most of the pain has been felt.”

Even congressional Republicans, who warned that the tax increases would destroy jobs, aren't making a serious push to repeal them. They're acting as though the new tax rates and increased take for the U.S. government are here to stay, even if they don't like it.

House Republicans' budget plan and draft tax-code revamp call for reshuffling the tax system in ways that would reduce top rates without reducing the amount of money the! government collects. Also, the tax plan was designed so it wouldn't cut the share of taxes paid by top earners.

Senate Republicans didn't include a major rollback of Mr. Obama's tax increases in their latest job-creation plan, instead focusing on repealing the 2010 health-care law and blocking regulations that would limit energy production.

That's a concession to political reality, said Orrin Hatch of Utah, the top Republican on the Senate Finance Committee.

“We know we can't do it with Democrats in control of the Senate,” he said, “so it's going to be a feckless effort.”

UNDOING CUTS

It took Mr. Obama two presidential campaigns, four years in office and a past-the-wire legislative fight at the end of 2012 to undo a fraction of the tax cuts secured by his predecessor. Mr. Obama prevailed two years after he signed a temporary extension of the Bush tax cuts.

The result set the top marginal income tax at 39.6%, up from 35%, starting at $450,000 of taxable income for married couples and $400,000 for individuals in 2013. The top basic rate on capital gains and dividends rose to 20% from 15%.

Congress also reinstated limits on itemized deductions and personal exemptions for top earners. Those affect married couples with adjusted gross income of more than $300,000 and individuals with income of more than $250,000.

On top of all that, tax increases for the highest earners from the 2010 Affordable Care Act took effect in 2013. That amounts to a 3.8% tax on net investment income and a 0.9% tax on wages. Those taxes start at $250,000 of annual income for married couples and $200,000 for individuals.

A married couple with about $915,000 in annual income will pay $277,426 in payroll and income taxes for 2013, up 12% from 2012. That's according to an example created by the Tax Policy Center in Washington.

The people affected by the tax increases include corporate executives, lawyers, doctors and people who report their business profits on their individual tax returns.

Th! e tax inc! rease constrains cash flow for the most successful small businesses, especially those with limited access to credit, and it's one reason why the economic recovery has been slow, said Douglas Holtz-Eakin, a former director of the Congressional Budget Office.

“It would have been a good idea to get everyone back to work before you decided to redistribute the income,” he said. “You've raised the marginal tax on the return to both high-income labor and high-income saving and in

5 Tech Stocks to Trade for Gains This Week

BALTIMORE (Stockpickr) -- After a long period of stock market underperformance, the tech sector is starting to look exciting for investors again. And that's creating some big opportunities in tech stocks this week.

>>5 Rocket Stocks to Buy for a Market Bounce

Typically, technology sector outperformance is synonymous with bull markets. But not this one. Since last June, the S&P 500 has moved 10.3% higher, while the tech sector has only managed to move the needle 4.5%. By and large, technology names haven't fully participated in this rally.

But if the trading setups in big tech names are any indication, they could be about to make up for lost time. Today, we'll take a technical look at five of them.

>>5 Stocks Poised for Breakouts

For the unfamiliar, technical analysis is a way for investors to quantify qualitative factors, such as investor psychology, based on a stock's price action and trends. Once the domain of cloistered trading teams on Wall Street, technicals can help top traders make consistently profitable trades and can aid fundamental investors in better planning their stock execution.

Without further ado, let's take a look at five technical setups worth trading now.

Micron Technology

First up is Micron Technology (MU), a name that's been one of the tech sector's shining momentum stars for the last year and change. Shares of MU have more than tripled in the last 12 months -- and this stock could have even further to go thanks to a bullish setup in shares.

>>2 Tech Stocks Rising on Unusual Volume

Micron spent the last two months forming an ascending triangle pattern, a bullish price setup that was formed by horizontal resistance above shares at $24 and uptrending support to the downside. Basically, as MU bounced in between those two technical price levels, it was getting squeezed closer and closer to a breakout above resistance at $24. Taking out $24 was the buy signal in MU -- and it triggered on Friday.

Momentum, measured by 14-day RSI, adds some extra confidence to upside in Micron. The momentum gauge broke its intermediate-term downtrend at the same time MU's shares pushed through $24. Since momentum is a leading indicator of price, that's a good sign for bulls.

If you decide to jump into MU here, I'd recommend putting a protective stop just below the 50-day moving average.

SunPower

We're seeing the exact same setup in shares of solar power systems maker SunPower (SPWR), except this mid-cap solar name hasn't broken out yet. The breakout comes on a push through resistance at $34. When $34 gets taken out, buying shares becomes a high-probability trade.

>>5 Hated Earnings Stocks You Should Love

Whenever you're looking at any technical price pattern, it's critical to think in terms of those buyers and sellers. Triangles and other pattern names are a good quick way to explain what's going on in a stock, but they're not the reason it's tradable. Instead, it all comes down to supply and demand for shares.

That $34 resistance level is a price where there has been an excess of supply of shares; in other words, it's a place where sellers have been more eager to step in and take gains than buyers have been to buy. That's what makes a breakout above it so significant -- the move means that buyers are finally strong enough to absorb all of the excess supply above that price level.

Wait for the breakout before taking the trade.

InvenSense

It's been a solid year for InvenSense (INVN); the small-cap motion interface device maker has rallied more that 36% in the trailing 12 months. And like the other technology stocks on our list of trading setups, INVN looks well-positioned for even more upside in 2014.

>>3 Huge Stocks to Trade (or Not)

That's because INVN is currently forming a cup and handle pattern, a classic bullish price setup that's formed by a cup-shaped rounding bottom in shares that's followed up by a short-duration channel down. The buy signal comes on a move through the pattern's price ceiling at $21. Shares are pushing up very close to that level in today's session thanks to news that a lingering patent dispute is getting settled.

Like with MU, the 50-day moving average has been a pretty good proxy for support all the way up in shares of InvenSense. It makes sense to keep a protective stop below that level in case this trade loses traction.

Infosys

Forget about the pattern names for a moment -- you don't have to be an expert technical analyst to figure out what's going on in shares of Infosys (INFY), the $32 billion Indian IT outsourcing firm. Instead, a quick glance at the chart is sufficient.

>>4 Stocks Breaking Out on Big Volume

Infosys is currently bouncing higher in an uptrending channel, a price setup that's been in place since all the way back at the start of the summer. From a relative strength standpoint, this name has been holding up exceptionally well over that six-month span, with shares catching a bid on every test of the trend line support level at the bottom of the channel. So with INFY sitting at the bottom of the channel for a sixth time now, it makes sense to buy the bounce.

Waiting to buy off a support bounce makes sense for two big reasons: It's the spot where shares have the furthest to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before you know you're wrong). Remember, all trend lines do eventually break, but by actually waiting for the bounce to happen first, you're ensuring INFY can actually still catch a bid along that line before you put your money on shares.

Alcatel-Lucent

Last up is Alcatel Lucent (ALU), the $10.5 billion French communications firm that's become a popular trading vehicle in the last couple of years. That huge liquidity in shares of ALU means that it's more likely to be technically obedient -- and considering the bullish setup in shares, that's a very good thing for anyone who owns shares.

Alcatel Lucent is currently forming an inverse head and shoulders pattern, a trading setup that indicates exhaustion among sellers. The pattern is formed by two swing lows that bottom out around the same level (the shoulders), separated by a deeper low (the head). The buy signal comes on a move through the neckline, which is right at $4.60.

So far, this pattern isn't complete -- it hasn't formed a right shoulder yet. But ultimately, for the reasons I mentioned earlier, that doesn't have a big bearing on the trading implications of ALU. If shares can catch a bid above $4.60, I'd be a buyer -- with a tight stop in place, of course. This stock is still a volatile name.

To see this week's trades in action, check out the Technical Setups for the Week portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

RELATED LINKS:

>>5 Toxic Stocks to Sell Now

>>5 Dividend Stocks That Want to Give You a Raise in 2014

>>4 Hot Stocks on Traders' Radars

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to

TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

Follow Jonas on Twitter @JonasElmerraji

Apple's Tortured Relationship with the Enterprise

NEW YORK (TheStreet) -- After the desktop publishing bonanza of the late 1980s that was launched by the early Macs and laser printers, Apple (AAPL) sought to further develop its position in the business world.

But as history tells it, a mistake by CEO John Sculley opened the door to Microsoft's (MSFT) Windows. By 1995, Microsoft was briskly improving its control of the enterprise with, after some false starts, Windows 95. At the time, the casual and damaging consensus was that Windows 95 was "just as good as a Mac," and by early 1996 Apple was foundering.

This is not the place to retell the story of Steve Jobs's return. It's been superbly told by many others, in book-length form. What I do want to do, however, is relate some of the interesting observations I encountered from my own experience because they shed light on Apple's topsy-turvey relationship with the enterprise over the years, especially since 2000.

CIO Encounters

When I worked for Apple in Federal sales, starting in 2003, I was assigned to sell into the Federally Funded R&D Centers. I met with almost every CIO of those organizations, and they were generally in the Microsoft camp. Microsoft products were designed for the enterprise from top to bottom. Microsoft understood the business needs of the enterprise and government and "checked the boxes" for the CIO's needs. So firmly entrenched was Microsoft that, even when confronted with a superior, more secure UNIX OS, called Mac OS X, they generally declined. That's because convincing one person in an organization, even a CIO, won't turn the ship around. Plus, an OS is just a point solution. The whole suite of business services, such as the Microsoft Exchange Server, was more critical to a business in their view. Finally, Macs being the very best were too expensive, and every business wanted the cheapest possible hardware for its cubicle dwellers. Of course, I had champions in some of those agencies, but by and large if an organization was already Mac-friendly, and they were few, sales were brisk. Otherwise, it was an uphill battle. Organizations don't change unless there's a catastrophe. (And in some cases, there were some major security events with Windows XP that earned Apple important customers.) But those were small battles, not the larger war.

Stock quotes in this article: AAPL, MSFT 

In October, 2001 Apple launched the iPod. I was in the room when Steve Jobs pulled the first iPod out of his pocket and gleamed at us. This was a new beginning. From that day on, Apple was able to get on the consumer bandwagon and appeal to individual purchase authority. If a product were very cool and well made and simple and fun, out came the individual's credit card. That has been Apple's mantra and key to success ever since.

Back to the enterprise. When it came to selling Macs of any kind, Apple was, in my impression, carefully treading so that it could dance its own dance. What was at stake was innovation. By that I mean that businesses and government can be plodding -- and demanding all at the same time.

While Microsoft catered to those businesses, Apple knew that it had to move relentlessly forward with technology in order to claim that it makes the very best products. Today, we need only look at the organizations still using Windows XP, even though Microsoft and the U.S. government have pleaded with them to leave that 14-year-old OS behind.

The Influence of Steve Jobs

Very often, the Apple federal and enterprise sales teams would look to the charisma and influence of Jobs to inspire a customer in special executive briefings on the Apple campus. These were customers critical to Apple's business sales. Sometimes it worked very well, but there were times when Jobs declined to intervene with his influence. It's possible he sensed that a particular technical area was unwise for Apple to pursue, like supercomputing and compute clusters. Plus, there were probably times when he was vey focused on his pet projects, like the iPad and iPhone, and he felt that if his sales team were really, really good, they could close the deal without him.

Finally, as I mentioned above, there's always that enterprise demon -- businesses and government want stability and long-term commitments. That's something Apple couldn't engage in if it were to stay in the business of radical advances in consumer technology. Apple's approach has generally been to put great products out there while moving forward briskly. If an organization embraces those Apple products, all's well. But if an organization thinks it can obtain concessions from Apple by making high-value purchases, that generally hasn't worked out well. All this explains why Apple pursues the enterprise on its own terms and why there are organizations that embrace Apple and those that consider Apple products and services (or lack thereof) unsatisfactory for their broad enterprise needs.

Stock quotes in this article: AAPL, MSFT 

There was a time in the early days of [Mac] OS X (2001-2005) when the security situation was a nightmare with its competition, Windows XP. If perhaps Jobs had gone all out, at every opportunity, to sway those organizations besieged with Windows viruses, maybe things would have been different.

But even when faced with security calamities, the approach was not to change platforms. Instead, it was for Microsoft to fix the problems, and the company pretty much did that with Vista and Windows 7. For some very personal history on the opportunities Apple may have missed, see, for example, Could Apple have been even more successful?

The Bottom Line

Today, it seems like a simple matter to suggest that if only Apple tried harder, it could generate much more Mac revenue in business and government. But the fact is, Apple has morphed into a very successful consumer electronics company. Enterprise sales are sought and won daily, and NASA is a major Apple customer. But Apple is always following its own vision, advancing the state-of the-art briskly, and asking its enterprise customers to be on that ride with them.

Now, in the post-PC era, with drastic reductions in PC sales and most consumer and enterprise customers finding that the classic tablet, conceived by Apple in the iPad, meets their needs, Apple's forward-looking vision has been vindicated. Try as Microsoft might, the Surface tablets are not the future whereas Apple has significant iPad and iPhone penetration in the enterprise. Before the iPhone and iPad, it was a rocky ride for Apple's Mac in the PC world. But the decision to race into the future with the iPhone and iPad looks to have paid off.


At the time of publication the author had no position in any of the stocks mentioned. Follow @jmartellaro This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Stock quotes in this article: AAPL, MSFT  John Martellaro was born at an early age and began writing about computers soon after that. He is a former U.S. Air Force officer and has worked for NASA, White Sands Missile Range, Lockheed Martin Astronautics, the Oak Ridge National Laboratory and Apple. At Apple he worked as a Senior Marketing Manager, a Federal Account Executive and a High Performance Computing manager. John is currently the Senior Editor for Analysis and Reviews at The Mac Observer. His interests include skiing, chess, science fiction and astronomy.

Sliding Auto Sales Kill the General Motors Rally

Remember when everyone loved General Motors (GM) and were disappointed with Ford (F)? That’s so 2013.

Here’s a chart of showing the price of General Motors’ stock divided by Ford’s during the past year.

 

But all positivity around General Motors has vanished today following its announcement of last month’s auto sales. General Motors reported that December sales slide 6.3%, well below the consensus estimate for a 1.5% increase. Ford missed forecasts too–it reported a gain of 1.7%, below the consensus of a 4.3% increase–but at least it was a gain.

RBC Capital Markets’ Joe Spak says investors should use weakness in General Motors to buy its shares, but they seem a lot more comfortable with Ford. General Motors’ shares have dropped 3.2% to $39.65 at 12:29 p.m.–while Ford has gained 0.6% to $15.53. Toyota Motor (TM) has dropped 0.5% to $120.05 and Honda Motor (HMC) is off 0.3% at $40.457.

Chestnuts make roaring comeback

Chestnuts still roast on open fires, but some farmers are now using the traditional holiday favorite in many other ways — making treats like hummus, soup and gluten-free beer.

With a combination of nature, entrepreneurial farming and some help from Michigan State University, Michigan has become a national leader in growing chestnuts and is harvesting more than 100,000 pounds a year.

It's a comeback of sorts for the nuts after the trees that grow them were nearly wiped out by a fungus that destroyed billions of chestnut trees across the country by the 1950s.

"If I had a million pounds of chestnuts, I could sell them tomorrow," said Roger Blackwell, president of the Chestnut Growers Inc., a cooperative of 29 growers across the state.

Roasting the nuts at Christmastime still is popular, Blackwell said, but additional uses have fueled the industry's growth. Unlike other nuts, chestnuts are full of water — rather than oil — which means they can be dried out and ground up like grain to make flour. Their natural sweetness makes them ideal for pastries.

Researchers say the American Chestnut tree was once king of the forest in the eastern U.S., producing a decay-resistant hardwood perfect for building things like railroad ties, barns and other structures left out in the elements. In the 1940s, Mel Torme and Bob Wells lionized chestnuts in "The Christmas Song," later made famous by Nat King Cole.

But a fungus, first noticed in the early 1900s, took out billions of the trees. By the 1950s, it was rare to see a mature tree that hadn't been destroyed. Most chestnuts sold in stores were imported from Italy and China.

By the 1990s, Michigan farmers sensed a potential cash crop if the nuts could be grown successfully. Dennis Fulbright — a professor of plants, soils and microbial sciences at MSU — was researching chestnut trees and isolated a natural advantage that Michigan could exploit.

The fungus that kills the trees was itself susceptible to a virus tha! t occurs naturally in Michigan.

"We don't know where the virus came from," Fulbright said. "But it slows down the fungus considerably to the point where the trees' resistance can work."

Scientists helped by finding a hybrid tree that combines European and Japanese varieties. They produce larger nuts and a larger crop.

Fulbright said that eventually farmers hope to grow about 3,000 pounds of nuts per acre. The nuts sell for about $2 per pound wholesale and can fetch three times that much when sold retail, said Joyce Ivory of the Chestnut Growers.

The Henry Ford buys Michigan-grown chestnuts, and roasts and sells them during its Holiday Nights in Greenfield Village.

Jesse Eisenhuth, director of Food Services for the Henry Ford, said it's important to musuem to buy local.

"Chestnuts are a type of food most people equate with the holidays," Eisenhuth said. "Few people, however, have actually tasted them. We see a lot of people at our Holiday Nights program in Greenfield Village, eating chestnuts for the first time."

Fulbright said chestnuts give growers a diversity of products to offer; that helps when something goes wrong with their other crops.

"It's an alternative crop," Fulbright said. "We didn't freeze out the year of the big freeze in Michigan. If your apples or cherries are damaged, you still have your chestnuts."

Fulbright said Michigan's fruit belt on the west side of the state, where apples and cherry thrive, is perfect for chestnuts. But he sees other areas that can grow them, too.

Ivory and her husband, Peter, grow chestnuts on their property in Lapeer County in the Thumb. Fulbright said he initially doubted they could do well there, but: "They've proven me wrong, and I like to be proven wrong."

Fulbright said soil conditions and other factors in metro Detroit could make chestnut-growing possible here, too.

"This a great agricultural story," Fulbright said. "There are not too many start-ups in agriculture in our lifetime."

Boeing Union Rejects Offer, Company Looks Elsewhere to Build 777X

After three days of talks between Boeing Co. (NYSE: BA) and the International Association of Machinists & Aerospace Workers (IAM) local union ended Thursday night, the union's leadership rejected what Boeing called its “best and final” contract extension offer. As part of its offer to the union, Boeing would have committed to doing final assembly of the new 777X aircraft and the assembly of the plane’s composite wing at a plant in Washington and would have committed to doing final assembly work on the 737 MAX through 2024.

Just a month ago, the IAM membership rejected a Boeing contract extension that called for cuts in wage increases for union members, reduced health care benefits and lower company contributions to its defined benefit retirement plan. Some 67% of IAM members voted to reject that deal.

Boeing tried to sweeten yesterday’s offer to the union, adding $5,000 to its previous offer of a $10,000 signing bonus and improving dental benefits. The company made no change its previous pension offer, which would have allowed union members to keep what they have accrued to date under the defined benefit plan, but base future benefits on a defined contribution plan. The pension benefit issue was the primary reason Boeing’s November offer was rejected.

Boeing said it has received offers to build a new plant for assembling the 777X from 22 states, many of which have submitted multiple sites. A total of 54 sites are being evaluated for a new plant location.

After the IAM rejected Boeing’s offer in November, we suggested that the negotiations were not really over between the two sides. Building a new plant in Washington and taking advantage of the available talent pool in the state is still the company’s best option for assembling its new planes. The union could win its struggle with Boeing over the long-term pension benefits issue because the company’s current management eventually will figure out that it will not be around when the bill comes due and paying the benefits will be somebody else’s problem.

After iPad Air, will Apple make an iPad Pro?

The biggest news from Apple's product launch event Tuesday was the new name for the company's flagship 9.7 inch tablet, the iPad Air.

The name is fueling speculation that Apple may be developing a high-end tablet called an iPad Pro for work tasks that are currently performed on PCs.

"The name change is likely intentional. Everything that Apple articulates it does for a reason," said Will Power, an analyst at RW Baird. "Developing an iPad that is better designed for productivity is something that could very well make sense."

Apple already makes this distinction with its line of laptop and notebook computers, calling the slimmer version the MacBook Air and the more expensive, heavier-duty model the MacBook Pro. It also offers a Mac mini, a small desktop computer, and uses that word to describe the 7.9 inch iPad.

"This would seem to leave room for a 'Pro' model at some point if a market for a higher performance tablet exists," Gene Munster, an analyst at Piper Jaffray, wrote in a note to investors after Apple unveiled the iPad Air Tuesday.

There may well be a huge market for a tablet that can do most of the tasks office workers need to get done, such as word processing, creating presentations and crunching numbers in spreadsheets.

This year, more than 300 million PCs are expected to ship, compared to just over 180 million tablets, according to Gartner estimates.

Apple has sold 170 million iPads so far and most of these devices are used for "consumptive purposes" such as playing games and watching video, rather than productivity, RW Baird's Power noted.

"Put that 170 million number in the context of the number of PCs out there," the analyst said. "There's still a significant growth opportunity for tablets and Apple is trying to find ways to further segment the market."

Apple spokeswoman Trudy Muller declined to comment.

Hedge fund trackers shooting the lights out

A pair of funds that track hedge fund filings are turning out to be much better at producing alpha than the real McCoys, but questions remain about how they will do if stocks head south.

The $117 million Global X Top Holdings ETF (GURU) and the $74.8 million 13D Activist Fund (DDDAX) were both up more than 23% year-to-date through Aug. 21, crushing the S&P 500's 16% return over the same time period.

They funds are also pounding the fabled investors that the funds are mimicking.

Through the first six months of this year, the most recently available data, the funds were up 19% and 17%, respectively, while the Morningstar MSCI Composite Hedge Fund Index, an asset-weighted composite of almost 1,000 hedge funds, was up just 7.2%.

Both the funds base their holdings on hedge fund filings, but each does it a bit differently.

The Global X Top Holdings ETF tracks an index that uses a proprietary methodology to select holdings from 63 different hedge fund managers, based on their 13F filings, which hedge funds with more than $100 million in assets are required to file quarterly.

The 13D Activist Fund, as its name suggests, is based on 13D filings, which hedge funds have to file when they buy a stake of 5% or more in any publicly traded company. These filings are typically tied to so-called activist investors such as Bill Ackman or Carl Icahn.

Even though the funds are tracking hedge fund filings, they aren't doing any hedging themselves. They are both plain-old long-only stock funds.

Because neither of the funds are two years old yet, their funds haven't been tested yet in a down market and it is unclear whether relying on hot hedge fund picks will help if stocks start to sag.

“When the market takes a dive a lot of people might sell their winners very quickly to take profits,” said Josh Charney, an alternatives analyst at Morningstar Inc. “I'd be concerned if I was doing this on the side and the market takes a dive.”

In the funds' defense, even without hedges, they have offered investors a surprising amount of downside protection over the past year.

The 13D Activist Fund has only captured 41% of the market's downside over the past year, while capturing 130% of the upside, according to Morningstar.

Global X's Guru ETF has captured 76% of the downside and 163% of the upside.

The average large-cap mutual fund captured 97% of the downside and just over 100% of the upside.

Ken Squire, portfolio manager of the 13D Activist Fund, is con! fident that the performance can keep up.

The average 13D holding period lasts about 15 months, and those stocks have an average return of 15% over that time period, he said.

Mr. Squire attributes the success, in part, to the star power of the hedge funders that his fund follows.

“They're not only putting capital on the line, they're also putting their reputations on the line,” he said.

New Housing Starts, Building Permits Hit Doldrums

The U.S. Census Bureau and the Department of Housing and Urban Development reported this morning that new housing starts in August rose to an annual seasonally adjusted rate of 891,000, an increase of 0.9% from the upwardly revised July rate of 883,000, and a gain of 19% above the August 2012 rate of 749,000. The consensus estimate from a survey of economists expected a rate of around 915,000.

The seasonally adjusted rate of new building permits fell to 918,000, which is 3.8% below the upwardly revised July rate of 954,000 and 11% higher than the July 2012 rate of 827,000. The consensus estimate called for 950,000 new permits.

Single-family housing starts rose to an annualized rate of 628,000 in August, up 7% from the downwardly revised July rate of 587,000.

Permits for new single-family homes rose 3% in August to an adjusted annual rate of 627,000 from an upwardly revised total of 609,000 in July.

Information on multifamily housing is sketchy for August because the Census Bureau's data does not meet the agency's standards for reliability on buildings of two to four units. Starts on buildings with five or more units fell 9.4% month-over-month in August, but remain 22.9% higher than August 2012.

The Art Of Cutting Your Losses

One of the most enduring sayings on Wall Street is "Cut your losses short and let your winners run." Sage advice, but many investors still appear to do the opposite, selling stocks after a small gain only to watch them head higher, or holding a stock with a small loss, only to see it worsen.

No one will deliberately buy a stock they believe will go down in price and be worth less than what they paid for it. However, buying stocks that drop in value is inherent to the nature of investing. The objective, therefore, is not to avoid losses, but to minimize the losses. Realizing a capital loss before it gets out of hand separates successful investors from the rest. In this article, we'll help you stand out from the crowd and show you how to identify when you should make your move.

Reasons Investors Hold Stocks With Large Unrealized Losses
In spite of the logic for cutting losses short, many small investors are still left holding the proverbial bag. They inevitably end up with a number of stock positions with large unrealized capital losses. At best, it's "dead" money; at worst, it drops further in value and never recovers. Typically, investors believe that the reason they have so many large, unrealized losses is because they bought the stock at the wrong time or it was a matter of bad luck. Rarely do they believe it is because of their own behavioral biases.

Let's look at a few of these biases:
Stocks Always Bounce Back - Don't They?
A glance at a long-term chart of any major stock index will see a line that moves from the lower-left corner to the upper right. The stock market, over any long time period, will always make new highs. Knowing that the stock market will go higher, investors mistakenly assume that their stocks will eventually bounce back. However, a stock index is made up of successful companies. It is an index of winners. Those less successful stocks may have been part of an index at one time, but if they've dropped significantly in value, they will eventually be replaced by more successful companies. The indexes are always being replenished by dropping the losers and replacing them with winners. Looking at the major indexes tends to overstate the resiliency of the average stock, which does not necessarily bounce back. In fact, many companies never regain their past highs and some go bankrupt.
Investors Do Not Like Admitting They've Made a Mistake
By avoiding selling a stock at a loss, many investors do not have to admit to themselves that they've made a judgment error. Under the false illusion that it is not a loss until the stock is sold, they elect to continue to hold a losing position. In doing so, they avoid the regret of a bad choice. After a stock suffers a loss, many investors plan to hold onto it until it returns to its purchase price. They intend to sell the stock once they recover this paper loss. This means they will break even, and "erase" their mistake. Unfortunately, many of these same stocks will continue to slide.
Neglect
When stock portfolios are doing well, investors often tend to them like well-maintained gardens. They show great interest in managing their investments and harvesting the fruits of their labor. However, when their stocks are holding steady or are dropping in value, especially for long time periods, many investors lose interest. As a result, these well-maintained stock portfolios start showing signs of neglect. Rather than weeding out the losers, many investors do nothing at all. Inertia takes over and, instead of pruning their losses, they often let them grow out of control.
Hope Springs Eternal
Hope is the belief in the possibility of a positive outcome, even though there is some evidence to the contrary. Hope is also one of the primary theological virtues in various religious traditions. Although hope has its place in theology, it does not belong in the cold hard reality of the stock market. In spite of continuing bad news, investors will steadfastly hold onto their losing stocks, based only on the faint hope that they will at least return to the purchase price. The decision to hold is not based on rational analysis or a well-thought-out strategy; and unfortunately, wishing and hoping that a stock will go up does not make it happen. Realizing Capital Losses
Often you just have to bite the bullet and sell your stock at a loss before those losses get bigger. The first thing to understand is that hope is not a strategy. An investor has to have a logical reason to hold a losing position. The second point is, what you paid for a stock is irrelevant to its future direction. The stock will go up or down based on forces in the stock market, the stock's underlying fundamentals and its future prospects.

Let's look at a few ways of assuring a small loss does not become "dead" money or turn into a much larger loss.
Have an Investment Strategy
Having a written investment strategy with a set of rules both for buying and selling stocks will provide the discipline to sell stocks before the losses blossom. The strategy could be based on fundamental, technical or quantitative factors.
Have Reasons to Sell a Stock
An investor generally has quite a few reasons why he or she bought a stock, but typically no set boundaries for when to sell it. Don't let this happen to you. Set reasons to sell stocks, and sell them when these things occur. The reason could be as simple as: "Sell if bad news is released about corporate developments or a price target."
Set Stop Losses
Having a stop-loss order on shares that you own, particularly the more volatile stocks, has been a mainstay of advice on this subject. The stop-loss order prevents your emotions from taking over and will limit your losses.
Would You Buy the Stock Now?
On a regular basis, review every stock you hold and ask yourself the simple question: "If I did not own this stock, would I buy it today?" If the answer is a resounding "No", then it should be sold. Tax-Loss Harvesting Strategies
A tax-loss harvesting strategy is used to realize capital losses on a regular basis and provides some discipline against holding losing stocks for extended time periods. To put your stock sales in a more positive light, remember that you receive tax credits that can be used to offset taxes on your capital gains.

Conclusion
Taking corrective action before your losses worsen is always a good strategy. In investing, avoiding losses entirely may not be possible; successful investors accept this and try to minimize their losses rather than avoid them. Selling a stock at a loss and receiving a tax credit is one benefit you will receive. Selling these "dogs" has another advantage too - you will not be reminded of your past mistake every time you look at your investment statement.