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

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

Carter has seen many members of his staff leave their posts recently, as his latest book was viewed as a joke. He is pro-Palestinian and virtually anti-Jewish. He says he isn't, but his statements supporting the wrong group show otherwise. Carter speaks to anyone who will listen as if he believes he was a great and wise president. Right.

Carter's presidency was marked by record high interest rates, international failures culminating in the failed rescue attempt of the hostages in Iran, and the idiotic "fireside chats" where he accused Americans of being in a "malaise." America was so "malaised" that Carter was crushed by Ronald Reagan 48 states to 2. The day Reagan was inaugurated, the hostages were released -- some 444 days after their capture. The State Department had warned Carter that the embassy was at risk, but Carter chose to ignore the warnings. Gee, what a surprise.

So why do we even give this guy a forum to spout off like a scorned lover? He never got over the Reagan landslide, and has taken every opportunity to publicly criticize President Bush. There was an unwritten rule that retired presidents do not openly criticize the current occupant of the Oval Office. So much for protocol.

Jimmy, it's time to go back to Plains, Ga., and retire -- for good.

Georges Yared is the CIO of Yared Investment Research and the author of "Baby Boomer Investing...Where do we go from here?"

Today marks the first time that Google (NASDAQ: GOOG) has touched upon the magical market capitalization figure of $200 billion. This is the company that will be the centerpiece of every MBA class 20 years from now, if not sooner. We have never seen anything like this before in the annals of the American stock market, nor anywhere else in the world. The stunning achievements of this 9-year-old company pale in comparison to where it is going to be in 3 years, 5 years and 10 years. Yes, the stock is still a buy -- actually a strong buy.

Traditional analysts and investors have attempted to put traditional barriers on Google when analyzing it. Can't do that, not going to work. Why? Because the world in which Google competes and dominates is so evergreen, that trying to put traditional growth numbers to the industry is nearly impossible. Google doesn't sell a physical hard product that requires delivery, set-up and training (although a Google phone is on the horizon). It operates in a virtual world -- and that's why many analysts and investors have tried to "temper" expectations. Temper is a fancy word for they haven't understood the story, have missed the story, and this is why it could become the first trillion dollar market-cap company.

Many of you know that I have been writing about Crocs (NASDAQ: CROX) since March of this year. I have been a bull on Crocs since the IPO in February 2006. The stock has been a homerun for many investor--and the nightmare of the short-sellers. The company has exceeded expectations quarter-in and quarter-out since the IPO. I have written that Crocs is a full-blown phenomenon and has the potential to one day challenge Nike (NYSE: NKE) as king of the hill. With all that said, I am moving my price target on Crocs from $80-85 to $100 within 12 months. Why?

Crocs has established, since its early days ( about 5 years ago), a global distribution model. Not only is the company taking advantage of the weak US dollar, but it has seeded its products all through Europe and Asia. The shoes carry a higher price point and when converted back into dollars, it bolsters its already high gross margins of 60%. The margins for Crocs are worthy of a case study at any major MBA program. For a young, growth company to post up operating margins in the 27-30% range is nearly unheard of. Young companies need to spend heavily in sales and marketing and in research and development all at the near-term expense of its operating margins--or pre-tax profits. The amazing fact is Crocs IS spending at the proper levels to develop its brand and marketshare and IT STILL PUTS UP THESE MASSIVE OPERATING MARGINS!

I had the pleasure of writing a series this spring on the Top 25 Stocks for the NEXT 25 years. I researched over 300 companies to come up with the list of what I thought were the best 25 stocks to own for the next 25 years. But something was missing that I now want to address in a new series.

The very nature of picking 25 stocks which hopefully would perform magnificently for 25 years excluded many great companies that were already executing well but could not be included because of their high current market capitalization. Some examples were "game changing" companies like Apple (NASDAQ: AAPL). Back in May, Apple had a market capitalization of about $90 billion. But I couldn't include it in my top 25 unless I expected Apple's market cap to reach several trillion dollars. I love Apple, but that's probably not in the cards. By the way, Apple today is worth $130 billion.

Another example of a game-changing company is McDonald's (NYSE: MCD). This once staid, stuck-in-the-mayonnaise company has re-invigorated itself in the past couple of years and has seen its market value more than double to $66 billion. I'd also throw in that camp Caterpillar (NYSE: CAT), which since January 2004 has seen its own market capitalization double to $51 billion. Caterpillar changed and fortified its business model starting back in late 2003. By the way, Apple,Caterpillar and McDonald's are still game changers---meaning the shares are a buy.

Bank of America's (NYSE: BAC) stock was trading at $48 back on August 14 when the market was as nervous as it's been in years. The sub-prime mess was exactly that -- a mess. The information flow was spotty and no one really knew what the effect would be on the major brokerage firms balance sheets. Times have changed a bit but investor psychology has shifted back to the positive. So what's going on and what has happened?

The mortgage scenario in the United States is still muddled and not quite over with at this point. The four major brokerage firms all reported their collective August 31st quarter-end numbers and they were a mixed bag. But the one overriding thought was that credit markets were stabilizing and perhaps after one more quarter's results, everyone should sleep better. The major banks, however, have yet to report their September 30th numbers as that event takes place over the next two to three weeks.

Citigroup (NYSE: C) pre-announced that its September quarter would be ugly and bad debt reserves will be absorbed through the balance sheet and income statement. But the stock reacted positively. Investors' sentiment has shifted to where most -- if not all -- of the bad news is out and the prices of these stocks reflect that fact. The Federal Reserve has also lowered the key interest rate and it looks promising for another round or two of further rate reductions.

Back on July 20, I wrote about the Dow Jones Industrial Average having a good chance of hitting 15,000 by year's end. I was early -- really early. The Dow had just hit 14,000 on July 19, and we went through two and half months of Fear, Uncertainty and Doubt, otherwise known as FUD. FUD took the Dow and similar indices down a painful and laborious 7-8%. The credit market crisis shook the markets globally until the European Central Bank and the U.S. Federal Reserve intervened with liquidity and the lowering of key interest rates. Since those actions were taken, the markets have begun a measured, but uneven recovery. Where do we go from here?

Markets react to news and events quickly and decisively. When the mortgage markets could not secure solid underwriting commitments, the dominoes began to fall. The financial stocks took the nastiest hits as the balance sheets were certain to absorb multi-billion dollar hits. Countrywide Financial (NASDAQ: CFC), the nation's largest issuer of mortgages, needed to tap credit lines and drew Bank of America's (NYSE: BAC) commitment of $2 billion in a preferred stock purchase. The credit market today is steadier, although still not on solid footing. The major brokerage firms announced their collective August 31 quarter-end results, and they were not shocking since expectations were already lowered. But they were not the disasters as some expected.

They say baseball is designed to break the hearts of fans: just when you think all is well, everything collapses around you. For a perfect example of this dictum, look no further than the New York Mets. With 17 games left to play, the Mets had a seven-game lead over the inconsistent Philadelphia Phillies. All in all, a pretty safe lead, right? Wrong!

The Mets lost nine of their last 10 home games -- no one loses nine of 10 at home! Yesterday, the Mets had only to win the final regular season game to win its division, or at least force a one-game playoff with the Phillies. Twenty-year veteran Tom Glavine was given the ball to start against the Florida Marlins. Yeah, that Tom Glavine, who pitched the deciding Game 6 of the 1995 World Series vs. the Cleveland Indians and won 1-0 for the Atlanta Braves!!

But before the second out was recorded in the top half of the first inning, Glavine was gone and the Mets trailed 7-0. It was over and the tears in the stands began to flow. ESPN showed several fans tearing up and watching what should have been a glorious season go the way of the fish -- like in Marlins.

This morning 3Com (NASDAQ: COMS) announced that private equity firm, Bain Capital, would put it out of its misery and pay $2.2 billion in cash for the company. 3Com has lagged so far behind that it has been painful to watch. 3Com and Cisco Systems (NASDAQ: CSCO) indeed could provide at least two to three chapters in an investing teaching and history book. Here's the CliffsNotes version:

Summer of 1994 was a tough technology environment. Technology had a great run from 1990 through 1994, till summer that is. Valuations contracted and investor fatigue set in for about four to five months. I was traveling through Silicon Valley with a couple of British portfolio managers visiting companies. One day we had a breakfast meeting with then CEO Eric Benamou of 3Com and lunch with a senior VP at Cisco (whose name escapes me). Benamou was an intellectual, a refined man, but did not possess the street smarts necessary for a tech company CEO. He was arrogant and bluntly declared that Cisco's days were numbered and 3Com would acquire any tech company necessary to achieve total domination. OK, great, and we went on to Cisco for lunch.

The senior VP was a classy guy, never said a bad word about any competitor and just explained Cisco's game plan and execution philosophy. Here is the funny part: In July 1994, BOTH companies had a market capitalization of $9 billion.

In my series on the top 25 stocks for the NEXT 25 years, I recommended Chipotle (NYSE: CMG) as one of the picks. The stock was at $82 per share on May 21 when I wrote about the company. The $82 price represented a market capitalization of $2.6 billion. Today the stock is at $114.65 with a market cap of $3.7 billion, up over 40% for investors who bought the stock.

But, I have to admit that short-term I am nervous about Chipotle. I still believe the concept is becoming the new rave in the fast food service sector. I still believe that Chipotle could take on McDonald's-like proportions in the years to come -- but I am nervous about the short-term prospects. Why?

I have two reasons. First, higher commodity prices: The price of wheat and dairy has gone up in the United States, which, I believe, could affect Chipotle's pricing structure and general margins. In this consumer-wary environment, restaurants are not about to raise menu prices and risk losing customers. Therefore, I think the food cost expenses for Chipotle's (and many other fast food chains) are going up and will stay high for a while. The second reason I am nervous is Chipotle is a domestic company with no international sales. It is purely reliant on American diners for its revenues.

Back on June 13, I wrote about DexCom Corp. (NASDAQ: DXCM) as one of the top 25 stocks for the NEXT 25 years. The stock was just under $7 with a market capitalization of $180 million. Today the stock is at $9.61 with a market cap of $280 million. The shares have performed well these past two and half months, but the best is certainly yet to come.

DexCom is targeting the massive diabetic market of five million Americans who suffer from this disease. These patients need to monitor their blood glucose on a daily basis and treat it with injections of insulin.The methodology used by most patients is a painful pin-prick usually on a finger. The problem -- therefore the opportunity for DexCom -- is that the daily readings can be scattered and inconsistent. The readings depend on time of day and recent dietary intake. With DexCom, however, the reading is continuous and fluid during the course of a day, thus allowing the patient to self-administer insulin at the right moments. Plus, with DexCom, there is no painful pin-prick.

Last week I wrote separate posts on Crocs (NASDAQ: CROX) and Apple (NASDAQ: AAPL), and fortunately both stocks have done very well in the past 4-5 days. I wrote that you better hurry if you want to buy Apple under $150, as the stock had rebounded from a recent low of $118 to the $140's. Tuesday, the stock closed at a new 52-week high of $153.18. Crocs had been foolishly under attack by an absurd Associated Press article last week that linked Crocs shoes to some children's mishaps on escalators. I wrote that the attack on Crocs was a crock. The stock was drilled down to $53 during the life of the AP article, today the stock closed at a 52-week high of $64.38.

So what's going on and what's new with these two great performers?

Many retail stocks are under pressure as consumers have pulled back on their purse strings. Target Corp. (NYSE: TGT) indicated that previously endorsed numbers for the rest of 2007 would not be achieved. The stock gave up 4.59% on Tuesday. Crocs, however, is NOT a retail story; Crocs is a global story. Crocs distributes its shoes and other products through 27,000 retail outlets of which 14,500 are located outside the United States. More than half of Crocs' "selling space" is benefiting from the weak U.S. dollar, and the margins from overseas sales are just huge. Coupled with foreign currencies converted back to dollars, this sets up Crocs for a terrific September 30 quarter end. I have many other reasons why Crocs is a bona-fide, sustainable growth story, but I have written ad nauseam about the subject.

Early in my career I worked for Dean Witter Reynolds, now Morgan Stanley (NYSE: MS), and had the opportunity to get to know Brian Biggins. Brian was a broker, an office branch manager and a compliance director in his 10-year stint with Dean Witter, until he went through a major career change. He put himself through law school at the tender age of 31 and became an advocate for the aggrieved individual investor.

Biggins opened his own law practice in Cleveland, Ohio, but has represented investors in nearly all 50 states. He works on behalf of investors who have been defrauded by unscrupulous brokers. He has handled, and won, hundreds of cases ranging from $10,000 to multi-million dollar losses. He has taken on almost every big Wall Street firm and insurance companies. Many of these firms know to sit down at the settlement table rather than go to arbitration against Mr. Biggins. What makes him so successful in helping investors who have been ripped off, defrauded or just plainly mismanaged by their brokers?

Biggins was in the securities industries for over a decade. He knows exactly how big firms operate and where the bones are buried. He can interrogate a broker or the other firm's counsel like no one else because Biggins was "one of them." Firms know that they cannot throw a fast ball past him because of his vast knowledge and experience in the industry. A true advocate for the individual investor.

The beauty of the Internet is that news and events can circulate globally in a matter of minutes. The bad news about the Internet is news and events can circulate globally in a matter of minutes. Just ask Crocs (NASDAQ: CROX) about the latter statement. The stock has suffered over an Associated Press article that is frankly -- a crock.

The gist of the AP article was that Crocs harmed a few children on escalators. As a father of five and a grandfather of two, I get kids. I also get kids' accidents. I have spent my fair share of time in emergency rooms with sports-related and household type injuries with my children! The AP article strongly suggested that the Crocs shoes worn by little children was the cause of their unfortunate accidents by catching their toes or feet in the teeth of the escalator. Some have required medical attention including suturing wounds or a broken foot.

To outright blame the Crocs shoes for these accidents is both unfair and pretty easy to do. It certainly has caught the attention of the concerned parents of the world and will cause some to rethink a possible purchase. Everyday life carries risks and of course, as parents, we strive to minimize those risks. If not Crocs shoes, then whose shoes are absolutely, guaranteed safe and escalator proof? None.

During the market disruptions of the past couple of months, we saw Apple (NASDAQ: AAPL) fall from a high of $148 to a low of $118 ( man, what an opportunity that was!!). The stock is now back up to $141 and this may be your last chance to buy it here under $150. Why? A lot of catalysts are on the near term horizon.

Apple finishes its fiscal year in 11 days. The September 30 quarter and year-end will wrap up an exceptional year for Apple, yet many would argue that the best is yet to come. I expect the year finishing in 11 days to have final revenue numbers of $24 billion with earnings per share coming in at $3.75. iPhone revenues will be somewhat relevant, but that piece of the Apple story is JUST BEGINNING. As Apple exits fiscal year 2007, the more relevant story is still the overwhelming success of the iPod with the corresponding iTunes store, and of course, the newly revamped Mac computer. Mac is gaining market share in a fairly fluid market.

The iPhone production is ramping up. For the year (calendar year), Apple had planned to produce 3.6 million iPhone units. That number is now at 4.8 million units in planned production. European nations will be rolled out for iPhone availability beginning in the calendar fourth quarter with the UK and Germany getting ready for the onslaught.

Arguably, these are the two best run banks in the United States and they are both trading at ridiculously low multiples. By any measure, these two are cheap and positioned for major movement over the next 6-24 months. Bank of America is trading at $51, only a 10 price-to-earnings multiple of the $4.95 estimate I have for 2007 earnings. The stock pays a dividend right now of $2.56 for a current yield of 5.1%. Bank of America is a coast-to-coast dominant bank with a powerful and complete consumer franchise. With a $5.30 earnings per share estimate for 2008, BAC should trade up to a 13-15 PE multiple putting the price target at $70.

Wells Fargo is trading at $37 for a current PE of 13 times 2007 earnings estimate of $2.75 and 2008 earnings of $3.05 per share. Wells Fargo is a leading consumer-oriented player as well. Wells Fargo has a strong mortgage business, like Bank of America, and although not totally out of the woods yet, the prospects look excellent. Wells Fargo and Bank of America have the financial muscle and the balance sheets to underwrite mortgages and KEEP them on their books. They are not forced to package and sell them like so many small mortgage companies have had to and are now out of the business. BAC and WFC have a higher credit-worthiness requirement of their customers before mortgages are taken on. Yes, both have had to raise their bad debt reserves for the past two quarters and will likely do the same for the third quarter, but they still comfortably achieved earnings expectations.