21561017@unknown@formal@none@1@S@The company said it doesn't expect the new line's capacity to adversely affect the company's existing hot-dipped galvanizing lines.@@@@1@19@@oe@2-2-2013
21561018@unknown@formal@none@1@S@Steelmakers have also been adding capacity of so-called electrogalvanized steel, which is another way to make coated corrosion-resistant steel.@@@@1@19@@oe@2-2-2013
21561019@unknown@formal@none@1@S@One of the advantages of the hot-dipped process is that it allows the steel to be covered with a thicker coat of zinc more quickly.@@@@1@25@@oe@2-2-2013
21562001@unknown@formal@none@1@S@ONCE YOU MAKE UP your mind about an investment, the rest is easy, right?@@@@1@14@@oe@2-2-2013
21562002@unknown@formal@none@1@S@You just call your broker and say "buy" or "sell."@@@@1@10@@oe@2-2-2013
21562003@unknown@formal@none@1@S@Dream on.@@@@1@2@@oe@2-2-2013
21562004@unknown@formal@none@1@S@There are all sorts of ways to give buy and sell instructions to a broker -- and just as many ways to get burned if you don't know what you're doing.@@@@1@31@@oe@2-2-2013
21562005@unknown@formal@none@1@S@So here's a rundown of the most common types of market orders permitted by the stock and commodity exchanges.@@@@1@19@@oe@2-2-2013
21562006@unknown@formal@none@1@S@Two things to keep in mind: Not all exchanges accept every type of order.@@@@1@14@@oe@2-2-2013
21562007@unknown@formal@none@1@S@And even when a specific order is acceptable to an exchange, a brokerage firm can refuse to enter it for a customer.@@@@1@22@@oe@2-2-2013
21562008@unknown@formal@none@1@S@Market Order: This is probably the most widely used order -- and the one most open to abuse by unscrupulous floor brokers, since it imposes no price restrictions.@@@@1@28@@oe@2-2-2013
21562009@unknown@formal@none@1@S@With a market order, an investor tells a broker to buy or sell "at the market."@@@@1@16@@oe@2-2-2013
21562010@unknown@formal@none@1@S@It's like saying, "get me in now" or "get me out now."@@@@1@12@@oe@2-2-2013
21562011@unknown@formal@none@1@S@For example, if wheat is being offered at $4.065 and bid at $4.060, a market order to buy would be filled at the higher price and a market order to sell at the lower price.@@@@1@35@@oe@2-2-2013
21562012@unknown@formal@none@1@S@A recent indictment alleges that some floor brokers at the two largest Chicago commodity exchanges used market orders to fill customers' orders at unfavorable prices by arranging trades with fellow brokers.@@@@1@31@@oe@2-2-2013
21562013@unknown@formal@none@1@S@Profits realized from these trades would then be shared by the conspiring brokers.@@@@1@13@@oe@2-2-2013
21562014@unknown@formal@none@1@S@Limit Order: Limit orders are used when investors want to restrict the amount they will receive or pay for an investment.@@@@1@21@@oe@2-2-2013
21562015@unknown@formal@none@1@S@Investors do this by specifying a minimum price at which the investment may be sold or the maximum price that may be paid for it.@@@@1@25@@oe@2-2-2013
21562016@unknown@formal@none@1@S@Suppose an investor wants to sell a stock, but not for less than $55.@@@@1@14@@oe@2-2-2013
21562017@unknown@formal@none@1@S@A limit order to sell could be entered at that price.@@@@1@11@@oe@2-2-2013
21562018@unknown@formal@none@1@S@One risk: Investors may regret the restriction if the stock reaches 54 and then falls.@@@@1@15@@oe@2-2-2013
21562019@unknown@formal@none@1@S@Unless the market goes at least one tick (the smallest price increment permitted) beyond the limit price, investors aren't assured of having their orders filled because there may not be sufficient trading volume to permit filling it at the specified price.@@@@1@41@@oe@2-2-2013
21562020@unknown@formal@none@1@S@Stop Order: Stop orders tell a floor broker to buy or sell an investment once the price reaches a certain level.@@@@1@21@@oe@2-2-2013
21562021@unknown@formal@none@1@S@Once the price reaches that level, a stop order turns into a market order, and the order is filled at whatever price the broker can get.@@@@1@26@@oe@2-2-2013
21562022@unknown@formal@none@1@S@Stop orders are sometimes called "stop-loss" orders because they are frequently used to protect profits or limit losses.@@@@1@18@@oe@2-2-2013
21562023@unknown@formal@none@1@S@While stop orders sound similar to limit orders, there is a difference: Sell stops must be entered at a price below the current market price and buy stops above.@@@@1@29@@oe@2-2-2013
21562024@unknown@formal@none@1@S@In contrast, sell limit orders must be placed above the market price and buy limit orders are placed below.@@@@1@19@@oe@2-2-2013
21562025@unknown@formal@none@1@S@The crash in October 1987 and last Friday's sell-off painfully taught some investors exactly what stop orders will and won't do.@@@@1@21@@oe@2-2-2013
21562026@unknown@formal@none@1@S@An investor who may have placed a stop-loss order at $90 under a stock that was trading at $100 a share on the Friday before the crash was stunned to discover that the order was filled at $75 when the stock opened at that price on Monday.@@@@1@47@@oe@2-2-2013
21562027@unknown@formal@none@1@S@Stop-Limit Order: Stop-limit orders turn into limit orders when an investment trades at the price specified in the order.@@@@1@19@@oe@2-2-2013
21562028@unknown@formal@none@1@S@Unlike stop orders -- which are filled at the market price when the stop price is hit -- stop-limit orders demand that the trades be made only at the specified price.@@@@1@31@@oe@2-2-2013
21562029@unknown@formal@none@1@S@If it can't be made at that price, it doesn't get filled.@@@@1@12@@oe@2-2-2013
21562030@unknown@formal@none@1@S@Investors who wish to be out of a position, without the risk of receiving a worse-than-expected price from a market order, may use this type of order to specify the price at which the order must be filled.@@@@1@38@@oe@2-2-2013
21562031@unknown@formal@none@1@S@But if the market moves quickly enough, it may be impossible for the broker to carry out the order because the investment has passed the specified price.@@@@1@27@@oe@2-2-2013
21562032@unknown@formal@none@1@S@Market-If-Touched Order: Market-if-touched orders are like stop orders in that they become market orders if a specified price is reached.@@@@1@20@@oe@2-2-2013
21562033@unknown@formal@none@1@S@However, unlike a buy-stop order, a buy market-if-touched order is entered at a price below the current price, while a sell market-if-touched order is entered at a price above it.@@@@1@30@@oe@2-2-2013
21562034@unknown@formal@none@1@S@As soon as the market trades at the specified price the floor broker will fill it at the best possible price.@@@@1@21@@oe@2-2-2013
21562035@unknown@formal@none@1@S@Fill-Or-Kill Order: The fill-or-kill order is one of several associated with the timing of trades.@@@@1@15@@oe@2-2-2013
21562036@unknown@formal@none@1@S@It instructs a broker to buy or sell an investment at the specified price or better.@@@@1@16@@oe@2-2-2013
21562037@unknown@formal@none@1@S@But if the investment can't be bought or sold immediately, the order is automatically canceled.@@@@1@15@@oe@2-2-2013
21562038@unknown@formal@none@1@S@Gregory Bessemer, who came in second in the stock division of the recently completed U.S. Trading Championship, says he uses fill-or-kill orders almost exclusively when trading options.@@@@1@27@@oe@2-2-2013
21562039@unknown@formal@none@1@S@"I like to use them to feel out the market," he says.@@@@1@12@@oe@2-2-2013
21562040@unknown@formal@none@1@S@"If they don't fill it immediately, then I can start over at a new price or try again with the same price."@@@@1@22@@oe@2-2-2013
21562041@unknown@formal@none@1@S@Not-Held Order: This is another timing order.@@@@1@7@@oe@2-2-2013
21562042@unknown@formal@none@1@S@It is a market order that allows floor brokers to take more time to buy or sell an investment, if they think they can get a better price by waiting.@@@@1@30@@oe@2-2-2013
21562043@unknown@formal@none@1@S@Not-held orders, which are also known as "disregard the tape" orders, are always done at the customer's risk.@@@@1@18@@oe@2-2-2013
21562044@unknown@formal@none@1@S@One-Cancels-The-Other Order: This is really two orders in one, generally for the same security or commodity, instructing floor brokers to fill whichever order they can first and then cancel the other order.@@@@1@32@@oe@2-2-2013
21562045@unknown@formal@none@1@S@In a fast-moving market, it prevents an investor from getting stuck with having made two trades on the same security.@@@@1@20@@oe@2-2-2013
21562046@unknown@formal@none@1@S@Specific-Time Order: This type of order couples many of the orders described above with instructions that the order must be carried out at or by a certain time.@@@@1@28@@oe@2-2-2013
21562047@unknown@formal@none@1@S@"On the close" can be added to many types of orders.@@@@1@11@@oe@2-2-2013
21562048@unknown@formal@none@1@S@For example, "market-on-close orders" must be filled during the last few minutes of trading for the day at a price that is within the official closing range of prices as determined by the exchange.@@@@1@34@@oe@2-2-2013
21562049@unknown@formal@none@1@S@"Stop-close-only orders" are stop orders that only become active during the closing minutes of trading.@@@@1@15@@oe@2-2-2013
21562050@unknown@formal@none@1@S@"Day orders" expire at the end of the day on which they are entered, "good-till-canceled orders" have no expiration date.@@@@1@20@@oe@2-2-2013
21562051@unknown@formal@none@1@S@Most brokers assume that all orders are day orders unless specified otherwise.@@@@1@12@@oe@2-2-2013
21562052@unknown@formal@none@1@S@On Oct. 19, 1987, some investors learned the consequences of entering "good-til-canceled limit orders" and then forgetting about them.@@@@1@19@@oe@2-2-2013
21562053@unknown@formal@none@1@S@They found they had bought stock from limit orders that they might have entered weeks or months earlier and had forgotten to cancel.@@@@1@23@@oe@2-2-2013
21562054@unknown@formal@none@1@S@It is always the responsibility of investors to keep track of the orders they have placed.@@@@1@16@@oe@2-2-2013
21562055@unknown@formal@none@1@S@Investors who change their mind about buying or selling after an order has been filled are, usually, stuck with the consequences.@@@@1@21@@oe@2-2-2013
21562056@unknown@formal@none@1@S@Mr. Angrist writes on the options and commodities markets for The Wall Street Journal.@@@@1@14@@oe@2-2-2013
21563001@unknown@formal@none@1@S@IN SIZING UP the risks of stock-market investments, there's probably no starting place better than "beta."@@@@1@16@@oe@2-2-2013
21563002@unknown@formal@none@1@S@But investors better not ignore its limitations, either.@@@@1@8@@oe@2-2-2013
21563003@unknown@formal@none@1@S@Beta is a handy gauge that measures the volatility of a stock or stock mutual fund.@@@@1@16@@oe@2-2-2013
21563004@unknown@formal@none@1@S@For any given move in the overall market, it suggests how steeply that particular issue might rise or fall.@@@@1@19@@oe@2-2-2013
21563005@unknown@formal@none@1@S@Beta figures are widely available and easy to interpret.@@@@1@9@@oe@2-2-2013
21563006@unknown@formal@none@1@S@The beta of the broad market, typically defined as the Standard & Poor's 500-stock index, is always 1.0.@@@@1@18@@oe@2-2-2013
21563007@unknown@formal@none@1@S@So a stock with a beta of 0.5 is half as volatile, one at 1.5 is 50% more volatile, and so on.@@@@1@22@@oe@2-2-2013
21563008@unknown@formal@none@1@S@Cautious investors should generally go with stocks that have low betas.@@@@1@11@@oe@2-2-2013
21563009@unknown@formal@none@1@S@Go with high-beta stocks to get the biggest payoff from a bet on a bull market.@@@@1@16@@oe@2-2-2013
21563010@unknown@formal@none@1@S@Remember, though, that beta also has important limitations.@@@@1@8@@oe@2-2-2013
21563011@unknown@formal@none@1@S@"Beta is only part of the risk in a stock," says William F. Sharpe, the Stanford University emeritus professor who developed the measure.@@@@1@23@@oe@2-2-2013
21563012@unknown@formal@none@1@S@"There is risk that is not associated with market moves, and the beta doesn't tell you the magnitude of that."@@@@1@20@@oe@2-2-2013
21563013@unknown@formal@none@1@S@In particular, beta doesn't measure the company- and industry-specific risk associated with an individual stock.@@@@1@15@@oe@2-2-2013
21563014@unknown@formal@none@1@S@That "business" risk is very significant for an investor with only a few stocks, but it virtually disappears in a large and well-diversified portfolio.@@@@1@24@@oe@2-2-2013
21563015@unknown@formal@none@1@S@Beta is also a poor indicator of the risk in stock groups that march to their own drummer.@@@@1@18@@oe@2-2-2013
21563016@unknown@formal@none@1@S@In particular, the prices of gold and other precious-metals stocks shoot up and down, but the stocks tend to have low betas because their moves are not market-inspired.@@@@1@28@@oe@2-2-2013
21563017@unknown@formal@none@1@S@Concern that investors could misinterpret such readings led the American Association of Individual Investors to eliminate beta figures for precious-metals funds in the 1989 edition of its mutual-fund guide.@@@@1@29@@oe@2-2-2013
21563018@unknown@formal@none@1@S@"Our fear was people would look just at the beta {of a gold fund} and say here is an investment with very low risk," says John Markese, director of research for the Chicago-based group.@@@@1@34@@oe@2-2-2013
21563019@unknown@formal@none@1@S@"In reality it's very volatile, but the movements are not because of market movements.@@@@1@14@@oe@2-2-2013
21564001@unknown@formal@none@1@S@READY TO REVIEW the riskiness of your investment portfolio?@@@@1@9@@oe@2-2-2013
21564002@unknown@formal@none@1@S@First, a pop quiz.@@@@1@4@@oe@2-2-2013
21564003@unknown@formal@none@1@S@When you think of the words "risk" and "investment," what's the specific peril that comes to mind?@@@@1@17@@oe@2-2-2013
21564004@unknown@formal@none@1@S@Pencils down.@@@@1@2@@oe@2-2-2013
21564005@unknown@formal@none@1@S@If you're like most people, you said it's a holding that goes completely sour -- maybe a bond that defaults or a stock whose value disappears in a bankruptcy proceeding.@@@@1@30@@oe@2-2-2013
21564006@unknown@formal@none@1@S@"People tend to see risk primarily on that one dimension," says Timothy Kochis, national director of personal financial planning for accountants Deloitte, Haskins & Sells.@@@@1@25@@oe@2-2-2013
21564007@unknown@formal@none@1@S@But therein lies another aspect of investment risk: the hazard of shaping your portfolio to avoid one or more types of risk and being blind-sided by others.@@@@1@27@@oe@2-2-2013
21564008@unknown@formal@none@1@S@This is clearly not good news to all you people who sleep like babies every night, lulled by visions of your money sitting risk-free in six-month CDs.@@@@1@27@@oe@2-2-2013
21564009@unknown@formal@none@1@S@Risk wears many disguises, and investments that are low in one type of obvious risk can be distressingly high in other, less obvious kinds.@@@@1@24@@oe@2-2-2013
21564010@unknown@formal@none@1@S@U.S. Treasury bonds, for example, are supersafe when it comes to returning money at maturity.@@@@1@15@@oe@2-2-2013
21564011@unknown@formal@none@1@S@But their value as investments can be decimated by inflation, which erodes the purchasing power of bonds' fixed-dollar interest payments.@@@@1@20@@oe@2-2-2013
21564012@unknown@formal@none@1@S@Risk is also a function of time.@@@@1@7@@oe@2-2-2013
21564013@unknown@formal@none@1@S@When financial professionals measure risk mathematically, they usually focus on the volatility of short-term returns.@@@@1@15@@oe@2-2-2013
21564014@unknown@formal@none@1@S@Stocks are much riskier than Treasury bills, for example, because the range in performance from the best years to the worst is much wider.@@@@1@24@@oe@2-2-2013
21564015@unknown@formal@none@1@S@That is usually measured by the standard deviation, or divergence, of annual results from the average return over time.@@@@1@19@@oe@2-2-2013
21564016@unknown@formal@none@1@S@But investors who are preoccupied with short-term fluctuations may be paying too little attention to another big risk -- not generating enough money to meet long-term financial and life-style goals.@@@@1@30@@oe@2-2-2013
21564017@unknown@formal@none@1@S@For instance, some investors have sworn off stocks since the 1987 market crash; last Friday's debacle only reinforced those feelings.@@@@1@20@@oe@2-2-2013
21564018@unknown@formal@none@1@S@But the stock market, despite some stomach-churning declines, has far outperformed other securities over extended periods.@@@@1@16@@oe@2-2-2013
21564019@unknown@formal@none@1@S@By retreating to the apparent security of, say, money-market funds, investors may not be earning enough investment return to pay for a comfortable retirement.@@@@1@24@@oe@2-2-2013
21564020@unknown@formal@none@1@S@"That's the biggest risk of all -- the risk of not meeting your objectives," says Steven B. Enright, a New York financial planner with Seidman Financial Services.@@@@1@27@@oe@2-2-2013
21564021@unknown@formal@none@1@S@As a result, financial advisers say they take several steps when evaluating the riskiness of clients' portfolios.@@@@1@17@@oe@2-2-2013
21564022@unknown@formal@none@1@S@They estimate the return a person's current portfolio is likely to generate over time, along with a standard deviation that suggests how much the return will vary year by year.@@@@1@30@@oe@2-2-2013
21564023@unknown@formal@none@1@S@They try to figure out the long-term results the person needs to meet major goals.@@@@1@15@@oe@2-2-2013
21564024@unknown@formal@none@1@S@And they eyeball types of risk that are not easily quantified.@@@@1@11@@oe@2-2-2013
21564025@unknown@formal@none@1@S@The portfolios of two hypothetical families, one a couple at retirement age and another a two-income couple at age 45, illustrate several types of risk that investors need to consider.@@@@1@30@@oe@2-2-2013
21564026@unknown@formal@none@1@S@For instance, the insured municipal bonds that dominate the older couple's portfolio were probably selected in large part for their low repayment risk.@@@@1@23@@oe@2-2-2013
21564027@unknown@formal@none@1@S@But they expose the holders to a lot of inflation risk and interest-rate risk.@@@@1@14@@oe@2-2-2013
21564028@unknown@formal@none@1@S@The younger couple's stockholdings involve more risk than a diversified stock portfolio because the bulk of the money is in a single issue.@@@@1@23@@oe@2-2-2013
21564029@unknown@formal@none@1@S@Note that the younger couple's portfolio has a higher expected annual return, 10.1% vs. 8.8%, as calculated by Seidman Financial Services, which is the financial-planning affiliate of BDO Seidman.@@@@1@29@@oe@2-2-2013
21564030@unknown@formal@none@1@S@That largely reflects the heavy stockholdings.@@@@1@6@@oe@2-2-2013
21564031@unknown@formal@none@1@S@But one price paid for the higher expected return is greater short-term volatility, as reflected in the higher standard deviation that Seidman estimates for the younger couple's portfolio.@@@@1@28@@oe@2-2-2013
21564032@unknown@formal@none@1@S@(Here's how to interpret a standard deviation figure: Take the expected return and add one standard deviation to it.@@@@1@19@@oe@2-2-2013
21564033@unknown@formal@none@1@S@Then take the expected return and subtract one standard deviation.@@@@1@10@@oe@2-2-2013
21564034@unknown@formal@none@1@S@In two of three years, the actual result should fall within that range if all the assumptions were accurate.@@@@1@19@@oe@2-2-2013
21564035@unknown@formal@none@1@S@Then add and subtract two standard deviations to get a wider range.@@@@1@12@@oe@2-2-2013
21564036@unknown@formal@none@1@S@There's a 95% probability any year's result will fall in the range.)@@@@1@12@@oe@2-2-2013
21564037@unknown@formal@none@1@S@Of course, the greater volatility of the younger couple's portfolio doesn't necessarily mean those investments are riskier in terms of meeting the holders' long-term goals.@@@@1@25@@oe@2-2-2013
21564038@unknown@formal@none@1@S@Indeed, the older couple's portfolio could actually be riskier in that sense if the expected return won't generate enough dollars to meet their spending plans.@@@@1@25@@oe@2-2-2013
21564039@unknown@formal@none@1@S@"They may feel emotionally secure now because they are not heavily in the stock market," says John H. Cammack, a financial planner with Alexandra Armstrong Advisors Inc. in Washington.@@@@1@29@@oe@2-2-2013
21564040@unknown@formal@none@1@S@"But they may pay a price 10 or 20 years in the future."@@@@1@13@@oe@2-2-2013
21564041@unknown@formal@none@1@S@Ms. Slater reports on personal finance from The Wall Street Journal's New York bureau.@@@@1@14@@oe@2-2-2013
21564042@unknown@formal@none@1@S@When it comes to investing, trying to weigh risk and reward can seem like throwing darts blindfolded: Investors don't know the actual returns that securities will deliver, or the ups and downs that will occur along the way.@@@@1@38@@oe@2-2-2013
21564043@unknown@formal@none@1@S@Looking to the past can provide some clues.@@@@1@8@@oe@2-2-2013
21564044@unknown@formal@none@1@S@Over several decades, for instance, investors who put up with the stock market's gyrations earned returns far in excess of those on bonds and "cash" investments like Treasury bills.@@@@1@29@@oe@2-2-2013
21564045@unknown@formal@none@1@S@But while history can suggest what is reasonable to expect there's no guarantee that the past will repeat itself.@@@@1@19@@oe@2-2-2013
21564046@unknown@formal@none@1@S@For instance, some analysts believe bond returns and volatility have moved permanently closer to those of the stock market.@@@@1@19@@oe@2-2-2013
21564047@unknown@formal@none@1@S@And returns on cash investments may continue to exceed inflation by a wider margin than they did over the long-term past.@@@@1@21@@oe@2-2-2013
21564048@unknown@formal@none@1@S@Portfolio A: Retired couple, age 65; $400,000 portfolio.@@@@1@8@@oe@2-2-2013
21564049@unknown@formal@none@1@S@Portfolio B: Two-income couple, age 45; $150,000 portfolio.@@@@1@8@@oe@2-2-2013
21565001@unknown@formal@none@1@S@A letter from Senator John Kerry chides us today for implying that he had "flip-flopped" on Manuel Noriega.@@@@1@18@@oe@2-2-2013
21565002@unknown@formal@none@1@S@He correctly says he has been down on Noriega for some time, hence his criticism of administration mishandling of the attempted coup.@@@@1@22@@oe@2-2-2013
21565003@unknown@formal@none@1@S@Our October 12 editorial should have been more precise.@@@@1@9@@oe@2-2-2013
21565004@unknown@formal@none@1@S@It meant to convey our hope that the Senator and other members of the congressional left are broadening their dislike of Noriega to include other notorious Central American drug runners.@@@@1@30@@oe@2-2-2013
21565005@unknown@formal@none@1@S@The Sandinistas of Nicaragua, for example, also are part of the Castro-Medellin cartel nexus.@@@@1@14@@oe@2-2-2013
21565006@unknown@formal@none@1@S@In his letter and on the basis of his losing vote Tuesday against U.S. aid for the Nicaraguan opposition, Senator Kerry makes clear he has not made that intellectual leap.@@@@1@30@@oe@2-2-2013
21565007@unknown@formal@none@1@S@We were wrong.@@@@1@3@@oe@2-2-2013
21566001@unknown@formal@none@1@S@THROUGHOUT THE 1980s, investors have been looking for creative alternatives to traditional modes of financial planning.@@@@1@16@@oe@2-2-2013
21566002@unknown@formal@none@1@S@Capital has been democratized, and people want in.@@@@1@8@@oe@2-2-2013
21566003@unknown@formal@none@1@S@Too often, however, small investors are left with the same stale solutions that appealed to previous generations of fiduciary strategists.@@@@1@20@@oe@2-2-2013
21566004@unknown@formal@none@1@S@Now a startling new approach is available to building your financial portfolio without undue risk, without extensive planning and without hurting your life style one bit!@@@@1@26@@oe@2-2-2013
21566005@unknown@formal@none@1@S@This is particularly good news for those who hate risk, who are incapable of doing extensive amounts of planning and who refuse to see their life styles hurt in any way.@@@@1@31@@oe@2-2-2013
21566006@unknown@formal@none@1@S@You know who you are.@@@@1@5@@oe@2-2-2013
21566007@unknown@formal@none@1@S@My revolutionary system is also useful for those who have tried customary forms of growing their currency cushion.@@@@1@18@@oe@2-2-2013
21566008@unknown@formal@none@1@S@Like all Americans seeking chronic prosperity, I do find it necessary to plunge certain funds into conservative monetary tools, if only to assuage my father-in-law, who believes in such things.@@@@1@30@@oe@2-2-2013
21566009@unknown@formal@none@1@S@So throughout the decade I have maintained my share of individual retirement accounts and CDs, and tinkered with stocks, bonds and mutual funds, as well as preserving my necessary position in the residential real-estate market.@@@@1@35@@oe@2-2-2013
21566010@unknown@formal@none@1@S@Return on this fine portfolio has been modest when it has not been negative.@@@@1@14@@oe@2-2-2013
21566011@unknown@formal@none@1@S@Figure 1 demonstrates the performance of those businesses I've invested in during this prosperous decade (see accompanying illustration -- WSJ Oct. 20, 1989).@@@@1@23@@oe@2-2-2013
21566012@unknown@formal@none@1@S@Oil-related properties suffered a huge decline until I divested myself of all such stocks in 1985, at which point the industry, while not lighting up any Christmas trees, began a slow recovery.@@@@1@32@@oe@2-2-2013
21566013@unknown@formal@none@1@S@Likewise, mutual funds remained relatively flat until I made what was, for me, a serious investment.@@@@1@16@@oe@2-2-2013
21566014@unknown@formal@none@1@S@By 1987, these properties were in a tailspin, causing my broker at Pru-Bache to remark that she'd "never seen anything like it."@@@@1@22@@oe@2-2-2013
21566015@unknown@formal@none@1@S@Concerned for her state of mind, I dropped them -- and the market instantly began its steady climb back to health.@@@@1@21@@oe@2-2-2013
21566016@unknown@formal@none@1@S@Perhaps most dramatic was the performance of the metropolitan New York real-estate market, which was booming until I entered it in late 1988, at which time it posted the first negative compound annual growth rate in years.@@@@1@37@@oe@2-2-2013
21566017@unknown@formal@none@1@S@Disgusted, I cast around for a different way to plan my asset distribution, and with hardly any heavy breathing the answer struck me: I was doing it already!@@@@1@28@@oe@2-2-2013
21566018@unknown@formal@none@1@S@We've all got money to spend, some of it clearly disposable since we keep disposing of it.@@@@1@17@@oe@2-2-2013
21566019@unknown@formal@none@1@S@Bank it?@@@@1@2@@oe@2-2-2013
21566020@unknown@formal@none@1@S@Not really!@@@@1@2@@oe@2-2-2013
21566021@unknown@formal@none@1@S@Sock it away in long-term instruments?@@@@1@6@@oe@2-2-2013
21566022@unknown@formal@none@1@S@Nonsense!@@@@1@1@@oe@2-2-2013
21566023@unknown@formal@none@1@S@Daily living is the best possible investment!@@@@1@7@@oe@2-2-2013
21566024@unknown@formal@none@1@S@Your priorities may be different, but here in Figure 2 is where I've chosen to build for the future: personal space; automotive pursuits; children's toys; gardening equipment, bulbs and shrubs; and finally, entertainment, perhaps the best investment of all.@@@@1@39@@oe@2-2-2013
21566025@unknown@formal@none@1@S@All have paid off for me in double-digit annual growth and continue to provide significant potential.@@@@1@16@@oe@2-2-2013
21566026@unknown@formal@none@1@S@At least, according to my calculations.@@@@1@6@@oe@2-2-2013
21566027@unknown@formal@none@1@S@Personal space (Figure 3) has grown 35% annually over the course of the decade, a performance that would compare positively with an investment in, say, synthetic-leather products for the interiors of cold-weather vehicles, which my cousin got into and sort of regrets to this day.@@@@1@45@@oe@2-2-2013
21566028@unknown@formal@none@1@S@The assortment of expensive children's toys that I have purchased wisely at a host of discount-toy brokerage firms (Figure 4) has increased handsomely in total asset value far beyond any personal investment except, perhaps, for my record collection, whose worth, I think it's safe to say, is incalculable.@@@@1@48@@oe@2-2-2013
21566029@unknown@formal@none@1@S@Continued investment in my 1984 subcompact has been part of my strategy (Figure 5), with present annual contributions now equaling more than 60% of the car's original value.@@@@1@28@@oe@2-2-2013
21566030@unknown@formal@none@1@S@According to my calculations, these outlays should have brought the value of my sedan to more than $22,000 on the open market (Figure 6), where I plan to offer it shortly.@@@@1@31@@oe@2-2-2013
21566031@unknown@formal@none@1@S@Expansion of my living space has produced an obvious need for maintenance and construction of suitable lawns, shrubs and bushes fitting to its suburban locale.@@@@1@25@@oe@2-2-2013
21566032@unknown@formal@none@1@S@I have thus committed sufficient personal outlay to ensure that my grounds and lodgings will never be short of greens and flowers.@@@@1@22@@oe@2-2-2013
21566033@unknown@formal@none@1@S@My initial stake in this blooming enterprise has grown tenfold, according to my conservative calculations.@@@@1@15@@oe@2-2-2013
21566034@unknown@formal@none@1@S@At the same time, my share in a wide variety of entertainment pursuits has given perhaps the most dramatic demonstration of the benefits of creative personal financial planning.@@@@1@28@@oe@2-2-2013
21566035@unknown@formal@none@1@S@Over the course of the decade, for instance, my return on investment in the area of poker alone (Figures 7A and 7B) has been most impressive, showing bodacious annual expansion with -- given the way my associates play -- no sign of abatement into the 1990s and beyond.@@@@1@48@@oe@2-2-2013
21566036@unknown@formal@none@1@S@With this personal strategy firmly in place, I look forward to years of fine life-style investments and increasing widespread leverage.@@@@1@20@@oe@2-2-2013
21566037@unknown@formal@none@1@S@My kids' college education looms as perhaps the greatest future opportunity for spending, although I'll probably have to cash in their toy portfolio to take advantage of it.@@@@1@28@@oe@2-2-2013
21566038@unknown@formal@none@1@S@But with every step I take, I'm building wealth.@@@@1@9@@oe@2-2-2013
21566039@unknown@formal@none@1@S@You can, too, if you, like me, refuse to bite the bullet.@@@@1@12@@oe@2-2-2013
21566040@unknown@formal@none@1@S@So go out there and eat that debt.@@@@1@8@@oe@2-2-2013
21566041@unknown@formal@none@1@S@You're right there in the mainstream of American business, building value on the back of insupportable expenditures.@@@@1@17@@oe@2-2-2013
21566042@unknown@formal@none@1@S@Henry Kravis, watch out!@@@@1@4@@oe@2-2-2013
21566043@unknown@formal@none@1@S@Mr. Schwartz is a business executive and writer in New York.@@@@1@11@@oe@2-2-2013
21567001@unknown@formal@none@1@S@WHEN JAMES SCHWARTZ was just a lad his father gave him a piece of career advice.@@@@1@16@@oe@2-2-2013
21567002@unknown@formal@none@1@S@"He told me to choose an area where just by being mediocre I could be great," recalls Mr. Schwartz, now 40.@@@@1@21@@oe@2-2-2013
21567003@unknown@formal@none@1@S@He tried management consulting, traded in turquoise for a while, and even managed professional wrestlers.@@@@1@15@@oe@2-2-2013
21567004@unknown@formal@none@1@S@Now he has settled into a career that fits the bill -- financial planning.@@@@1@14@@oe@2-2-2013
21567005@unknown@formal@none@1@S@It should be noted that Mr. Schwartz, who operates out of Englewood, Colo., is a puckish sort who likes to give his colleagues the needle.@@@@1@25@@oe@2-2-2013
21567006@unknown@formal@none@1@S@But in this case the needle has a very sharp point.@@@@1@11@@oe@2-2-2013
21567007@unknown@formal@none@1@S@Though it's probably safe to assume that the majority of financial planners are honest and even reasonably competent, the fact remains that, as one wag puts it, "anybody who can fog a mirror" can call himself a financial planner.@@@@1@39@@oe@2-2-2013
21567008@unknown@formal@none@1@S@Planners now influence the investment of several hundred billion dollars, but in effect they operate in the dark.@@@@1@18@@oe@2-2-2013
21567009@unknown@formal@none@1@S@There is no effective regulation of planners, no accepted standard for admission into their ranks -- a dog got into one trade group -- no way to assess their performance, no way even to know how many of them there are (estimates range from 60,000 to 450,000).@@@@1@47@@oe@2-2-2013
21567010@unknown@formal@none@1@S@All anyone need do is hang up a shingle and start planning.@@@@1@12@@oe@2-2-2013
21567011@unknown@formal@none@1@S@So it should come as no shock that the profession, if that's what it is, has attracted a lot of people whose principal talents seem to be frittering away or flat-out stealing their clients' money.@@@@1@35@@oe@2-2-2013
21567012@unknown@formal@none@1@S@Alarmed, state and federal authorities are trying to devise ways to certify and regulate planners.@@@@1@15@@oe@2-2-2013
21567013@unknown@formal@none@1@S@Industry groups and reputable planners who are members of them want comprehensive standards, too; they're tired of seeing practitioners depicted collectively in the business press as dumber than chimpanzees and greedier than a herd of swine.@@@@1@36@@oe@2-2-2013
21567014@unknown@formal@none@1@S@But reform hasn't taken hold yet.@@@@1@6@@oe@2-2-2013
21567015@unknown@formal@none@1@S@"The industry is still pretty much in its Wild West days," says Scott Stapf, director of investor education for the North American Securities Administrators Association.@@@@1@25@@oe@2-2-2013
21567016@unknown@formal@none@1@S@An admittedly limited survey by NASAA, whose members are state securities-law regulators, found that between 1986 and 1988 "fraud and abuse" by financial planners cost 22,000 investors $400 million.@@@@1@29@@oe@2-2-2013
21567017@unknown@formal@none@1@S@The rogues' gallery of planners involved includes some convicted felons, a compulsive gambler or two, various businessmen who had planned their own previous ventures right into bankruptcy, and one man who scammed his wife's grandmother.@@@@1@35@@oe@2-2-2013
21567018@unknown@formal@none@1@S@What's more, the losses they and the others caused "are just what we are stumbling over," says Mr. Stapf, adding that the majority of misdeeds probably go undetected.@@@@1@28@@oe@2-2-2013
21567019@unknown@formal@none@1@S@So do just about all the losses that could be attributed to the sheer incompetence of unqualified planners.@@@@1@18@@oe@2-2-2013
21567020@unknown@formal@none@1@S@Nobody can estimate the toll, but John Gargan, a Tampa, Fla., planner and head of one trade group, the International Association of Registered Financial Planners, thinks the danger to investors from incompetence is "humongous," far greater than that from crookery.@@@@1@40@@oe@2-2-2013
21567021@unknown@formal@none@1@S@His group, like others, wants minimum standards applied to all who call themselves financial planners.@@@@1@15@@oe@2-2-2013
21567022@unknown@formal@none@1@S@Surveying all this, some people now think the best planner might be no planner at all.@@@@1@16@@oe@2-2-2013
21567023@unknown@formal@none@1@S@For most investors "the benefits just aren't worth the risks," says Barbara Roper, who follows financial-planning issues for the Consumer Federation of America, a consumer-advocacy organization based in Washington.@@@@1@29@@oe@2-2-2013
21567024@unknown@formal@none@1@S@She concedes that such a position is "unfair" to the thousands of conscientious and qualified people plying the trade, but as a consumer advocate she feels impelled to take it.@@@@1@30@@oe@2-2-2013
21567025@unknown@formal@none@1@S@She says her group used to give tips on selecting planners -- check educational and experience credentials, consult regulators and Better Business Bureaus -- but found that even some people who took these steps "were still getting ripped off."@@@@1@39@@oe@2-2-2013
21567026@unknown@formal@none@1@S@The bad news, however, hasn't been bad enough to kill the growing demand for financial planning.@@@@1@16@@oe@2-2-2013
21567027@unknown@formal@none@1@S@The Tax Reform Act of 1986, which eliminated many tax shelters peddled by planners, and the stock market crash the next year did cause a sharp slump in such demand, and many planners had to make an unplanned exit from the business.@@@@1@42@@oe@2-2-2013
21567028@unknown@formal@none@1@S@But membership in the International Association of Financial Planners (IAFP), the industry's biggest trade group, is still nearly triple what it was in 1980, and it's believed that the ranks of planners who don't belong to any group have soared as well.@@@@1@42@@oe@2-2-2013
21567029@unknown@formal@none@1@S@An estimated 10 million Americans are now using financial planners, and the pool of capital they influence is enormous.@@@@1@19@@oe@2-2-2013
21567030@unknown@formal@none@1@S@A survey of 54,000 of them conducted by the IAFP in April showed that these practitioners alone had controlled or guided the investment of $154 billion of their clients' money in the previous 12 months.@@@@1@35@@oe@2-2-2013
21567031@unknown@formal@none@1@S@The sheer number of planners makes the business extremely difficult, if not impossible, to regulate.@@@@1@15@@oe@2-2-2013
21567032@unknown@formal@none@1@S@Even the minority of them who must register with the Securities and Exchange Commission as "investment advisers" -- people who are in the business of counseling others on the buying and selling of securities specifically -- have been enough to swamp the agency's capacity.@@@@1@44@@oe@2-2-2013
21567033@unknown@formal@none@1@S@The SEC has only about 200 staffers assigned to keep tabs on investment advisers -- about the same as in 1980 -- even though the number of advisers has tripled to about 15,000 over the past decade.@@@@1@37@@oe@2-2-2013
21567034@unknown@formal@none@1@S@Currently, a registered investment adviser can expect an SEC audit only once every 12 years.@@@@1@15@@oe@2-2-2013
21567035@unknown@formal@none@1@S@A lot of bad things can happen in 12 years.@@@@1@10@@oe@2-2-2013
21567036@unknown@formal@none@1@S@"It doesn't take a rocket scientist to figure out our problem," says Kathryn McGrath, director of the SEC's division of investment management.@@@@1@22@@oe@2-2-2013
21567037@unknown@formal@none@1@S@So the SEC has proposed to Congress that much of the job of oversight be turned over to an industry-funded, self-regulatory organization patterned on the National Association of Securities Dealers, which operates in the brokerage business.@@@@1@36@@oe@2-2-2013
21567038@unknown@formal@none@1@S@Such an organization could, among other things, set minimum standards for competence, ethics and finances and punish those investment advisers who broke the rules.@@@@1@24@@oe@2-2-2013
21567039@unknown@formal@none@1@S@The proposal has set off a lively debate within an industry that was far from united to begin with.@@@@1@19@@oe@2-2-2013
21567040@unknown@formal@none@1@S@Mr. Schwartz, the puckish planner from Englewood, Colo., says that allowing the business to police itself would be "like putting Dracula in charge of the blood bank."@@@@1@27@@oe@2-2-2013
21567041@unknown@formal@none@1@S@Mr. Gargan, the Tampa planner who heads one trade group, favors simply assessing the industry and giving the money to the SEC to hire more staff.@@@@1@26@@oe@2-2-2013
21567042@unknown@formal@none@1@S@(Mr. Gargan's views are not greeted with wild enthusiasm over at the IAFP, the major industry organization.@@@@1@17@@oe@2-2-2013
21567043@unknown@formal@none@1@S@When the IAFP recently assembled other industry groups to discuss common standards that might be applied to planners, Mr. Gargan's group was excluded.@@@@1@23@@oe@2-2-2013
21567044@unknown@formal@none@1@S@That may be because Mr. Gargan, smarting at what he considered slurs on his membership standards made by the rival group, enrolled his dog, Beauregard, as a member of the IAFP.@@@@1@31@@oe@2-2-2013
21567045@unknown@formal@none@1@S@Then he sent the pooch's picture with the certificate of membership -- it was made out to "Boris `Bo' Regaard" -- to every newspaper he could think of.)@@@@1@28@@oe@2-2-2013
21567046@unknown@formal@none@1@S@The states have their own ideas about regulation and certification.@@@@1@10@@oe@2-2-2013
21567047@unknown@formal@none@1@S@NASAA, the organization of state securities regulators, is pushing for a model regulatory statute already adopted in eight states.@@@@1@19@@oe@2-2-2013
21567048@unknown@formal@none@1@S@It requires financial planners to register with states, pass competency tests and reveal to customers any conflicts of interest.@@@@1@19@@oe@2-2-2013
21567049@unknown@formal@none@1@S@The most common conflict involves compensation.@@@@1@6@@oe@2-2-2013
21567050@unknown@formal@none@1@S@NASAA estimates that nearly 90% of planners receive some or all of their income from sales commissions on securities, insurance and other financial products they recommend.@@@@1@26@@oe@2-2-2013
21567051@unknown@formal@none@1@S@The issue: Is the planner putting his clients into the best investments, or the ones that garner the biggest commissions?@@@@1@20@@oe@2-2-2013
21567052@unknown@formal@none@1@S@In 1986 the New York attorney general's office got an order from a state court in Albany shutting down First Meridian Corp., an Albany financial-planning firm that had invested $55 million on behalf of nearly 1,000 investors.@@@@1@37@@oe@2-2-2013
21567053@unknown@formal@none@1@S@In its notice of action, the attorney general said the company had promised to put clients into "balanced" investment portfolios; instead, the attorney general alleged, the company consistently shoved unwary customers into high-risk investments in paintings, coins and Florida condos.@@@@1@40@@oe@2-2-2013
21567054@unknown@formal@none@1@S@Those investments paid big commissions to First Meridian, payments investors were never told about, the attorney general alleged.@@@@1@18@@oe@2-2-2013
21567055@unknown@formal@none@1@S@Investors were further assured that only those with a minimun net worth would be accepted.@@@@1@15@@oe@2-2-2013
21567056@unknown@formal@none@1@S@In practice, the attorney general alleged in an affidavit, if an investor had access to cash "the chances of being turned down by First Meridian were about as probable as being rejected by the Book-of-the-Month Club."@@@@1@36@@oe@2-2-2013
21567057@unknown@formal@none@1@S@And, the attorney general added, First Meridian's president, Roger V. Sala, portrayed himself as a "financial expert" when his qualifications largely consisted of a high-school diploma, work as a real-estate and insurance salesman, and a stint as supervisor at a highway toll booth.@@@@1@43@@oe@2-2-2013
21567058@unknown@formal@none@1@S@First Meridian and its officials are currently under investigation for possible criminal wrongdoing, according to a spokeswoman for the attorney general.@@@@1@21@@oe@2-2-2013
21567059@unknown@formal@none@1@S@Harry Manion, Mr. Sala's attorney, says his client denies any wrongdoing and adds that the attorney general's contentions about First Meridian's business practices are incorrect.@@@@1@25@@oe@2-2-2013
21567060@unknown@formal@none@1@S@As for Mr. Sala's qualifications, "the snooty attorneys for the state of New York decided Mr. Sala wasn't qualified because he didn't have a Harvard degree," says Mr. Manion.@@@@1@29@@oe@2-2-2013
21567061@unknown@formal@none@1@S@Civil suits against planners by clients seeking recovery of funds are increasingly common.@@@@1@13@@oe@2-2-2013
21567062@unknown@formal@none@1@S@Two such actions, both filed earlier this year in Georgia state court in Atlanta, could be particularly embarrassing to the industry: both name J. Chandler Peterson, an Atlanta financial planner who is a founder and past chairman of the IAFP, as defendant.@@@@1@42@@oe@2-2-2013
21567063@unknown@formal@none@1@S@One suit, filed by more than three dozen investors, charges that Mr. Peterson misused much of the $9.7 million put into a limited partnership that he operated and promoted, spending some of it to pay his own legal bills and to invest in other companies in which he had an interest.@@@@1@51@@oe@2-2-2013
21567064@unknown@formal@none@1@S@Those companies, in turn, paid Mr. Peterson commissions and fees, the suit alleges.@@@@1@13@@oe@2-2-2013
21567065@unknown@formal@none@1@S@The other suit was filed by two men in a dispute over $100,000 investments each says he made with Mr. Peterson as part of an effort to purchase the Bank of Scottsdale in Scottsdale, Ariz.@@@@1@35@@oe@2-2-2013
21567066@unknown@formal@none@1@S@One plaintiff, a doctor, testified in an affidavit that he also gave Mr. Peterson $50,000 to join a sort of investment club which essentially gave the physician "the privilege of making additional investments" with Mr. Peterson.@@@@1@36@@oe@2-2-2013
21567067@unknown@formal@none@1@S@In affidavits, each plaintiff claims Mr. Peterson promised the bank purchase would be completed by the end of 1988 or the money returned.@@@@1@23@@oe@2-2-2013
21567068@unknown@formal@none@1@S@Mr. Peterson took the plaintiffs' and other investors' money to a meeting of the bank's directors.@@@@1@16@@oe@2-2-2013
21567069@unknown@formal@none@1@S@Wearing a business suit and western-style hat and boots, he opened up his briefcase and dumped $1 million in cash on a table in front of the directors, says Myron Diebel, the bank's president.@@@@1@34@@oe@2-2-2013
21567070@unknown@formal@none@1@S@"He said he wanted to show the color of his money," recalls Mr. Diebel.@@@@1@14@@oe@2-2-2013
21567071@unknown@formal@none@1@S@Bank officials, however, showed him the door, and the sale never came off.@@@@1@13@@oe@2-2-2013
21567072@unknown@formal@none@1@S@According to the suit, Mr. Peterson has yet to return the plaintiffs' investment.@@@@1@13@@oe@2-2-2013
21567073@unknown@formal@none@1@S@They want it back.@@@@1@4@@oe@2-2-2013
21567074@unknown@formal@none@1@S@Mr. Peterson declines to comment on specific allegations in the two suits, saying he prefers to save such responses for court.@@@@1@21@@oe@2-2-2013
21567075@unknown@formal@none@1@S@But he does say that all of his activities have been "entirely proper."@@@@1@13@@oe@2-2-2013
21567076@unknown@formal@none@1@S@On the suit by the limited partners, he says he is considering a defamation suit against the plaintiffs.@@@@1@18@@oe@2-2-2013
21567077@unknown@formal@none@1@S@The suit, he adds, "is almost in the nature of a vendetta by a handful of disgruntled people."@@@@1@18@@oe@2-2-2013
21567078@unknown@formal@none@1@S@Rearding the suit over the bank bid, Mr. Peterson says it is filled with "inflammatory language and half truths."@@@@1@19@@oe@2-2-2013
21567079@unknown@formal@none@1@S@He declines to go into specifics.@@@@1@6@@oe@2-2-2013
21567080@unknown@formal@none@1@S@Mr. Peterson says the suits against him are less a measure of his work than they are a "sign of the times" in which people generally are more prone to sue.@@@@1@31@@oe@2-2-2013
21567081@unknown@formal@none@1@S@"I don't know anybody in the industry who hasn't experienced litigation," he says.@@@@1@13@@oe@2-2-2013
21567082@unknown@formal@none@1@S@Mr. Peterson also says he doesn't consider himself a financial planner anymore.@@@@1@12@@oe@2-2-2013
21567083@unknown@formal@none@1@S@He now calls himself an "investment banker."@@@@1@7@@oe@2-2-2013
21567084@unknown@formal@none@1@S@In many scams or alleged scams involving planners, it's plain that only a modicum of common sense on the part of the investors would have kept them out of harm's way.@@@@1@31@@oe@2-2-2013
21567085@unknown@formal@none@1@S@Using it, wouldn't a proessional hesitate to pay tens of thousands of dollars just for a chance to invest witha planner?@@@@1@21@@oe@2-2-2013
21567086@unknown@formal@none@1@S@Other cases go to show that an old saw still applies: If it sounds too good to be true, it probably is.@@@@1@22@@oe@2-2-2013
21567087@unknown@formal@none@1@S@Certificates of deposit don't pay 23% a year, for example, but that didn't give pause to clients of one Alabama planner.@@@@1@21@@oe@2-2-2013
21567088@unknown@formal@none@1@S@Now they're losers and he's in jail in Mobile County.@@@@1@10@@oe@2-2-2013
21567089@unknown@formal@none@1@S@CDs yielding 40% are even more implausible -- especially when the issuing "bank" in the Marshall Islands is merely a mail drop watched over by a local gas-station operator -- but investors fell for that one too.@@@@1@37@@oe@2-2-2013
21567090@unknown@formal@none@1@S@And the Colorado planner who promised to make some of his clients millionaires on investments of as litle as $100?@@@@1@20@@oe@2-2-2013
21567091@unknown@formal@none@1@S@Never mind.@@@@1@2@@oe@2-2-2013
21567092@unknown@formal@none@1@S@You already know the answer.@@@@1@5@@oe@2-2-2013
21567093@unknown@formal@none@1@S@Mr. Emshwiller is a staff reporter in The Wall Street Journal's Los Angeles bureau.@@@@1@14@@oe@2-2-2013
21568001@unknown@formal@none@1@S@At the ritzy Fashion Island Shopping Center, the tanned and elegant ladies of this wealthy Southern California beach community disembark from their Mercedes-Benzes and BMWs for another day of exercising their credit cards.@@@@1@33@@oe@2-2-2013
21568002@unknown@formal@none@1@S@They root among the designer offerings at Neiman-Marcus and Bullocks Wilshire.@@@@1@11@@oe@2-2-2013
21568003@unknown@formal@none@1@S@They stroll through the marble-encased corridors of the Atrium Court.@@@@1@10@@oe@2-2-2013
21568004@unknown@formal@none@1@S@They graze at the Farmers Market, a combination gourmet food court and grocery store, while a pianist accompanies the noon fashion show with a selection of dreamy melodies.@@@@1@28@@oe@2-2-2013
21568005@unknown@formal@none@1@S@"The beautiful look of wool," croons the show's narrator, "slightly Victorian in its influence...."@@@@1@14@@oe@2-2-2013
21568006@unknown@formal@none@1@S@Meanwhile, in the squat office buildings that ring Fashion Island, the odds are good that someone is getting fleeced.@@@@1@19@@oe@2-2-2013
21568007@unknown@formal@none@1@S@Law-enforcement authorities say that at any given time, a host of fraudulent telemarketing operations mingle with the many legitimate businesses here.@@@@1@21@@oe@2-2-2013
21568008@unknown@formal@none@1@S@"They seem to like these industrial parks," says Kacy McClelland, a postal inspector who specializes in mail fraud.@@@@1@18@@oe@2-2-2013
21568009@unknown@formal@none@1@S@"We call them fraud farms."@@@@1@5@@oe@2-2-2013
21568010@unknown@formal@none@1@S@Welcome to that welter of contradictions known as Newport Beach.@@@@1@10@@oe@2-2-2013
21568011@unknown@formal@none@1@S@This city of more than 70,000 is known for sunshine, yachts and rich residents.@@@@1@14@@oe@2-2-2013
21568012@unknown@formal@none@1@S@It is also known as the fraud capital of the U.S., dubbed by investigators and the media as the "Cote de Fraud".@@@@1@22@@oe@2-2-2013
21568013@unknown@formal@none@1@S@How does a community famous for its high living end up as a haven for low-lifes?@@@@1@16@@oe@2-2-2013
21568014@unknown@formal@none@1@S@Clearly, the existence of the former lures the latter.@@@@1@9@@oe@2-2-2013
21568015@unknown@formal@none@1@S@The places renowned for breeding bunco, like the Miami neighborhood known as the "Maggot Mile" and Las Vegas's flashy strip of casinos, invariably offer fast cars, high rollers, glamorous women and lots of sunshine.@@@@1@34@@oe@2-2-2013
21568016@unknown@formal@none@1@S@You don't hear much about unusual concentrations of fraud in Green Bay or Buffalo.@@@@1@14@@oe@2-2-2013
21568017@unknown@formal@none@1@S@Con men hate snow.@@@@1@4@@oe@2-2-2013
21568018@unknown@formal@none@1@S@Newport Beach fits the scam artists' specifications perfectly.@@@@1@8@@oe@2-2-2013
21568019@unknown@formal@none@1@S@What more could a con man in search of the easy life ask for?@@@@1@14@@oe@2-2-2013
21568020@unknown@formal@none@1@S@Nothing seems hard here.@@@@1@4@@oe@2-2-2013
21568021@unknown@formal@none@1@S@The breezes are soft, the waves lap gently and the palm trees sway lazily.@@@@1@14@@oe@2-2-2013
21568022@unknown@formal@none@1@S@Nightlife is plentiful.@@@@1@3@@oe@2-2-2013
21568023@unknown@formal@none@1@S@Moreover, ostentation is appreciated.@@@@1@4@@oe@2-2-2013
21568024@unknown@formal@none@1@S@The median price of homes is $547,000; more than 9,000 vessels fill what the chamber of commerce calls the nation's largest pleasure-boat harbor.@@@@1@23@@oe@2-2-2013
21568025@unknown@formal@none@1@S@"Blondes, cocaine and Corvettes," mutters Mr. McClelland.@@@@1@7@@oe@2-2-2013
21568026@unknown@formal@none@1@S@"That's what they're after."@@@@1@4@@oe@2-2-2013
21568027@unknown@formal@none@1@S@The rich image of Newport Beach also helps lend the con artists' operation an air of respectability.@@@@1@17@@oe@2-2-2013
21568028@unknown@formal@none@1@S@"One reason they use Newport Beach is that it sounds swankier than most addresses," says David Katz, a U.S. attorney who, until recently, headed a multi-agency Southern California fraud task force.@@@@1@31@@oe@2-2-2013
21568029@unknown@formal@none@1@S@"Newport Beach is known in Rhode Island for having a lot of rich people."@@@@1@14@@oe@2-2-2013
21568030@unknown@formal@none@1@S@No wonder all kinds of big-time scams have flourished here, from phony tax-sheltered Bible sales to crooked car dealers to bogus penny-stock traders.@@@@1@23@@oe@2-2-2013
21568031@unknown@formal@none@1@S@But above all, this is the national headquarters for boiler-room operators, those slick-talking snake-oil salesmen who use the telephone to extract money from the gullible and the greedy and then vanish.@@@@1@31@@oe@2-2-2013
21568032@unknown@formal@none@1@S@Because only a fraction of them are ever prosecuted, nobody really knows how much money bogus telemarketing operators really harvest.@@@@1@20@@oe@2-2-2013
21568033@unknown@formal@none@1@S@"I've heard that there is $40 billion taken in nationwide by boiler rooms every year," Mr. McClelland says.@@@@1@18@@oe@2-2-2013
21568034@unknown@formal@none@1@S@"If that's true, Orange County has to be at least 10% of that."@@@@1@13@@oe@2-2-2013
21568035@unknown@formal@none@1@S@And most of the truly big scams in Orange County seem to originate in Newport Beach or one of the other well-heeled communities that surround this sliver-like city that hooks around a point of land on the California coast south of Los Angeles.@@@@1@43@@oe@2-2-2013
21568036@unknown@formal@none@1@S@In fact, sophisticated big-bucks boiler-room scams are known generically among law-enforcement types as "Newport Beach" operations.@@@@1@16@@oe@2-2-2013
21568037@unknown@formal@none@1@S@That contrasts with the penny-ante sales of things such as pen-and-pencil sets and office supplies that are known as "Hollywood" scams.@@@@1@21@@oe@2-2-2013
21568038@unknown@formal@none@1@S@Newport Beach telemarketers concentrate on precious metals and oil-leasing deals that typically cost thousands of dollars a shot.@@@@1@18@@oe@2-2-2013
21568039@unknown@formal@none@1@S@The investors range from elderly widows to affluent professionals.@@@@1@9@@oe@2-2-2013
21568040@unknown@formal@none@1@S@In one ingenious recent example of a Newport Beach boiler room, prospective investors in Capital Trust Inc. were allegedly told that their investment in precious metals was insured against losses "caused by employees due to dishonesty, destruction or disappearance," according to an indictment handed up by a federal grand jury in Los Angeles last month.@@@@1@55@@oe@2-2-2013
21568041@unknown@formal@none@1@S@Thus falsely reassured, investors sent $11.4 million to the Newport Beach company, most of which was diverted to unauthorized uses, the indictment charges.@@@@1@23@@oe@2-2-2013
21568042@unknown@formal@none@1@S@Douglas Jones, an attorney representing Richard O. Kelly Sr., the chairman and president of Capital Trust, says his client denies that there was any attempt to defraud investors.@@@@1@28@@oe@2-2-2013
21568043@unknown@formal@none@1@S@"There were some business deals that went bad," Mr. Jones says, "but no intent to defraud."@@@@1@16@@oe@2-2-2013
21568044@unknown@formal@none@1@S@Newport Beach operations differ from the Hollywood boiler rooms in style as well as in dollars.@@@@1@16@@oe@2-2-2013
21568045@unknown@formal@none@1@S@Traditionally, boiler rooms operate on the cheap, since few, if any, customers ever visit their offices.@@@@1@16@@oe@2-2-2013
21568046@unknown@formal@none@1@S@Indeed, the name derives from the tendency among telemarketing scammers to rent cheap basement space, near the boiler room.@@@@1@19@@oe@2-2-2013
21568047@unknown@formal@none@1@S@But, says Mr. Katz, the U.S. attorney, "the interesting thing about Newport Beach operations is that they give themselves the indulgence of beautiful offices, with plush furnishings.@@@@1@27@@oe@2-2-2013
21568048@unknown@formal@none@1@S@When we go there, it's quite different from these Hollywood places where the sandwiches are spread out on the table and the people are picking their noses."@@@@1@27@@oe@2-2-2013
21568049@unknown@formal@none@1@S@The Newport Beach operators also tend to indulge themselves privately.@@@@1@10@@oe@2-2-2013
21568050@unknown@formal@none@1@S@Investigators cite the case of Matthew Valentine, who is currently serving a six-year sentence at Lompoc Federal Prison for his role in Intech Investment Corp., which promised investors returns of as much as 625% on precious metals.@@@@1@37@@oe@2-2-2013
21568051@unknown@formal@none@1@S@Mr. Valentine, who pleaded guilty to five counts of fraud in federal court in Los Angeles, drove a leased Mercedes and lived in an expensive home on Lido Isle, an island in Newport's harbor, according to investigators.@@@@1@37@@oe@2-2-2013
21568052@unknown@formal@none@1@S@With the $3 million received from investors, he took frequent junkets with friends to exotic locales and leased an expensive BMW for his girlfriend, whom he met at the shop where he got his custom-tailored suits.@@@@1@36@@oe@2-2-2013
21568053@unknown@formal@none@1@S@"It's amazing the amount of money that goes up their nose, out to the dog track or to the tables in Las Vegas," Mr. Katz says.@@@@1@26@@oe@2-2-2013
21568054@unknown@formal@none@1@S@All this talk of boiler rooms and fraud is unnerving to the city's legitimate business element.@@@@1@16@@oe@2-2-2013
21568055@unknown@formal@none@1@S@Vincent M Ciavarella, regional manager of Property Management Systems, insists he doesn't know of any bogus telemarketers operating in the 1.6 million square feet of office space around Fashion Island that his company leases for Irvine Co., the owner and developer of the project.@@@@1@44@@oe@2-2-2013
21568056@unknown@formal@none@1@S@Mr. Ciavarella has rejected a few prospective tenants who provided "incomplete" financial information and acknowledges that illegitimate operators "are not easily detectable.@@@@1@22@@oe@2-2-2013
21568057@unknown@formal@none@1@S@" (Investigators stress that building owners are victims, too, since boiler rooms often leave without paying rent.)@@@@1@17@@oe@2-2-2013
21568058@unknown@formal@none@1@S@Richard Luehrs, president of the Newport Harbor Area Chamber of Commerce, calls boiler rooms a "negative we wish we could get rid of."@@@@1@23@@oe@2-2-2013
21568059@unknown@formal@none@1@S@Actually, "we don't get much negative publicity about this," he insists, "except for the press who write about it."@@@@1@19@@oe@2-2-2013
21568060@unknown@formal@none@1@S@Mr. Lancaster is deputy chief of The Wall Street Journal's Dallas bureau.@@@@1@12@@oe@2-2-2013
21569001@unknown@formal@none@1@S@YOU WENT to college and thought you got an education.@@@@1@10@@oe@2-2-2013
21569002@unknown@formal@none@1@S@Now you discover that you never learned the most important lesson: How to send your kids to college.@@@@1@18@@oe@2-2-2013
21569003@unknown@formal@none@1@S@True, when you went to college, there wasn't that much to learn.@@@@1@12@@oe@2-2-2013
21569004@unknown@formal@none@1@S@Stick some money in an interest-bearing account and watch it grow.@@@@1@11@@oe@2-2-2013
21569005@unknown@formal@none@1@S@Now, investment salesmen say it's time to take some risks if you want the kind of returns that will buy your toddler a ticket to Prestige U. in 18 years.@@@@1@30@@oe@2-2-2013
21569006@unknown@formal@none@1@S@In short, throw away the passbook and go for the glory.@@@@1@11@@oe@2-2-2013
21569007@unknown@formal@none@1@S@The reason is cost.@@@@1@4@@oe@2-2-2013
21569008@unknown@formal@none@1@S@Nothing in the annals of tuition readied parents for the 1980s.@@@@1@11@@oe@2-2-2013
21569009@unknown@formal@none@1@S@Tuitions at private colleges rose 154% in the 10 years ended in June of this year; that's twice the 77% increase in consumer prices for the same period.@@@@1@28@@oe@2-2-2013
21569010@unknown@formal@none@1@S@A year at Harvard now goes for $19,395.@@@@1@8@@oe@2-2-2013
21569011@unknown@formal@none@1@S@By 2007, when this year's newborns hit campus, a four-year Ivy League sheepskin will cost $300,000, give or take a few pizzas-with-everything at exam time.@@@@1@25@@oe@2-2-2013
21569012@unknown@formal@none@1@S@Stanford, MIT and other utmosts will cost no less.@@@@1@9@@oe@2-2-2013
21569013@unknown@formal@none@1@S@So what's a parent to do?@@@@1@6@@oe@2-2-2013
21569014@unknown@formal@none@1@S@Some investment advisers are suggesting, in effect, a bet on a start-up investment pool -- maybe even on margin.@@@@1@19@@oe@2-2-2013
21569015@unknown@formal@none@1@S@Others prefer deep-discount zero-coupon bonds.@@@@1@5@@oe@2-2-2013
21569016@unknown@formal@none@1@S@Still others say, Why not take a chance on a high-octane growth fund?@@@@1@13@@oe@2-2-2013
21569017@unknown@formal@none@1@S@"You're not going to make it in a 5% bank account," says James Riepe, director of mutual funds at T. Rowe Price.@@@@1@22@@oe@2-2-2013
21569018@unknown@formal@none@1@S@To get the necessary growth, adds Murray Ruffel, a marketing official at the Financial Programs mutual-fund group, "you need to go to the stock market."@@@@1@25@@oe@2-2-2013
21569019@unknown@formal@none@1@S@In other words, a little volatility never hurt.@@@@1@8@@oe@2-2-2013
21569020@unknown@formal@none@1@S@It never hurt anyone, that is, unless the growth funds don't grow when you need them to.@@@@1@17@@oe@2-2-2013
21569021@unknown@formal@none@1@S@Or the zero-coupon bonds turn out not to have been discounted deeply enough to pay your kid's tuition.@@@@1@18@@oe@2-2-2013
21569022@unknown@formal@none@1@S@That's the dilemma for today's parent.@@@@1@6@@oe@2-2-2013
21569023@unknown@formal@none@1@S@Although many experts are advising risk, no one has a good answer for you if the risk doesn't pay off.@@@@1@20@@oe@2-2-2013
21569024@unknown@formal@none@1@S@Help may be on the way.@@@@1@6@@oe@2-2-2013
21569025@unknown@formal@none@1@S@The antitrust division of the Justice Department is investigating the oddly similar tuition charges and increases among the top schools.@@@@1@20@@oe@2-2-2013
21569026@unknown@formal@none@1@S@Fear of the price police could help cool things off in the 1990s.@@@@1@13@@oe@2-2-2013
21569027@unknown@formal@none@1@S@And then there's always State U.@@@@1@6@@oe@2-2-2013
21569028@unknown@formal@none@1@S@But parents' craving for a top-rated education for their children is growing like their taste for fancy wheels and vintage wine.@@@@1@21@@oe@2-2-2013
21569029@unknown@formal@none@1@S@Belatedly aware of public concern, lawmakers and financial middlemen are working overtime to create and sell college savings and investment schemes.@@@@1@21@@oe@2-2-2013
21569030@unknown@formal@none@1@S@Their message, explicit or implicit, is that a good college will cost so much by whenever you want it that the tried and true won't do anymore.@@@@1@27@@oe@2-2-2013
21569031@unknown@formal@none@1@S@Forget about Treasury bills or a money-market fund.@@@@1@8@@oe@2-2-2013
21569032@unknown@formal@none@1@S@The latest wave of marketing is instructive.@@@@1@7@@oe@2-2-2013
21569033@unknown@formal@none@1@S@Several outfits -- including the Financial Programs, Franklin, and T. Rowe Price mutual-fund groups and the Edward D. Jones brokerage house -- are advertising "college planner" tables and charts that tell you how much you need to put aside regularly.@@@@1@40@@oe@2-2-2013
21569034@unknown@formal@none@1@S@The calculations generally rely on an after-tax rate of return of 8% annually -- a rate historically obtainable by the individual in only one place, the stock market.@@@@1@28@@oe@2-2-2013
21569035@unknown@formal@none@1@S@Most of the mailers are free, but Denver-based Financial Programs sells, for $15, a version customized to the age of the child and the college of choice.@@@@1@27@@oe@2-2-2013
21569036@unknown@formal@none@1@S@The figures are shocking.@@@@1@4@@oe@2-2-2013
21569037@unknown@formal@none@1@S@To build a nest egg that would pay for Stanford when a current first-grader reaches college age, parents would need to set aside $773.94 a month -- for 12 years.@@@@1@30@@oe@2-2-2013
21569038@unknown@formal@none@1@S@They can cut this to $691.09 a month if the investing keeps up through college.@@@@1@15@@oe@2-2-2013
21569039@unknown@formal@none@1@S@And they can further reduce the monthly amount if they start saving earlier -- when mother and child come home from the hospital.@@@@1@23@@oe@2-2-2013
21569040@unknown@formal@none@1@S@Plugging a cheaper college into the formulas still doesn't generate an installment most people can live with.@@@@1@17@@oe@2-2-2013
21569041@unknown@formal@none@1@S@Using a recent average private-school cost of about $12,500 a year, T. Rowe Price's planner prescribes $450 monthly if the plan begins when the child is six.@@@@1@27@@oe@2-2-2013
21569042@unknown@formal@none@1@S@Since the formula assumes an 8% before-tax return in a mutual fund, there would also be $16,500 in taxes to pay over the 12 years.@@@@1@25@@oe@2-2-2013
21569043@unknown@formal@none@1@S@Not everyone is so pessimistic.@@@@1@5@@oe@2-2-2013
21569044@unknown@formal@none@1@S@"People are basically peddling a lot of fear," says Arthur Hauptman, a consultant to the American Council on Education in Washington.@@@@1@21@@oe@2-2-2013
21569045@unknown@formal@none@1@S@He takes issue with projections that don't factor in students' own contribution, which reduces most parents' burden substantially.@@@@1@18@@oe@2-2-2013
21569046@unknown@formal@none@1@S@Still, he says, "it's no bad thing" if all the marketing prods people into putting aside a little more.@@@@1@19@@oe@2-2-2013
21569047@unknown@formal@none@1@S@"The situation you want to avoid is having somebody not save anything and hope they'll be able to do it out of current income," he says.@@@@1@26@@oe@2-2-2013
21569048@unknown@formal@none@1@S@"That's crazy."@@@@1@2@@oe@2-2-2013
21569049@unknown@formal@none@1@S@His advice: Don't panic.@@@@1@4@@oe@2-2-2013
21569050@unknown@formal@none@1@S@Parents, he says, should aim at whatever regular investment sum they can afford.@@@@1@13@@oe@2-2-2013
21569051@unknown@formal@none@1@S@Half the amount that the investment tables suggest might be a good goal, he adds.@@@@1@15@@oe@2-2-2013
21569052@unknown@formal@none@1@S@That way, parents will reduce borrowings and outlays from current income when the time comes to pay tuition.@@@@1@18@@oe@2-2-2013
21569053@unknown@formal@none@1@S@Mr. Hauptman reckons that the best investment choice is mutual funds because they are managed and over time have nearly kept up with the broad stock averages.@@@@1@27@@oe@2-2-2013
21569054@unknown@formal@none@1@S@He favors either an all-stock fund or a balanced fund that mixes both stocks and bonds.@@@@1@16@@oe@2-2-2013
21569055@unknown@formal@none@1@S@In their anxiety, however, parents and other student benefactors are flocking to new schemes.@@@@1@14@@oe@2-2-2013
21569056@unknown@formal@none@1@S@They have laid out about $1 billion for so-called baccalaureate zero-coupon municipal bonds -- so far offered by Connecticut, Illinois, Virginia and eight other states.@@@@1@25@@oe@2-2-2013
21569057@unknown@formal@none@1@S@And they have bought about $500 million in prepaid-tuition plans, offered in Michigan, Florida and Wyoming.@@@@1@16@@oe@2-2-2013
21569058@unknown@formal@none@1@S@The prepaid plans take payment today -- usually at current tuitions or at a slight discount -- for a promise that tuition will be covered tomorrow.@@@@1@26@@oe@2-2-2013
21569059@unknown@formal@none@1@S@The baccalaureate bonds -- tax-free, offered in small denominations and usually containing a provision that they won't be called before maturity -- seem to be tailor-made for college savers.@@@@1@29@@oe@2-2-2013
21569060@unknown@formal@none@1@S@Like other zeros, they pay all their interest at maturity, meaning that buyers can time things so that their bonds pay off just when Junior graduates from high school.@@@@1@29@@oe@2-2-2013
21569061@unknown@formal@none@1@S@Their compounding effect is also alluring.@@@@1@6@@oe@2-2-2013
21569062@unknown@formal@none@1@S@In June, Virginia sold bonds for $268.98 that will pay $1,000 in 2009.@@@@1@13@@oe@2-2-2013
21569063@unknown@formal@none@1@S@But Richard Anderson, head of the Forum for College Financing Alternatives, at Columbia University, a research group partly financed by the federal government, says zeros are particularly ill-suited.@@@@1@28@@oe@2-2-2013
21569064@unknown@formal@none@1@S@Their price falls further than that of other bonds when inflation and interest rates kick up.@@@@1@16@@oe@2-2-2013
21569065@unknown@formal@none@1@S@That won't matter if they are held to maturity, but if, for any reason, the parents need to sell them before then, there could be a severe loss of principal.@@@@1@30@@oe@2-2-2013
21569066@unknown@formal@none@1@S@Had zeros been available in 1972 and had parents bought a face amount equal to four years' tuition at the time, aiming for their children's 1988 enrollment, they would have been left with only enough to pay for two years, Mr. Anderson figures.@@@@1@43@@oe@2-2-2013
21569067@unknown@formal@none@1@S@Most other bonds, however, would probably not have fared much better.@@@@1@11@@oe@2-2-2013
21569068@unknown@formal@none@1@S@The prepaid plans may be a good bet, provided the guarantee of future tuition is secure.@@@@1@16@@oe@2-2-2013
21569069@unknown@formal@none@1@S@Issuing states generally limit the guarantees to in-state institutions, however, and buyers get refunds without much interest if the children don't attend the specified schools.@@@@1@25@@oe@2-2-2013
21569070@unknown@formal@none@1@S@Two private groups are seeking Securities and Exchange Commission approval for plans that could be more broadly transferable.@@@@1@18@@oe@2-2-2013
21569071@unknown@formal@none@1@S@Mr. Anderson wants the prestige colleges to sponsor such a plan.@@@@1@11@@oe@2-2-2013
21569072@unknown@formal@none@1@S@The issue here may be the soundness of the guarantee.@@@@1@10@@oe@2-2-2013
21569073@unknown@formal@none@1@S@Prepayments, much like mutual-fund purchases, are pooled for investment.@@@@1@9@@oe@2-2-2013
21569074@unknown@formal@none@1@S@Sponsors are naturally counting on their ability to keep ahead of tuition inflation with investment returns.@@@@1@16@@oe@2-2-2013
21569075@unknown@formal@none@1@S@But buyers are essentially betting on a start-up investment fund with no track record -- and some have been encouraged to borrow to do so.@@@@1@25@@oe@2-2-2013
21569076@unknown@formal@none@1@S@One problem is that the Internal Revenue Service has decided that the investment earnings and gains of the sponsors' funds are taxable.@@@@1@22@@oe@2-2-2013
21569077@unknown@formal@none@1@S@The colleges, as educational institutions, had hoped that wouldn't be the case.@@@@1@12@@oe@2-2-2013
21569078@unknown@formal@none@1@S@Based on historical rates of return, Mr. Anderson reckons a 100% stock portfolio, indexed to the market, would have kept up with tuition and taxes in the 20th century.@@@@1@29@@oe@2-2-2013
21569079@unknown@formal@none@1@S@But sponsors might not pick the stocks that will match the market.@@@@1@12@@oe@2-2-2013
21569080@unknown@formal@none@1@S@And they're leaning more toward fixed income, whose returns after tax have trailed tuition increases.@@@@1@15@@oe@2-2-2013
21569081@unknown@formal@none@1@S@"I'm not sure they're going to make it work," says Mr. Anderson.@@@@1@12@@oe@2-2-2013
21569082@unknown@formal@none@1@S@What happens if the sponsors don't have the cash to pay the tuitions?@@@@1@13@@oe@2-2-2013
21569083@unknown@formal@none@1@S@Florida and Wyoming have backed up their guarantees with the full faith and credit of the state governments, meaning that taxpayers will pick up any slack.@@@@1@26@@oe@2-2-2013
21569084@unknown@formal@none@1@S@Not so Michigan.@@@@1@3@@oe@2-2-2013
21569085@unknown@formal@none@1@S@Its plan is set up as an independent agency.@@@@1@9@@oe@2-2-2013
21569086@unknown@formal@none@1@S@The state says there's no worry -- investment returns, combined with fees and the gains from unused plans, will provide all the cash it needs.@@@@1@25@@oe@2-2-2013
21569087@unknown@formal@none@1@S@Mr. Putka covers education from The Wall Street Journal's Boston bureau.@@@@1@11@@oe@2-2-2013
21569088@unknown@formal@none@1@S@If you start saving for your child's eduction on Jan. 1, 1990, here's the monthly sum you will need to invest to pay for four years at Yale, Notre Dame and University of Minnesota.@@@@1@34@@oe@2-2-2013
21569089@unknown@formal@none@1@S@Figures assume a 7% annual rise in tuition, fees, room and board and an 8% annual investment return.@@@@1@18@@oe@2-2-2013
21569090@unknown@formal@none@1@S@Note: These figures are only for mandatory charges and don't include books, transportation etc.@@@@1@14@@oe@2-2-2013
21569091@unknown@formal@none@1@S@*For in-state students@@@@1@3@@oe@2-2-2013
21569092@unknown@formal@none@1@S@Source: PaineWebber Inc.@@@@1@3@@oe@2-2-2013
21570001@unknown@formal@none@1@S@AMONG THE CATFISH farmers in the watery delta land of Humphreys County, Miss., Allen D. Tharp of Isola was one of the best known and most enterprising.@@@@1@27@@oe@2-2-2013
21570002@unknown@formal@none@1@S@He sold quarter-inch fingerlings to stock other farmers' ponds, and he bought back one-pound-or-so food-fish that he "live-hauled" to market along with his own whiskery crop.@@@@1@26@@oe@2-2-2013
21570003@unknown@formal@none@1@S@And he nearly always bought and sold for cash.@@@@1@9@@oe@2-2-2013
21570004@unknown@formal@none@1@S@Along the way, Mr. Tharp omitted a total of $1.5 million from his receipts reported on federal tax returns for three years.@@@@1@22@@oe@2-2-2013
21570005@unknown@formal@none@1@S@The returns landed in the hands of an Internal Revenue Service criminal investigator, Samuel James Baker.@@@@1@16@@oe@2-2-2013
21570006@unknown@formal@none@1@S@Mr. Baker interviewed or wrote to hundreds of catfish farmers, live-haulers and processors throughout the South before coming up with detailed estimates of purchases and sales, in pounds and dollars, by Mr. Tharp and others.@@@@1@35@@oe@2-2-2013
21570007@unknown@formal@none@1@S@Unknown to Mr. Tharp, he had fouled his net on a special IRS project to catch catfish farmers and haulers inclined to cheat on their taxes.@@@@1@26@@oe@2-2-2013
21570008@unknown@formal@none@1@S@Confronted with the evidence, Mr. Tharp pleaded guilty to one charge of filing a false return and was fined $5,000 and sentenced to 18 months in prison.@@@@1@27@@oe@2-2-2013
21570009@unknown@formal@none@1@S@He also owes a lot of back taxes, interest and civil fraud penalties.@@@@1@13@@oe@2-2-2013
21570010@unknown@formal@none@1@S@A lot of taxpayers out there aren't as paranoid as one might think.@@@@1@13@@oe@2-2-2013
21570011@unknown@formal@none@1@S@Federal and state tax enforcers develop many group targets for investigation, on the basis of occupation, high income, type of income, or some other characteristic that may signal an opportunity or tendency to hide income or exaggerate deductions.@@@@1@38@@oe@2-2-2013
21570012@unknown@formal@none@1@S@Many professions long have seemed to be targets because of the exotic or ludicrous efforts of some members to offset high income with fake losses from phony tax shelters: dentists who invested in dubiously dubbed foreign films or airline pilots who raised racehorses on their days off.@@@@1@47@@oe@2-2-2013
21570013@unknown@formal@none@1@S@Mail-order ministers have been squelched.@@@@1@5@@oe@2-2-2013
21570014@unknown@formal@none@1@S@Now, television and radio evangelists are under scrutiny.@@@@1@8@@oe@2-2-2013
21570015@unknown@formal@none@1@S@The IRS recently won part of its long-running battle with the Church of Scientology over exemptions when the U.S. Supreme Court held that members' payments to the church weren't deductible because the members received services in return.@@@@1@37@@oe@2-2-2013
21570016@unknown@formal@none@1@S@IRS statistics show that the more persistent hiders of income among sole proprietors of businesses include used-car dealers, entertainment producers, masons, roofers, and taxi owners.@@@@1@25@@oe@2-2-2013
21570017@unknown@formal@none@1@S@Small businesses in general account for almost 40% of unreported personal income, the IRS has said.@@@@1@16@@oe@2-2-2013
21570018@unknown@formal@none@1@S@Once such abuses become so pervasive, the IRS builds another factor into its secret computer formula for selecting returns for audit and doesn't need special projects for them.@@@@1@28@@oe@2-2-2013
21570019@unknown@formal@none@1@S@San Franciscans have a much higher incidence of audits than average because more of them score high under that formula, not because IRS agents envy their life styles.@@@@1@28@@oe@2-2-2013
21570020@unknown@formal@none@1@S@Many openings for mass cheating, such as questionable tax shelters and home offices, have gaped so broadly that Congress has passed stringent laws to close them.@@@@1@26@@oe@2-2-2013
21570021@unknown@formal@none@1@S@Deductions of charitable gifts of highly valued art now must be accompanied by appraisals.@@@@1@14@@oe@2-2-2013
21570022@unknown@formal@none@1@S@And laws requiring the reporting of more varieties of transactions have enabled the IRS to rely on computers to ferret out discrepancies with returns and to generate form-letter inquiries to taxpayers.@@@@1@31@@oe@2-2-2013
21570023@unknown@formal@none@1@S@Unreported alimony income can be spotted by computer because a payer of alimony (who gets a deduction) must report the former spouse's Social Security number.@@@@1@25@@oe@2-2-2013
21570024@unknown@formal@none@1@S@Passport applicants now must give Social Security numbers, enabling the IRS to see whether Americans living abroad are filing required U.S. returns.@@@@1@22@@oe@2-2-2013
21570025@unknown@formal@none@1@S@But while IRS computers focus routinely on target groups like these, the agency has assigned many agents to special projects that need more personal attention.@@@@1@25@@oe@2-2-2013
21570026@unknown@formal@none@1@S@In most cases, the IRS says, these projects are local or regional, rather than national, and arise because auditors in an area detect some pattern of abuse among, say, factory workers claiming that having a multitude of dependents frees them from tax withholding or yacht owners deducting losses from sideline charter businesses.@@@@1@52@@oe@2-2-2013
21570027@unknown@formal@none@1@S@The national office currently has 21 noncriminal audit projects, according to Marshall V. Washburn, deputy assistant commissioner for examination.@@@@1@19@@oe@2-2-2013
21570028@unknown@formal@none@1@S@Auditors involved in noncriminal projects can't send anyone to jail, but they can make life miserable in other ways -- for one, by imposing some of the 150 different civil penalties for negligence, failure to file a return, and the like.@@@@1@41@@oe@2-2-2013
21570029@unknown@formal@none@1@S@The targeted audit groups include direct sellers -- people who sell cosmetics, housewares and other items door to door or at home parties -- and employers who label workers as independent contractors instead of employees, to avoid the employer share of payroll taxes.@@@@1@43@@oe@2-2-2013
21570030@unknown@formal@none@1@S@Other projects look for offenders among waiters who get cash tips, people who engage in large cash transactions, and people whose returns show they sold a home for a profit without reinvesting the capital gain in another home by the end of the same year; the gain must be rolled over within two years to defer tax.@@@@1@57@@oe@2-2-2013
21570031@unknown@formal@none@1@S@And now that returns must show dependents' Social Security numbers, the IRS wants to see which dependents show up on more than one return -- and which dependents turn out to be deceased.@@@@1@33@@oe@2-2-2013
21570032@unknown@formal@none@1@S@Impetus for the direct-seller project came from a congressional hearing some years back.@@@@1@13@@oe@2-2-2013
21570033@unknown@formal@none@1@S@It prompted an IRS study that found many sellers were concealing income and treating large amounts of nondeductible travel and other personal expenses as business costs, Mr. Washburn says.@@@@1@29@@oe@2-2-2013
21570034@unknown@formal@none@1@S@The study provided criteria for singling out returns of "potentially noncompliant" taxpayers who report low income and large expenses from a part-time business.@@@@1@23@@oe@2-2-2013
21570035@unknown@formal@none@1@S@The Tax Court recently denied business deductions by Mr. and Mrs. Peter S. Rubin of Cherry Hill, N.J., who both were part-time distributors of Amway products in addition to their regular jobs as sales people in other fields.@@@@1@38@@oe@2-2-2013
21570036@unknown@formal@none@1@S@For 1984, they reported gross income of $1,647 from Amway sales, offset by expenses totaling $16,746 -- including car costs of $6,805 and travel and entertainment costs of $5,088.@@@@1@29@@oe@2-2-2013
21570037@unknown@formal@none@1@S@The Tax Court didn't believe that the Rubins, who earned $65,619 in their regular jobs, treated the sideline as a real business and derived "merely incidental elements of recreation and other personal pleasure and benefits" from it.@@@@1@37@@oe@2-2-2013
21570038@unknown@formal@none@1@S@The Direct Selling Association, a trade group, points out that its members, which include Amway Corp., cooperate with the IRS to distribute tax-compliance material to sales people and are helping to prepare a public-service television program on the subject.@@@@1@39@@oe@2-2-2013
21570039@unknown@formal@none@1@S@The independent-contractor project, which began in 1988, involves about 350 IRS agents.@@@@1@12@@oe@2-2-2013
21570040@unknown@formal@none@1@S@In the fiscal nine months ended June 30, reports Raymond P. Keenan, assistant commissioner for collection, they examined about 13,000 employers, assessed more than $67 million in delinquent employment taxes, and reclassified about 56,000 workers as employees instead of self-employed contractors.@@@@1@41@@oe@2-2-2013
21570041@unknown@formal@none@1@S@The number of misclassified workers may be in the millions, mostly paid by small firms.@@@@1@15@@oe@2-2-2013
21570042@unknown@formal@none@1@S@Many workers, especially professionals, want to remain independent to avoid tax withholding and to continue to deduct many expenses that employees can't.@@@@1@22@@oe@2-2-2013
21570043@unknown@formal@none@1@S@But many others, who want to qualify for employee benefits and unemployment compensation, become tipsters for the IRS, says Jerry Lackey, who manages the IRS project's force of nine agents in north and central Florida from Orlando.@@@@1@37@@oe@2-2-2013
21570044@unknown@formal@none@1@S@Firms that are paying employment taxes also provide leads to competitors that aren't, he says.@@@@1@15@@oe@2-2-2013
21570045@unknown@formal@none@1@S@In his area, Mr. Lackey continues, the miscreant employers most commonly are in construction -- doing framing, drywall, masonry and similar work.@@@@1@22@@oe@2-2-2013
21570046@unknown@formal@none@1@S@But a medical clinic with about 20 employees wrongly listed all of them -- including physicians and receptionists -- as independent contractors.@@@@1@22@@oe@2-2-2013
21570047@unknown@formal@none@1@S@The IRS assessed the clinic $350,000 in back payroll taxes.@@@@1@10@@oe@2-2-2013
21570048@unknown@formal@none@1@S@It assessed nearly $500,000 against a cruise-ship company that carried about 100 deckhands, cooks, bartenders, entertainers and other employees as self-employed independents.@@@@1@22@@oe@2-2-2013
21570049@unknown@formal@none@1@S@Revenue-short states also are becoming more aggressive pursuers of tax delinquents, and perhaps none tracks them down with more relish than does New York since it acquired an $80 million computer system in 1985.@@@@1@34@@oe@2-2-2013
21570050@unknown@formal@none@1@S@The state's tax enforcers have amassed data bases from other New York agencies that license or register professionals and businesses; from exchange agreements with the IRS, 24 other states, and two Canadian provinces, and even from phonebook Yellow Pages.@@@@1@39@@oe@2-2-2013
21570051@unknown@formal@none@1@S@Thus armed for massive matching of documents by computer, they single out high-income groups, looking primarily for people who haven't filed New York income-tax returns.@@@@1@25@@oe@2-2-2013
21570052@unknown@formal@none@1@S@The state has combed through records relating to architects, stockbrokers, lawyers in the New York City area, construction workers from out of the state, and homeowners who claim to be residents of other states -- especially Florida, which has no personal income tax.@@@@1@43@@oe@2-2-2013
21570053@unknown@formal@none@1@S@Soon to feel the glare of attention are lawyers elsewhere in the state, doctors, dentists, and accountants, says Frederick G. Hicks, director of the tax-department division that develops the computer-matching programs.@@@@1@31@@oe@2-2-2013
21570054@unknown@formal@none@1@S@The department has collected over $6.5 million from brokers so far and recommended more than 30 of them for criminal prosecution.@@@@1@21@@oe@2-2-2013
21570055@unknown@formal@none@1@S@In the early stage of checking people with incomes exceeding $500,000 who were filing nonresident returns, it squeezed $7.5 million out of a man who was posing as a Florida resident.@@@@1@31@@oe@2-2-2013
21570056@unknown@formal@none@1@S@"We think we can reclaim hundreds of millions of dollars just through the nonresident project," Mr. Hicks declares.@@@@1@18@@oe@2-2-2013
21570057@unknown@formal@none@1@S@Mr. Schmedel is editor of The Wall Street Journal's Tax Report column.@@@@1@12@@oe@2-2-2013
21571001@unknown@formal@none@1@S@In finding "good news" in Berkeley's new freshman admissions plan ("The Privileged Class," editorial, Sept. 20), you're reading the headline but not the story.@@@@1@24@@oe@2-2-2013
21571002@unknown@formal@none@1@S@The plan indeed raises from 40% to 50% the number of freshmen applicants admitted strictly by academic criteria.@@@@1@18@@oe@2-2-2013
21571003@unknown@formal@none@1@S@But that doesn't mean "half of the students attending Berkeley" will be admitted this way.@@@@1@15@@oe@2-2-2013
21571004@unknown@formal@none@1@S@The plan is talking about applicants admitted, not students who enroll.@@@@1@11@@oe@2-2-2013
21571005@unknown@formal@none@1@S@Since the "yield" from this top slice of applicants is relatively low, boosting admits from 40% to 50% will boost registrants from about 31% to 38% of the class.@@@@1@29@@oe@2-2-2013
21571006@unknown@formal@none@1@S@In addition, perhaps 5% of registrants will come from a new category consisting of applicants whose academic credentials "narrowly missed" gaining them admission in the first category.@@@@1@27@@oe@2-2-2013
21571007@unknown@formal@none@1@S@But against that combined increase of 12% in students chosen by academic criteria, the plan eliminates a large category in which admissions now are based on grades, test scores and "supplemental points" for factors such as high-school curriculum, English-language proficiency and an essay.@@@@1@43@@oe@2-2-2013
21571008@unknown@formal@none@1@S@This category now accounts for about 19% of admits and 22% of registrants.@@@@1@13@@oe@2-2-2013
21571009@unknown@formal@none@1@S@The plan thus will decrease by 22%, for a net loss of 10%, the number of students admitted primarily by academic criteria.@@@@1@22@@oe@2-2-2013
21571010@unknown@formal@none@1@S@Who will take over these places?@@@@1@6@@oe@2-2-2013
21571011@unknown@formal@none@1@S@The plan creates a new category of students from "socioeconomically disadvantaged backgrounds," a concept not yet defined, and gives them about 10% of the class.@@@@1@25@@oe@2-2-2013
21571012@unknown@formal@none@1@S@One of the plan's authors has defended the "socioeconomic disadvantage" category as perhaps making more sense than the current affirmative-action preferences based on race.@@@@1@24@@oe@2-2-2013
21571013@unknown@formal@none@1@S@Perhaps it does.@@@@1@3@@oe@2-2-2013
21571014@unknown@formal@none@1@S@But the new category does not replace or reduce Berkeley's broad racial preferences.@@@@1@13@@oe@2-2-2013
21571015@unknown@formal@none@1@S@Nor will students from racial-minority groups who are admitted through the new category be counted against the affirmative-action "target" for their group.@@@@1@22@@oe@2-2-2013
21571016@unknown@formal@none@1@S@The plan thus places a large new affirmative-action program, based on "socioeconomic disadvantage," on top of the existing program based on race.@@@@1@22@@oe@2-2-2013
21571017@unknown@formal@none@1@S@The role of academic criteria in choosing Berkeley's freshmen can only decline as a result.@@@@1@15@@oe@2-2-2013
21571018@unknown@formal@none@1@S@Stephen R. Barnett Professor of Law University of California Berkeley, Calif.@@@@1@11@@oe@2-2-2013
21572001@unknown@formal@none@1@S@FOR THOSE WHO DELIGHT in the misfortune of others, read on.@@@@1@11@@oe@2-2-2013
21572002@unknown@formal@none@1@S@This is a story about suckers.@@@@1@6@@oe@2-2-2013
21572003@unknown@formal@none@1@S@Most of us know a sucker.@@@@1@6@@oe@2-2-2013