As always, we recommend taking the time to get to know these companies before trading them.—Jon

Staffing Your Mansion with Your Trademechanic Trading Profits Aug 24th

When the rich buy mansions or yachts, they usually just consider the purchase price. But what about the operating costs? Staffing, maintenance, and repairs can be financial sinkholes, and its all too easy not to discover them until you’ve been swallowed up.

For yachts, the operating costs are about 10% of the purchase price. So a $24 million, 150-foot yacht will cost you about $2.5 million a year to run.

The calculations are a little more complicated for mansions. But thanks to the good folks at the magazine Celeb Staff (yes, its a real magazine, one devoted to the staffing woes of the rich), we now have a rough guide to what it costs to staff mansions of various sizes.

According to the magazine, a 3,000 to 5,000 square foot mansion — categorized as “small”; in a major city will cost a little over $100,000 a year to staff, if the owner has children. That pays for two nannies ($750 a week each), a weekend nanny ($400 per weekend) and a housekeeper/cook at $750 per week.

So-called “medium” estates, which run 5,000 to 10,000 square feet, might cost about $650,000 a year to staff. To keep these estates spic and span, much more elbow grease is needed, which requires more staff,” the magazine advises. That means nannies and childcare ($98,000), a household manager ($95,000) to run the day-to-day affairs of the home, an executive housekeeper ($65,000), regular housekeepers, a personal assistant, and perhaps a chauffeur. That adds up to staffing costs of $436,000 a year; operational costs will take you the rest of the way to $650,000 annum.

A “large” estate, at 10,000 to 30,000 square feet, can run you more than $1.5 million a year. That includes an estate manager (which the magazine says is mandatory) at $100,000, three housekeepers, a laundress, head chef, cook, at least five security personnel and a whole lot more. Add in other operational costs and the yearly price tag could run as high as $2 million.

A top-of-the-line mansion over 30,000 square feet ; requires a whole army of staff and annual dues of $3 million or more. The magazine cites one such house with 30 housekeepers, 12 laundresses, 10 butlers, 20 full-time security personnel and a lot more. The security bill alone was $1.5 million, the magazine says.

But, the magazine says, its all worth it: Employers will definitely reap the benefits of a well-organized estate and keep their operational costs down to a minimum.-R Frank

Cramer: Self-Promoter, Entertainer, Or Savvy Market Insider? Readers Respond

Posted by Tiernan Ray Aug 22nd

My colleague Bill Alpert’s story on Jim Cramer in this past weekend’s Barron’s print magazine has generated quite a passle of reader letters, which you may enjoy checking out.

There’s also been discussion of Bill’s article on BloggingStocks and on Theflyonthewall. The theme that runs through the variety of responses, both those agreeing with Bill and those taking him to task, is that Cramer’s insights about the market and about the nature of stock investors, can be useful, regardless of the acumen of his stock picks.

Zac Bissonnette on BloggingStocks, for example, offers the following:

“I would never dream of buying any stock based on Cramer’s recommendation, and here’s why: Warren Buffett, one of the greatest investors in the world ever, has often said that he can only find a few good investment ideas per year. All you need is a few in your life to do well. How about Jim Cramer? He gives a few stock picks per show, five days a week, and then gives dozens more buy and sell calls on the Lightning Round each week.”

On Theflyonthewall, Eric Buscemi writes,

“You mean a single person can’t consistently churn out dozens of winners each night, five nights a week, in addition to even more picks that he makes on other CNBC segments?”

At any rate, the original article by Bill is engaging and a worthwhile read.

Stocks staged a positive reversal Monday, wiping out earlier losses and ending the day with mixed results.

The Dow industrials hit a low at about 1:25 p.m. EDT, off 0.7%. A late-day rebound carried the Dow to a 0.3% gain. The Nasdaq and NYSE composite both rose 0.1%. The S&P 500 pared most of its losses, but still gave up a fraction of a point for the day.

Volume slumped across the board. Nasdaq trading fell 31% compared with Friday's level. NYSE turnover ebbed 38%.

The session's relatively quiet action marked a departure from the volatile trading in recent weeks. Stocks started falling hard in late July, ending a four-month rally.

A follow-through day two weeks ago by the blue-chip Dow industrial average seemed to signal a market upturn. But the major indexes quickly turned tail again, tacking on more sharp losses.

On Thursday, stocks flashed a big price swing. But this time, the action was more encouraging as the market erased huge losses. A big price advance ensued Friday.

Monday marked Day 3 of a rally attempt, led by the S&P 500. That means that starting Tuesday, a major price gain in higher volume than the previous session would signal a fresh follow-through.

Just remember that while every major market advance has started with a follow-through, not every follow-through triggers a big bull run. The Dow surged 2.2% in heavy volume Aug. 6, confirming a market rally. But a new uptrend never materialized, as the broad gauges quickly turned tail and undercut their recent lows.

With that said, the past three sessions have offered at least some cause for optimism. The Dow and Nasdaq have bounced back above their 200-day moving averages. Big-money institutional investors will sometimes nab shares around that support level, following a market pullback or correction.

According to Barrons, "Then there's the day-after-pop phenomenon. Our analysis of Cramer's picks over the past two years, from YourMoneyWatch.com, showed that, on average, the stocks jumped 2% the day after he mentioned them. From there, they usually moved sideways or down for the following 30 trading days (see chart). This offered an opportunity to make money -- 5% to 30% a year -- by selling Cramer's selections short."

These two terms are important to understand the difference especially for traders. An incorrect interpretation of the current trend, can be a very costly mistake for traders.

Counter trends are short term changes in direction of the current trend, but will only end up bringing in more sellers or buyers sending the index back into its defined trend.

Trend Reversals are a complete change of direction from the current trend.

Now the question right now is, are we in an up trend or down trend, and is the current Fed action causing a Counter Trend or a Trend Reversal?

Lets take a look at the first question, what direction are we going, up or down? Historically, markets change direction 90 to 135 calendar days from a previous Trend Reversal Low.

Looking at this chart, and based on stock market trading for the last 100 years, I would say its ok to declare a bear campaign is in full swing.

Now comes the tricky part. When we say “bear campaign”, I am not referring to a bear market. Just simply stating that those who are attempting to get the market to move lower, are dictating the action right now, having the upper hand.

Again, looking at our 100 year trading history, the 1st leg down in a “bear market” is 20 to 25%. In DOW numbers, this would put the DOW down to 11,200 before hitting the 1st leg bottom.

Keep in mind, this move would not be straight down, which is too obvious. We would have “Counter Trends” in the down move.

This brings me back to the second part of our question. Is the Fed action, a “Counter Trend” or a “Trend Reversal”?

Lets go back to our history. Bull market campaigns last typically 4 to 5 years. Everyone knows we bottomed in 2003, so we are long in the bull campaign and right in the latter stages of the 4th year. The previous bear market, was the worst one in history, seeing the NASDAQ for example decline almost 90%.

Given the current world economic expansion, 2008 Olympics, Presidential year, and a probably reaccelerating US economy, together with fairly value or even cheap stock valuations, I am in the DOW 15,000 camp, thus "Trend Reversal".

Only time will tell for sure, but if over the next few weeks we find ourselves lower then DOW 12,500, we have to assume a full fledged bear market and anticipate DOW 11,000 in the near future.

Its important that we are not investing against the trend. This is why I have not taken on any new trades for a while, until this question can be answered for sure.—Jon

I didn’t remove any stocks from our list this week. Given the fact that almost every stock in the market was moving lower, we are not able to determine at this time which stocks have lost their mojo, verses which ones are just moving down with the market.

Stocks added this week are;

As always, best to research these stock to be familiar with them.—Jon

Have not said much this last week, but there was nothing to say. I still believe the DOW will close at 15,000 by Christmas, world growth has not changed, companies finances are doing great, the market value compared to its growth rate is cheap, in short, nothing has changed.

We are in historically bad months for momentum trading, August and September, and this year has turned out to be no different.

Next year the market will worry about something different in these months, but the results will be the same, 6-10% correction, and then all of the sudden, were not worried anymore.

We have 10 more stocks to add into our portfolio to get us to full capacity. I am going after the bargain basement book value plays first.—Jon

Attached you will find a chart of the Metal Production Industry with two lines on it. The top line is the value of the combined stocks in the industry. The value is figured by future growth, dividends, and other traditional methods.

The price is the current cumulative price of all the stocks in the industry divided by the total number of stocks.

Now, I am looking at this to try and see where our trade BOOM is heading. We know that BOOM has already raised forecast for the year, but 50% of a stocks movement is related to the industry it belongs in.

If BOOM is doing well, but the other companies are not, big money players are unlikely to put much money to work in the sector.

However in this case, we see the metal stocks have not kept pace with the growth in their businesses. Some of the top players in this space are;

I think this is a sector that has not realized its full value for share holders, and has many up days to go.—Jon

Wal Mart is continuing its overseas focus where their biggest opportunity to return to the glory days of high growth lie. Its hard to grow a 300 billion dollar company at a rate fast enough to consider it a growth play by momentum investors.

However, analyst Deborah Weinswig of Citigroup says of Wal Marts overseas growth plans, “International sales will expand to 30 percent of Wal-Mart's total in 2010, up from 22 percent last year. The expansion may help end the seven-year stock slump for Bentonville, Arkansas-based Wal-Mart. The shares will rise 29 percent in the next 12 months, says Weinswig. She is top-ranked by Institutional Investor and rates the stock ``buy.''

Take a look at the attached picture of a Wal Mart grocery display in China. China considers chicken feet a delicacy. Wal Mart however while adapting to consumers taste in the markets they are expanding to, are also quickly becoming the biggest distributor of American goods overseas.

Wal-Mart sends such iconic American brands as chocolate kisses from Pennsylvania-based Hershey Co., and Head & Shoulders shampoo from Procter & Gamble Co. of Cincinnati.

While Wal Mart gets a lot of bad press for labor issues here in the US and abroad, there is not question their marketing power and money muscle is helping to Americanize the rest of world, thus building the USA brand and with it, continued employment for Americans.

I think we will see these shares top $70 over the next 24 months.—Jon

In Globally Contained Liquidity Crunch I pointed out that the Fed was providing temporary loans (as repos) not capital to the markets. While true I missed something. What I missed involves the collateral the Fed is willing to take for those short term loans.

Mr. Practical was right there with The Fed's Path.

It has now become obvious to me the path of the Fed. No, Mr. Bernanke is not going to be tough on markets. He is not going to give the medicine that is needed. He has chosen his path, the seeds of which were planted in his November 2002 speech about monetization (dropping dollars from helicopters).

The Fed today injected $65 bln of repos, extending credit to banks to shore up their liquidity needs. Normally the Fed only accepts treasuries as collateral. But the banks no longer have enough treasuries, or they don't want to sell their "safe" assets in exchange for credit. But they do have lots of risky assets like CDOs that everyone wants to get rid of. The Fed bent over and today announced they will take those "off their hands".

This is alchemy finance in its truest form. All it will do is stave off the inevitable and make it worse when it happens.

Read that last sentence again. This is the same mistake Japan made.

In 1980 it took $1 in debt to add $1 to the GDP. Today it takes closer to $7 or $8 in debt to add $1 to GDP and that of course presumes one believes today's GDP figures.

The problem with such addiction is that stronger and stronger doses eventually kills the patient. This is where we are today. Some junkies (consumers) have finally realized this on their own accord, most far too late to do any good, as debt has already hollowed out their livelihood just as heroin would have done. Some dealers (banks and brokerage houses) have belatedly realized the same thing and have stopped extending credit to credit junkies. A violent withdrawal is now underway. An enabling Fed is attempting to halt this "credit withdrawal" but as Succo suggests, the Fed is fighting a losing battle.

In looking at what sectors were moving up the most last week, we see data that was not expected. Here is the top performing sectors last week:

Bottom Sectors are:

On the surface this tells me not that a bull market is beginning in Financial companies, but points to a bottom in the shares as most of them are trading well below book value.

What we saw Friday in shares of BOOM and other stocks at 52wk highs, was profit taking by institutional money to cover redemptions.

In other words they were forced to sell their favorite stocks to raise enough cash to cover the weak hands that are jumping out and wanting their money.

These are things we see at the end of a bear campaign, not the beginning. I added at least 25 stocks to our watch list today, which would not have been possible if we were in a bear market.

Dow 15,000 by Christmas, bank on it.—Jon

WuXi PharmaTech Inc.

Shanghai, China

(86-21) 5046-1111

wuxipharmatech.com

Lead underwriters:

Credit Suisse and JPMorgan

Offering price: $11-$13

Expected date: week of Aug. 6

Ticker: WX

THE BUZZ

Start talking to any executive in big pharma, and soon enough you'll hear complaints about how much it costs to develop a drug. It's no lie: Counting all the work and all the failures before a successful candidate comes out, developing a single drug can easily cost $1 billion.

To cut expenses, drug makers are doing what everyone else is doing: offshoring. According to Kalorama Information, about a third of drug research and development spending is now outsourced, up from 10% in 1997. A drug firm can pull especially big savings if it goes to a place like China, where a scientist can be had for as little as a tenth of the salary of a U.S. scientist.

Enter WuXi PharmaTech. The company was formed at the turn of the century by "returnees" — Chinese who left for education and work in the West and then came back to go into business. Their fluency with Western business practices has helped turn WuXi into the biggest contract research provider based in China.

WuXi was profitable almost right out of the box and has been enjoying annual revenue growth upwards of 80%.

THE COMPANY

WuXi was founded in 2000. At first, it offered services at the earliest stage of discovery — finding and developing promising chemicals. As time went on, it added services to help analyze and develop drugs as well as labs to identify biological as well as chemical substances. In 2003, it added drug manufacturing to its offerings.

The company now has 70 customers, all American, including nine of the 10 largest drug makers. Last year, the leading clients were Pfizer (PFE) and Merck, (MRK) but this year it launched a major deal with Vertex Pharmaceuticals. (VRTX) Vertex provided almost 25% of revenue in the first quarter, and WuXi is expanding one of its facilities to meet Vertex's needs. Some of the IPO proceeds will go toward the expansion.

The Vertex deal is boosting WuXi's manufacturing segment, which was already growing ahead of the R&D services division. In the first quarter, manufacturing provided more than a third of revenue vs. less than 15% two years ago.

The R&D is paid for either by fee-for-service or full-time equivalent contracts. The latter pays a fixed amount to do a particular project, regardless of how much labor the scientists actually put in. This puts pressure on margins, so WuXi plans to reduce this type of contract in favor of fee-for-service.

RISKS/CHALLENGES

The Vertex deal is a major growth opportunity, but also makes WuXi vulnerable. Not only does it hang much of WuXi's business on one client, it hangs it on one drug that is now in phase-two development. If the drug candidate fails, it will harm WuXi as well as Vertex.

WuXi leads the market in China, but it competes on a global scale. It competes both with other contract research and manufacturing firms and with the in-house divisions of drug makers that perform these tasks. WuXi is still small by comparison.

The company needs to hire highly educated and skilled workers. More than 40% of current employees hold post-graduate degrees. WuXi plans to expand its head count dramatically in the near future, so it will be challenging to find and pay for enough of them.

The growth in the manufacturing segment has helped revenue but has also pushed down margins, since manufacturing generally has lower margins than R&D work. An increase in China's value-added tax took effect on July 1, which is further pressing margins in this field.

WuXi retains its customers not only by quality of service but by protecting their intellectual property. It has a number of security measures in place for this, but China's is a notoriously porous environment for IP.

Like most Chinese start-ups, WuXi did not have internal financial controls up to U.S. regulatory standards when it decided to go public. In the last year, it has hired new personnel and has worked to correct this but it has not yet finished the process.

THE RESULTS

Net revenue has climbed steeply the last five years, doubling last year to $69.9 million. The first quarter of this year accelerated the trend as revenue surged 165% to $33.8 million.

Net income jumped sevenfold to $6 million, not counting pre-IPO stock compensation.

USE OF PROCEEDS

WuXi expects to raise $107.8 million from the sale of 13.2 million shares, or $129.9 million if the underwriters exercise their options. The firm plans to use $40 million to expand its Jingsu facility, another $40 million to build a new center in Suzhou, and the rest for general corporate purposes.

THE MANAGEMENT

Ge Li
Chief executive and chairman

Co-founder and CEO since the company's inception. He also co-founded Pharmacopeia. (PCOP) Holds a Ph.D. in organic chemistry from Columbia University.

Xiaozhong Liu
Executive vice president and director

Co-founded the company and has been EVP since 2001, in charge of WuXi's project and engineering departments. He holds an EMBA from China Europe International Business School.

Tao Lin
Vice president of internal operations

Another co-founder, he attained his current position in 2002. Previously he held managerial positions at Builders Products International and Zhuhai King Strengthen Trading Company. He holds a bachelor's degree in engineering from Jiangnan University.

A few months ago, I wrote about the proliferation of luxury-stock indexes.

The idea is simple: The rich are doing better financially than the rest of the population, so they’ll have the biggest buying power in the coming years. It seems to follow that the companies that sell to the rich (along with their publicly traded stocks) will do better than those that sell to the mass market.

Hence, financial-services firms and exchanges are launching a raft of new “luxury indexes” pegged to the notion that a rising tide will continue to lift all yachts. The trouble with many of these indexes is that in order to find enough stocks to put into the basket, firms have stretched the definition of luxury. As I mentioned in my April column, Merrill Lynch’s index includes sneaker makers Nike and Adidas, along with Gap and Fossil watches. Not to be elitist, but in an age in which high-end watches start at $10,000, a $100 watch isn’t luxury.

Now the folks at Robb Report, purveyor of all things conspicuous, have launched a luxury index of their own. Most of the companies are consumer stocks. Fashion houses Burberry, Christian Dior, Coach, Shiseido, and Tod’s are included. Financial stocks such as Goldman Sachs, Julius Baer and UBS are there, representing firms that manage rich people’s money. Jet makers Dassault and Embraer made the list, along with yacht purveyor Rodriguez Group.

Of course, betting on any big sector — especially one as loosely defined as “luxury” — has obvious risks. Not all of the companies may be well-managed or profitable. And not all of them may benefit from high-end spending. What’s more, if liquidity dries up, even the rich will take a tumble, since they’re leveraged like everybody else.

But the Robb list is a pretty good measure of what’s happening in the luxury space. And the economy of the rich, also known as the plutonomy, seems to be holding up well, despite cracks in the rest of the economy. High-end home prices, for instance, are holding up better than the rest of the housing market. Inflation for the things rich people buy is now running at twice the rate of the overall consumer price index — showing that pricing power is strongest in the luxury market.

So even if you’re not rich, investing in companies that sell to the rich may be a way to benefit from the wealth boom.

I know this might not be the time anyone wants to hear a positive spin on things, but I have been here many times before and just want to share my observation of things.

I wont talk about the actual problems the market is worrying about, for us as traders they don’t matter.

We trade not the problems but the reaction to the problems. The problems are never important to us, because we make money, no mater what, somewhere, somehow.

This is why I always say we don’t get bullish or bearish, those are emotions and emotions in this game are a killer.

The facts as of right now are fantastic earnings and raising of guidance for companies not related to debt financing. Second, earnings growth for these companies far exceeds their current p/e valuations, and historical valuations.

Last, the only trump card the bears can come up with is these sub prime announcements.

I can tell you for a fact having been in this game for a while, at some point, that ammo will no longer have an affect like we see today.

Folks will have priced in all the possibilities of these finance problems in their minds, and soon will no longer react to these events.

Hang in there, this will pass soon enough.—Jon

Ceragon Networks (NasdaqGM: CRNT - News), based out of Israel, have found their way to profitability with impressive and accelerating growth. The company manufactures wireless networking systems and antennas for mobile infrastructure.

They are working on major WiMax projects (think of a wireless network at your home or business except that it covers an entire city) and working to help increase the wireless bandwidth limits for PCs and cellphones so that it is possible to stream voice, video and data at high speeds. This "triple play" and the increasing need for massive amounts of bandwidth really starting to explode bodes very well for the future prospects of this company.

The company should also be seeing a little more street recognition as it made the number 1 spot in the IBD this weekend. CRNT just reported another great quarter at the end of July, and the stock price passed the $15 threshold. That should help to support the stock in this tough market and Telecom Wireless Equipment Sector is also a strong one.

This stock has come a long way this year - up some 247% already - and the company is not forecasting to continue trouncing their EPS year over year by 100 plus percent. They did, however, raise their revenue estimates for this year from plus 30% to plus 40%. There is also the possible deal with Sprint (NYSE: S - News) now that they are working with ClearWire (NasdaqGS: CLWR - News) on some major WiMax projects. Ceragon Networks and ClearWire have worked together before, so Ceragon may be able to benefit from this and if so could have a significant impact on their numbers.

The company should also benefit from not having to pay taxes throughout the year and next year or up to 70 M.

Another note that I particularly liked coming from the management of Ceragon Networks when asked about the growth rates in the U.S. increasing as a percentage of business:

We plan that the U.S. market will continue to grow - percentage wise it's tough when Asia is growing so fast, it's taking the pie from the others.

That's the kind of tough percentage growth that I love to hear about.

Disclosure: Author is long CRNT

Headline, “ENGlobal Corporation Announces Record Quarterly Results Tuesday August 7, 8:05 am ET .

William A. Coskey, P.E., ENGlobal's Chairman and Chief Executive Officer, said, "We are pleased to report another quarter of improved financial performance for the Company, with solid top line growth along with an increased level of operating profit margin. ENGlobal has continued to benefit from an upward trend in cost-plus billable work in its engineering segment that resulted in revenue and net income setting new quarterly records. In summary, many measures undertaken to improve performance during the first half of 2007 have proven to be successful, and we expect that the near term trends in our business will continue to be positive."

We have to give our High Risk plays time to work out. Patience is a must part of this game to become successful at it. As long as the story is good, stay long. When we get a double in these shares or any of our holdings, we sell half and let the rest run.

That is how to build a long term, multi-million dollar portfolio.-Jon

OME, "DA Davidson upgrades Omega Protein Corp ( OME.NYS ) from "neutral" to "buy," while raising his estimates for the company. The target price has been raised from $10 to $13. In a research note published yesterday, the analyst mentions that the company has reported its 2Q EPS ahead of the estimates.

Omega Protein’s gross margins grew significantly to 32.6%, ahead of the estimates, and revenues grew by 11.3% to $37.1 million in the quarter. The company is likely to deliver significant sales in 3Q, driven by a sequential improvement in prices and volumes, the analyst says. The EPS estimate for 2007 has been raised from $0.45 to $0.55."

Good for a 15% return today, go OME!—Jon

As we all know the FED is meeting this week. Fed futures is pricing in only a 5% chance the FED will cut rates. We also know the problems in the housing market, I have posted the numbers for some top cities around the country.

So, this brings us to the fact that what we “know” is priced into the home builders stocks, that’s how the stock market works.

In fact, the stocks are now priced for what we “don’t know”, which is where the opportunity for short term and long term gain arises.

Now, our trading system doesn’t allow for the type of speculation I am talking about. I will not be adding these stocks to our stock to consider portfolios, mostly for your protection.

However, I wouldn’t be telling you everything if I left out the fact that I will be playing the Home Builders this week, in anticipation of a FED rate cut or shift in policy which could spark a short covering rally.

Again, if the FED doesn’t cut rates, with only a 5% expectation that they will, shouldn’t affect the stocks, because its not priced in. However, if they did cut rates, watch out!

Many of these stocks are trading as if they are already bankrupt, which is not the case. In fact, some of them have done a good job of selling under performing properties and actual increasing revenue.

The housing market is the single greatest investment over the next 10 years. It is equal to the investment in oil back in 1997, when oil was $8 a barrel and the stocks were all under $10.

Here is a list of home builders and their book value:

I could go on, but just grabbed a few names to illustrate where we sit. Probably some on this short list, will not make it, so if you decide to play in this pond right now, do your research.

Only invest money that you can afford to lose.-Jon

HLF reports earnings on Monday. Stock is up 27% this year and has weathered the market downturn very well, so far.

HLF has beat analyst estimates the last two quarters, and is likely to do so again. Checking the average street investor views on the stock, they are 65% negative, which is great. This points to low expectations for the stock, making it easier to exceed.

The stock trades at 21xs compared to 29xs for its peer group. Revenue growth came in at 11%, compared to industry average of 1%.

Currently the stock has held the zero number $40, and is poised to move higher on the heels of a nice earnings report.

We value the shares north of $60 per share.—Jon

Headline, “House Approves Taxes on Oil Companies Sunday August 5, 3:32 am ET”

We need to keep an eye on our oil trades, not on Monday, but as the trading week progresses. Some money has been coming off the table in some areas of oil, and this news might be the panic button that shakes out the weak hands or could be the start of a long down turn in oil.

I will be watching the underlying commodity price to see if it can stay above $70.—Jon

The Iomega eGo portable hard drive sports a stylish look and compact size. It's currently offered in just one capacity--160GB--but it's available in two colors, red and silver.

The look and feel of this drive is impressive. The anodized-aluminum-and-polished-steel case resembles a flask and we find ourselves wanting to handle it constantly. But looks aren't everything, and unfortunately, this drive proved to be a slow writer (its read times were fine, however).

If you're looking for a stylish, flashy drive and don't mind slow write speeds, this $130 drive is a great choice. But if you can't do without fast write speeds, check out the Seagate FreeAgent Go (which is stylish in its own right).

The annual growth rate in prices of existing single family homes across the United States continued to decline for the 18th consecutive month in May, according to the Standard & Poor’s/Case-Shiller Home Price Index.

Overall, the top 20 cities in the index declined 2.8 percent year-over-year, although five of the cities showed increases.

Cities measured by the index where values have increased in the 12 months are Atlanta, Charlotte, Dallas, Portland, and Seattle. Detroit continues to lead the metro areas in growth rate declines, down 11.1 percent from a year ago.

Here are the top 20 metropolitan areas and the percent of change in their real estate values over the last year:

• Atlanta: 1.7 percent
• Boston: -4.3 percent
• Charlotte: 7 percent
• Chicago: -0.6 percent
• Cleveland: -2.8 percent
• Dallas: 1.8 percent
• Denver: -1.4 percent
• Detroit: -11.1 percent
• Las Vegas: -4.1 percent
• Los Angeles: -3.3 percent
• Miami: -3.3 percent
• Minneapolis: -3.5 percent
• New York: -2.3 percent
• Phoenix: -5.5 percent
• Portland: 5.7 percent
• San Diego: -7 percent
• San Francisco: -3.4 percent
• Seattle: 9.1 percent
• Tampa: -6.7 percent
• Washington, D.C.: -6.3 percent

Telecom wireless is a hot industry group right now. Here are the top 5 companies in that sector as rated by Investors Business Daily:

The reason I point this out to you, is because of the #3 stock on the list, Ceragon Networks (CRNT). Most have heard of the other 4 companies, but if you were a member of Trademechanic on May 10th, then you would have heard about CRNT as well.

While this stock is still unknown by the average person on the street and not followed by Wall Street, we added it to our High Risk list on May 10th at $7.80 per share.

If one wants to get rich at this game, use the High Risk list, there you will find big future winners long before anyone on Wall Street is talking about them.—Jon

I’ve have reviewed the industry sector charts for BOOM and HOS as 50% of a stocks movement is the industry it belongs to.

Both the charts are not bearish, nor bullish, more neutral.

Considering this, and given the bullishness of the two stocks, we will stay long for now.—Jon

Don't be a hero and don't kid yourself into thinking it is possible to continue to roll in and out everyday catching every up move and missing every down move.

I say if your trying to swing trade right now you are;

Now lets look at the reason why. The next chart shows the huge increase in volatility and the fact that more stocks are hitting 52 week lows, verses hitting 52 week highs.

Our stocks are sitting just fine, its what I like to call parking trading. Better to hang on, let them bounce around until the coast is clear.--Jon

There’s a growing chorus of rich people making a surprising demand: Raise our taxes!

Warren Buffett sounded off last month at a fundraiser for Hillary Clinton, saying the rich should pay a more-fair share of taxes. He said that he surveyed his employees at Berkshire headquarters and found that all of them down to the secretaries paid a higher share of their income to taxes in 2006 than he did. And Mr. Buffett is the second-richest man in America. He told the group he uses no tax shelters, employs no tax planner and pays a mere 17.7%.

Now comes an even more passionate argument from Bill Gross, the billionaire bond king at Pimco. In a post on the Pimco site, Mr. Gross says today,s rich didn’t get rich simply through pluck and smarts they got there by taking risks with other people’s money and through low taxes. The rich are sailing off into their own world of privilege because it is in fact society’s wind and its current willingness to nurture the rich that fills their sails.

Mr. Gross acknowledges that American capitalism and free markets have brought great benefits to society: They have fostered and encouraged innovation and globalization which are the fundamental building blocks of wealth. (And he should know, having made a bundle when Pimco was sold to Allianz.) But today’s rich, he says, have gone too far.

Mr. Gross writes that now is the time, long overdue in fact, to admit that for the rich, for the mega-rich of this country, that enough is never enough, and it is therefore incumbent upon government to rectify today’s imbalances.

But what about philanthropy, Bill? And all the good things the rich do with their money, such as employing other people?

Here too, Mr. Gross is sick of the rich-guy rhetoric.

Trust funds for the kids, inheritances for the grandkids, multiple vacation homes, private planes, multi-million dollar birthday bashes and ego-rich donations to local art museums and concert halls are but a few of the ways that rich people waste money and I must admit, I am guilty of at least one of these on this admittedly short list of sins; he writes. I have, however, avoided the last one. When millions of people are dying from AIDS and malaria in Africa, it is hard to justify the umpteenth society gala held for the benefit of a performing arts center or an art museum. A thirty million dollar gift for a concert hall is not philanthropy, it is a Napoleonic coronation.

Of course, Bill Gates and other, less well-known philanthropists are trying to fight AIDS and malaria in Africa. And Mr. Gross himself has given millions to philanthropic causes, including $23 million to Duke.

And there are plenty of rich people lobbying to keep their taxes right where they are. Today’s Journal has a fascinating article by Brody Mullins and Sarah Lueck about how the Democrats are losing interest in raising taxes for private-equity and hedge-fund billionaires. Maybe it has something to do with the Private Equity Council giving a couple of million dollars to Democratic candidates.

Yet I think comments like Mr. Gross’s will become increasingly common as the rich realize that even in America, acceptable wealth may have its limits.

Virtusa Corp.

Westborough, Mass.

(508) 389-7300

virtusa.com

Lead underwriter: JPMorgan

Offering price: $14-$16

Expected date: week of July 30

Ticker: VRTU

THE BUZZ

Second-quarter results are in for most offshore technology consultants, such as Infosys, (INFY) Cognizant (CTSH) and Wipro. (WIT) Despite some foreign-exchange worries, most analysts like what they see.

"Demand trends for offshore IT work are still quite good," said Joseph Vafi, who covers the sector for Jefferies & Co. "Every (company) showed nice sequential growth."

That could buoy the IPO of Virtusa, a U.S.-based company which provides 80% of its services from India.

Virtusa is tiny compared to the industry's leaders, but it's gaining fast. Revenue has grown at a compound annual rate of 50% over the last five years, thanks to large client wins such as British Telecom (BT) and Aetna. (AET)

In the road show, Chief Executive Kris Canekeratne said the company is leading the way as the offshore industry increasingly offers value over simple cost-saving. Vafi agrees that that's essential to competing in today's environment.

"I don't believe that, industry-wide, we would have witnessed such growth rates if (offshoring) were purely a cost-cutting play," he said.

THE COMPANY

The company was founded in 1996 as Technology Providers. It adopted the name Virtusa in 2002.

Most of the client base is in communications, finance or technology. About three-quarters are in North America and the rest hail from Europe. Notable customers include IBM, (IBM) ING Group, (ING) JPMorgan Chase (JPM) and Pegasystems. (PEGA)

Virtusa provides a range of services covering all phases of the planning, implementation and management of a client's IT systems. About 20% of the services are provided on-site through the Massachusetts and British offices, with the rest delivered from the firm's centers in India and Sri Lanka. Currently, Virtusa leases all its Asian offices, but funds from the IPO will go toward building its own center in a free-enterprise zone in Hyderabad, India.

In the road show, Canekeratne emphasized the firm's "platforming" approach as a key differentiator from its rivals. Instead of developing totally different systems for different markets or business segments, Virtusa uses a single proprietary platform across the board that it can adapt to different needs.

This flexibility helps the company add more services once it gets hold of a client. This in turn helps keep a high rate of retention. According to the prospectus, some 84% of current revenue comes from clients who've been on board for at least two years.

RISKS/CHALLENGES

Despite strong industry fundamentals, analysts worry about the growing value of the rupee, India's currency. That caused Infosys, for instance, to trim its outlook for the year.

"Most of these companies get paid in dollars or pounds or euros, but they pay their programmers in rupees," said Vafi. "The appreciation of the rupee has affected margins."

Add to that the fact that the industry's growth also has driven up Indian programmers' salaries in absolute terms. This has encouraged a fairly high rate of attrition as well.

Nearly half of Virtusa's revenue comes from its top five clients. In the most recent year, 23% came from British Telecom alone. The firm will need to diversify to shield itself from sudden client losses.

Some of Virtusa's rivals are very, very big. On top of those already mentioned, the firm goes head to head with Accenture, (ACN) Electronic Data Systems, (EDS) BearingPoint (BE) and its own client, IBM.

Virtusa has made liberal use of stock options for its employees. The company warns that it may have been required to register as a reporting company as early as 2003, although it did not actually do so until it filed to go public. After researching the subject, the firm cut its options program in July 2005. Still, if the Securities and Exchange Commission decides to come down on it, this could bring fines and penalties.

THE RESULTS

Revenue jumped 69% in the fiscal year ended March 31, reaching $124.7 million. Net income multiplied nearly 10 times to $1.03 a share.

USE OF PROCEEDS

Virtusa is selling a modest 4.4 million shares, which should net the firm about $57 million. The company will sink $30 million into the Hyderabad project and the rest into general corporate uses.

THE MANAGEMENT

Krishan Canekeratne
Chief executive and chairman

Co-founded the company and has been chairman since its inception. He served as CEO for the first year of Virtusa's existence, but then ceded leadership when he founded eDocs, now part of Oracle. (ORCL) He took up the reins at Virtusa again in 2000. Previously, he also founded INSCI. He holds a B.S. in computer science from Syracuse University.

Danford Smith
President and chief operating officer

Joined in 2004 from Cognizant, where he was a general manager. He was a partner at CSC Consulting from 1990 to 1998. Holds an M.B.A. from Rutgers University.

Thomas Holler
Executive vice president and chief financial officer

Joined in 2001 from Cerulean Technology, now part of Aether Systems. Holds an M.B.A. from Northeastern University.