Dividends
STOCKS
THE MARKETS
Analyst Follies
Wall Street analysts may be held in the sort of low esteem usually reserved for telemarketers. But that doesn't mean they can't be useful. So says a new book, Ahead of the Market (HarperBusiness, $26.95), by Mitch Zacks of Zacks Investment Management in Chicago, a veteran tracker of analysts' earnings estimates.
Zacks's book is full of ways to exploit the analysts' strengths and foibles. One of the least-known is to look with a skeptical eye not just at quarterly or annual earnings estimates but also at long-term growth forecasts. Over the 15 years ended in September, 2002, companies forecast to have low rates of long-term earnings growth returned 11.4% a year, vs. 9% for the Standard & Poor's 500-stock index. Companies forecast to show high rates of profit growth lost an annual average of 0.6%. "No one, not even the most capable analyst, knows what is going to happen with a company three, let alone five, years into the future," Zacks writes. Stay away, he says, from any stock that analysts think will see profits grow at more than 30% a year.
By Robert Barker
FOOD
Downturn Delight
Turns out pregnancy isn't the only thing that piques a penchant for pickles. So does a recession. That's one of the findings of a study by agricultural economist Azzeddine Azzam of the University of Nebraska at Lincoln. What do people consume more of in good times? Booze and ice cream.
TRAVEL
The Cost of Legroom
Short on frequent-flier miles for that first-class upgrade? US Airways' (U
) E-Upgrades program lets you use cash instead. Any Dividend Miles member can pay $50 (for each 500 miles of travel) and leave that cramped seat in back for a roomy perch up front. Just remember: The longer the trip, the more you'll pay for this privilege. You can also trade in 10,000 miles for the equivalent of six $50 upgrade certificates.
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Copyright 2003, by The McGraw-Hill Companies Inc. All rights reserved.
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