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"It is an ignominious end to a glorious career." — An unnamed analyst on BP CEO John Browne's decision to step down after British courts ruled that the press could publish details about his past relationship with a man, as reported by Reuters. Forget the headlines shouting about Dow 13,000 and beyond. Quietly, a much more meaningful milestone is approaching. The Standard & Poor's (MHP
) 500-stock index, the single most significant measure of the U.S. stock market, is within a whisker—just 2%—of its previous record, hit during the heady days of early 2000. When it exceeds that all-time high of 1527.46, investors will finally be back where they were seven years ago, before the worst bear market since the Great Depression.
"Many investors don't feel good about their portfolios even when the Dow is over 13,000," says Jim Stack, president of InvesTech Research in Whitefish, Mont. "That's because the broader market index is just now getting back to its previous peak." (S&P, like BusinessWeek, is a unit of The McGraw-Hill Companies (MHP
For the Dow, which is made up of big, well-established companies, the tech stock bubble wasn't as big a deal on the way up. Or down. The Dow peaked in January, 2000, while the S&P, which included many more tech and telecom stocks, kept running up for two months more. When gravity kicked in, the Dow fell 38% from its peak. The S&P? It lost 49% of its value.
The Dow is the mother of all market measures, dating back to 1896, but the S&P is the main show. It represents about 75% of the value of the U.S. market. Its diverse 500 stocks are worth about $13.6 trillion, three times more than the Dow's 30. The S&P is the real measure of the market's health, says money manager Manny Weintraub, president of Integre Advisors.
InvesTech's Stack says that seeing the S&P climb back above its March, 2000, level should bring closure for many investors—marking clearly the stock market's recovery from one of its worst bouts of excess.
Of course, investors who went whole hog on tech stocks continue to hurt. The tech-filled NASDAQ stock index still shows a 49% loss from its 2000 peak. For some, climbing the corporate ladder brings on vertigo. In a recent survey, nearly one in five managers ranked getting a promotion as their most challenging life event. One big reason, say researchers at Development Dimensions International, which conducted the poll of 785 business leaders, is that 40% of managers get little or no support as they enter their new jobs, according to the survey. "It's sink or swim," says Matthew Paese, vice-president at the Bridgeville (Pa.)-based human resources consulting firm. Even more managers may express such fears in the near future, says Paese, as many baby boomers retire and leave an even bigger mentoring void for executives on the move.
The business leaders surveyed by DDI ranged from line supervisory staff to those in executive suites, including 400 managers outside the U.S. Promotion was ranked as "most challenging" by 19% of respondents, followed by bereavement (15%), divorce (11%), moving (10%), and managing teenage children (9%). Could those droll Mac-vs.-PC TV ads be working well enough to push Apple's (AAPL
) computer sales way up? In the first three months of 2007, Mac sales jumped 36%, to 1.52 million units. That's more than three times the industry's growth average of 11% during what is usually the slowest sales period of the year.
"I don't know that you can tie it to one thing," says Richard Shim, senior research analyst at market intelligence firm IDC. Apple is benefiting from its switch last year from IBM PowerPC chips to brawny Intel (INTC
)-based chips, he notes, a change that has given MacBook laptops and iMac desktops the processing power of Windows-based rivals. It's possible, too, that glowing reviews of the new iPod and iPhone are creating a halo effect. Still, Shim says, the "Hello, I'm a Mac" commercials—which poke fun at temperamental PCs and stress the Mac's ease of use—are a big factor. "It's a really great ad campaign that has opened a lot of people's eyes," he says.Click here to participate in a debate on Steve Jobs. As the IRS digs into the nation's 2006 tax returns in the weeks after the filing deadline, they may be encountering fewer of the creative excuses some taxpayers use to avoid paying up. Tired of confronting such arguments—what the agency and courts deem "frivolous positions"—the IRS issued a "guidance" for taxpayers in March: a list of "40 frivolous positions to avoid" when filling out tax forms. Among the most popular in past years: a contention that taxpaying is voluntary or that income can't be taxed if one deems oneself "a citizen of an individual state" rather than of the U.S. The agency says people are also fond of asserting that they can "buy or sell the rights to claim a child for purposes of the Earned Income Tax Credit." Others simply write "nunc pro tunc" (Latin for "now is then") on their returns, arguing that this makes a delinquent return timely.
If the list of the forbidden 40 isn't enough to cut down on the frivolity, there's this: The fine for invoking such an excuse on a tax form is now $5,000, up from the $500 in force since 1982. "There was a need for the penalty to be increased and applied in a broader way," says IRS spokesman Eric Smith. Last year the agency assessed 9,583 such fines, up from 3,754 in 2005, Smith says—largely because of a spate of "zero wage" contentions: taxpayers "correcting" the W2 or 1099 sent by their employer to show "0" under "wages, tips, and other compensation."
Frivolous filers get a chance to refile a proper return within a month, Smith says. If they pursue the matter in tax court, they could pay an additional fine of up to $25,000. Bullied at work? Depending on where you live, you may soon be able to file a harassment claim. A half-dozen states from New Jersey to Oregon are considering laws that would make workplace bullying an "unlawful employment practice" and give victims the right to sue an employer that fails to prevent it.
The draft Oregon statute defines bullying as "derogatory remarks, insults or epithets, physical conduct that a reasonable person would find threatening, intimidating or humiliating, or the gratuitous sabotage or undermining of an employee's work performance." The preamble to the bill cites surveys and studies that found 16% to 21% of employees "experience health-endangering workplace bullying, abuse, or harassment."
David Ritter, a Neal Gerber Eisenberg attorney in Chicago who represents companies, says he is taking the proposed laws seriously. He notes that laws barring hostile-environment sexual harassment (think pin-up posters and suggestive remarks) were initially greeted with skepticism but are now taken in stride at most companies. Besides, Ritter notes, preventing meanness on the job makes business sense. "I'm sure we can all agree that good management technique means not berating your employees," he says. How much does it cost to protect a top executive? Judging by the annual crop of proxies—which this year disclosed some of these outlays for the first time under new Securities & Exchange Commission rules—the pricetag varies sharply. It takes more than a million bucks to keep Amazon.com CEO Jeff Bezos safe, while Playboy Enterprises Chief Executive Christie Hefner is much less expensive to guard. How much does it cost to protect a top executive? Click Here In a bare-knuckle battle that wouldn't be out of place inparts of the longshoremen's union, Academy Awardwinning cameraman Haskell Wexler is vying to replace Steven Poster as president of Local 600 of the International Cinematographers Guild.
The campaign issue: sleep. Wexler, 81, the cinematographer of One Flew Over the Cuckoo's Nest and the director of Medium Cool, wants to shorten the 15- to 18-hour days customary for most TV and movie projects. He has mailed every member of the 5,700-strong local a DVD of Who Needs Sleep?, his 2006 documentary linking moviemaking's long hours to illness and deathoincluding that of a cameraman on Pleasantville who fell asleep at the wheel while driving home from a 19-hour shoot. After a similarly long day in the late 1990s, Wexler had a nonfatal accident in which his El Camino flipped over.
Wexler wants his union's parent, the International Alliance of Theatrical Stage Employees, to negotiate 12 hours on and 12 off. Incumbent Poster, 63, a cinematographer whose credits include Daddy Day Care and Stuart Little 2, argues that Wexler's campaign will further alienate the union from IATSE. Last year, Wexler led an unsuccessful fight against the basic agreement IATSE negotiated with Hollywood. "I've known Haskell since 1969, and I respect him immensely as a cinematographer," says Poster. "But he's out of touch with the working man, and what he is doing is counterproductive." Says Wexler: "I've been a union man for 52 years, and my job is to speak for the workers." Ballots were sent out on Apr. 10, with results to be announced on May 16. http://managementaschangeagent.blogspot.com/This blog, affiliated with Liberum Research, which studies management turnover, focuses on churn in the top ranks of publicly traded companies and speculates on the implications for investors. Its tagline: "CEO Change Makes a Difference," slyly placed above headshots pairing former Hewlett-Packard CEO Carly Fiorina with current chief Mark Hurd. Among recent postingsowritten by Liberum Director Richard Jacovitz and Andy Pickup, publisher of Liberum parent Wall Street Transcriptois one dissecting the decision of Sony PlayStation inventor Ken Kutaraji to call it quits. America's funeral homes, losing revenues as more families choose the less costly option of cremation, are trying to get a new lease on life by booking other events: "celebrations" of the deceased, business meetings, reunions, even weddings.
The Smith Mortuary in Maryville, Tenn., is a case in point. It has held a wedding almost every weekend since it built a Life Event Center on its property two years ago. Sherrie Shuler, the center's event services director, says most couples aren't troubled by the mortuary across the lawn or the cemetery down the road—although one bride balked at the thought of getting married on the site of her grandfather's funeral. "It's not really an issue," Shuler says.
All across the country, funeral homes—a $12.1 billion business in 2005, according to the latest Census figures—are adding similar reception halls to boost sales as demand dips for traditional burial. The cost for in-ground services can reach $7,000 or more. Cremation, which can cost one-fifth of that when no service accompanies it, is already used in at least 30% of deaths, a figure expected to rise to 50% by 2025, according to the Cremation Association of North America.
While a family might be unwilling to drop a few thousand on a lavish conventional funeral, however, many are willing to spend as much or more on a customized "celebration" of a loved one's life, complete with extras like a video memorial, a prime rib dinner, or a champagne fountain.
That's why the Musgrove Family Mortuary's chapel in Eugene, Ore., has been resurrected as a multipurpose "family center," complete with catering kitchen and a 12-foot screen for multimedia business (and memorial) presentations. Gone are the chapel's pews and stained-glass windows. They made it look like, "well, a funeral home," says co-owner Mark Musgrove.
Musgrove says he'd also like to partner with a law firm to assist families with estate planning and wills. Another possibility: helping to facilitate travel arrangements for out-of-town guests, perhaps working out partnerships with local hotels and a travel agent.
Branching out into services for the living makes sense, says Glenn Gould of mkj Marketing, which specializes in the death-care industry. When you come right down to it, arranging weddings isn't all that different from arranging funerals, he says: "The business of a funeral home is to have events." The news that MIT Admissions Dean Marilee Jones falsified her credentials prompts us to ask: Can decades of good work overcome a lie told earlier?"Given the dean's position, her lie was of extreme gravity. But I think MIT should strike a balance between sanctions and recognition of her good work." — Cristina Bicchieri, professor, philosophy and legal studies, University of Pennsylvania "When someone else reveals the lie, it's more difficult to overcome. What's striking is the waste. The mistake could easily have been corrected earlier." — Lawrence Hinman, director, The Values Institute, University of San Diego"Unfortunately, a lie that monumental will overshadow the fantastic work. When trust is breached, it's hard to regain the confidence of peers." — Stella Zinger, MBA student; president, University of Michigan chapter of Michigan Business Women