•  Management. Does the company have competent people running it? The backgrounds of the directors can be found in proxy statements (14As) in the Edgar database. Note that proxies are written by the companies, though. Another thing I would suggest looking at is the compensation structure of the CEO and other top management. Don't worry so much about the raw figure of how they are paid -- instead, look to see how that compensation is structured. If the management gets a big base but bonuses are a small portion, look carefully at the company. For some industries, like electric utilities, this is OK, because the management isn't going to make a huge difference (utilities are highly regulated, and thus the management is prevented from making a lot of decisions). However, in a high tech industry, or many other industries, watch your step if the mgmt. gets a big base and the bonus is insignificant. This means that they won't be any better off financially if the company makes a lot of profits vs. no profits (unless, of course, they own a lot of stock). This information is all in the proxies at the SEC. Also check to see if the company has a shareholder rights plan, because if they do, the management likely doesn't give a damn about shareholder rights, but rather cares about their own jobs. (These plans are commonly used to defend against unfriendly takeovers and therefore provide a safety blanket for management.)

Subject: Target Stock Prices

    A target price for a stock is a figure published by a securities industry person, usually an analyst. The idea is that the target price is a prediction, a guess about where the stock is headed. Target prices usually are associated with a date by which the stock is expected to hit the target. With that explanation out of the way..

    Why do people suddenly think that the term du jour "target price" has any meaning?? Consider the sources of these numbers. They're ALWAYS issued by someone who has a vested interest in the issue: It could be an analyst whose firm was the underwriter, it could be an analyst whose firm is brown-nosing the company, it could be a firm with a large position in the stock, it could be an individual trying to talk the stock up so he can get out even, or it could be the "pump" segment of a pump-and-dump operation. There is also a chance that the analyst has no agenda and honestly thinks the stock price is really going places. But in all too many cases it's nothing more than wishful guesswork (unless they have a crystal ball that works), so the advice here: ignore target prices, especially ones for internet companies.

  What the recession means to you

Michael Pascoe discusses how a mild recession of the type we're (hopefully) having can create opportunities for many people.

The popular media is awash with recession stories - most dire and foreboding, perhaps playing most of all on the fears and susceptibility of Gen Y which has never known a work force that was anything less than improving.
     Yet for most people, that Australia is in recession doesn't really matter. In fact, a mild recession of the type we're (hopefully) having creates opportunities for many people.
      For those who have just lost their jobs and those who will over the next year or so, that sounds rather heartless and uncaring. It's not - it's just the truth of the matter. And it's also part of the way we eventually come out of recession and those who want to get back to work, can.
      The general definition of a recession, as everyone has been told countless times lately, is two consecutive quarters of the negative economic growth, which is the way economists say "the country's going backwards".
       But what a recession really means to people is unemployment rising to an uncomfortable extent. That's what is going to start happening and what determines whether you end up being part of the recession or not.
       The goods news
If you're in a secure job, the recession is not such a bad thing for you. In fact, you can profit out of it. If you're looking to buy a home, they get cheaper. Inflation falls so the buying power of your money stays stronger. Shares are cheaper to buy - the best performing investments are made when everyone else is selling and panicking. If you want to do some renovating, you'll find trades people are easier to find and perhaps more willing to do a deal.
         The bad news
Many people don't know if their jobs are secure. If you're a police officer, an accountant working in the receivership area, involved in the health system in just about any way, or a teacher, you know your job is safe, but there tends to be a nagging doubt about security for most of us.
(The good news again here that most of us worry for no good reason. Even in quite a nasty recession, like the last one Australia had, unemployment of 10 per cent still meant 90 per cent of people had jobs. Maybe not the job they most wanted, but still a job for which they could be grateful.)
             So, handling the recession primarily comes down to avoiding unemployment and, preferably, feeling secure in your employment. Thus the best thing to do - and it's always the best thing to invest in - is your employability.
Invest in your employability
Lots of people already are. I've spoken to a couple of professional bodies lately and they report that their members are more interested in attending courses and seminars - they're increasing their skills and doing a little networking at the same time.
Similarly, university enrolment is holding up well as people seek more qualifications. There's no guarantee of a job out the other end of a uni (unless perhaps you do medicine), but it greatly improves your chances and the likelihood of being paid better in the long run.
It's also a time when people think twice about changing jobs - you might not be entirely happy in your present position, but if it's secure, you're more likely to decide to hang on to it anyway.
            Losing your job
Worse than feeling insecure is finding out you were right to feel insecure - losing your job. That comes as a shock for anyone, but smart people try to make the best of the situation and never lose sight of the fact that the economy will turn around. And they never stop looking for work, even if it outside their usual area.
A common complaint from employers is that even when there is excess labor, there's always a shortage of good labor.
For people with few skills and unwilling or unable to obtain more or perhaps move to where there are better employment opportunities, life gets much harder. Savings are used up, homes can be lost, and they find out what life is like living on social security.
And worse again, as the economy slows, businesses at the margin go broke and the people who owned them, perhaps built them up over years of hard work, lose the lot.
             Starting again
The people with the guts and determination to build a business generally aren't the types to just give up when circumstances go against them.
It's hard, but it's the way of the world. We have been incredibly fortunate not to experience a recession since the early 90s - most countries have had a couple since then - and we are very, very fortunate to be living in a country where the recession is still likely to be mild, where there is a decent social security system to prevent us starving and where we have the chance to have another go.
Not losing sight of that and what is most important in your life - think of the lessons the bush fire survivors have taught us - the recession can be managed even if you're one of its victims.

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