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Margaret's Musings (2009)

| December 22, 2009 – Making A Difference – Christmas 2009|

For those of you who watch the nightly news on NBC, you are familiar with each night's closing segment which features a "making a difference" story. This has been a wonderful reminder of the many individuals, groups, and organizations in communities throughout the country who respond daily with a helping hand to those in need and a reminder of how acts of kindness can "make a difference".

Probably many of you have a "making a difference story" you would like to share. I definitely have one though it has been 12 years in the making. Of course, that's ahead of schedule judged against the old adage "overnight success takes about 15 years".

About 12 years ago, I read an article in the Miami Herald about the lack of nurses and health clinics in Miami public schools. The shortage was due to both an absence of funding and lack of state law requiring school nurses. I was shocked. Even where I grew up, in rural Mississippi, a visiting school nurse came to our tiny school 2-3 days each week. The school even had an infirmary where we could rest if we felt sick. I was appalled that such basic services were not available to our school children despite the relative wealth of Florida when compared to Mississippi.

Back then, I was a board member of the John T. Macdonald Foundation (JTM) I am chairperson today. JTM is a grant-making foundation that provides financial support to the health community of Miami-Dade County. At the time, we were funding grants primarily to new ideas or "start ups" with innovative approaches to health care. I approached the board about providing funds to support nurses in schools. I found support from a colleague on the board. This colleague, a Pediatrics professor at the University of Miami School of Medicine, already had a detailed vision of a school health initiative which was significantly greater than just having a school nurse. After much debate, deliberation, and searchingthe Foundation decided to partner with University of Miami School of Medicine to form a school health initiative. This initiative would provide comprehensive health services to an entire school feeder pattern (K-12) in North Miami Beach. The majority of the families in these schools did not have health insurance and a high percentage qualified for the school free lunch/breakfast program. The Foundation would provide all the funding and the University of Miami would design and run the health clinics, including hiring and managing the health providers, social workers and related staff.

Our basic premise was that kids needed to be in school to learn, yet absenteeism was far too frequent. Often times, the cause of absenteeism was illness or social issues at home. We hoped that having social workers and medical providers at school would make it possible to coordinate the children's health needs immediately, reducing absenteeism in a cost-effective manner.

Given that JTM was providing all the "money," we thought that establishing this program would be a relatively straightforward task. We were wrong. We had multiple challenges, from securing school board "buy-in" to finding space in crowded schools, plus not insignificant liability issues. Once those hurdles were cleared, we still had to convince the faculty that providing health care on site made for a better learning environment. After that, we needed to ensure parents signed the darn consent forms.

Three years passed before we cut through all the red tape/hurdles and the first clinics were opened. Initially, progress was slow but steady. Luckily, we had a young physician, Dr. Lawrence, who headed the program. Her continuing leadership and commitment was critical to the success of hiring and running the program. Additional support came from an enthusiastic school principal who was committed to finding space, getting faculty support, and getting parents to sign up for health care services. Every parent's signature had to be notarized this was not a small task.

The goal of the clinics was to provide comprehensive health care... which is more than giving immunization or heading off a cold. Comprehensive health care includes mental health, testing for sexually-transmitted diseases, dental and vision exams, violence in the home, alcoholism, drug addition... and on and on. These services were in each high school, middle school, and elementary school of the feeder pattern, and were available not only to the students but to all members of their family.

Today I can say with confidence that the John T. Foundation and University of Miami School of Medicine made a difference. As the years went on, school attendance began to improve. Today, attendance throughout the North Miami Beach feeder pattern ranks at or near the top of all Miami-Dade County schools. This is remarkable, especially considering the demographics. Furthermore, 75% of all school families have enrolled for health care. Last quarter alone, the clinics had about 4500 visits/encounters! I hope my pride is shining through in this Musing. Though I can only take a sliver of the credit, I know that the Foundation is making a difference to some degree because I remembered my school nurses.

So, what next? To date, we have made remarkable progress, with only ~$7 million of grants from the Foundation over the 10 years... a relatively small amount given the results. However, we still have much to do. For sure this program could be replicated serving as a prototype for how to provide cost effective, high quality integrated health care to school children and their families. So, even though we have already "made a difference," we are ready to move onto our next goal making a BIG DIFFERENCE. Specifically, we want to repeat what we have done on a much broader scale, making health clinics mandatory for all schools and all students in Florida. And after that...? Check back with me in 15 years and I'll let you know. If you'd like to help in the meantime, remember to support and vote for more clinics in our public schools.

This year, I will be making contributions on behalf of our clients to both the John T. Macdonald Foundation for the health school initiative as well as for Teach For America in the Mississippi Delta.

This is my last Musing for 2009... however, before the New Year, you will receive the Starner Group Market Outlook... our thoughts on the coming year. I hope this holiday season finds you all well and spending time with loved ones. Roger and I are preparing to be invaded by grandchildren a pleasant invasion if there ever was one.

Happy Holidays!!

| November 24, 2009 – The Road to Recovery – Happy Thanksgiving 2009 ... |

Thanksgiving is here again. I just re-read my Thanksgiving blog from last year. As we all remember vividly, we were in the midst of a miserable market freefall. Little did any of us know that the freefall would continue until March '09... if we had, we might have had a hard time giving thanks!

What a difference a year makes! Since March, the major markets have rallied over 50%. Though no one knows for certain, many folks seem to feel the world is getting back to normal. Others, however, most notably bond-guru Bill Gross, have coined a new and now popular term -- the "new normal." Gross defines new normal as a sustained period where U.S. Gross Domestic Product (GDP) grows at 1-2%, as opposed to the 3% we have enjoyed in the past couple of decades.

I have no idea if Gross is right... however, if he is, I would at least take comfort in knowing that the "new normal" would likely require Americans to go "back to basics" from a financial perspective... i.e., living within their means, maintaining a reasonable debt load, and not treating their homes like ATM machines. There is a growing awareness and appreciation of what is "reasonable". Visions of evictions from homes, job losses, and pay cuts are a strong reminder that life requires a margin of safety most citizens have ignored. Many pundits refer to these phenomena as the deleveraging of America. In the short term, this deleveraging will slow our growth rate but I am hopeful that the focus on long term goals of financial security rather than immediate gratification will make for a stronger nation.

While Gross and others talk about this, we at the Starner Group are actually doing it. We have given some clients more breathing room by reducing debt, moving to lesser homes, and refinancing their lives with cheaper mortgages. Of course, some of their dreams had to change... but this wasn't so hard once they realized the dreams weren't going to happen anyway... at least not right now. Needless to say, this has been an interesting time... not fun... but I am immensely proud of these clients who have had the courage to change. And so far, they are also proud and happy with themselves. Another benefit of our planning has been the focus on being more selective about spending. Being selective doesn't mean reduction in lifestyle as much as getting greater enjoyment per dollar spent. Of course, if you get more enjoyment out of frivolous spending... then "selective" has less meaning to you!

Speaking of Thanksgiving, I am thankful that

1. My granddaughter, Micaela, called last week and reported she had been accepted into her school's gifted program. I was thrilled that she wanted to tell us.

2. Congress upped the date for imposing limits and rules on credit cards issuers to protect unsuspecting users. Recently Macy's increased my mother's interest rate to 25% as she was one day late on a payment. This prompted me to check the interest rate on my Macy's card. The rate has steadily increased to 24% over the past year and we have never had a late payment. Given our credit rating... I am going to protest... even though we always pay in full. More on this to come.

3. We have received 100% "yes" responses on our offer to "replan" - specifically to review the impact of market decline and whether action is required to get back on track toward goals.

4. Scott and Melissa have a new home to celebrate Thanksgiving.

5. My mother enjoyed the penny slots in Vegas along with a large family contingent to keep her company. We will all share Thanksgiving with her, too.

6. Walmart is aiding their suppliers who can't get credit by lending their AA credit rating to 1,000 of their 60,000 vendors - only in America.

Above all, I am thankful for our clients and friends, and that you continue to read my blog. Happy Thanksgiving to you and your family.

| October 31, 2009 – Trick or Treat time again...Jobs! Jobs!... |

The real "treat" would be growth of sustainable jobs. Unemployment is just too high and is a major obstacle to meaningful economic growth. The "trick" is breaking the cycle of "no money to lend."

As many of you know, most of America's new job creation comes from small businesses. Yet, unlike the GM's of the world, they have seen relatively little relief from this credit crisis. For example, one of Scott's friends is a small business owner who has always relied on short-term loans to purchase inventory for the holiday season. This year, for the first time ever, he has been unable to find a lender willing to loan him money. As a result, his inventory will suffer and his holiday sales will lag, undermining his ability to grow and hire more employees. In fact, he has to lay off employees. Consequently, his supplier will suffer since Scott's friend doesn't have the capital resources to buy inventory...and the supplier will not be able to hire or buy from his supplier...this circle goes on and on and thus unemployment continues to grow. This story is repeated all over America.

Another "treat" would be seeing more credit become available to the "mom and pop" businesses all over the country who can do business and hire folks. While a solution is not easy...this is Halloween and the spirits may surprise us if we have the right costume. At least this is what I tell my grandchildren.

My office is filled with Halloween candy and decorations. Anyone who stops by will enjoy our treats. I will be in Las Vegas for Halloween with most of my family. I wrote about my mother's challenge with cancer...well, the tumors in her pancreas have returned. Though, she was able to enjoy her 88th birthday, she has decided not to resume chemotherapy. Instead she wants to enjoy her time having fun with her family. She decided to go to Vegas for Halloween to try her luck once more. Naturally, much of the family wants join her in the fun at the "penny slots". Again, we are gifting her red envelopes ("treats" of money) to try her luck. Likely she will also go trick or treating with Micaela and Cole. (She sits in the car and has fun just watching) After Vegas, Roger and I will get her back home to Shelby, MS.

I hope this brief Halloween note finds you all well. Please feel free to share what "tricks" or "treats" you hope for most this season.

| October 23, 2009 – Challenges and Joy of Teaching |

Many of you know that I am an active supporter of Teach for America (TFA), a non-profit organization that places recent college graduates in struggling rural and urban school districts. These graduates or "corps members" commit to serve as teachers for two years in these schools. When their two years are complete, many move on to other careers, other remain as teachers, but all become life-long advocates for education.

Each year, I sponsor two TFA Corps Members to teach in my home-town of Shelby, Mississippi, a struggling rural school district by anyone's definition. Part of my holiday gifting goes toward supporting the teachers and some of their projects. These corps members often write me letters speaking about their experiences. Recently, a new Corps member, Maryann M., wrote me a letter which I thought was remarkable enough to share. Here it is, word for word:

Dear Mr. and Mrs. Starner:

It is with deep gratitude that I write to thank you for your support of Teach For America, Mississippi Delta, and specifically for your support of the work we are doing here in Shelby. As you know, Teach For America invests heavily in its teachers, providing extensive training and ongoing support to each of us. Our movement depends on individuals like you who believe that one day all children in this nation can attain the excellent education they deserve. I am pleased to have the opportunity to give you additional insight into the direct and positive impact that your contributions are making possible in North Bolivar.

As for my own background, I grew up in a small suburb of Los Angeles, and attended Princeton University. I graduated from Princeton in 1987 (that's right – more than 20 years ago!!), and then attended the University of California, Berkeley School of Law (Boalt Hall). After graduating from Boalt in 1990, I practiced trusts and estates law for 6 years before transitioning into various management and sales positions with financial services firms (most recently with the Bank of New York Mellon).

I enjoyed working with my wealth management clients, but believed that I would feel more fulfilled and that my skills would be better deployed in education. When early this year I learned about Teach For America and its work to close the achievement gap, I knew I had found my new path. Eager to leave the congestion of Los Angeles, I asked to be placed in the Delta region, and am thrilled to be working at Broad Street High School in Shelby, where I teach math and reading.

As you may know, in Mississippi students must pass a number of state tests in order to receive a high school diploma. Two of these tests are Algebra and English. The purpose of my compensatory classes is to give my students a "double dose" of math and reading to help them pass these tests that are so critical to their future success. Approximately one-half of my math students are "re-testers", i.e., they have failed the state test at least once. Some of my students are seniors who have failed multiple times; they are approaching their last chance to get over these hurdles so that they can graduate. Needless to say, the sense of urgency is high!

Teaching in the Delta has been an incredible experience – extremely challenging, and at the same time, extremely rewarding. It is one thing to read about the achievement gap; it is another to see how it plays out in a classroom every day. The challenges are indeed many and intense. In my math classes, I teach 9th – 12th graders who not only lack a basic understanding of algebra, but also struggle with basic skills such as adding positive and negative numbers and recognizing equivalent fractions (i.e., recognizing that 1/2 = 2/4) . My reading classes are filled with students who are 3 – 4 years behind grade level in their reading ability.

While there is much work to be done academically, perhaps even more challenging are the psychological and emotional barriers to be overcome. Many of my students have become accustomed to failing, and have built up defenses to make them feel that failure is fine. If they simply stop trying, they can avoid the deep disappointment they would feel if they tried and failed. Investing and motivating these students to believe in themselves and in the power of their own hard work is perhaps the most difficult part of what we do.

But while the challenges are extreme, so too are the rewards as we help these students see the possibilities that come from hard work and smart choices. So many of my students are bright, talented young men and women who, notwithstanding their prior failures, still have dreams of going to college and broadening the choices they will have in life. They are eager to learn, and want desperately to pass their state tests. It is so exciting to see the potential in these students unleashed. While change does not happen overnight, we see significant progress over time.

For example, one of my students is Clinton, a football player. A few weeks ago I gave a test on which Clinton did not perform well. He felt very discouraged, but I told him that if he would work with me after school, I would let him take the test again and give him the better grade of the two tests. He accepted my offer, and even missed a couple of football practices to do math drills instead!!! What an amazing experience watching Clinton confidently work through a problem that had previously been a complete mystery to him, and seeing the look on his face when he saw his answer among the choices provided! To watch a student transition from feeling discouraged to feeling empowered is indeed extraordinary!!

One more example is Ashley, another math student. Ashley is a single mother whose mind often wanders in class. I knew I needed to find something more engaging to interest my students in some of math's drier concepts, and learned of other teachers' successes in integrating music into math curricula. As I taught a recent lesson on polynomials using math raps from the internet, Ashley could not have been more enthusiastic as she focused on the lesson, and even sang the song as she walked down the hallway at the end of class. I even heard students NOT in my class humming the "polynomial rap" later in the day!! But most important, Ashley, scored 100% on her latest test, and is excited about coming to math class!

I hope this letter has given you some insight into the very real difference your contributions are making in the lives of our students. Thanks you again for your generosity. We are deeply grateful for your help, and hope you will enjoy our updates in the months to come.

Best Regards,
Maryann M.
and the students of Room 10,
Broad Street High School

| September 11, 2009 – Where Were You In 2001? |

Today is September 11 and I am in CA. Coincidentally I was in California the day the planes struck NYC. As usual when traveling west I am up early and just observed a moment of silence with CNBC to commemorate the awful moment 8 years ago.

On the Saturday before 9/11/2001, I went to Dallas for our first grandson's baby shower and then travelled to the San Francisco area for a wedding at Yosemite the following weekend. Of course, the wedding was postponed, because the groom's family was from New Jersey and couldn't fly to the event.

9/11 occurred on a Tuesday. I couldn't fly back to Miami until Friday when flights began to resume. The SF airport was a strange experience... rumors were abound that American Airlines (my carrier) would be a target for terrorists because of its name. The flight was somewhat nerve-wracking... we all clapped when we landed.

Once back home, I had this urge to go out and buy the American flag and do all kinds of things patriotic. The following Monday trading was resumed...and we all held our breath that the markets would function... which they did. Clients called in with many orders. I remember one of our female clients called to buy Krispy Kreme – 100 shares at $25 apiece. Alas she still owns the stock – now at $3.50/sh. In the months after 9/11, the stock soared, but she would not sell... I guess it is her way of remembering 9/11

As that first week progressed, the mood continued to be somber all week…watching TV was getting old. I decided that a "get together" was in order. So, I sent an e-mail invitation to anyone I knew with an e-mail address. People showed up from all over... we kept running to the store for more food... it was a tremendous event for "getting in touch" and did much to revive the spirit of togetherness for all who attended.

Another anniversary is also forthcoming... September 15th marks the one-year anniversary of Lehman's collapse... an event many call the 9/11 of the financial industry. I still recall watching TV in disbelief as Lehman employees packed up their belongings and left the building. Many were our friends. I found it unbelievable that this storied firm would no longer exist. The days and weeks that followed were as tumultuous as any I can recall in the financial world. Truth be told, I sometimes find it hard to believe we are only 12 months removed from Lehman... we have gone through so many challenging scenarios that Lehman's demise feels like many years ago.

Today, Secretary of Treasury Geithner is claiming victory over the financial crisis as the stock markets around the world continue to roll upward. This doesn't mean all is well... it just means we are on the mend. No one really knows how long the mending process will take.

As I reflect back on the events of the past 8 years, my hope is that the turmoil has taught us that we cannot be afraid to factor in the impossible when planning for the future. We all know that the unimaginable can happen. At The Starner Group, we firmly believe that having a plan and discipline is the best insurance for surviving a disaster. After 9/11, my plan was to host a party and see others... this turned out to be the perfect recipe to get my emotions back on track. The plan for surviving the financial crisis was to not panic, have ready cash when needed, and to know the difference between liquidity and valuations. The best lesson we could learn as individual investors is the value of savings and proper use of debt.

We just celebrated Labor Day, school has begun…another summer is about over. I hope this Musing finds you all well. Please keep an eye out for our newly redesigned Starner Group Website, which will be making its debut in a few days. And in a future Musing I will share my wonderful cruise on the Elbe from Berlin to Prague.

| August 7, 2009 – A Vote for Growth |

Happy August!

Two pieces of positive news...

First: the S&P 500 appreciated 7.4% last month, its strongest July since 1997 (+7.8%) and 1989 (+8.8%). By the end of July, the S&P was up 45.8% from the lows of early March.

Second: the personal savings rate is up to 6.2% from a dismal rate around 1%.

Of course, the markets are not in our control, but the savings rate is... and I'm glad to see the improvement. We, as financial planners, know that savings are critical to creating a sound foundation for long-term, personal financial security. Despite this fact, numerous recent headlines have bemoaned that increased savings are a drag on the economy. Though this may be true for the short-term, I see the new savings rate as a potential behavioral change... that Americans are finally recognizing their personal responsibility and the importance of saving for their future... a goal that can only be accomplished by controlling their spending day-by-day.

Likewise, the headlines continue to scream about government spending, presuming that today's huge deficits will eventually lead to huge inflation and a worthless dollar in years to come.

Personal savings / spending and government spending have different roles and consequences. I would definitely prefer that no one, including our government, have excess debt. Individuals save and invest so they can spend with comfort in their retirement years. However, severe crises (financial and natural disasters) do occur from time-to-time. This recession is just as severe as surviving four hurricanes in one summer. In these instances, only the government has the power and financial resources to manage disasters effectively.

Despite the credit crisis and recession, the US is still a very rich country. The US still has the financial capacity to spend / invest now to ensure the country's long term financial strength and leadership. Such a commitment requires focus and being smart about how monies are spent.

My thoughts are that I prefer more stimulus to less stimulus because we can't meet the country's long term goals with "no" or "slow" growth. And deflation would mean a lower standard of living for all of us. For now, I worry about deflation and a "no growth" economy more than I worry about inflation. Currently, the government seems fairly determined to impose additional taxes despite the recessionary times. I have little doubt that these taxes will be a drag on growth. More importantly, we can't tax enough to solve our current problems/goals... health care reform for all, improving the environment, and providing support to the poor. At best we have a band-aid with little cure for growth. These problems are much easier to address when we have a growing economy which generates higher tax revenue.

Worry about wasteful government spending is justified by Congress's history. This fact was further evidenced by the pork barrel spending that was included in the first stimulus bill. Still, more spending is needed and the stimulus must be directed toward:

  • Creating a foundation for economic growth. Investments in infrastructure (i.e. highways, bridges, research and development, schools) would be such a foundation.
  • Restoring full faith and confidence in our financial system.
  • Creating opportunities for employment now and growing wages for the future. The middle class must be restored to a higher level.

We may need to use the carrot (tax credits) and the stick (increase taxes and penalties) to encourage / discourage decisions that direct us to a healthier economy in the long run.

This is a pivotal time in history for us to make bold investments to restore growth and retain our leadership in the global economy.

The "cash for clunkers" is a bright spot in the stimulus despite the critics. Based upon my reading, the cars that replaced the "clunkers" had better gas mileage by 9.6 miles per gallon (15.8 MPG for "clunkers", 25.4 for the replacements). "Cash for clunkers" is a relatively small program, but it has brought smiles and savings to many who were wasting too much on gas. Smiles are important tonics in these times.

Finally - thanks to the many who responded to my "Musings on Health Care Reform". I received numerous insights, suggestions, and genuine concerns as well as good wishes for my Mom. I hope to summarize these for other readers. In the meanwhile, reform has been stalled as many who have health insurance or Medicare worry about what "are we going to lose" to help a "few" and how to pay for more Americans to have health care access.

Past performance does not guarantee future results. There is no assurance these trends will continue.

Opinions expressed are those of (Margaret C. Starner, CFP®) and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice.

| July 22, 2009 – Thoughts on Reforming Health Care |

Last night on national TV, President Obama pleaded with the American People for health care reform. As I watched, I couldn't help but think about my mother's battles with cancer and aging.

I have never written about my mother, who is a beautiful, smart, successful business woman. She just celebrated her 88th birthday on July 16th. Mom has survived numerous cancers. Her first bout, with ovarian cancer, came when she was a young woman in her 40s. In 1987, her right kidney was removed…on Black Monday no less!!! Ten years later, she survived colon cancer. Finally, two years ago, mom was told that she needed to remove her remaining kidney due to cancer and go on dialysis. According to her doctor, she had no other choice... neither radiation, surgery, nor chemotherapy were viable options. Given her age, dialysis seemed to be a sub-optimal solution. At the same time, mom also had great pain in her hip from arthritis and stenosis. She had several epidurals which only provided temporary relief. Due to her discomfort, she didn't sit properly and often fell...complicating her pain. Last year at this time she was using a walker.

Mom could have chalked all this up to the infirmities of old age. HOWEVER…my mother is a pretty determined lady. She called to remind me that a doctor had once said she would live to 90. She wanted me to do something about making that happen. What could I do but try?

The family decided she should go to UCSF (San Francisco), which had a highly regarded urology oncology center. Also, she could stay with my sister who lived in the area. Luck was truly with us…we were able to get her an appointment with the leading urologist oncologist at UCSF. He decided to try a procedure that was painless and a bit unorthodox...but seemed appropriate given her age. That was two years ago... so good.

Though we had addressed mom's cancer, she still needed a solution for her hip pain and lack of mobility. Luck was on our side again…mom was referred to an orthopedist who specialized in pain management. After giving mom another epidural, he proceeded with an acupuncture program.

During this process, Mom developed a slow growing cancer in her pancreas that spread to her liver and lungs. The oncologists at UCSF huddled together and decided to try a mild chemotherapy program. The doctors being so collaborative made me more comfortable that the decisions took into account all of her problems/ailments.

My sister had an herb doctor (everyone in SF has one) and took my mother for a consultation. He told her that within a few weeks he could have her strong enough to withstand any chemotherapy program.

So how is Mom now?

Amazingly, Mom's various cancers are in remission. Her hip is relatively pain free and she exchanged her walkers for more appropriate shoes that help ensure she walks properly. In fact, she felt so good last month that she headed to Las Vegas for her 88th birthday!

Prior to the Vegas trip, I hosted an early birthday party for Mom in California. Every member of the family, including her great grandchildren, gave her the traditional, Chinese red envelope… filled with money to play the slot machines in Vegas. Mom had never received so many little red envelopes. She was so excited just as the little kids who get them at Chinese New Years. Though Mom didn't have any luck on the slots, she did find a pair of Jimmy Choo's sandals on sale...luckily the sandals are approved by her orthopedist!

This story is very relevant given the current health care debate. Clearly, Mom had lots of services, costly tests, costly medicine, and some top notch doctors who cared. She had the best of everything, including my sister who navigated the medical system for her. While most was covered by Medicare/Medigap insurance, the out of pocket cost were also significant. I am delighted with the outcome...but I also know the process was very expensive…there has to be another way.

Certainly, the ideal is to have my mom's story for everyone. That being said, I am hard-pressed to imagine how to pay for everyone getting this level of service...especially since seniors are a rapidly growing percentage of our population. The costs of providing for the 47 million uninsured would be staggering.

I find it unlikely that reform will come from trying to do "more of the same" cheaper or by expecting the rich to shoulder the cost of insuring all the uninsured…despite the rhetoric. I also don't accept those who might say that my mother had it too good. Americans will not accept rationing of health services. We may need to accept two or three tiers of services.

While I have no concrete solution, I have hope that America has the courage to think out of the box and accept change with the goal of a better health care system for all. All of use must be engaged in the process.

| July 4, 2009 – Happy July 4th |

The Raymond James offices as well as the US stock market exchanges will be closed on July 3rd for the holiday weekend.

I will be celebrating July 4th with our traditional family barbeque. As many of you know, July 4th is one of the most important holiday in our family. A quick summary – my father was a grocery store owner and butcher who happened to be born on July 4th.. Given these facts, he thought it only natural to celebrate his birthday with a barbecue. Hence, he concocted a barbeque sauce recipe to add his personal touch to the event. Folks came from all over the Mississippi Delta to devour his famous ribs and chicken …and to partake in fireworks galore (quite legal as we were just on the outskirts of town).

My father passed away in 1999. Soon thereafter, we learned that our oldest daughter Lise (Bruce's wife) was pregnant…with a due date of June 29. After congratulating Lise, I requested that she try to hold off on having the baby until July 4th, so that we'd still have a birthday to celebrate. Of course, Lise told me that I was crazy…even so, my first granddaughter Micaela arrived on July 4th after 24 hours of labor (isn't it great when our children listen to us?). Micaela, now 9, has turned out to have a lot in common with my dad…she's smart, headstrong, and always tries to get her way. Coincidentally , even before Micaela was born, we had something else to celebrate on July 4th…. Dana (our second daughter) and Kenji were married on July 4, 1998 and will be celebrating their 11th wedding anniversary this year. Again, my family and friends will be gathering at Micaela's home atop a hill in Glendale, CA to celebrate. My mom, who NEVER misses a party even at the age of 88, will be flying in to sample the barbeque to make sure the ribs taste just as good as when we cooked them in Shelby, MS. From the hill top, we will watch the fireworks in the valley below…my Dad would be happy to know we have somehow managed to celebrate his birthday and July 4th in the tradition he loved….family, friends, great barbeque, fireworks in the land of greatness and opportunity.

While today's Musing is really to wish everyone a great July 4th weekend, I can't help but comment on the US stock market's performance for the quarter that ended Jun 30th…. the best for the market since 1998. For the quarter, the approximate stats were:

Dow + 11%
S & P 500 +15%
Nasdaq +20%

(Past performance is not a guarantee of future results.)

Of course, for those of you who are driving over the holidays…you won't be happy that oil is trading in the $70 range…a large bounce (over 100%) from the sub $33 level that was briefly touched in December '08. Every financial crisis presents new opportunities that are not apparent at the time.

Jeff Saut, who is featured every week on the Starner Group's website has a particularly interesting commentary this week that explores changes that may bode well for the global economy. CLICK HERE

In my next Musings, I will discuss what's been going on with the Starner Group.

Again, Happy Holiday. Please drive safely and watch those fingers if you're setting off any firecrackers!

| May 14, 2009 – We Can Finally Exhale

The market is up, up, up – and I'm worried. To clarify, I'm not worried about the market…I'm worried what will happen if the country's dependency on the fed continues for too long…or even worse, if the government fails to address the next set of priorities in a timely or appropriate manner.

I'm sure many of you have read how the market shot up 80% after F.D.R. was elected…due to the optimism generated by his stimulus plans. In the late 1930's, the government pulled back on spending…a deep recession began soon thereafter. Clearly, the current administration is determined not to repeat that mistake and put on the brakes too soon. So, the question is, will they put on the brakes too late? More specifically, how will the administration know when to start letting the banks "swim on their own" and stop propping them up with free money. At some point, other priorities…health care, education, infrastructure, etc, must move to the forefront of our investments. How will the government implement these priorities…do they have any guiding principles to help them make decisions. If not, we all need to be worried. I am already worried by discussions about wage control.

Despite my concern, I've had some recent experiences that provide me with a sense of optimism.

A couple of weeks ago, I had surgery that caused me to be in the hospital for a few days. Afterwards, I had home health care for a week. Prior to this surgery, my experience with health care had been limited to annual physicals, trips to the dentist, few ER visits and the two daughters I delivered. Except for my doctors, I didn't know much about my health providers. They were simply the voices who made my appointment or showed me to my exam room.

In the hospital, I was able to get to know my nurses and assistant nurses…shift by shift. In particular, I was able to chat with the night shift and learn quite a bit about their lives and jobs. Specifically, I learned three key facts:

  1. All of the nurses created their own hours and even chose which days to work. Some worked 12 hours per day, three days straight. Others worked sporadically to supplement part-time jobs elsewhere. Regardless, in every case, these men/women controlled their hours so they could balance their lives. They had autonomy. Why were they able to do this? Because…
  2. Each of my caregivers practiced strict adherence to a set of well-defined processes and procedures. What do I mean by "well-defined processes and procedures?" I mean that every caregiver performed certain activities exactly the same way… from the way they took off and disposed of their gloves to how they took my blood pressure. They had structure. In fact, they were almost like robots, except…
  3. To a person, my caregivers seemed to genuinely love their work and, perhaps more importantly, they wanted to provide the best quality service. In other words, they cared about the outcome of their work.

Autonomy, structure, and caring about outcomes… I think that my experience at the hospital holds some valuable lessons for addressing the macro challenges facing our country. We need solutions that provide our workers with autonomy and freedom…however, in exchange for this freedom, we need to have confidence that people are competent AND following well-understood guidelines and processes. Lastly, we need people who care about what they do. If I think back to the laissez faire capitalism of recent years, our financial system had a lot of autonomy, but clearly not enough structure or caring about long-term outcomes.

In closing, I must say that my perception of what it means to be hospitalized has changed since my surgery. Prior to my recent stay, I was apprehensive and even a bit frightened of the experience. Now, though I can't say I would be excited to go back, I am confident that I will be well taken care of and my needs will be met. I can only hope that the coming months will provide me with similar confidence in the solutions our government may propose.

For a few chuckles click on to YouTube - BOB&TOM TV: "Obama Man" by Greg Morton

For a serious discussion click on to: PIMCO

| April 6, 2009 – Tooth Fairies and Market Rallies |

Last week began with Kailee, my 7 year old grandson, playing his first soccer playoff game. His team had played well all season…but they were playing the top team in the league. His worst fear came true…in the 4th quarter his team was beaten by a late goal. He went to bed devastated and depressed. His soccer season was over for the year.

Thankfully, Kailee lost his first tooth two days later…the last kid in his class to do so. He was elated and came home ecstatic. He asked his mom if he could expect $75 from the tooth fairy? Apparently, inflation is already here. Of course, his mom set him straight but said the tooth fairy might be more generous since his tooth was so delayed. Nevertheless Kailee went to bed very happy and was thankful for the tooth fairy.

For investors, who for 18 months have felt much like Kailee after his soccer game, the recent stock market rally surely feels like the tooth fairy has arrived. Between March 9th and April 6th (the time of this writing), the S&P 500 has risen over 20%. I have rarely seen such optimism arise out of increasing unemployment, foreclosures, and bankruptcies.

In fact, the "alphabet" lending programs emanating from the Fed, FDIC, and the Treasury are still a mystery to most. Easier to understand - tax breaks should be arriving as a bigger paycheck (smaller withholdings) for workers earning less than $250,000 this week.

However after all the explaining and reading, I tend to agree with the many who say the plans are just too complicated. Congress seems to be misguided on their goals. The focus must be on rebuilding a sound financial system with trust and confidence…not on who should be punished or who can profit. Changing "mark to market" at this point is meaningless for the current crisis. Going forward, we clearly need a more flexible valuation system…especially as it relates to reserve requirements and loan agreements.

What we need is increase in real demand and a credit system than can accommodate that demand. Gradually the increased demand will translate into more employment...and the growth cycle will begin.

During times like these, many ideas come out of the woodwork, two of the best:

  • Buy all the toxic assets from the bank at original cost. This will provide the injection of capital to the banks that are already being assisted without any further concerns about mark downs. The government will keep the assets... what recovers will recover.

  • Provide incentive to buy more cars. In Europe, governments have instituted the "cash for clunkers" program…providing cash incentives to replace gas guzzlers with new cars. The program has worked remarkably well, and would likely be a win for the taxpayers and the environment as well... taking cars off GM, Chrysler, and Ford lots while reducing fuel consumption.

Certainly, many other ideas exist…too many to name in this Musing. Of the two I've highlighted, only cash for clunkers has a good chance to be implemented here in the U.S. Already two "cash for clunkers" bills have been introduced in Congress.

Regardless, I continue to be confident that we will continue to push through this global mess and growth will return to the global economy. I wish I could say with 100% certainty that the time is now... but I can no more do that than predict the date when Kailee will lose his next tooth. However, I can promise you that Kailee will eventually lose that next tooth…and the tooth fairy will be back to reward him for his patience.

This will be Easter weekend and our office will be closed for Good Friday. I am sure many of you will be using the weekend to finish up your tax preparation. As for me, Kailee and his sister, Kendall will be visiting me and Roger, looking for the Easter Bunny.

I will end this with a Happy Birthday to Kendall – who is 5 today.

| February 25, 2009 – Day after Obama's Speech to a Joint Session of Congress...

Obama's call to reform, and rebuild a stronger, more transparent economy and government is compelling…regardless of political affiliation. As I write, the market is saying "vision" is not sufficient. In the short run maybe the market is correct by asking the administration to "show me the details." In the long run, however, vision is everything.

During phone calls and client meetings, we have heard many questions, such as: "Will the stimulus bill work?"..."Where is the money coming from?"..."What will this do to our future?" I think it's safe to say there is a wall of worry.

March will mark one year since Wall Street began unraveling with the demise of Bear Stearns. No one could imagine then that we would be where we are today. Lehman Brothers and Merrill Lynch are gone. Many stories abound as to what happened, who did what and who is to blame. Certainly, as we've learned about the unbridled greed everywhere, we have come to the conclusion that there are plenty of folks to blame.

I know that it is extremely disturbing to have spent years doing financial planning - saving, acting responsibility - only to watch part of one's wealth evaporate in a poof because of the financial chicanery of so many. I also know it is hard for many of you to see light at the end of the tunnel. Today there is a short supply of optimism as well as credit.

Obama's speech is important because the rally to optimism and "light at the end of the tunnel" is part of the recovery. We are what we believe.

Interestingly we have more of the world rooting for us. And that is a very important "plus" for the recovery. Without the US economic recovery…the global economy will struggle even more. The miracle of the last decade or so has been the emergence and growth of the middle class in the emerging economies around the world. This new and growing middle class is the force for democracy, entrepreneurial spirit, economic growth and peace in the world that trumps any other effort to promote our interest in these areas. However the survival of this new middle class is somewhat dependent on a financially strong US economy.

So what is this missive all about?

First, I do think and believe, based upon my experience and U.S. history, that all the money being thrown at the banks and ordinary folks through the stimulus bill will result in a big step toward economic recovery.

That being said, there is a natural delay between the time the first dollar is spent and the time when that dollar begins to ripple and multiply through the economy. Waiting for the cure is not easy for most of us, especially if you keep looking at your portfolio values. The outcome will depend on minimizing wasteful spending and mistakes... it's important as voters to remind the elected officials that this is not the time for luxuries or pampering constituents.

One worry I would like to share. I watch quite a few cop shows on TV. Often times, the good guys enlist criminals to help solve the crime. Smart move. Conversely, I have heard that the Obama administration, in their commitment to being purist and avoid conflicts of interests, does not want to hire anyone from Wall Street. As a consequence Geithner and others have had trouble finding adequate staff. Maybe they can learn something from Law and Order?

Still, we have a combination of wise elders (Volker), energetic enthusiastic brilliant young minds (Geithner and peers), and a calm scholar (Bernake). I believe these men are the best to steer us through somehow.

Historically, economic turning points (or tipping points) have created new opportunities. Go back and study when Microsoft, Apple, Genetech, and other giants of today started. Yes, some of our mighty institutions will fade away… but new ones will emerge for the next decades. For now, the Starner Group's task is to facilitate navigating these turbulent waters to the light at the end of the tunnel.

Opinions expressed are those of (Margaret C. Starner, CFP®) and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice.


As you may know from recent headlines, the market experienced the worst January in history this year. Many look to January as the indicator of the market for the year. Of course, no one can predict the future and the "January Indicator" has not been foolproof in the past … we will wait and see. I am happy to say farewell to January.

This January was sad for personal reasons ... I bid farewell to two friends. Lou Kirschbaum and Earl Pertnoy.

Lou managed the Equity Income portfolio for Eagle (a Raymond James subsidiary). I knew him best as my professor and friend. Over 20 years ago, Lou and I began to have scholarly discussions about the market … the phone calls were long and frequent. Lou was a true student of the markets, having spent his early years as director of Research at Value Line. He wasn't a whiz trader ... he understood value and valued income. During the dot com era, he was "pooh-poohed" like many other patient long-term value managers. Despite those dark days, Lou persisted in his belief that free/cheap money would eventually bring its own form of destruction. Lou taught me about traps and opportunities. If I asked questions he couldn't answer ... he would ponder and reflect until he determined the appropriate response. Scott soon became a part of these conversations. In early December, Lou called and said "I only have a few weeks" and we had our last market conversation. Scott and I flew to visit with him at his home near Tampa. Lou gave us one last tip - focus on the large caps for now. He passed away a week later on January 5th. Lou was a good man in every sense of the word ... a good man to his family, friends, company, clients, Temple, and the world. I will miss him and our talks.

Earl Pertnoy was Scott Weingarden's grandfather. Earl led what appeared to be a low-key life in his 80's. However, Earl was a giant to many. Rather than write my thoughts about Earl, I wanted to share with you an excerpt of the wonderful eulogy Scott delivered at Earl's funeral:

What I want to share with you today is a little insight into my special relationship with my grandfather.

As a child I had the typical grandchild-grandparent relationship – visit your grandparents on weekends and holidays and speak to them on the phone once in a while (mostly prodded by my parents). However, as an adult, our relationship changed when I began my current career as a financial planner about 11 yrs ago. "Pop Pop" and I embarked on a new phase of our relationship now that we had something we both enjoyed talking about: business and the markets.

Through our multiple daily phone calls, sometimes as many as 10 in a day, we both began to learn from each other. How cool is that? Being able to learn from and teach your grandfather a few things at the same time. After several years of this back and forth, I feel like we eventually became equals on some levels.

Pop Pop, as a child of the depression, was a creature of habit and set in his ways. For example, I sent him hundreds, maybe even thousands of e-mails over the years, but it took probably eigth years for me to get my first e-mail back from him. This was a man who typed out his checks on a typewriter and would clip articles weekly for me and many in his family. I'm sure many of you out there have been on the receiving end of some of these articles ... my wife and kids would even receive articles sometimes. And you didn't just get the article, you got arrows drawn to, and circles around, the pertinent parts of the article Pop Pop wanted you to read.

Frequently he would send me checks to be deposited into an account – included with the check would be a note on his "From the Desk of Earl Pertnoy" stationery that said "please call me to confirm receipt." For 11 years he would type out this same note every time, as if I didn't know by year seven or eight to tell him when the check arrived. The irony is that he would call me virtually every time to ask if I had received the check before I even had a chance to call him. When I told him "yes the check arrived" he would then be annoyed I hadn't called him. Sometimes you couldn't win, that was part of his charm.

We also discussed the state of the market every day. Pop Pop always had some great sayings when we discussed the market, such as "bigness destroys" and my personal favorite, "When they raid the whorehouse, they take all the girls" (referring to times such as now when the entire market is down and even great company's stocks are declining).

I want to conclude my tribute to Pop Pop today by leaving you with some of the valuable lessons I learned from him over the years. Number one, why only tell a story six or seven times, when you can tell it 15 or 20 times (that's just a joke, Pop Pop!)

Now for the serious lessons:

  1. Always conduct yourself in a manner that will leave people speaking respectfully of you even when you aren't in the room.
  2. You can make quite a difference in people's lives without seeking the limelight. Those who know Pop Pop well, know he purposely avoided the limelight with a passion, preferring to be the behind the scenes advisor to many.
  3. Lastly, wealth can be measured in many ways, but the truest measure of wealth for Pop Pop would be this gathering today and the hundreds of people who came to pay tribute and honor this devoted family man." (over 700 were at the Temple to say farewell)

In due time, we likely will recover from the market losses. Sadly, we will never get Lou and Earl back. However, we will remember them and their many lessons forever. They have made us better and will enrich what we do for you, ourselves, and our families. Earl and Lou: thank you !

| January 26, 2009 – HAPPY NEW YEAR OF THE OX |

January 26, 2009 begins the Chinese New Year. The Chinese zodiac consists of 12 years and each year of the zodiac is represented by an animal - this year is the Ox. The Chinese calendar goes in a 60 year cycle. We are in the 26th year of the cycle, which is the 2nd year of the 2nd zodiac. The place in the calendar and zodiac makes this the Year of the Earth Ox. The Earth Ox evokes stability and dependability. Thus this year will have similarities to 1949.

What does the Year of the Ox have in store for us? As legends go...

The Ox is a practical work animal, while the Earth element is steady and firm. Together they create a kind of plodding energy that can be exasperating. Still, progress will be made in 2009, though it will occur in slow, barely perceptible increments. If you stay patient and keep your nose to the grindstone, you will make the most of this ponderous energy.

Oxen place great emphasis on authority and tradition. Therefore, 2009 will lay an especially heavy burden on world leaders. Government officials, CEOs and community organizers will be expected to correct society's ills. If they slack off, they will be thrown by the wayside. Substance is always favored over style in the year of the Ox. (I promise I did not make this up).

2009 promises to be a time of financial restraint too. Positive thinking will not be enough…hard work will be rewarded.

Practical tradesmen like plumbers, electricians, carpenters, and mechanics may do especially well this year because the Earth Ox prizes foundations. Anyone involved in strengthening and improving foundations is sure to profit in 2009. Teachers, engineers, farmers, nurses, dentists, doctors, politicians, technicians are also in for a good year, as the Earth Ox favors long term investments in people and structures. Creative professionals may have a lean year in 2009….as such work seems superfluous to the ultra-practical Earth Ox.

Home improvement projects are highly favored this year. Earth Ox years are also wonderful for acquiring hands-on skills.

What about love this year?? The year of the Earth Ox is time to get serious. The Ox doesn't favor careless flings...reminder...this animal favors work over play.

The Chinese place great emphasis on what year you are born. The Yin and the Yang also play an important role in the Chinese calendar year. The years ending in odd numbers are Yin while the years ending in even numbers are represented by the Yang. This means this Ox year will have a Yin influence.

The Chinese character for "Yin Earth" represents a field or garden. It is associated with the quality of moderate, peaceful, intellectual, charming, and charitable kind of person.

Babies born this year will have the following traits: Dependable with leadership qualities, patient, strong and responsible, and they will be great in organizing. They are also honest, reliable and logical. People born in this year are also said to be stubborn, narrow-minded with low public relation skills.

Our new president, Barack Obama, was born in the year of the Ox and is a Yin Earth person. Thus his birth elements bear similarity with Abraham Lincoln, who is also a Yin Earth person.

What is the point of all these predictions besides the wish to know the future? From a practical standpoint, it's about multiplying good luck and minimizing bad luck. In this year of the Ox, you will be rewarded for working hard to make sure your foundation is in order. Avoid wishful thinking. Not so bad for those of us who believe in long term planning.

HAPPY New Year of the OX!!!

Years of the OX: 2009, 1997, 1985, 1973, 1961, 1949, 1937, 1925, 1913, 1901.