My Understandig

The Fortune magazine is a some kind of theological magazine which all people around the world who are interested in business can follow news through it. In this Fortune No23 Dec 2008, the articles mostly focused on the financial problem which the world faced to it since 2008. The problem caused by decrement of house price, stockholders, different type of business and people ran away from buying goods. as I mention in above you can see different idea from people who are working in different type of business or some theoretician. most of them think the changes which organization do on their business are not help full and even make their business worse.

About First Article

The title of the first article is “Making Sense of the madness” , the first paragraph is about Dr. doom’s idea , he think this problem will be continued and maybe it will become worse than the day it was started, he has an idea about the rate of unemployment which said that the rate of unemployment people is going to increase to 9% in 2010, also he talk about using credit cards which now no body like to do it. He also explained the decrement of the house price which was fallen to 25% and he thought that this rate will fall another 15% until 2010.In his sight of view the customer should stay away from stock market, credit, commodities and etc.

In Meredith’s idea is that “What the government has done is so far with TRAP”. She said that what they done is not fundamentally and it will be deficient. In her idea when the governments announce these plans, investors get excited and hopeful. But detail have been slim and white she appreciate the government saying “We’ve been wrong, let’s change the strategy” the strategy change has not solve anything. In this word I can see the real meaning of innovative change , which I studied during past semester, What the organization need to know is knowledge about how to change and transform to gain succeed? Also her answer to this question “What will happen in 2009?”, she thought that the overall economy will be worse than people expected in 2009, the biggest issue will be consumer spending. He also said that if the biggest impact in 2008 was the market impacting to economy, in 2009 it will be about economy impacting the market, which is already started.

The Second Article

In continues the other article which was amazing to me is “Where in the world to put your money”, which talk about the international stocks. For example China's CSI index of 300 publicly traded stocks has fallen 63% for the year. The MICEX index of 30 of Russia's most liquid stocks is down a staggering 73%.

In this article the author tries to introduce some companies which in his idea is good to invest capital on. These companies are: 1-PetroChina, 2-Novartis, 3-Emerging market. As I read for Novartis the reasons that author publish to buy its share is “Novartis has always been innovative, and the new research approach may goose its earnings. And if the genetics gambit takes some time to materialize, Novartis (NVS) still looks like a safe bet: The stock is trading near its 52-week low and yields a tidy 3.4%. For those looking for a healthy blue-chip stock, Novartis might be exactly what the doctor ordered.” What I understand from this article is that if an organization can manage the changes and use is in a right way even in worst conditions they can be best.

Where in the world to put your money

International stocks are in even worse shape than U.S. equities - and that presents hardy investors with an opportunity to go abroad.

As bad as the year has been for U.S. equities, the scene around the world has been even more harrowing. Morgan Stanley Capital International's index of 21 non-U.S. markets is down 49% through Dec. 1, 2008, compared with a 43% slide in the S&P 500. But the real devastation has occurred in once-hot emerging markets. China's CSI index of 300 publicly traded stocks has fallen 63% for the year. The MICEX index of 30 of Russia's most liquid stocks is down a staggering 73%.

A year ago many economists and analysts earnestly posited that the global economy had "decoupled": Fast-growing European and so-called BRIC countries - Brazil, Russia, India, and China - could thrive regardless of what was taking place in U.S. and Western European markets.

Turns out it really is a small world after all. These rising economies are now suffering as mature countries' demand for their wares weakens.

Complicating the picture for global investors is the potential volatility of the U.S. dollar. Despite the weakness in the American economy and financial system, the dollar has strengthened in recent months as international investors have sought a safe haven for their money. Today's dollar buys about 0.79 euro, compared with 0.68 euro a year ago.

The effects of currency swings can be tricky to calculate. A stronger dollar can boost profits at foreign companies that get a lot of their sales in the U.S., for example, but it increases the cost of many raw materials those companies use, like oil, that are traded in dollars. And with Washington borrowing hundreds of billions of dollars to boost the flagging economy, the value of the dollar could easily plummet as the financial crisis eases.

For long-term investors, the best advice is to stick with strong companies and don't worry about currency fluctuations. We've identified three investments that trade on the New York Stock Exchange (and thus in dollars) that are good bets for people looking to test the international waters.

Petrochina

For all the handwringing about slowdowns in the Chinese economy, the country's long-term growth is undeniable: China continues to urbanize, invest in infrastructure, and consume more and more energy and commodities. Even before the central government announced a huge stimulus program to put a floor under the economy, China said that it was building 93,000 miles of new oil and gas pipelines.

Yet the stocks of many of China's suppliers have been crushed in recent months, and that makes for some interesting buying opportunities. "Any sign of recovery in demand (in emerging markets) will send stocks higher in the energy and commodity space," says Khiem Do, head of the Asia multi-asset group at Barings Asset Management in Hong Kong.

Among the possibilities, PetroChina (PTR) is hard to ignore. Its stock has been beaten down from a 52-week high of $206 on the NYSE to a recent low of $56. Buyers pounced when the stock plunged; Petro-China now trades around $79 a share. But analysts argue that it is still cheap: It is trading at about eight times the past 12 months' earnings, on par with Exxon Mobil (XOM, Fortune 500), which is likely to grow much more slowly. China, after all, remains a great market for PetroChina's products: Each day it adds 25,000 cars to its roads, and - sorry, environmentalists - none of those vehicles are Priuses. PetroChina, for anyone not cowering beneath the covers these days, should be at the core of any foreign portfolio.

Novartis

A fair number of people have indeed assumed a fetal position, especially when it comes to investing in companies based in places like China and India. Those investors may be wondering if there are any good buys to be had in relatively stable Western Europe. Teun Draaisma, head of European Equity Strategy at Morgan Stanley, notes that developed Europe is trading at all-time lows relative to the U.S. That's right, all-time lows. Even so, given the economic contraction globally, he's not willing to get too frisky, so he recommends defensive names such as big European pharmaceutical and telecom stocks.

Of those, Swiss pharmaceutical and biotech company Novartis is perhaps the most intriguing. Like most Big Pharma companies, Novartis is facing a lot of pressures globally, including the loss of its most profitable patents and increased competition from generic drugs. To combat these challenges, Novartis has been redirecting its research and development pipeline. It is now focusing on the genetic underpinnings of what makes people sick, and trying to address them. The company says that it has a larger and more promising stable of drugs in development - including early-development treatments for hepatitis C, ovarian cancer, spinal cord injuries, and solid tumors.

Novartis has always been innovative, and the new research approach may goose its earnings. And if the genetics gambit takes some time to materialize, Novartis (NVS) still looks like a safe bet: The stock is trading near its 52-week low and yields a tidy 3.4%. For those looking for a healthy blue-chip stock, Novartis might be exactly what the doctor ordered.

Lazard Emerging Markets Equity Fund

For investors who believe that Brazil, China, India and other developing economies will bounce back, the safest bet is to buy an emerging-market fund. Lazard's Emerging Markets Equity (LZOEX) fund is open to new investors for a minimum $2,500 commitment.

Like all such funds, it's gotten crushed this year, down 61%. But its top ten holdings are mostly big, liquid companies (Korea's Samsung and Russia's Lukoil among others) that should remain upright even in the midst of a global slump.

In the last ten years the fund has returned close to 8% annually - not bad, considering that his tenure has included the two worst periods for emerging markets in the post-World War II era. By focusing on big-cap companies in solid sectors, this fund offers shareholders a lot of international exposure without an undue amount of risk.

Correction: In an earlier version of this story, we inaccurately described the Lazard Emerging Markets Equity Fund as an exchange-traded fund. It is not an ETF. We also said the minimum investment in the fund is $5,000; it is $2,500. We incorrectly identified the portfolio manager of the fund. It is James Donald.

Citadel under siege

Ken Griffin's $15 billion firm was flirting with disaster this fall. In a rare interview, he explains how it survived.

On the morning of Friday, Oct. 24, James Forese, Citigroup's head of capital markets, picked up the phone and called Kenneth C. Griffin, the founder and chief executive officer of Citadel Investment Group, a Chicago-based hedge fund that manages $15 billion and has 1,300 employees worldwide.

For Forese, it wasn't an easy call to make, but he felt compelled to do it. People were gossiping all over Wall Street, on CNBC, and on blogs that Citadel was toast. Word had it that the firm's two hedge funds were down as much as 40%. Talk of the firm's liquidation was rampant.

Then there was the most damaging rumor of all: Griffin had been holding "secret meetings" with the Federal Reserve, looking for a bailout.

According to the scuttlebutt, Citadel was shaping up to be the next tragedy of the credit crisis - soon to be tagged and bagged alongside Bear Stearns, Fannie Mae (FNM,Fortune 500), Freddie Mac, and AIG (AIG, Fortune 500).

The firm's vital signs were in fact weak: Credit default swaps (essentially insurance) on Citadel's bonds were trading at distressed levels, priced higher than the ones on Lehman Brothers during the Friday before the investment bank declared bankruptcy.

As one of Citadel's trading partners, Forese knew the truth: Citadel's liquidity position was fine, though its flagship funds were down about 35%. So Forese told Griffin to do something that went against every clandestine bone in the hedge fund manager's body: take his case public.

"Ken, you guys are getting killed in the rumor mill," Forese said. "Most of these things are just blatantly false. If you get out there and say you're fine, it will mean a lot to the market right now."

Griffin, 40, took the advice to heart and staged a conference call in which he addressed the firm's cash position and performance. Within days, the rumors ceased and the firm stabilized - albeit with assets down about 25% from where they had been at the end of 2007.

"I have never seen a market as full of panic as I have seen in the past two months," Griffin told Fortune in a rare interview on Nov. 14 at New York's Four Seasons Hotel.

The experience of being inside the panic changed Griffin and changed his firm. Once thought of as humorless and stiff, he now comes across as more personable and even makes the occasional quip. He no longer speaks about how Citadel will become the Goldman Sachs of the 21st century.

While it may be hard to relate to a guy who buys an $80 million Jasper Johns painting (as Griffin did two years ago), the story of how Citadel clawed its way back from the abyss is a cautionary tale for any investor who would try his hand at making money in volatile markets. The firm's horrific downturn provides a lesson about the way raw human emotions like panic can trump even the smartest mathematical models.

More important, the tactics the hedge fund used to survive - preventing its investors from withdrawing en masse and opening up its books - may become trends for hedge funds in the future. He summed up this life lesson when he testified before the House Committee on Oversight and Reform in November: "Our financial markets work best when they are competitive, fair, and transparent."

Griffin, a math whiz who traded stocks from his dorm room when he was at Harvard, had until very recently succeeded in insulating his firm from risk. Since starting his hedge fund in 1990, Griffin had become a multibillionaire.

He had grown Citadel beyond a hedge fund into a diversified financial company with lucrative, fee-based businesses. Those include trading and back-office services as well as a trading platform that handles more than 30% of U.S. equity options trades and more than 8% of Nasdaq and New York Stock Exchange stock trades.

The firm seemed so solid that two years ago it effortlessly sold roughly $500 million of bonds in its first offering and was considering going public. Indeed, Citadel has been one of the most successful and consistent hedge funds over the years. The firm prided itself on using state-of-the-art technology to turn investing into a science.

Between 1998 and 2007 it notched returns of 20% a year, more than three times that of the Standard & Poor's 500-stock index. Citadel's best year ever was 2007, because its flagship fund, Kensington, rose 30%.

Part of the explanation for these healthy returns was Griffin's talent for steering clear of investing fads. He also stepped in to profit from the wreckage when hot money chased the mania of the moment. Citadel pounced on Amaranth Advisors, the $9.5 billion hedge fund that cratered over bad natural gas trades ( "The Man Who Lost $6 Billion").

Citadel bought Amaranth's positions and eventually turned a sizable profit on them. It also swooped in and bought credit portfolios of Sowood Capital Management in mid-2007 when that $3 billion hedge fund took a 50% nosedive and imploded.

After watching Long-Term Capital flame out in 1998, Griffin specifically designed Citadel to be prepared for almost any market calamity.

"We had planned for a repeat of the crash of '87. We had planned for a repeat of '98," says Griffin.

He claims, for example, that Citadel would have made it through a 1987-style crash losing just a few percentage points, or "in pretty good shape." But, he is quick to add, "the idea that the largest banks in the world would simultaneously fail, need government support, government guarantees, and/or government intervention to survive was not in my range of realistic scenarios."

Maybe if he had paid more attention to English literature back in Cambridge, Griffin would have remembered Hamlet's admonition to his risk manager: "There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy."

Until Labor Day, Griffin thought he had pulled off one of the most difficult feats in investing: calling the bottom of the market. On trading desks, this strategy is also known as "catching a falling knife."

Making Sense of the Madness

One of the most interesting articles in this magazine is “MAKING SENSE OF THE MADNESS” which is about the opinion of theoretician about the financial panic of 2008 and what if it spill into 2009?

Also we asked them to put historically bad year in perspective and offer guidance on what’s ahead. In continue I briefly explain their thinking and then I’ll talk about some of Idea which I interested in.

Nouriel Roubini, known as Dr. DOOM theNYU economics professor saw the Mortgage-related meltdown coming.

Bill Gross, the founder of bond giant PIMCO warned of a subprime contagion back in July 2007 told that: “Investors need to recognize titanic shifts in market policies and be content with single-digit returns in future

years”. Robert Shiller, The Yale professor and Co-Founder of Macromarkets called both the DOT-COM and Housing Bubbles.

Sheila Bair, The FDIC chairman has been pushing to get mortgage relief for borrowers told: “We will dig out of this and when we do I hope for a back to basics society-with banks promoting real value and long-term growth”. Jim Rogers, The commodities guru predicted two years ago that the credit bubble would devastate Wall Street has an idea which is: “U.S Stocks are down a lot, but they’re still very expensive. The key is to stay solvent so you can load up when opportunity comes”.

John Train, The author and chairman of Montrose advisors has 50 years of Wall Street experience. Meredith Whitney, the Oppenheimer & Co. analyst was among the first to warn that the big banks had big problems, she thought that: “Overall economy will be worse than people expect. The biggest issue will be consumer spending”. Wilbur Ross, The billionaire chairman of W.L. ROSS & Co. Specialize in turning around troubled companies. His idea is: “The economy will not stabilize until mortgages are adjusted down to the value of homes, with affordable payment schedules”.

Pass over the Topics of Fortune No.23

In this fortune magazine the topics are:

Should Jump In Now:

Ignore, for a minimum, the turmoil in the business world. If you have the time (say six years) and the patient, you may want to carefully consider the markets. By ALLAN SLOAN

The Best Stocks For 2009

Here’s the silver lining of the market meltdown: Enquiries are cheaper than they’ve been in year. We found ten prospects that should flourish.BY JON BIRGER, KATIE BENNER, STEPHEN GANDE AND MINA KIMES.

The Case for Bonds

Solid corporation issues are offering juicy yields. BY SHAWN TULLY AND MINA KIMES.

Stock Picks from the Experts

The crash has driven prices so low that even extreme value investors see some buys. BY GEOFF COLVIN

Riding the Housing Bust

Investors are scooping up for closed properties, afraid of missing the real state chance of a lifetime, Want to join them? Follow our trip BY DAVID WHITFORD

The 2009 Housing Outlook

When will prices rebound? With the economy weakening probably not next year, when only two of the top 100 U.S. markets are expected to show gains. BY SCOTT CENDROWSKI

Where in the World to Put Your Money

International stocks are in even worse shape than U.S. equities, especially in once-hot emerging markets. That presents hardly investors with an opportunity to go abroad. BY BIL POWELL

Playing the Blame Game

Americans want simple answer to our economic woes. Here are four. BY GEOFF COLVIN

When Bad Year Happen to Good Funds

Even the best managers lost money in 2008. But we’ve found five with stellar long-term records who see today’s crisis as a golden opportunity. BY YUVAL ROSENBERG.

Making Sense of the Madness

Will the financial panic of 2008 spill into 2009? With a scary recession looming, we asked eight of the market’s sharpest thinkers-including Nouriel Roubini, Bill Gross, Robert Shiller and Sheila Bair – to put a historically bad year in perspective and offer guidance on what’s ahead.

The Colvin Interview

When will the market roar back? Charles Schwab, who’s had a few comebacks himself, says a lot sooner than you think. WITH GEOFF COLVIN

Citadels under Siege

Ken Griffin’s $15 billion firm was flirting with disaster this fall. In a rare interview, he explains how is survived. BY MARCIA VICKERS AND RODDY BOYD

How to Get Back in the Game

Here are some tips for navigating financial meltdown, culled from the pages of this year’s investment guide.

About Fortune Magazine

According Wikipedia: “Fortune is a global business magazine published by Time Inc.'s Fortune | Money Group. Founded by Henry Luce in 1930, the publishing business, consisting of Time, Life, Fortune, and Sports Illustrated, grew to become Time Warner. In turn, AOL grew as it acquired Time Warner in 2000 when Time Warner was the world's largest media conglomerate. Fortune's primary competitors in the national business magazine category are Forbes, which is also published bi-weekly, and Business Week. The magazine is especially known for its annual features ranking companies by revenue.CNNMoney.com is the online home of Fortune, in addition to Money and Fortune Small Business. Fortune was founded by Time co-founder Henry Booth Luce in February 1930, four months after the Wall Street Crash of 1929 that marked the onset of the Great Depression. Briton Hadden, Luce's partner, wasn't enthusiastic about the idea, but Luce went forward with it after Hadden's February 27, 1929 death (probably of septicemia)”

Luce wrote a memo to the Time, Inc. board in November 1929, "We will not be over-optimistic. We will recognize that this business slump may last as long as an entire year."

Single copies of that first issue cost $1 at a time when the Sunday New York Times was only 5¢. At a time when business publications were little more than numbers and statistics printed in black and white, Fortune was an oversized 11"×14", using creamy heavy paper, and art on a cover printed by a special process. Fortune was also noted for its photography, featuring the work of Margaret Bourke-White and others. Walker Evans served as its photography editor from 1945-1965.

An urban legend says that art director T. M. Clelland mocked up the cover of the first issue with the $1 price because nobody had yet decided how much to charge; the magazine was printed before anyone realized it, and when people saw it for sale, they thought that the magazine must really have worthwhile content. In fact, there were 30,000 subscribers who had already signed up to receive that initial 184-page issue.

During the Great Depression, Fortune developed a reputation for its social conscience, for Walker Evans and Margaret Bourke-White's color photographs, and for a team of writers including James Agee, Archibald MacLeish, John Kenneth Galbraith, and Alfred Kazin, hired specifically for their writing abilities.

Fortune became an important leg of Luce's Time/Life media empire, which has grown to become Time Warner. For many years Fortune was published as a monthly, but as of January, 1978, it is published twice a month. It considers its purview the entire field of business, including the people, trends, companies, and ideas that characterize modern business.

Marshall Loeb was named managing editor in 1986 and stepped down in May 1994 upon hitting Time Inc.'s mandatory retirement age of 65, to be replaced by Walter Kiechel 3d, an executive editor at the publication. During his tenure at Fortune, Loeb was credited with expanding the traditional focus on business and the economy with added graphs, charts and tables, as well as the addition of articles on topics such as executive life, and social issues connected to the world of business, such as the effectiveness of public schools and on homelessness.

While circulation of the business magazines sector has apparently slumped since 2000. Fortune claims their circulation has risen from 833,000 to 857,000 in that period.

Fortune lists A theme of Fortune is its regular publishing of researched and ranked lists. In the human resources field, for example, their Best Companies to Work For list is an industry benchmark. Its most famous lists rank companies by gross revenue and profile

Their businesses:

Fortune 500

Fortune 1000

Fortune Global 500

Fortune 100 Best Companies To Work For