The Importance of Investor Relations Consulting in Providing Exposure for Startup Enterprises

Developing companies face a number of challenges. Many such companies know they have a good idea, whether it be a new technology, human service, or something else. They know their idea can have a major, profitable impact. However, the conditions have to be right. These companies often rely on a new, unknown, and untrusted idea, concept, or product. They may also face difficult competition from more established players in their market. In an environment defined by these sorts of marketing challenges, it can be difficult to gain sufficient startup capital to establish a competitive market footprint. Moreover, these challenges can be greatly exacerbated in a weak economy. In a pool of diminishing resources, consumers are cutting back on all but the most essential goods and services, and suspicious, funds-short investors are wary about anything that does not look like a sure bet. Many larger, established companies have specialists permanently on staff to help the company frame its information flow in the face of this kind of skepticism, but it may not be financially feasible for a startup to hire such a specialist on a permanent basis.

A good investor-relations consulting firm can help a company facing these daunting prospects. There are a variety of consulting firms available, such as Emerging Markets Consulting, that specialize in working with startup enterprises. These consultants offer strategic planning to help the fledgling company better position itself in relation to its peers. Oftentimes, the biggest challenge to startups is visibility. A new company may be an unknown quantity in a field of established, trusted competitors, and what little exposure the company does have may do more to hurt it than help it if that exposure is not conducted in the proper manner. In such conditions, the new company needs to construct a compelling story that can convince potential investors that what the company has to offer is worth an investor’s money. A good consulting firm will provide the coaching needed on how to use both traditional and digital media—including websites, webcasts, mail, and email—for the company to make a compelling case for the viability of its product or service. An effective consulting specialist will understand how best to deploy these media vis-à-vis developing market trends to create an attractive profile that puts the client company’s long-term prospects in a positive light and that helps the company aggressively answer potential investor concerns. Consultants will also be able to provide sound advice regarding how to properly follow oftentimes complex federal regulations.

Perhaps most importantly, a quality such consulting firm will have access to concrete resources. Investor relations specialists are in the business of building relationships in the investment community, and the best such specialists are trusted by expansive networks of contacts. They can oftentimes put startups in contact with precisely the right people needed for the company to establish a strong capital base.

US futures flat after Dow hits post-crisis high

US stock market futures flat a day after Dow hits highest point since 2007; banks rising

U.S. stock market futures are little changed a day after stocks posted the biggest gains of the year.

Dow Jones industrial average futures were up 5 points to 13,115.

The index closed at its highest level since 2007 on Tuesday — within 1,000 points of its record — after a day of encouraging signs for the economy: Retail sales were strong, the Federal Reserve was optimistic and most of the nation's biggest banks got a clean bill of health.

The Nasdaq composite index also reached a milestone on Tuesday, closing above 3,000 for the first time since December 2000. Inpremarket trading Wednesday, Nasdaq 100 futures edged up 0.50 to 2,694.50.

S&P 500 futures added 0.3 points to 1,391.

Bank stocks were gaining modestly in premarket trading after surging Tuesday. JPMorgan Chase & Co. added 6 cents in the premarket after leaping 7 percent on Tuesday. Bank of America Corp. shares added 20 cents ahead of the opening after Tuesday's 6.3 percent gain.

Citigroup Inc., which also jumped more than 6 percent Tuesday, fell 4.3 percent in premarket trading after being one of the four major banks that failed the Fed's annual "stress tests."

The bank rally started Tuesday when JPMorgan Chase said it was raising its dividend and launching a $15 billion stock buyback program, all with the blessing of the Fed.

The Fed was planning to wait until Thursday to release the results of its stress tests, which determine which are healthy enough to raise their dividends. After JPMorgan's announcement, the Fed released the results early.

The Fed's action was the latest sign that the U.S. financial system was getting healthier.

"That's what really made the day," said Jeffrey Kleintop, chief market strategist at LPL Financial. Banks were easily the best-performing stocks in the market, gaining almost 4 percent as a group.

The Nasdaq gain was also notable. On Dec. 11, 2000, the last time the Nasdaq closed above 3,000, it was in the middle of a horrifying slide — from a peak above 5,000 in March 2000 to just above 1,100 in October 2002.

At the beginning of 2000, the peak of the dot-com frenzy, investors valued stocks in the Nasdaq composite index at an astronomical 175 times their per-share earnings over the previous year.

Google was not yet a public company, and the iPod didn't exist. Apple pulled in $2.3 billion in quarterly revenue. Many Nasdaq companies were Internet startups with high stock prices but big losses.

And many of them failed, taking the Nasdaq down with them.

Jack Ablin, chief investment officer at Harris Private Bank, said the key difference between the Nasdaq then and now is that the technology companies that dominate the index only promised profits 12 years ago.

"The Nasdaq hasn't done much of anything for 12 years, but it's had a huge rally in earnings," Ablin said.

Today, the profits are real. Apple reported $46 billion in revenue in its latest quarter. The Nasdaq composite, which includes more than 2,500 companies, trades at about 24 times earnings, according to Birinyi Associates.

Meanwhile, the S&P is a 12 percent rally from its record of 1,565.15.

Brian Gendreau, market strategist at Cetera Financial, said stocks could still go higher. Investors are paying roughly 14 times the past year's earnings for the S&P 500 index. The long-term average is closer to 15.

"Valuations are still very cheap," he said.

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AP Business Writer Eileen AJ Connelly contributed to this report.

BMW warns sees no signs of end to incentive war

BMW (GER:BMW.DE - News), the world's largest premium carmaker, warned that more and more profit-eroding incentives are being offered to sell luxury cars at the moment, adding there are no signs this will change anytime soon.

"What we see with the beginning of the fourth quarter is that the pressure on the pricing front has increased. When it will end is, at the moment, not clear," finance chief Friedrich Eichiner told analysts during a webcast.

BMW does not break out separately the net effect of pricing power on its earnings due to competitive reasons, but the Automobile segment's earnings before interest and tax (EBIT) improved by 3.14 billion euros ($4.12 billion) last year thanks to a combination of balance of volumes, sales mix and pricing.

Eichiner also said efficiency gains would be in the medium to high hundreds of millions of euros this year, compared with 520 million in 2011.

According to Eichiner, BMW's financial services business set aside a risk provision of around 100 million euros last year due to exposure to the Southern European luxury car market. ($1 = 0.7628 euros)

(Reporting by Christiaan Hetzner)

Magnitude 6.1 quake jolts eastern Japan, no tsunami warning

TOKYO (Reuters) - An earthquake with a preliminary magnitude of 6.1 hit east of Tokyo on Wednesday but no tsunami warning was issued and there were no initial reports of damage or troubles at area nuclear plants, the Japan Meteorological Agency and local media said.

High-speed bullet trains serving northern Japan were halted and the two runways at Tokyo's Narita International Airport were closed after the quake but quickly resumed operations, local media reported.

No abnormalities were reported at the Tokai No.2 nuclear power plant northeast of Tokyo, which has been shut for routine maintenance, or at Tokyo Electric Power Co's tsunami-hitFukushima Daiichi and Daini plants, local media said.

The earthquake, which caused substantial shaking in Ibaraki and Chiba prefectures east of Tokyo, followed just a few hours after a magnitude 6.8 quake jolted northern Japan. A tsunami warning was issued but later lifted after that earthquake.

Just over one year ago, the northeast coast was struck by amagnitude 9 earthquake, Japan's strongest on record, and a massive tsunami, triggering the world's worst nuclear crisis in 25 years at the Fukushima Daiichi plant.

There has been a five-fold increase in the number of quakes in theTokyo metropolitan area since the year-ago disaster, the Tokyo University Earthquake Research Institute has said.

(Reporting by Kaori Kaneko; Editing by Edmund Klamann)

Fear of Iran is inflating gas prices

Tensions with Iran are adding at least 30 cents to a gallon of gasoline in the United States, and experts say gas prices have only just begun to rise.

Gasoline prices have surged over 10% in the last two months, largely tracking the runup in oil prices, which have increased by a similar amount and are now at a 9-month high.

Several factors have caused oil prices to rise, including the sense that the economy is improving and supply disruptions in a handful of minor oil producing nations.

But the biggest factor by far, say analysts, is fear that tensions with Iran will lead to an all-out war that causes a disruption in oil supplies.

"The market right now is fairly well supplied," said John Kingston, director of oil, at the analytics firm Platts. "You've just got a significant fear factor that things could get worse."

Kingston noted that OPEC is actually producing more oil right now than is needed to keep pace with global demand. As such, stockpiles are rising.

Gas spending and prices by state

And thanks to the recession and better fuel efficiency, gasoline demand in the Untied States, the world's largest consumer, is actually the lowest it's been in a decade, according to the Energy Information Administration.

Yet gas and oil prices continue to climb.

The fear is that Iran's 2.2 million barrels a day in exports could be cut off. Iranian oil is already being sanctioned, but so far most is still finding its way to market, just at lower prices.

Worse, there's fear the 17 million barrels a day that flow through the Strait of Hormuz, one fifth of the world's total production, could be disrupted by an Israeli attack.

That's a big reason why gasoline prices in the Untied States averaged $3.37 in January, the highest for any January ever, according to AAA.

"It's a market that's caught fire," said Ben Brockwell, an analyst at the Oil Price Information Service, which collects data for AAA. "And it doesn't look like there's any circuit breakers to stop it."

Indeed, Brockwell noted that while retail prices are up 36 cents a gallon in the last two months, futures prices have risen even higher -- 82 cents over the same time period.

Unless the situation with Iran cools off and future prices decline, consumers will likely see that 35-cent-a-gallon difference in the form of a similarly paired price hike at the pump in a matter of weeks.

Iran's 'distressed' oil to keep flowing - at deep discount

"I definitely think the market is psyching itself up for a new record," he said, referring to the previous high for gasoline, which was $4.11 a gallon set in the summer of 2008. "Probably before memorial day."

That possibility has got a lot of people freaked out. Everyone from the Obama administrations to the American Petroleum Institute has been trying to talk down prices in the last few days.

Many economists say gasoline prices sustained above $4 a gallon couldstunt the growth of the fragile worldwide economy -- a fact which diplomats shuttling to Israel must be well aware.

It's thought the Israelis are considering an attack on Iran as a means to disrupt its nuclear program, which Iran says is for peaceful purposes but many suspect is intended to produce a bomb.

But if Israel can't be persuaded to hold off an attack, $4 gas will look cheap.

"If Israel does hit Iran, all bets are off," said Mike Fitzpatrick, editor-in-chief of Kilduff Report's Energy Overview. "$150 [oil] is the first marker we'll hit."

Oil at $150 a barrel could translate into over $5 a gallon at the pump.

How to Avoid Miscalculating in Small-Cap Investments

Many investors seeking big gains look to small-cap stocks. Definitions vary, but “small cap” typically refers to stocks with market capitalizations of between $300 million and $2 billion. These stocks oftentimes represent smaller, fledgling companies, and an investor who buys a large stake in such a company does so with the hope that the company will take off, thus making the investor a large sum of money. Large caps, by contrast, cannot promise such exponential gains; they are stable, to be sure, but their growth is more likely to be steady than marked.

With big potential comes big risk, though. As said, small caps typically represent younger, less established companies, and, needless to say, many more of these companies are destined to become the next Atari than the next Nintendo. The image of an investor breaking the bank on the latest “sure thing” to flop is just as common as that of an investor making a killing off a wise speculation. What can one do to protect their investment while speculating in small caps?

One way to go is to invest in small-cap exclusive mutual funds. It is popularly thought, although perhaps not universally true, that, on average, small caps outpace large caps over time. If that’s true, then investing in a range of small caps via a small-cap exclusive mutual fund should be more lucrative than investing in large-cap funds, and investing in a fund, of course, has the benefit of protecting one from the failure of any one of the companies represented by the fund.

Of course, at the same time, the flip side of investing in a fund is that the failures of companies represented by funds drags down the gains to be had by the successes of the other companies. Small-cap funds are stable, but they do not have the potential for exorbitant success. Therefore, many investors still seek to speculate in individual small caps.

Investment guru John Wilkinson provides some suggestions that may help such a person, saying investors should avoid “the seven deadly sins.” Talented professional traders, says Wilkinson, do not give in to “greed, lust, envy, laziness, gluttony, pride and vengeance.” What does this mean?

For one thing, what we have just said: Spread your money around, not only in small-cap funds but, also, in other types of stock and funds. Greed is wanting too much of a good thing, and those who put all of their capital in one thing risk losing it all. Good investors have to avoid this kind of temptation.

Once your portfolio is diversified, though, you will still want to wisely pick the right individual stocks. Wilkinson’s “seven deadly sins” metaphor indicates, for instance, that investors should avoid lust—the desire to invest in something that simply looks too good to be true, as most such things turn out to be just that, that is, not true.

As may already be clear, Wilkinson’s argument is, in sum, to avoid investing on emotion. Good investors do their research and make decisions based on sound analytical judgments, not hunches about “what feels right.”

Million-dollar foreclosures rise as rich walk away

Five years after the housing bubble burst, America's wealthiest families are now losing their homes to foreclosure at a faster rate than the rest of the country -- and many of them are doing so voluntarily.

Over 36,000 homes valued at $1 million or more were foreclosed on -- or at least served with a notice of default -- in 2011, according to data compiled by RealtyTrac, which tracks foreclosures. While that's less than 2% of all foreclosures nationwide, it represents a much bigger share of foreclosure activity than in previous years.

"These properties are accounting for a bigger piece of the foreclosure pie," said Daren Blomquist, vice president of RealtyTrac.

Out of all foreclosure activity, the share of foreclosures on properties valued at $1 million or more has risen by 115% since 2007 while the share of multi-million dollar foreclosures -- or homes valued at more than $2 million -- jumped by 273%. Meanwhile, the share of foreclosures on mid-range properties valued between $500,000 and $1 million fell by 21%.

Until recently, many homeowners at the high end of the housing market were able to postpone the foreclosure process, Blomquist explained. With other assets and alternatives, "they had more financial means to hold out against default."

In addition, lenders are typically more amenable to working with homeowners that have other resources, said Ron Shuffield, president of Esslinger-Wooten-Maxwell, a real-estate firm in Miami where homes priced over $1 million represented 9% of all foreclosures last year.

But with a recovery in the housing market still years away, foreclosure has turned out to be a worthwhile option after all. Saddled with bloated mortgages after a long run up in property values, many high-end homeowners have chosen to pursue a "strategic default." Even though they can afford the monthly mortgage payments, they still decide to walk away from their home because they owe more on the property than it is worth.

See inside 8 multi-million dollar foreclosures

"In the lower-priced houses you'll see more people defaulting because they can't afford the payments and it's a choice between feeding their family and paying the mortgage on a home that's under water," said Stuart Vener, a national real estate and mortgage expert with the Florida-based Wilshire Holding Group.

"In million-dollar homes, you're looking at people who can afford it, but they have to make a business decision: Does it make sense to make payments on a mortgage when the home is worth less than they owe?" he said. In many cases, it often makes more financial sense to walk away.

At least they can take their time packing up all of their belongings. On average, it takes about 348 days for a foreclosure to be completed, Blomquist said. "They may get almost a year of free housing out of the deal."

But don't expect a few depressed mansions to bring down the neighborhood. A single foreclosure in an otherwise wealthy area is unlikely to impact surrounding values, Blomquist said.

"You're not going to see the weeds growing," Vener added. But there will be an opportunity for buyers to snatch up these impressive houses at bargain basement prices, he said, which could provide a much-needed boost to sales overall. "In a good way, this is going to drive turnover," he said.