3. INVESTOR'S BUSINESS DAILY
MONDAY, NOVEMBER 11, 2013
A3
Imagine the possibilities
and weigh them by the probabilities.
Thomas Peterffy
Founder
Interactive Brokers
Good advice for navigating through life,
directly applicable to investing
and the very essence of options trading.
At interactivebrokers.com/probabilities
I tell you a practical way of thinking about options
without complicated mathematics.
The most valuable half hour
you could spend on this topic.
Interactive Brokers
Interactive Brokers LLC is a member of NYSE/FINRA/SIPC. Probability LabSM (Patent Pending). Any trading symbols displayed are for illustrative purposes only and are
not intended to portray recommendations. Supporting documentation for any claims and statistical information will be provided upon request. Options involve risk
and are not suitable for all investors. For more information read the “Characteristics and Risks of Standardized Options”.
11-IB13-695CH691
For a copy visit Interactivebrokers.com/disclosures or call 203-618-5800.
4. A4
MONDAY, NOVEMBER 11, 2013
INVESTORS.COM
WISDOM TO LIVE BY
Cutts On Time Management
When you’ve got five minutes to fill, Twitter is a
great way to fill 35 minutes.
Manning On Practice
Pressure is something
you feel when you
don’t know what
you’re doing.
Zeldman On Marketing
The best way to engage honestly with the marketplace via
Twitter is to never use the words engage, honestly or
marketplace.
Matt Cutts, executive
Jeffrey Zeldman, Web designer
Sanders On Balance
Baer On Inspiration
There’s no reason to be the richest man in the
cemetery. You can’t do any business from there.
Activate your fans; don’t just collect them like baseball cards.
Harland Sanders, founder of Kentucky Fried Chicken
Peyton Manning,
football player
Jay Baer, author
LEADERS & SUCCESS
IBD’S 10 SECRETS TO SUCCESS
Investor’s Business Daily has spent years analyzing leaders and successful people in all walks of life. Most have 10 traits that, when
combined, can turn dreams into reality. Each day, we highlight one.
1
HOW YOU THINK IS EVERYTHING: Always be positive. Think
success, not failure. Beware of a negative environment.
2
3
4
5
6
7
8
9
DECIDE UPON YOUR TRUE DREAMS AND GOALS: Write
down your specific goals and develop a plan to reach them.
10
TAKE ACTION: Goals are nothing without action. Don’t be
afraid to get started. Just do it.
NEVER STOP LEARNING: Go back to school or read books. Get
training and acquire skills.
BE PERSISTENT AND WORK HARD: Success is a marathon, not a
sprint. Never give up.
LEARN TO ANALYZE DETAILS: Get all the facts, all the input.
Learn from your mistakes.
FOCUS YOUR TIME AND MONEY: Don’t let other people or
things distract you.
DON’T BE AFRAID TO INNOVATE; BE DIFFERENT: Following
the herd is a sure way to mediocrity.
DEAL AND COMMUNICATE WITH PEOPLE EFFECTIVELY: No
person is an island. Learn to understand and motivate others.
BE HONEST AND DEPENDABLE; TAKE RESPONSIBILITY:
Otherwise, Nos. 1-9 won’t matter.
HOW YOU THINK IS EVERYTHING
Tapping The Right Stuff
For indomitable spirit, look
no further than veterans.
How they shine in corporate
and entrepreneurial fields:
00 Give your all. Military service instills a particular brand of tenacity. “It’s illegal to give up — to
surrender. That, of course, applies
to business.”
So says James Cummiskey, a
former Marine and now CEO of
Cima Coffee Farms. He applies
boots-on-the-ground lessons to his
South American coffee bean operation. “Outstanding execution and
excellent behavior — this is our
company motto,” he said.
00 Take it on. The Marines taught
Cummiskey that authority can be
delegated, but not responsibility.
That’s why he takes ownership of
his firm’s output. “From seed to
cup, we’re responsible for it,” he
told IBD. “So if the coffee sucks, it’s
my fault. And I like that.”
00 Reverse the order. When a hot
meal is served to Marines in the
field, “the officers take a deliberate
place in the back of the line,” said
Cummiskey. “The troops see that
every day and it really means a lot.”
The leadership lesson?
“People are your most important
asset,” he said.
00 Try their boots. “I don’t need a
sniper. I need a trader.”
The slap, from a Wall Street executive who’d interviewed a veteran,
is not uncommon.
“That’s someone who doesn’t understand what it takes to be a sniper,” said Cauldon Quinn, chief financial officer at financial service
firm Drexel Hamilton.
A retired Navy lieutenant who
served in the Afghan war, Quinn
made the jump to Wall Street after
leaving the service in 2002.
He urges business executives to
take a closer look at people who
sharpened their talent in the military. Take that sniper.
“It’s a highly competitive job,”
Quinn said, requiring mental acuity, math expertise and the ability
1
to deal with intense pressure — all
assets in the finance world.
00 Clear a path. Quinn wants
more attention on this stat: Nationally, 41% of disabled vets fight unemployment. “I believe that disabled vets don’t want to be anybody’s damn charity,” he said.
Neither does Drexel Hamilton
founder and Chairman Lawrence
Doll. A service-disabled veteran
who was awarded two Purple
Hearts during the Vietnam War,
Doll is committed to hiring those
who’ve served.
Approximately 50% of Drexel
Hamilton’s 60 executives are veterans, and 13 are service-disabled.
Doll also co-founded, with retired Marine Gen. Peter Pace, the
Wall Street Warfighters Foundation, which helps vets transition to
finance professions.
00 Fight back. “There were days
when I didn’t want to get out of
bed,” said Shilo Harris.
Gravely wounded in Iraq by an
improvised explosive device, the
retired Army staff sergeant has endured 50 surgeries since 2007.
Burns over 35% of his body took
Harris’ ears, the tip of his nose and
three fingers. He also lost his place.
“I had been the provider for the
family,” Harris said.
Pushing forward took grit.
After working as a motivational
speaker, he became a franchisee
with Win Home Inspection, which
has committed to making veterans
one-quarter of its franchise owners. Harris’ message: “What looks
like a mountain ahead of you — it
isn’t impossible.”
00 Value their skills. “Each and
every one of these veterans has had
a great deal of responsibility, regardless of age,” Harris said.
Entrusted with millions of dollars of equipment and crucial battle secrets, they’re a dependable
and loyal workforce — given the
chance. “Make them feel like
they’re part of something again,”
Harris said. Sonja Carberry
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Army Ranger Gary O’Neal
Fought With Strong Spirit
Go All Out: He tracked America’s long-range enemies
BY SCOTT S. SMITH
FOR INVESTOR'S BUSINESS DAILY
Army Ranger Gary O’Neal is one
tough dude, according to retired
two-star Gen. John Singlaub.
Singlaub would know, since he
was the first commander of the special operations group in Vietnam
that became the model for Delta
Force and SEAL Team Six.
“Of the citizens of the U.S., only
1% voluntarily joins the armed forces,” he wrote in the foreword to
O’Neal’s recently released memoir
(co-authored with David Fisher),
“American Warrior.” “Of that
number, only 1% joins the ranks of
special operations. The top 1% of
that group makes it in the ranks of
the super soldiers in the Joint Special Operations Command. Then
there are the individuals like Gary
O’Neal, who is in the Ranger Hall
of Fame.”
O’Neal tracked down America’s
enemies for four decades, getting
wounded nine times and tortured
while earning decorations such as
the Silver Star, Bronze Star with
Valor and Legion of Merit.
“I want to share what I learned so
that others can benefit, no matter
what their path in life is,” O’Neal,
62, told IBD.
O’Neal was born in 1951 in Deadwood, S.D., to a Lakota Sioux mother and a white World War II veteran whose ancestors fought in the
American Revolution.
Infantry And Vietnam
Being a warrior was in Gary’s
blood, but he didn’t know about his
Indian heritage until he was 10,
when he found out his father’s wife
was his stepmom. Properly enlightened, he began attending Sioux ceremonies, and, as his spiritual practices evolved, he was surprised to
find that he could communicate
with what he calls otherworldly
spirit guides.
He had been honing his hunting
skills since age 6. By 13 he was skydiving, so it was natural to think
about a career in Army Airborne.
Turning 15 in 1966 — with America in the thick of the Vietnam War
— he dropped out of high school,
stole a cousin’s identity papers and
joined the Army as Butch O’Neal.
After training at Fort Benning,
Ga., he hooked up with the 173rd
Airborne Brigade, landed with the
infantry outfit in Vietnam in 1967
and went right into combat.
“My squad was walking point for
the company when we were ambushed, and for the first seconds I
hit the ground and was frozen in
fear,” he said. “I saw what people
around me were doing and let the
training take over. The enemy was
killed or fled, and I learned that
fear can be channeled into action
or it can cripple you.”
O’Neal, who wore the rank of specialist, developed a ritual in Vietnam. He would perform a prayer
ceremony before going on missions and draw on his spiritual
training to hone his ability to sense
impending attacks. Meanwhile, he
became skillful at guerrilla warfare.
Then came a serious ‘Woops’ moment. His cousin was drafted, and
the Army discovered that Gary had
impersonated him. He was given
an honorable discharge, but was
banned from re-enlisting.
Still, O’Neal had a slim chance of
jumping back into action. He was
still subject to the draft.
After returning to South Dakota,
he meandered on reservations and
dug into Indian spirituality and old
warrior ways. He also fell in love
and married, but couldn’t shake
the draw of combat.
There was always that draft card,
and O’Neal played it. He asked his
aunt to pull some strings, put Army
green back on, left his pregnant
wife and hit repeat basic training at
Fort Leonard Wood, Mo.
Back in Vietnam in 1969, O’Neal
found a mentor in Sgt. Maj. Pappy
Wells, who had also joined the
Army at 15, fighting against the
Nazis. Wells helped him get extra
training for reconnaissance patrol.
O’Neal felt the heat immediately.
His company walked into a North
Vietnamese army base camp, and
O’Neal wasted little time joining an infantry outfit headed for Vietnam,
wherehisIndianspiritualtrainingcameinhandyamidtheguerrillawar.
O’Neal’s Keys
00 Highly decorated mem-
ber of the Army Ranger
Hall of Fame.
00 Overcame: Torture in
Nicaragua.
00 Lesson: Train the mind
to endure any adversity.
00 “If it sounds stupid, but
it works, it isn’t stupid.”
the firefight battered O’Neal. His
wounds were so convincing, he
was put into a body bag before soldiers realized he was alive.
He returned to his unit after several months in a hospital. Rather
than seek safety behind a desk,
O’Neal wanted the edge of being in
special operations — and soon
gained entry to the 20th LongRange Reconnaissance Patrol,
called Charlie’s Rangers.
“We’d go out for weeks at a time,
and no one at headquarters really
knew what we were doing,” he said.
“We’d go into Laos and Cambodia
and hit the NVA rest camps to let
them know they weren’t safe.”
His platoon leader in 1970 and
1971 was Gary Dolan, now a retired
lieutenant colonel and author of
“Of Their Own Accord,” who said:
“Gary O’Neal adapted to the jungle
better than anyone else I ever met.
He shared his unique field methods to use the unforgiving terrain
to our advantage, blending in and
becoming comfortable with the
teeming insects and wild animals.
He was the only one who wasn’t an
officer or team leader who studied
the maps of each area of operation
before missions.”
One day, O’Neal and his Vietnamese guide got separated from the
rest of the team during an exchange of fire with communist
camp guards. The duo seized the
moment and charged in, screaming
like banshees and throwing grenades to create confusion until the
others could arrive. The two were
wounded by shrapnel, but O’Neal
believes they left behind hundreds
of enemy casualties.
The Star
“I put him in for a Silver Star for
that extraordinary cunning and
heroism, but he repeatedly refused
the Purple Heart, considering it a
tribute to the skill of his enemy!”
said Dolan. “Even though he didn’t
possess the rank of a leader, he led
by the example of his composure
under fire and decisive actions. He
made everybody better without
ever seeking glory for himself.”
In December 1971, O’Neal returned to South Dakota with symptoms of what would be recognized
as post-traumatic stress disorder.
He was moody and overreacted to
noise, imagining he was back in
Vietnam, and it scared his wife and
son. He finally went through Ranger School at Fort Bragg, but by the
time he returned to Vietnam in
1972, the American combat mission was in its last throes, so he did
paperwork for two months.
Back at Bragg, he joined the Golden Knights, the Army’s demonstration and competition parachute
team. But his wife had had enough
of his risk-taking and unpredictable behavior, and left with their
son. Thereafter, O’Neal developed
a friendship with his ex and closeness to his son.
O’Neal’s lesson is that when your
work is causing your closest relationships to suffer, it’s time to re-examine your priorities.
The Teacher
By 1974, he was sharing his combat expertise with fellow soldiers,
instructing them on everything
from sniping to living off the land.
But clashes with superiors made
him decide to leave the Army.
Two years later, one of his former
commanders offered him a job
training the Nicaraguan national
guard in its effort to beat back the
socialist Sandinista rebels. While
in the Central American country,
he fell in love with the widow of an
officer from whom he was renting
an apartment and bonded with her
three children, and they married.
In September 1978, three U.S.
trainers were killed, and he accompanied their bodies to America.
When he returned to Nicaragua,
he saw his home had been ransacked and his wife and children
missing. He tracked them to a farmhouse and got into a firefight, but
ran out of ammo and was captured.
He was tortured by the Sandinistas for days, but blocked out much
of the pain with mental techniques.
What he would always remember were the bodies of his family
displayed in front of him in a pool
of blood. He was also left for dead,
but farmers took him to a hospital.
After months of rehab, he got
intel on the five Sandinistas responsible for his family’s massacre. He
ended up killing four of them.
O’Neal returned to America in
1980 and felt a need to deal with his
demons, so he trekked into the
Teton Mountains of Wyoming to
“cleanse my body and soul,” he
wrote.
After he came down from the
mountain, a friend enticed him
back to Fort Bragg to teach government employees how to escape if
kidnapped. After that stint, he
trained special forces in Latin
America to fight drug cartels.
His stress disorder improved
with the help of Veterans Affairs
doctors, as well as by sweating
through the grueling Sioux sun
dance. “No matter how tough you
are, some problems can’t be solved
without the help of others,” he said.
Married again, he teaches what
he calls the American Warrior
Free Fighting System, a synthesis
of the martial arts he has mastered.
5. INVESTOR'S BUSINESS DAILY
MONDAY, NOVEMBER 11, 2013
A NEW DAWN FOR PANAMA
LEADING THE WAY IN LATIN AMERICA, PANAMA’S FUTURE IS BRIGHT.
Panama has seen unprecedented growth and prosperity thanks to the progrowth, pro-business policies of President Ricardo Martinelli. Recently
ranked one of the most economically competitive nations in the region,
Panama has become a global hot spot for venture capital investment.
President Martinelli´s aggressive 5-year, $20 billion investment plan is
driving a growing economy and launching new infrastructure projects across
the country and his crucial tax reforms are encouraging business to expand.
As a result, more and more Fortune 100 companies, including Procter &
Gamble, General Electric, Johnson & Johnson and Dell have moved key
operations to Panama. Foreign investment has grown on average 38%
annually, since 2009, and free trade agreements have opened and modernized
Panama’s economic markets.
Robust domestic investments in health care, public transportation and
education have resulted in millions of dollars for new hospitals, a new
transportation system and schools.
Panama has not just weathered the economic crisis, but President Martinelli’s
forward-looking policies have helped Panama enjoy a new dawn of prosperity
and promise, becoming a global epicenter for commerce and trade. Today the
future is bright for Panama.
Learn more at:
www.meetpanama.com.pa
Distributed by HDMK, LLC on behalf of the Republic of Panama.
Additional information is on file with the Department of Justice, Washington DC.
A5
6. A6
MONDAY, NOVEMBER 11, 2013
INVESTORS.COM
AFTER MARKET
IBD New Issues Index
Leading New Issues
Sprouts Careens After Earnings Report
Offering
Company
Symbol Date
Insys Therapeutics INSY 5/ 2/13
Aratana Therapeutics PETX 6/27/13
Voxeljet Ag Adr VJET 10/18/13
G W Pharma Adr GWPH 5/ 2/13
Marketo Inc.
MKTO 5/17/13
ChannelAdvisor ECOM 5/23/13
Sprouts Fmrs Mkts SFM 8/ 1/13
QIWI Plc Cl B Ads QIWI 5/ 3/13
After a wild ride, Sprouts Farmers Markets
SFM
finished the day down 0.61 to close at 45.97,
a 1.3% drop. The company announced earnings
after the close Thursday along with a secondary offering. It traded as low as 44.20 in the
morning and as high as 48.95 near midday before falling back. The company reported EPS of
13 cents with sales up 24% from a year ago.
Offering
price
8.00
6.00
13.00
8.90
13.00
14.00
18.00
17.00
Current
price
41.95
21.14
44.91
29.03
34.00
36.23
45.69
40.48
EPS Industry
%Chg Rtg group
424.4 78 Medical-Biomed/Biotech
252.3 4 Medical-Ethical Drugs
245.5 20 Machinery-Mtl Hdlg/Autmn
226.2 14 Medical-Biomed/Biotech
161.5 19 Computer Sftwr-Enterprse
158.8 1 Computer Sftwr-Enterprse
153.8 84 Retail-Super/Mini Mkts
138.1 80 Finance-Crdtcard/Pmtpr
Lead
underwriter
Wells Fargo Sec
Stifel Nicolaus Weisel
Piper Jaffray & Co
Lazard Cap Markets
Goldman Sachs & Co
Goldman Sachs & Co
Goldman Sachs & Co
J P Morgan
THE NEW AMERICA
ALIGN TECHNOLOGY San Jose, California
Technology For Teeth Raises Bar At Maker Of Invisible Braces
BY MARIE BEERENS
Align Technology
FOR INVESTOR'S BUSINESS DAILY
aligntech.com
Just when it looks like Align Technology has about perfected the
tech behind its invisible braces, the
company finds yet another way to
improve it.
Early this year the San Jose, Calif.,
maker of alternatives to metal braces introduced a new material for its
Invisalign clear aligner system. It’s
SmartTrack, a highly elastic material that better maintains its shape
and a more constant force over the
twoweeks a patientwears thealigners. It conforms better to tooth morphologyandattachments,andis easier to insert and remove.
According to orthodontists or
general practitioners, the old material would hold its form very well
the first four to five days but then
quickly lose its shape, says
Jonathan Block, managing director at Stifel Financial.
“So it’s acting as a retainer for the
last week or week and a half. What
SmartTrack holds its shape much
better and therefore has been
shown to move teeth more effectively,” he said. “Our due diligence
suggests it’s allowing — notably —
orthodontists to do more complex
cases and that’s helping increase
case volume.”
In a recent study by Stifel Financial, 80% of respondents said they
believe the new material will help
them treat more complex cases
and 55% said it has already allowed
them to do that. In addition, 40% of
Stifel’s respondents believe SmartTrack already shortened treatment
times for their Invisalign patients.
Product Innovations
In June, Align Technology also introduced Realine, an entry-level,
five-stage clear aligner product
that helps with very minor crowding and spacing issues that a general practitioner can help fix. Treatments Invisalign Express and Lite
also help with minor corrections,
while taking less time to implement. And finally, Align Technology sells 3D scanners and software
to help dentists create digital
molds of patients’ mouths.
These new introductions certain-
Ticker
Share price
12-month sales
5-year profit growth rate
IBD SmartSelect Corporate Ratings
Composite Rating
Earnings Per Share
Relative Price Strength
Industry Group Rank
Sales+Profit Margins+ROE
Accumulation-Distribution
See Investors.com for more details
Align Technology’s straighteners for teeth include several Invisalign
products used by orthodontists and the Realine aligner for minor fixes.
Aligned For Progress
Product innovation in “invisible orthodontics” continues to
help Align Technology grow. It’s a pioneer in that market with
its Invisalign system for misalignment of teeth.
Net revenue, in millions Invisalign shipments Operating margin
Scanner and CAD/CAM
$180
120 Thousands of cases
27%
Clear aligner
160
18
100
140
80
9
120
Total
60
100
Q3 Q4 Q1 Q2 Q3 Q4e*
’12
’13
0
Q3 Q4 Q1 Q2 Q3 Q4e*
’12
’13
ly have helped the company’s results. After flat and then singledigit year-over-year earnings
growth the prior two quarters,
earnings per share shot up 62% in
the third quarter on a 21% increase
in sales, both above analyst forecasts. The stock surged 26% on the
news to near 58 on Oct. 18 and has
been trading near it since.
Align Technology holds the highest Composite Rating — 98 of a possible 99 — of all companies in IBD’s
Medical-Systems & Equipment industry group. It is also the best in
the group in EPS Rating, with a 95.
The industry group itself ranks
28th among 197 that IBD tracks.
Align Technology is seventh largest
CHINA FROM A1
and Japan, the study said. But
China isn’t as wealthy as those developed nations, so it will need to
boost its growth if it wants its citizens to live in relative comfort, the
economists concluded.
“The window is closing,” Rozelle said. “If they don’t do these
reforms within the next five to 10
years, it’s going to creep to a slow
stop and you’re going to have 600
million to 700 million of the rural
population be unemployable.”
More Vested Interests
But China’s rocket-speed growth
and the wealth that the government elite has amassed mean more
obstacles to reform than they did
even a decade ago.
“You’re asking them to get together and take away some of their own
goodies,” Dollar said. “But on the
other hand, this is a leadership that
has been committed to the continued development of the Chinese
economy. It’s very hard to predict
what’s going to come out of the
meeting.”
Ultimately, China’s deeds rather
than its leaders’ words will be the
lasting impression.
“Roughly a year from now, we’ll
have a very good sense whether reform has accelerated,” Dollar said.
Q3 Q4 Q1 Q2 Q3 Q4e*
’12
’13
*Midpoint of outlook range
Source: Company reports
State-Owned Enterprises Among
Vested Interests Blocking Change
largest economy has dropped
from 14.2% in 2007 to 7.8% in Q3
2013. That’s still the envy of almost the entire world. But analysts say China faces stagnation in
its future unless it finds a way to reduce the influence of state-run enterprises.
Strengthening peasants’ rights
by allowing them to sell their land
would make the economy more efficient and encourage peasants to
move to the cities and open their
own businesses, said David Dollar, a senior fellow at the Brookings Institution.
China’s aging populace means
the clock is ticking. The 15-59
working age population fell by 3.45
million last year to 937.27 million,
according to official statistics.
China’s “deteriorating demographics” are likely to trim 3.25
percentage points off the nation’s
yearly growth rate between 2012
and 2030, Citigroup economists
Nathan Sheets and Robert Sockin
estimated in a report last month.
The Chinese working population (age 15-64 in Citi’s reckoning)
is expected to decline over that
span at nearly the same rate as in
wealthy nations such as the U.S.
ALGN
Near 58
$625 mil
38%
in the 66-member group by market
cap, after Intuitive SurgicalISRG,
GrifolsGRFS, CareFusionCFN, Varian
Medical SystemsVAR, HologicHOLX
and Idexx LaboratoriesIDXX.
Align Technology’s new product
launches are part of the company’s
goal to introduce one big product
per year, Block says. Another goal
the company has been pursuing is
breaking down the barriers in the
teen market.
Youth Tooth Market
Teenager Invisalign cases have
been steadily growing since the
end of 2012. Last quarter, the company had a total of 29,000 teenage
cases, a 23% increase from the
98
95
95
28
A
A-
prior-year period. But the market
penetration is still relatively small.
“We have a very positive outlook
on the company, even within teenagers,” said analyst J.T. Haresco of
JMP Securities, noting that the
marker remains only about 10% to
15% penetrated in the U.S., if that.
“And given that they have a monopoly on invisible braces,” he said
of Align Technology, “it’s easy to
paint a very good long-term picture for how they’re going to do.”
Growing Business Abroad
A third area of growth for Align
Technology is international. During the third quarter, the company
had 22% of its worldwide cases
originate internationally. International revenue soared 31% vs. a
year earlier and represented 24%
of total revenue.
“There’s a lot of opportunity to
pursue (internationally),” Haresco
said. “It’s purely a cash-pay business — as opposed to the U.S.,
where there is some reimbursement — and they have a little economic sensitivity, but it hasn’t softened yet. There are not really any alternatives out there.”
Japan and China provided strong
volume growth. The company repurchased its Asia-Pacific distributor in May, allowing it to directly
sell its products in that market and
command end-user pricing. This
deal has quickly become accretive
to earnings, noted Block.
Europe also performed well, with
case shipments growing 20% in the
third quarter vs. a year earlier. The
growth was led by Spain, France,
Italy and Germany. The U.K. mar-
ket was the only one to post a slight
decrease due to the soft economic
environment.
An advantage in pursuing international growth is that Align Technology is able to command higher prices abroad vs. in the U.S.
“It is one of the very few medical
device companies that has arguably as high a gross margin structure internationally as it has in the
U.S.,” Block said. “The unwritten
law in med tech is ‘you’re selling
products a little bit cheaper internationally than you do in the U.S.’ —
but not for them.”
Normally, he says, what you have
is faster growth internationally but
it comes at a lower margin.
However, for Align Technology,
“arguably you can have faster
growth internationally while maintaining that very attractive margin
profile,” Block said.
Align Technology’s operating
margins have been creeping up
slightly from one year to the next,
with the most recent number at
23.1% in the third quarter. Nevertheless, quarterly margin and earnings numbers can be pretty volatile.
Block expects margin growth to
speed up going forward. He estimates it will reach 25.7% in 2014
and 28% in 2015. He believes drivers for this stronger growth will be
lower general, administrative, legal,
sales and marketing expenses.
“Even if you flat-linethem and revenue grows, you’ll get leverage out of
that line item.”
Align Technology also added
about 40 to 50 Invisalign reps in
2013 in North America, which will
start being accretive to revenue
next year.
Risks for the company include a
lethargic economy and quarter-toquarter variability in their results.
Align holds 538 patents and another 201 pending worldwide. The
first of the patents are due to expire
in 2017-18.
The company had $400 million
in cash at the end of last quarter
and no debt. It’s been using some of
its cash to do share buybacks.
“They’re a disruptive technology
in a very large market that, arguably, might be in the very early innings of executing,” Block said.
IPO Filings Soon To Be Priced
Symbol/
Shares Estimated Mkt Value
P/E Ratios:
Company
Exchange
(000)
Price
($Mil) Industry Group
Co / Grp
Lead Underwriter
CardioDx Inc
CDX/NDQ 5,750 14.0– 16.0 285.6 Medical–Products
n.a./ 32 Bofa Merrill Lynch.
Palo Alto, CA. Develops diagnostic tests for cardiovascular diseases such as coronary artery disease, arrhythmia and heart failure.
CLDN/NDQ 5,000 14.0– 16.0 273.7 Medical–Biomed/Biotech
n.a./ 62 J P Morgan.
Celladon Corp
San Diego, CA. Develops therapies for diseases with unmet medical needs in the field of calcium dysregulation.
XNCR/NDQ 5,750 14.0– 16.0 359.1 Medical–Biomed/Biotech
n.a./ 62 Credit Suisse.
Xencor Inc
Monrovia, CA. Develops engineered monoclonal antibodies to treat autoimmune and allergic diseases, cancer and other conditions.
ZU/NDQ
13,225 16.0– 18.0 2228.2 Retail–Internet
n.a./ 60 Goldman Sachs & Co.
Zulily Inc Cl A
Seattle, WA. Offers a selection of over 4,500 product styles through various flash sales events targeting mothers via zulily.com.
n.a./ 32 Bofa Merrill Lynch.
Tandem Diabetes Care Inc TNDM/NDQ 8,214 13.0– 15.0 323.9 Medical–Products
San Diego, CA. Manufactures medical devices for people with insulin–dependent diabetes using its Micro–Delivery Technology.
RLYP/NDQ 7,878 16.0– 19.0 413.0 Medical–Biomed/Biotech
n.a./ 62 Morgan Stanley.
Relypsa Inc
Redwood City, CA. Develops non–absorbed polymeric drugs to treat disorders in the areas of renal, cardiovascular and metabolic diseases.
CHGG/NSE 17,250 9.5– 11.5 1018.6 Consumer Svcs–Education n.a./ 33 J P Morgan.
Chegg Inc
Santa Clara, CA. Offers print textbooks, eTextbooks and supplemental materials to college students via its Student Hub platform.
HMHC/NDQ 18,250 14.0– 16.0 2239.3 Consumer Svcs–Education n.a./ 33 Goldman Sachs & Co.
Houghton Mifflin Harct
Boston, MA. Provides K–12 educational content to educational institutions and consumers in over 150 countries worldwide.
STAY/NSE 32,488 18.0– 21.0 4298.5 Leisure–Lodging
68/ 34
Deutsche Bank Sec.
ESH Hospitality Inc
Charlotte, NC. Owns and operates 682 extended stay hotels with 75,928 rooms located across the U.S. and in Canada.
Prices Of Recent IPOs
Company
Symbol/ Offer
Exchange Date
High
Filing Offer
Price Price
% Chg
% Chg
From Current From
Filing Price Offer Industry Group
Lead Underwriter
Mavenir Systems Inc
L G I Homes Inc
Norcraft Companies Inc
Twitter Inc
MVNR/NSE
LGIH/NDQ
NCFT/NSE
TWTR/NSE
11/ 7
11/ 7
11/ 7
11/ 7
17.0
15.0
18.0
25.0
10.0 –41.2 9.3 –7.5 Telecom–Infrastructure
11.0 –26.7 13.0 18.5 Bldg–Resident/Comml
16.0 –11.1 15.6 –2.6 Bldg–Constr Prds/Misc
26.0
4.0 41.6 60.2 Internet–Content
Midcoast Ener Ptnrs Cl A
Arc Logistics Prtns LP
Avianca Holdings Ads
Barracuda Networks Inc
MEP/NSE
ARCX/NSE
AVH/NSE
CUDA/NSE
11/ 7
11/ 6
11/ 6
11/ 6
21.0
21.0
20.0
21.0
18.0 –14.3 17.8 –0.9 Oil&Gas–Transprt/PipelneBofa Merrill Lynch
19.0 –9.5 19.0 0.2 Oil&Gas–Transprt/PipelneCitigroup
15.0 –25.0 14.5 –3.3 Transportation–Airline
J P Morgan
18.0 –14.3 21.2 17.9 Computer Sftwr–Security Morgan Stanley
Wix.com Ltd
WIX/NDQ 11/ 6
Karyopharm Therapeutics KPTI/NDQ 11/ 6
Blue Capital Reins Hldg
BCRH/NSE 11/ 6
The Container Store Grp
TCS/NSE 11/ 1
16.5
16.0
20.0
18.0
16.5
16.0
20.0
18.0
Qunar Cayman Cl B Ads
58.com Inc Cl A Ads
Essent Group Ltd
Marcus & Millichap Inc
QUNR/NDQ 11/ 1
WUBA/NSE 10/31
ESNT/NSE 10/31
MMI/NSE 10/31
14.0
16.0
15.5
16.0
15.0
7.1
17.0
6.3
17.0
9.7
12.0 –25.0
Brixmor Property Group
Surgical Care Affiliates
Veracyte Inc
Criteo SA Ads
BRX/NSE 10/30
SCAI/NDQ 10/30
VCYT/NDQ 10/30
CRTO/NDQ 10/30
Commscope Holding Co Inc COMM/NDQ 10/25
Endurance Intl Grp Hldgs
EIGI/NDQ 10/25
Sprague Resources LP
SRLP/NSE 10/25
Aerie Pharmaceuticals
AERI/NDQ 10/25
0.0
0.0
0.0
0.0
Morgan Stanley
Deutsche Bank Sec
Citigroup
Goldman Sachs & Co
17.3 4.8 Compter Sftwr–Enterprse
16.2 1.5 Medical–Biomed/Biotech
19.1 –4.4 Insurance–Prop/Cas/Titl
35.0 94.2 Retail–Home Furnishings
J P Morgan
Bofa Merrill Lynch
Deutsche Bank Sec
J P Morgan
25.6
28.5
21.3
13.7
70.9
67.9
25.0
13.8
Leisure–Travel Booking
Retail–Internet
Finance–Mrtg&Rel Svc
Real Estate Dvlpmt/Ops
Goldman Sachs & Co
Morgan Stanley
Goldman Sachs & Co
Citigroup
21.0
24.0
15.0
29.0
20.0 –4.8 19.8
24.0
0.0 26.5
13.0 –13.3 11.4
31.0
6.9 29.8
–1.3
10.5
–12.2
–4.0
Finance–Property Reit
Medical–Hospitals
Medical–Resrch Eqp/Svc
Comml Svcs–Advertising
Bofa Merrill Lynch
J P Morgan
Morgan Stanley
J P Morgan
21.0
16.0
21.0
14.0
15.0
12.0
18.0
10.0
–28.6
–25.0
–14.3
–28.6
15.3 1.8 Telecom–Infrastructure
11.0 –8.2 Computer–Tech Services
17.6 –2.2 Oil&Gas–Refining/Mktg
10.9 8.9 Medical–Biomed/Biotech
J P Morgan
Goldman Sachs & Co
Barclays Capital
Rbc Capital Markets
9. INVESTOR'S BUSINESS DAILY
A9
MONDAY, NOVEMBER 11, 2013
TOP DOWN
Older Americans Spearhead New Firms
An aging population and post-1996 economic
strains are increasing the share of new
entrepreneurs 55-64, while the creation of new
businesses by some younger groups is falling.
The entrepreneurial activity rate of those 55 and
older is also edging up after a recessionary slump.
New entrepreneurs by age
1996
20-34
26.2%
55-64
23.4%
55-64
14.3%
45-54
23.9%
Index of entrepreneurial activity by age*
2012
20-34
34.8%
35-44
27.0%
45-54
26.3%
Source: Ewing Marion Kauffman Foundation
35-44
24.2%
0.4%
0.3
0.2
0.1
0
Ages 20-34
Ages 35-44
Ages 45-54
Ages 55-64
’08
’09
’10
’11
’12
*Gauging individuals who don’t own a business in first survey month that launch one in the following month
MANAGING FOR SUCCESS
FOLLOW THE LEADERS
Lumber Liquidators CEO
Holds Annual ‘University’
BY MOREY STETTNER
Barista Liz West passes out a tray of coffee samples to customers at a Starbucks outlet in Seattle.
Serving Up Innovation
Inside The Coffeehouse
Creativity, acquisitions and staffers boost Starbucks
BY GARY M. STERN
FOR INVESTOR'S BUSINESS DAILY
It’s more than the tasty coffee and
nimble baristas that pump up business at Starbucks. More than the
Frappuccino and espresso, analysts say it’s the employees who
connect with customers and the
global coffeehouse’s ability to innovate that’s spurring growth.
In fact, StarbucksSBUX has been
on a roll. It’s had 14 consecutive
quarters of global sales growth
greater than 5% and its stock price
has jumped by over 45% since January. Observers say the company
has mastered staying one step
ahead of customers, anticipating
their needs and creating a clientfriendly atmosphere that encourages them to return.
Starbucks has more than
200,000 global employees serving
60 million customers weekly in
19,302 global retail stores, notes
consultant Joseph Michelli, the author of “Leading the Starbucks
Way: 5 Principles for Connecting
With Your Customers, Your Products and Your People.”
Surging From Within
Michelli, an expert on organizational excellence, credits Starbucks’ recent surge to its culture,
openness to innovation, and its embrace of social media. Fueling its revival has been “its emotional engagement with the customer.” The
company has also recast its global
strategy and expanded its product
lines to take into account increasingly mobile customers, he says.
Michelli adds that Starbucks understands that its sales are based
on “forming relationships” with its
clientele. Staff is trained to provide
uplifting moments, give eye contact, become familiar with regular
clientele and remember their preferences on drinks and food.
It connects with customers by
building environments that become “the living room of the community,” Michelli said. Community tables enhance the chances of
Starbucks customers interacting
or friends conversing over a cup of
coffee. Free Wi-Fi in most locations brings customers in and often
keeps them for extended periods.
Michelli says Starbucks has also
turned into a technology company.
Knowing that many customers rely
on smartphones as their chief form
of communication, its Starbucks
app enables clientele to “convert
their gift cards with one keystroke
into a loyalty card,” he said. With
the app, customers turn their
smartphones into payment sources and flick them to pay, without
needing cash.
Forging strong relationships
with customers is fueling its bottom line. Loyal customers reduce
its marketing costs since these enthusiasts recommend Starbucks to
friends. Retaining customers allows the chain to “sell more deeply,
cross-sell its products to existing
customers and to create pipelines
of new customers,” Michelli says.
Starbucks’ culture is a major factor in its success story, says Marc
Riddick, New York-based consum-
er analyst at the Williams Capital
Group. Since Starbucks operates in
a manner that its customers appreciate, they’re more likely to support it in good times or bad.
In fact, Starbucks loyalty cards
generate a quarter of its sales, Riddick says.
For example, Marisa Amador, a
New York-based independent publicist, relies on her Starbucks card
because of its all-around benefits.
She likes it because of the perks
and the free drink she gets after 12
drinks. “I can use the app on my
phone and not have to fumble for a
card or carry it around,” she added.
Since her debit card is connected
to the app, she can buy anything at
Starbucks instantaneously.
Communicating with customers
also breeds loyalty. Starbucks established MyStarbucksIdeas.com to
generate suggestions from customers. So far, 150,000 recommendations have been submitted, with
265 ideas acted on by the company.
Examples are the creation of the
Starbucks eGift program, environmentally sound cup sleeves and
stepped-up recycling efforts.
Acquisitions are also spiking revenue and creating new markets. In
the last few years, Starbucks has acquired a bakery, juice company
and tea company by buying the
businesses of La Boulange Bakery,
Evolution Fresh and Teavana.
La Boulange pastries sell in existing Starbucks outlets. Michelli says
it provides an array of croissants,
muffins and scones.
Evolution Fresh offers standalone stores that specialize in juices, salads and smoothies. Its products are also sold at Whole Foods
WFM
. By the end of 2013, its juices
are expected to be available in
8,000 Starbucks stores.
In 2012 Starbucks acquired Teavana, which operates 300 company-owned tea stores, opening up a
new sales channel. It also announced in October that it’s
opened its first Teavana store in
New York City.
An Afternoon Coffee
Starbucks also introduced a milder coffee, Blonde Roast. Because
it’s a lighter blend, consumers are
prone to order it later in the day,
not just at breakfast. The new coffee selection helps because Starbucks, which generates 70% of its
revenue by 2 p.m., is trying to boost
post-lunch sales .
Seasonal drinks and limited offers are also buoying sales, and
overall revenue is expected to rise
when its latest acquisitions are
fully rolled out. Reduced coffee
prices on the commodity markets
are also boosting margins.
Starbucks says it’s planning to
open 1,400 new stores worldwide
next year, setting the stage for
what Riddick calls a “moderate” expansion. About 600 new stores will
launch in the Americas, 700 in
Asia, and 100 in Europe and the
Middle East.
In the past, Riddick had doubts
whether Starbucks could sustain
its growth and its valuation, but
now he’s become a convert. “We
underestimated the ability of Star-
bucks to drive sales growth and underestimated the price that investors are willing to pay for companies that can deliver top-line
growth,” he said.
Moreover, the company’s benefiting from consumers moving away
from carbonated soda beverages
into coffee and tea.
“At the end of the day, Starbucks’
culture drives its growth,” Michelli
said.
Lumber Liquidators
FOR INVESTOR'S BUSINESS DAILY
lumberliquidators.com
Lumber Liquidators has about 300
retail stores across the U.S. Around
the time of each store manager’s
birthday, a special card arrives in
the mail.
“I send a handwritten birthday
card to every store manager,” said
Rob Lynch, president and chief executive of Lumber Liquidators
HoldingsLL, a hardwood flooring retailer based in Toano, Va. “I also enclose a $10 Starbucks gift card.”
Lynch likes to stay accessible to
his far-flung workforce. After
working at retail giants Wal-MartWMT and Home DepotHD, Lynch has
learned the importance of staying
close to his team even if they operate thousands of miles apart.
While Lynch’s cards solidify personal bonds with his managers,
they sometimes serve a secondary
purpose. If a manager’s store is performing particularly well, Lynch
may praise the superior results.
Lynch became the company’s
CEO in January 2012. Soon after,
he launched a one-week training
program for store managers.
“I learned this at Wal-Mart,” said
Lynch, 47. “Sam Walton did this really well. Sam believed in pushing
down information and sharing it
with the troops at every store.”
At these annual “Lumber Liquidators University” retreats, Lynch
and other senior executives update
store managers on the firm’s oneand five-year strategic plan. He
also allows time for managers to
mingle with peers so that they can
Ticker
Share price
12-month sales
5-year profit growth rate
Rank in 11/4 IBD 50
LL
Near 113
$952 mil
22%
14
IBD SmartSelect Corporate Ratings
Composite Rating
Earnings Per Share
Relative Price Strength
Industry Group Rank
Sales+Profit Margins+ROE
Accumulation-Distribution
See Investors.com for more details
95
97
93
158
A
B+
share ideas and best practices that
benefit the entire store network.
To motivate the group, Lynch instructs everyone to join hands and
participate in what he calls “quirky
cheers” that build camaraderie. He
sets five goals for the coming year
(relating to sales, gross margins,
etc.) and, as each goal flashes on a
big screen, the managers shout
their intention to fulfill it.
“I learned at Wal-Mart that when
you directly ask someone to commit to something in public as part
of a team, they’re not going to let
the team down,” he said. “And if
the CEO talks with confidence that
you believe the team will hit all its
goals, the team believes too.”
Lynch lists the goals on a sheet of
paper and asks every manager to
sign it. Then he frames it on his office wall for the year, periodically
sending copies to his managers to
remind them to stay focused on
reaching the goals.This way, everyone keeps their eye on the ball.
Own the only mutual fund to use the CAN SLIM® Investment System.
The system that adjusts to market conditions, while selecting
top-ranked growth stocks.
Ticker: CANGX.
(800) 274-5448
www.northcoastam.com
The fund’s investment objectives, risks, charges, and expenses must be considered carefully before investing. The summary prospectus and statutory
prospectus contain this and other important information about the investment company, and it may be obtained by calling (800) 274-5448, or visiting
www.northcoastam.com. Read carefully before investing.
The Fund may invest in foreign securities which will involve greater volatility and political, economic and currency risks and differences in accounting methods. The Fund invests in small and
medium capitalization companies which tend to have greater price volatility than larger compain adverse tax consequences to the Fund’s shareholders. While the fund is no-load, management
and other expenses still apply. Please see the prospectus for more details.
CAN SLIM, Investor’s Business Daily and IBD are registered trademarks owned by Investor’s Business Daily, Inc. The
CAN SLIM Select mark has been licensed to the Adviser by Investor’s Business Daily, Inc. for use by the Fund under certain
circumstances. The Fund is not sponsored, endorsed or sold by Investor’s Business Daily, Inc. The CAN SLIM Select List is
available at www.investors.com.
CAN SLIM® Select Growth Fund, which is distributed by Quasar Distributors, LLC.
10. A10
WE SAY IT LIKE IT IS
MONDAY, NOVEMBER 11, 2013
INVESTORS.COM
ISSUES & INSIGHTS
WINNER OF THE 2008
Pulitzer Prize
A Deal Forcing
Israel’s Hand
Mideast: An impending deal to ease sanctions
without real concessions from Tehran over its
nuclear program virtually assures that Israel
will bomb Iran. This is a crisis that should
have been prevented years ago.
T
he grave tone of Israeli Prime Minister Benjamin Netanyahu’s voice in the video of his
statement after meeting Secretary of State
John Kerry before Kerry’s trip to Geneva to
negotiate with Iran makes it clear that the leader of the
Jewish state feels the die has been cast.
He called what the U.S. was about to undertake “the
deal of a century for Iran” but “a very dangerous and
bad deal for peace and the international community.”
Without being required to dismantle even a single uranium centrifuge, economic sanctions will be lessened
on Iran in the hope that these Islamofascist fanatics see
it as a gesture of good will from the Great Satan.
Netanyahu knows what is really happening: Tehran
has succeeded in buying a great deal of time for itself as
it completes its nuclear weapons capability.
Once negotiating with Tehran about negotiations
begin, it stops mattering how many centrifuges spin,
how many multi-stage rockets are tested under the
cover of the Iranian first-jihadist-on-the-moon program, how many secret underground nuclear facilities
continue to operate within the country.
The appease-first, ask-questions-later forces who
dominate the United Nations will insist, month after
month, that the world “give peace a chance.”
What we hear of the deal is that Iran will agree to limits on uranium enrichment, delay use of (not remove or
dismantle) its advanced uranium centrifuges and plutonium reactor and allow a modest increase in inspections by the U.N.’s International Atomic Energy Agency
— less than what the IAEA needs to assure compliance.
Every bit of this can be cheated or worked around.
As Robert Zarate of the Foreign Policy Initiative
points out, such a deal would continue to exclude IAEA
inspectors’ “extensive near-real-time monitoring, widearea surveillance and zero-notice inspections at any remaining or suspected nuclear-related facilities.”
No wonder the Iranian negotiators are gleeful. Netanyahu, on the other hand, now looks like a man
being forced to act. His military is set to go, having less
than a month ago conducted a “special long-range flight
exercise” over Greece, practicing mid-air refueling for
the long-range mission to Iran. In an unusual move, Israel even publicly posted video of the exercises online.
The U.S. years ago had a number of opportunities to
prevent what will soon be a full-blown crisis of global
proportions. Most recently, President Obama could
have publicly taken the side of the Iranian people demonstrating against their regime’s voter fraud in 2009; he
chose to stay silent.
But even the previous administration could have provided student, union and religious anti-regime forces
with material and public moral support, with the objective of overturning one of the most repressive governments in the world.
We did not. And so Israel will almost certainly soon go
to war for its own preservation.
Owned By The State
Serfdom: Don’t think that ObamaCare is the
Democrats’ last word on health care. They
won’t be content until both patients and doctors are under their command.
D
emocrats won’t say out loud in public that it’s
their goal to drive physicians under the government boot. But sometimes ambitions are revealed in unguarded moments.
Consider the confession of a Democratic candidate
running for the Virginia House of Delegates during the
Great Falls Grange Debate on Nov. 1. According to reports, Kathleen Murphy, who lost the 34th District race
to Republican incumbent Barbara Comstock, said she
supported the idea of forcing doctors to accept Medicaid and Medicare patients against their will.
Yes, this is one Democrat running for a state office.
But it’s foolish to think her comment isn’t in line with
her party.
A few years ago Massachusetts Democrats were behind a bill in the state legislature that would strip doctors who didn’t accept Medicare, Medicaid and the
state plan of their licenses to practice.
This isn’t a political molehill. If doctors can be forced
to participate in a government payment system they
don’t want to be in, then doctors are owned by government. Their education, labor and intellects will have
been seized by the state. They are no longer free agents
— they are serfs, the bondsmen of legislators who will
sweat them like galley slaves.
Roughly a fourth of physicians across the country already don’t take Medicaid. About 10% to 12% don’t participate in Medicare. Here’s why: Government plans
don’t pay well.
According to the Office of the Actuary for the Centers
for Medicare and Medicaid Services, doctors are reimbursed by Medicare at a rate of about 80% of what private insurance pays, while Medicaid pays them only
about 58% of what private coverage will take care of.
“Physicians say they just can’t afford to be part of a system that generates so many patients for so little compensation,” says, Richard Jackson, chairman and CEO of
Jackson Healthcare, a medical staffing and technology
solutions company that has surveyed doctors.
Four years ago, our IBD/TIPP Poll found that 45%
doctors said they “would consider leaving their practice or taking an early retirement” if the Democrats’
health care overhaul became law.
How many more would leave if Washington required
them to accept Medicare and Medicaid? How many brilliant students would choose other professions? No one
wants, or deserves to be, chattel of the state.
Adding Another Lie To The Pile
Prevarication: At the very moment President
Obama was supposedly saying sorry for his
“keep your plan” lie, he told a brand-new one
when he claimed that just 5% are at risk of
losing the health plans they like.
A
s many have already pointed out, Obama didn’t
actually apologize for misleading the public
about ObamaCare. “I meant what I said,” he
told NBC News’ Chuck Todd. He was just sorry people
were upset to learn that what he said wasn’t true.
Oh, and Obama also managed to imply that anyone
who likes what they have is a fool, since they’re sticking
with the “bad insurance that they’ve got right now.”
But then Obama added a fresh lie to the pile by trying
to minimize the impact of ObamaCare on people who already have insurance plans they like.
“We’re talking about 5% of the population,” Obama
said early in the interview. “It only affects a small
amount of the population.”
Later he said, “it’s a small percentage of folks who may
be disadvantaged, you know.”
And just in case anyone missed the point, he said it
once more. “It’s a small percentage of people. . . . I
mean, we’re talking about 5% of the population.”
But Obama knows full well this 5% figure isn’t true.
His own administration predicted in a 2010 regulatory filing that as many as 64% of large companies and
80% of small businesses would be forced to give up the
“plans they like” because of ObamaCare. And for the
same reason that millions of individuals are losing their
plans.
The law only allows companies to keep their existing
insurance plans if they bought them before March
2010, and then only if the plans didn’t change much
over the past three years.
Since his administration defined “change” so narrowly, Obama knew that most plans — individual and employer-provided alike — would fail to qualify for “grandfather” status.
And just like all those individuals Obama claims to be
so concerned about, many of these employers and their
workers will find that the ObamaCare-approved plans
are far more expensive.
When McClatchy News crunched the numbers, they
concluded that 41 million workers would end up losing
the employer-provided plans they currently have.
That’s in addition to the 11 million individuals losing
their plans.
Memo to Mr. Obama: That’s equal to 17% of the population.
Avik Roy, a health policy expert at the Manhattan Institute, figures the total number is more like 93 million.
Duke University professor Chris Conover thinks it will
be as high as 129 million.
Now we’re up to 41% of the population.
This doesn’t count the millions of seniors slated to
lose the Medicare Advantage plans they like, thanks to
deep ObamaCare cuts to that program. The chief actuary at the Centers for Medicare and Medicaid Services
projected that about 3 million seniors would get booted
off their Medicare Advantage plans by 2017.
Nor does it include workers who’ve lost their employer-provided benefits because of ObamaCare.
Several companies, for example, have canceled coverage for their part-time workers. That’s what Home
Depot did for 20,000 of its part-timers. Others are dropping spousal coverage and retiree benefits.
Yet, mysteriously, Obama’s interviewer, Chuck Todd,
failed to press him on this. That’s despite the fact that
NBC News was one of the first to report — using the
very regulatory filing mentioned above — that Obama
knew millions would be forced off their plans even as
he was repeating his phony “keep your plan” promise.
Most of the rest of the media also simply repeated the
5% figure, as though Obama can be trusted with anything he says about ObamaCare.
It’s unlikely the president will ever get around to apologizing to the tens of millions of workers harmed by
ObamaCare. Not that they should accept one.
Instead, they need to organize and demand that Congress repeal this law and start over.
A Deceptively Good Month For Jobs
Employment: Like everyone else, we were
happy to see 204,000 new jobs created in October. But is it time to pop the champagne
corks and celebrate an end to the worst recovery in history? Hardly.
W
e hate to be downers, but the 204,000 jobs
created during October — the month of the
government shutdown, by the way — were
about the only good news contained in the report.
Fact is, unless a sustained burst of new jobs well in excess of 200,000 a month takes place over the next few
years, President Obama will go down in history as the
first leader ever to actually destroy jobs during a time
when the economy was expanding. Quite a feat.
How can that be? Explaining this job destruction
thing is a bit tricky, but here goes:
The economy began its recovery in June of 2009, five
months after Obama took office. Since then, it’s added
5.97 million jobs. Sounds good, except the previous
peak in employment, in January 2008, was 138.056 million. So we’re still about 1.5 million jobs below that.
Since the Depression, it has taken on average 26
months to return to the previous peak in payroll employment after a recession. Under Obama, we’re at 53
months and counting.
Last month, a shocking 932,000 more Americans
were added to the count of those “not in the labor
force.” That’s an all-time high of 91.5 million people not
working, about a third of our total population.
Meanwhile, a separate government measure showed
the civilian labor force plunging by 720,000 in October,
pushing the labor force participation rate down to
62.8% — its lowest level since 1978 (see chart).
If our labor force participation rate had merely remained stable since Obama entered office, the total
number of jobs would be about 7 million more than
today. That’s the Obama jobs gap, and it’s not closing.
And that’s the real crisis. Jobs that disappear and
don’t come back.
Under this administration, we’ve hollowed out America’s once-thriving job market, creating a growing army
of dependents who desperately need government handouts to make ends meet.
It’s no accident that, even as Obama touts his economic policy successes after four years and five months of recovery, both the number of food stamp recipients and
people in poverty have shot to record highs.
Economists call this “immiserating growth.”
By the way, government’s own broad measure of unemployment— thesocalled U6 index,
Participation Problem
which includes people who want to
% of civilian labor force
with jobs
work
but
have
stopped looking and
66%
people in part-time
jobs who want to
65
work full-time —
edged up for the
64
month to 13.8% from
63
13.6%. If the governOct.:
ment has a real “un62.8%
62
employment rate,”
’09 ’10 ’11 ’12 ’13
that’s it.
Source: Labor Department
This is where we
are right now, and no
single month of “unexpectedly good” job growth can
disguise it.
With the economy growing at a rate below 3%, it will
be very tough to restore the abundance of jobs we enjoyed during much of our history.
Even so, we can and do take at least one bit of comfort
from the October report: Despite widespread predictions that the government shutdown would decimate
payroll employment, it didn’t. Hmm, maybe we should
shut down the government every month.
With unemployment still high and hundreds of thousands of people fleeing the labor force, the job market is
imploding. The only way to change that is to change to
pro-growth economic policies — which means we have
a long way to go before real improvement begins.
