Taking joy in the little things adds up to a happy life

Fred Koury, CEO, Smart Business Network

Fred Koury, CEO, Smart Business Network

Ronald Reagan was well known for not only his confidence but also his positive outlook and sense of humor. He had a way of never taking himself seriously and always found a way to find humor even during the direst times.

In fact, following the assassination attempt, he told his wife, “Honey, I forgot to duck.”

His constant positive outlook made him appealing to voters and is one of the reasons he continues to score high in polls ranking presidents.

Do we approach life and leadership the same way that Reagan did? Do we always take a positive outlook into the start of each day?

Some CEOs act as if being in charge makes them a victim and complain of the burden. Leadership is a privilege that all of us should learn to enjoy. We have to train ourselves to enjoy the process, not just the end result.

Let’s take some time to reflect on the victories, no matter how small, and celebrate them. Learn to reflect on the great clients we have and the great people who work for us instead of focusing on the one unhappy customer or an employee with a bad attitude. But most importantly, we shouldn’t take ourselves too seriously.

Each day that passes is a day that we do not get back. We have to look at each day as a series of moments and find the happy things that put joy in our life.

These can be simple things — a funny comment from your child, something silly you heard on the radio or a bright, sunny day. When we start focusing on these small joys in life and start stringing them together, we’ll find that an entire day has become joyous. Enjoy the time you are in now and don’t spend so much time fretting about tomorrow. Be intentional: Start by writing down four little things a day at work that bring you joy on a daily basis and build from there. This can even be a conversation around the watercooler that makes you laugh. String together a few days like this, and we are well on our way to a more joyous life.

By developing this habit, we will be more inclined to treat people better, and they, in turn, will treat others better, which will increase the overall positive culture of our workforce. The work environment is a bigger factor in why employees leave than money is, so focusing on providing a more joyful environment will also help your business in the end.

Whether in business or in life, it all comes down to being joyful. Happiness is fleeting based on circumstances, but joy becomes permanent once we have cultivated it. Start by focusing on the little joys and build from there. Remember, people won’t remember what you said, but they will remember how you treated them.

Fred Koury is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or [email protected]

WellPoint profit beats, but 2013 outlook ‘prudent’

INDIANAPOLIS, Wed Jan 23, 2013 — WellPoint Inc. reported a higher-than-expected fourth-quarter profit on Wednesday as it kept medical costs down, but the second-largest U.S. health insurer said it was taking a “prudent” view of 2013 in the face of industry reform.

WellPoint, which sells private health insurance to businesses and individuals and also provides government insurance for the elderly and the poor, is preparing for a round of changes resulting from the U.S. Affordable Care Act.

Later this year, states and the federal government will begin selling health insurance on exchanges for 2014, and new insurance taxes are on the way. Pressure on prices for medical services is also a concern for insurers.

WellPoint said that given the “fluid and dynamic” market over the next 18 to 24 months, it expected a 2013 net profit of at least $7.60 per share, including the costs of integrating its recent acquisition of smaller competitor Amerigroup.

Analysts on average have been expecting $7.98 a share, according to Thomson Reuters I/B/E/S. It was not immediately clear if the two numbers are comparable.

“It’s lighter than we thought, but it’s also including Amerigroup’s integration costs,” Leerink Swann analyst Jason Gurda said, so it was not clear that investors would be disappointed by the outlook.

Shares of WellPoint were down 0.4 percent at $63.54 in early trading.

Management changes might be behind the conservative forecast, Gurda said. WellPoint is being run by an interim chief executive officer, John Cannon, who took over following the abrupt resignation of Angela Braly in August.

CFO Wayne DeVeydt told analysts on a conference call on Wednesday that the company still expected to name a new CEO this quarter.

He said the 2013 outlook included 20 cents to 25 cents a share in Amerigroup-related costs and $300 million in additional investments such as preparation for the health insurance exchanges.

The outlook for the economic and financial markets in 2013: It all hinges on Washington

Bob Leggett, CFA, Senior Investment Strategist, FirstMerit Wealth Management Services

Our economic forecast for 2013 comes down to one simple phrase: “It all hinges on Washington.” The President and Congress must decide whether tax rates rise or fall, whether fiscal stimulus or austerity rules the day, and whether the long term budget deficit issues (entitlements) will be addressed. The Federal Reserve has now promised to hold short term rates low until the unemployment rate falls to 6.5 percent, unless they determine inflation is likely to exceed 2.5 percent. Will the Fed’s newest $85 billion monthly quantitative easing (bond buying) program continue to suppress longer maturity bond yields in 2013? To paraphrase the European Central Bank’s Mario Draghi: “believe us, it’ll be enough” to keep the U.S. Treasury 10 year bond yield from rising much in 2013.

We continue to view the Washington glass as “half full,” so we expect fiscal cliff compromises will be reached by early 2013. Taxes will be raised on the “rich” (however that is defined) but the impact of tax increases on everyone else will be limited by extending the middle class tax cuts, “patching” the Alternative Minimum Tax, and gradually ending the FICA 2 percent payroll tax holiday. Alas, anyone who has a taxable investment account will pay more taxes through higher capital gains rates and higher tax rates on common stock dividends. Entitlement reform will likely be kicked down the road, but we expect the credit rating agencies will be assuaged by an agreement to create a Congressional commission, lessening the risk of a January ratings downgrade. Likewise, there should be just enough spending cuts to allow a compromise on raising the debt ceiling.

The downside risk from here hinges on Washington: policy errors that take us over the cliff might leave the economy crushed at the bottom of the gorge by another severe recession.

Sounds horrifying, doesn’t it? Well, it is — but we think this worst-case scenario is VERY unlikely. Even if taxes are raised, the increase shouldn’t be too stiff and history shows that the impact on spending will be minor. Modestly higher capital gains rates also have a limited impact. Changes to corporate taxes and deductions will be a mix of plusses and minuses, as always. The regulatory burden only goes in one direction — heavier, but who could be surprised by that? Despite volatile gasoline prices, the CPI inflation rate has dropped to roughly 2 percent and that trend should continue in 2013. Energy prices should not rise significantly as increased supply meets very slow demand growth. With regard to consumers, housing activity and prices are on the upswing. In fact, residential construction has been additive to GDP for the past six consecutive quarters! Combined with the doubling of the S&P 500 since 2009 and decline in consumer debt outstanding, household net worth has improved sharply. Continued modest, but steady job growth should result in lower unemployment rates during 2013.

Basically, the economy can do one of three things: improve, stay the same, or get worse. The presence of feedback loops often determines which of these occurs. We began 2012 with a positive feedback loop — rising production of goods and services meant more hours worked, which meant incomes grew, which resulted in greater demand for goods and services, leading to rising production of goods and services! Unfortunately, fears arose during the year that caused great uncertainty for both businesses and consumers. Uncertainty weakens the links of a positive feedback loop and can eventually forge a negative chain. Fortunately, much of the current uncertainty should be alleviated by even a partial resolution of the fiscal cliff/budget deficit issues.

All in all, we expect a slow start to 2013 due to the hangover from Washington’s partisan battles and going over the fiscal cliff (fiscal slope?) to some extent. However, as uncertainties are alleviated, we expect GDP growth to re-accelerate toward 2.5 percent+ in the second half.

Bob Leggett, CFA, is the Senior Investment Strategist at FirstMerit Wealth Management Services. Reach him at [email protected] or follow him on Twitter @firstmerit_mkt.

The opinions and information contained in this message have been derived from sources believed to be accurate and reliable, but FirstMerit Bank N.A. makes no representation as to their timeliness or completeness. This message does not constitute individual investment, legal or tax advice. All opinions are reflective of judgments made on the original date of publication and do not constitute a guarantee of present or future financial market conditions.


3M cuts profit outlook on currency concerns, deal costs

MINNEAPOLIS, Minn., Tue Oct 23, 2012 – Diversified U.S. manufacturer 3M Co. on Tuesday reported a 6.7 percent rise in third-quarter profit but cut its profit forecast for the full year as acquisition costs and a strengthening dollar hurt margins.

The maker of products ranging from Post-It notes to films used in consumer electronics said net income was $1.16 billion, or $1.65 per share, compared with $1.09 billion, or $1.52 per share, a year earlier.

Profit met Wall Street forecasts, according to Thomson Reuters I/B/E/S.

3M now expects to earn $6.27 to $6.35 per share for all of 2012, below its prior forecast of $6.35 to $6.50. Analysts had expected $6.40.

Third-quarter revenue was little changed at $7.5 billion, shy of the $7.63 billion analysts had anticipated.

Planes, auto demand help Alcoa results beat Wall Street view

PITTSBURGH, Wed Oct 10, 2012 – Stronger demand for aluminum products from airplane and automobile producers helped Alcoa Inc.’s third-quarter profit before one-time charges beat Wall Street’s expectations, offsetting weak aluminum prices and worries about China’s slumping economy.

But, even with its strong downstream business, Chairman and CEO Klaus Kleinfeld said the company had noticed a “slight slowdown” in some regions and end markets.

As a result, Alcoa lowered its global aluminum consumption outlook to 6 percent growth from 7 percent previously for 2012. “The main driver for this is China,” Kleinfeld told Wall Street analysts on a conference call on Tuesday.

China’s aluminum demand growth was 11 percent in the first half of the year, he said, but “we believe this is going to come down in the second half to 7 percent.

“I’m pretty confident given the already announced China stimulus package which is going into the ground … (it) will be picking up speed but this is probably going to take until the end of the fourth quarter,” he said.

Kleinfeld was bullish about Alcoa’s downstream businesses, noting that the aerospace and automobile markets were coming back strongly from the recession.

“Global aerospace remains solid,” with a backlog of 8,500 planes, or eight years work, he said. “In autos, we are seeing an increase of 11 to 15 percent (annual) growth in North America.”

Airplane maker Boeing Co., truck builder Navistar International Corp. and other manufacturers have been using more engineered aluminum parts from Alcoa to lighten the weight of planes and vehicles.

Making aluminum bolts, wheels, aircraft fuselages and other components for these customers is proving more lucrative for Alcoa than just supplying basic aluminum of which the price has dropped to near two-year lows.

Alcoa’s core metal-making business is struggling to make a profit.

PIMCO’s Gross spotlights crumbling credit in September outlook

NEW YORK, Wed Sep 5, 2012 – Bill Gross, founder and co-chief investment officer of bond giant PIMCO, said in his September investment outlook that low returns for banks and other lenders will lead to reduced lending and a scaling back of operations in coming years.

Gross, whose Pacific Investment Management Co had $1.82 trillion in assets as of June 30, wrote that weak returns for banks and the “overleveraged” condition of borrowers has brought the global economy to a tipping point.

For some time now, Gross has been sounding a somber note about the economy and prospects for economic growth. In his last investor letter, he talked about the death of equities and the prospect for mediocre returns for both bonds and stocks.

“When credit is priced such that carry is no longer as profitable at a customary amount of leverage/risk, then the system will stall, list, or perhaps even tip over,” Gross wrote.

Gross wrote that credit “is what makes the global economy go” and that financial institutions such as banks, insurance companies, and investment firms will lose their incentive to lend at low rates and cut back on lending and enact more austere measures.

“In the process, (financial institutions) lay off, instead of hire new workers; close branch offices or even ATM machines by the thousands as did Bank of America recently; and yes, ultimately reduce the rate of lending or credit growth which propelled the global economy so effortlessly over the past century,” Gross wrote.

The U.S. Federal Reserve and other central banks may be “to blame” for the “current shipwreck,” wrote Gross, and their plans to inject liquidity into the financial system have backfired.

Gross, who runs the world’s largest bond fund, the PIMCO Total Return Fund, which has $272.5 billion in assets as of Aug. 31 and attracted about $1.29 billion in inflows last month, according to Morningstar.

Gross wrote that reduced lending habits and a new “age of inflation” will lead to weaker returns on both stocks and bonds, which was the main point in his August letter.

Luxury retailers resilient, forecasts bullish

NEW YORK, Tue Aug 14, 2012 – Affluent shoppers shrugged off anxiety about the global economy that cast a pall over the luxury sector in the spring, leading Estee Lauder, Michael Kors and Saks to issue bullish sales forecasts.

Consumers showed a willingness to pay for high-end handbags and designer gowns and anti-aging creams despite fears earlier this year that rocky stock markets and worries about the euro zone financial crisis and the global economy would dampen luxury spending.

“We have not seen any change in traffic in the full price channel,” Michael Kors Holdings Ltd. CEO John Idol said on a conference call on Tuesday.

Kors raised its full-year sales and profit forecast and said it expects same-store sales, a key retail measure, to rise 30 percent.

Kors and Saks Inc. also each offered fewer markdowns than expected.

At the same time, consumers continued to travel, snapping up Estee Lauder Cos. Inc.’s beauty goods at its airport stores, and flocking to department stores to buy Michael Kors eyeglasses and watches.

More broadly, the government reported U.S. retail sales increased in July for the first time in four months as demand rose broadly for everything from cars to electronics. That signaled consumers could drive faster growth in the third quarter.

Home Depot profit tops estimates; outlook raised

ATLANTA, Tue Aug 14, 2012 – Home Depot Inc. raised its fiscal-year earnings outlook on Tuesday as tight cost controls helped the world’s largest home improvement chain to offset sales weakness and beat Wall Street’s profit estimates in the latest quarter.

The company’s second quarter, which ended on July 29, is typically the most important selling period for home improvement chains, but unseasonably warm weather early in the year pulled some demand into the first quarter.

Net earnings rose to $1.53 billion, or $1.01 a share, in the quarter from $1.36 billion, or 86 cents a share, a year earlier.

Analysts on average were expecting a profit of 97 cents a share, according to Thomson Reuters I/B/E/S.

Sales rose 1.7 percent to $20.57 billion, but missed the analysts’ average estimate of $20.74 billion. Operating expenses fell 2.7 percent to $4.46 billion.

Shares of Home Depot rose 1.3 percent to $53.50 in trading before the market opened.

Home Depot has benefited from its recent efforts to improve distribution and customer service. It has been quicker to cut costs than rival Lowe’s Cos. Inc., and in some cases has gotten a boost as housing markets have rebounded in regions where it has a heavy presence.

For bullish Caterpillar, ‘This doesn’t feel like 2008’

PEORIA, Ill., Wed Jul 25, 2012 – Caterpillar Inc., the world’s largest maker of construction equipment, raised its 2012 profit forecast on Wednesday and said that despite pockets of weakness, the global economy was improving.
The strong outlook came after Caterpillar posted a quarterly profit that easily beat Wall Street’s expectations, sending the company’s stock up 4 percent.
Fiscal improvement is still needed in Asia, Latin America and North America, but steps toward a healthier global economy have already begun, Caterpillar CEO Doug Oberhelman said.
“While we’re expecting a record year in 2012, we understand the world is facing economic challenges, and if it becomes necessary, we are prepared to act quickly,” Oberhelman said in a statement. “The good news is, this doesn’t feel like 2008.”
The company reported a second-quarter profit of $1.67 billion, or $2.54 per share, compared with $1.02 billion, or $1.52 per share, a year earlier.
Analysts on average expected earnings of $2.28 per share, according to Thomson Reuters I/B/E/S.
Revenue rose 21 percent to $17.37 billion. Analysts expected $17.11 billion.
The company now expects to earn $9.60 per share in 2012, up from a previous forecast of $9.50.
For the year, analysts expect a profit of $9.54 per share.
Shares of Caterpillar rose 4 percent to $84.65 in premarket trading.

Best Buy results top estimates; outlook maintained

NEW YORK, Tue May 22, 2012 – Best Buy Co. Inc. reported better-than-expected quarterly results and maintained its outlook for the year as a turnaround plan started to take hold, sending shares in the world’s largest consumer electronics chain up more nearly 4 percent.

The stronger results eased concerns about the future of the retailer after Chief Executive Brian Dunn resigned abruptly last month amid a probe into allegations of personal misconduct.

Critics are also worried that Best Buy is serving as a showroom for Amazon.com Inc. and other online retailers.

“Best Buy is in a turnaround, and the strategic priorities we laid out at the beginning of the year are just the first phase of the changes to come,” Interim CEO Mike Mikan said. “We know we have to better adapt to the new realities of the marketplace.”

Sales rose 2.1 percent to $11.61 billion, beating the analysts’ average estimate of $11.52 billion.

Net earnings fell to $161 million, or 47 cents a share, for the quarter ended May 5, from $255 million, or 64 cents a share, a year earlier. Excluding items, it earned 72 cents a share, beating the average estimate of 59 cents.