Trading year for you so far. What are some tricks that have really been working this year . You have to differentiate between what you think is gonna happen and whats gonna happen. Now, it took me a long time to do that and i wasted a lot of money fighting what was really gonna happen versus what i thought should happen. And i think a lot of folks have started to take some money off the table worrying about the stock market continuing its march. But the fed is data dependent and we dont believe that were gonna see that data change very much. The u. S. Economy is still in trouble. Theyre still gonna accomodate loose money policies still on the table. The stocks are going to march higher. Whether you think its manipulated or not, thats just the world we live in today. How have you been handling the hedge funds . Theyve been taking these large shots at companies, making a lot of news, a lot of noise. But what have you been doing as a trader with that information . Unfortunately as a trader you have to have better timing and keep an eye on when they come and when they go. They are cyclical and they all act at once. But right now we have to have better timing and we cant use our big positions all at once. We have to slowly piece ourselves into the market because we cant afford to let it all go at once because these hedge funds are so big that that could really cost us some money. The ipo market has been hot this year. Its up about 43 compared to last year. Did you buy any ipos . Are you buying any ipos . Were gonna say thisyes we did. Were gonna go with the flow here and this is another one of those dot com things and i always get a little bit worried about it but this market has been slowly creeping higher. And we say buy it when theyre creepin and sell it when theyre leapin and were not leaping yet. Were gonna go with the flow, get on board with some of these ipos because theres money going into the market. The fed is still pushing us toward these risk assets and until that changesand youll be able to tell when it changeswere gonna start to see some economic figures telling you that thats the way it is. Those tea leaves are gonna tell you to get out. But right now, nothing changes. That market is gonna slowly grind higher. And yes, wed like to stay involved with some of these ipos because we think that theres money on the table for those. That was a great trader save by the way. Thanks for coming on the show and have a great holiday. You too. A flipping frenzy is happening in the housing market. People who made big money fixing up homes then quickly sell them are back with a vengence. Realty trac reports more than 136thousand Single Family homes were flipped nationwide during the first half of 2013a 19 increase over 2012 and a 74 increase from 2011. With investors remodeling houses from the inside out, Construction Companies are enjoying the craze. My business hasnt had any downtime as a result of these investors wanting to flip homes. At the end of the day we take bad ugly houses, make them beautiful, sell them to great families, and increase Property Values in neighborhoods, and it stimulates the economy. They make flipping house like easy on tv but in reality. A Financial Advisor warns it takes a pile of cash for the mortgage, insurance and utilities if the home does not sell quickly. The gap is widening between middleclass salaries and homes they hope to buy. As our cover story explains, it adds up to more properties out of reach. Home prices are going up a lot faster than wages, and its led to dire predictions. Until we fix that, improve median income, im afraid were going to see Home Affordability slipping. The National Association of realtors reports home prices have risen nearly 16 in 25 cities over the past year. While financial website interestdotcom reports incomes rose about three percent. Discouraging, to luisa fonsecas sister. She has to scale back. Shes looking at cheaper homes that she can afford. Putting homebuying on hold for others. Waiting and getting money together, hoping it goes down. San francisco, an expensive market already, got even pricier. When the median home price last year of 552thousand, 600 dollars. Rose this year to 706thousand, 300. An increase of more than 150thousand dollars. A big bounce, unlikely to repeat, next year. Its gonna be less than 16 , next year. So youre better off saving, maybe paying a slightly higher rate but be in a stronger position. And there are options. There are program with 10 down, there are programs with 3 down, but your credit drives that 10 product. If yout want to own your own home, youre going to have to have more liquidity because your wages arent going to keep up to the market. In a related survey, Country Financial reports 41 of americans think owning a home is attainable for a typical middleclass family. Thats down five points from last year. The Banking Industry is showing signs of health and wealth. Overall revenue for the sector jumped 8. 5 in the second quarter. Total earnings were up 30 however, Community Banks are still struggling under the weight of regulations, low Interest Rates and bad loans. Jack keenan reports from florida. Power lunches are common again, here at mise en place in tampa, florida. Good news for owner Maryann Ferenc who is paying off loans she borrowed from gulf Shore Community bank to open her second restaurant. We knew that it was the right thing to do, it was right for our business, event business just died, and we went to the bank and we know it would be go, and dig in and loan us the money. Mise en place is thankful to gulf shore, and vice versa. With more than 230 Million Dollars in assets, and armed with a recent Capital Raise of 6milliondollars, gulf shore wants to grow to one of the largest Community Banks in town. You need to get to 750 to a billion dollar in assets that not only allows you to have the capabilities to serve your clients, it also gets you to a point where you see fixed costs rise in the industry, margin compression, at that level we are able to have the scale to drive the type of returns investors want to see. Five years after the start of the financial crisis, Community Banks are still being closed. The number of banks shrunk to just over 7,000 in 2012, down from 8,500 in 2007. The five largest thrifts now control 52 percent of all us assets. The crisis brought dramatic changes to us banking regulations, regulations that are devastating profits already squeezed in Community Banks. Cabillero says Community Banks are burdened. Whether its investment in technology, its people, so you take the same size institution, and you just moved the same fixedcost bar. In addition to regulations, overexposure to bad loans will continue to haunt Community Banks. The banks are on the hook for that money, and theyre gradually writing down those loans,. They are overexposed, they lent too much. But trying to make money in a low interestrate world is tough when banks make money from yield. Cabillaro says making a risky loan is not worth it. You dont want to extend that credit risk, cuz what happens is a bank changes its credit risk profile and you get 3 percent more over an investment, but you take 12 percent more risk, so its mispriced. And with lending still tight, ferenc says Community Banks might be the only ones Small Businesses can turn to. I wouldnt be in business if it wasnt for Community Banks. For First Business news, im jackie keenan. The fdic reports the number of problem Community Banks is down, and Bank Failures have slowed. Credit unions are catching on to consumers overdraft habits. As fewer consumers overdraw their accounts, unions are increasing fees to 28 dollars, up from 25 a few years ago. Big banks still charge the most, at nearly 35 dollars. A job market milestone has been reached this year for the ladies. Womenhave recovered all jobs lost during the recession. However, men are still falling behind. The Labor Department reports a record 67. 5 million women are working today. Thats above the 67. 4 who held jobs back in 2008. As for the men 69 million are currently working. But that is below the high of 70. 9 set in june 2007. The reason is women tend to work in education, health, hospitality and retail sectors that have made a rebound or weathered the downturn. Men dominate jobs in construction and manufacturing which were hit hardest by the recession. Traders are expected to reap the benefits of this years robust stock market rise. Its predicted traders, Financial Advisors and Investment Bankers working on wall street will take home bonuses up 15 from last year. According to the new york times,however, bond traders could see a drop by 15 or even more in their endof year compensation. Hedge fund bonusess will likely increase by 5 to 15 . Employees working at private equity firms can expect a 5 to 10 increase in bonuses. Turning now to a money maker from the past that is making a comeback. Sales numbers for Vinyl Records are at levels not seen in years. Ky sisson takes us for a spin in hollywood. Even in the digital age, Clarke Andros buys the obsolete. Its worth my paying more. Its not just a digital file. I have the album art in my hands. You cant touch an mp3. He is part of the resurgence in Vinyl Records and sales of this 65yearold technology are making a record comeback. Nielsen soundscan projects 5. 47 million Vinyl Records will be sold in 2013, up 338 percent in the last seven years. Steve sheldon is the president of rainbo records, a vinyl manufacturer that presses nearly 25,000 records a day. His company has been in the business since 1939, and says the demand for Vinyl Records is unlike anything theyve seen in years. This year has been the busiest for uswere doing double what we were doing two years ago. Capacity is at 100 percent. And its about the 1325 year old range that is making these hot off the press vinyls throw record fly off store shelves. Its a tangible item and they were brought up on virtual everything. I think they are enjoying handling the records, handling the jacket; the artwork on the album cover was always an attraction. Here it is really awesome to see a 15 year old say oh i just got a turntable for my first time, what do i buy . And they are extremely excited about it. Adrienne pearson works at Amoeba Records on sunset blvd in hollywood, california and says that record labels have worked in an extra incentive to buy vinyl. I could honestly say within the past 5 years vinyl record sales have increased dramatically. A bunch of record labels are actually putting out vinyl that also include digital downloads and you know vinyl sales are going up when you see them at best buy. Rainbo records, has seen more than seven decades of changes in the music industry, from records included in a wheaties box, to cassettes, cds and 8 tracks. Sheldon says the digital age couldnt have been more detrimental to his company, but the comeback in vinyls came at the perfect time. Vinyl has been the savior for us. After 74 years, it was looking pretty bleak with cds. Our cd sales have dropped about 75 since 2008. I was going to scale down the company to a much smaller operation and then the last few years vinyl has taken off. We hired some employees back. 2010 we were at 90, now were at 140 employees. Reporting in los angeles for First Business news, im ky sisson. The cost to make Vinyl Records has remained about the same for the past 20 years. Still to come how to shield your portfolio from a harsh winter. Plus. Which is easier getting a job at walmart or getting into harvard . The surprising answer in traders unplugged. And is etiquette outdated at the office . Bill moller gets a lesson from miss manners. After the break miss manners hard to believe shes just penned her 17th book. She did it with her son. Its a business book. Miss manners minds your business. Judith and nicholas martin, welcome. Thank you. This book to me reads like a comedy book. Have you guys ever done standup . Our lives are standup. You can hardly do this sort of thing straight. Its funny how Little People know and how important it is that you set them right. But in the business world, we have no idea about the proper etiquette for how to conduct business. Not only that, but its all been reversed. So people are using their social manners in the office and their business manners with their family and friends. And were trying to move them back into the proper spheres. And the peculiar thing is that at the office when people want to get out of these endless parties, the showers, the engagement parties for people they hardly know they ask us for an excuse and i say how abouti have to work. They dont think of that. But thats the excuse theyre using with families and friends. Thats what i mean by the reversal. Judith, are there any kind of universal truths about manners that we should consider to be a guide . I make a dinstinction between manners and etiquette. Manners are the universal truths. That you should treat other people with consideration, you should get a grip on some of your more repulsive impulses so that we can live together peaceably. But etiquette is particular rules of a particular society or a segment of a society at a particular time. Nicholas, when you grew up was she a pretty tough taskmaster around the house . Not at all. Manners is a language. One of the things we discovered with the business book is how many people dont speak the language. Its hard to communicate if you dont. Well, here i am in my tennis shoes talking to you both. Were too polite to notice. Thank you very much. Again, its miss manners minds her business. Judith and nicholas, thank you so much. Lovely to have her here. Thank you bill coming up. Traders follow the money trail. Is it smart to invest like a billionaire, if youre not one. And later on. How to sidestep the winter trading slump. Well be right back. The time has come to put our traders to the test. Joining us now from the floor of cme group, Alan Knuckman and james ramelli. Gear up guys, here we go. Topic one drop or pop Goldman Sachs predicts a 10 stock market decline in 2014. Is goldman getting it right . Alan goldman actually said it could happen. Id actually think a pullback would be welcome. Mathematically the last 7 times the market sold off 20 , it has rallied and made new highs so when it does sell off you have to look at it as an opportunity until proven otherwise. James and could wasnt even the only qualifier that they included in that statement. They said that it could sell off 10 sometime next year. They really didnt have a time frame in mind. Alan and the best part is goldman lost a billion dollars trading currencies last quarter so i guess theyre not always right. Angie topic twoselective company. Its tougher to get a job at walmart than get into harvard. Is walmart a stock you would buy . James walmart is not a stock that i would buy. Retail has been very tricky this year. And the discount retailers are the ones you want to avoid at all costs. I dont want to get in these at all. Looking at Luxury Brands like kors and macys those are the ones that are working out. Those are the ones i want to stick with. Alan walmart has potential if it breaks out to the upside. It has been trading at the same spot for 6 months. If it moves up here, it could have a 10 move. You would be better off to trade in the spiderjust track the s p, then walmart. Walmart is kind of dead money. Angie topic three billionaire index. There is a new index that tracks the money moves of big guys like Warren Buffett or daniel loeb. Does it pay to follow the smart money . James i think it pays very well to follow the smart money. That is my bread and butter. Following the institutional order flow is how i base 90 percent of my trades and how i was able to put together a win rate. 30 straight winning trades following institutional paper in november. This works out. There is a reason they have all the money. Its because theyre smarter than us. Alan you also have to understand this index is tracking might be getting in later than by reading the reports and finding out when they bought but not getting at the same time. Theyve got a lot more money. They can afford bigger losses. But trading is all about risk control probability no matter who you follow or how you trade. Angie time for your bonus round questionand its ticker time the holidays are all about foodglorious food so which of the follow are true tickers . Ayumy b ueat cyum ddine e all of the above . Alan well, i know yum james all of the above . Alan it has to be all of the above. Angie its all of the above. First business continues right after this. Matt shapiro of mws capital joins us now to talk about the january effect. Good morning matt. Good morning angie. The january effect happens as people put their bonus money into the stock market. Do you suspect that will happen this year . Always. January seasonally strong. As january goes, so goes the year. Were coming off a blockbuster year so well have to see what happens. Theres gonna be a lot of money put into the market. People that really missed the boat last year and finally theyre gonna have their annual reviews. Theyre deciding theyve got to do something. We are already hearing that traders on wall street and Wealth Managers on wall street will have big bonuses this year. So do you have your stock selected and are you ready for the rally . Im still playing it as i always do. Long term and you know just the inertial momentum of the economy is gonna do well. That will have actually a strong regional effect in new york and that area as traders and those big bonuses go to work in that area of the economy. But its part of a broader thing that it really was a good year with strong Consumer Spending and that was reflected in the stock market. So my only message is hopefully january goes well but you have to have some patience. Last year we started off really well but then the market waffled and was in and out, back and forth until it finally regained its footing and shot to the highs late in the fall. Again, were gonna have to see what happens with quantitative easing as we go into march and may and see how the year plays out. Im very optimistic but we have to have patience. The economy takes time to make wealth. Weve seen an improvement in the labor market this year. It was moderate but more people are working. So do you think that they will be buying more stocks . I think so. And dont go for the overvalued stuff. Go for the core stuff in the economy thats especially gonna do well with more employment and more Capital Spending because i think thats the part thats lagging and will get us through and power us through 2014 and 2015. Thanks for coming on the show matt. Youre welcome. Thats a wrap for today. As always feel free to follow us on facebook and twitter. Or send us an email. We look forward to hearing from you. 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