By CBS MarketWatch
In a company's early days, the personality of the founder sets the tone, a founder who's likely to be the CEO when that company goes public: Sam Walton and Wal-Mart, Bill Gates and Microsoft, Walt Disney and Disney and Martha Stewart and Martha Stewart Living Omnimedia come right to mind.
It's easy to see why investing in a company at the beginning is so often a bet on the vision of that founder. But what happens when the founder has moved on or died? Does personality still hold sway?
Very much so. In fact, as much as 25 percent of a stock price might be attributable to the CEO's character, a new study finds. And that makes investigating the person at the top nearly as important as the numbers on the bottom line.
Thomas Kostigen delves into this "cult of personality" and just what effect it can have on stock prices in his Sophisticated Investor column. Read his thoughts, plus find out how big a role health-care issues are playing in the 2004 election and learn how President Bush's proposal for sweeping new tax-free savings accounts is being received, on Tuesday's Personal Finance pages.
We've seen in the past few years, from both corporate executives and mutual fund managers, how much character counts -- on the down side. It's about time we all demanded the up side.
Steve Kerch , personal finance editor
When personality trumps performance in the market
The character of chief executives carries more import these days; their personalities hold sway over public perception of their companies at large. And, increasingly, that character affects stock price. See Sophisticated Investor
Bush budget renews call for new tax-free savings
The Bush Administration's fiscal 2005 budget rekindles several controversial initiatives designed to encourage savings in individual accounts and retirement plans. The administration Monday offered modified versions of its individual Lifetime Savings Account and Retirement Savings Account, first proposed in last year's budget but soon tabled amid heated congressional opposition. See full story
U.S. corporate layoffs up 26% in January, survey says
Announcements of job reductions by U.S. corporations surged 26 percent in January to 117,556, the highest since October, according to a monthly tally by outplacement firm Challenger, Gray & Christmas. See Economic Report
Budget, inflation bombs will sink bonds
The real "question isn't whether the Fed might tighten too early but whether it may already be too late to head off inflation that leads to higher interest rates" say the editors of the Wall Street Journal. Their editorial was aimed at Greenspan's surprise hint that low interest rates will disappear in the near future. In short, inflation's coming. Forget all the happy-talk from Washington and Wall Street about economic recoveries and bull markets. The new "budgets of mass destruction," as the New York Times calls the federal deficits, are about to explode in our face. See Paul B. Farrell
Federated plans to repay investors; sanctions officers
Federated Investors created a $7.6 million restoration fund Tuesday following an internal review that uncovered improper trading in its mutual funds. The Pittsburgh-based mutual-fund company also sanctioned three senior officers and two fund managers, and fired one employee. See Fund Watch
Election 2004: It's the economy and health care
Bill Clinton's 1992 presidential triumph was famously predicated on his campaign staff's internal reminder to itself of the election's most salient issue: "It's the economy, stupid." Twelve years later, the Democratic candidates hoping to unseat another President Bush are singing the same refrain, but it's got a new twist. See full story
Grassroots campaign for health care
Tired of inside-Washington politics, America's largest union has decided to take its campaign for better health care to the voters. See full story
Housing affordability improves in Q4
A seasonal decline in home prices and rising family income led to improved housing affordability conditions in the fourth quarter, the National Association of Realtors said Monday. See full story
Fed hands are still tied
The Federal Reserve may think it has untied its hands to raise interest rates by changing the wording of its recent policy statement, but conditions in the real world suggest otherwise. See Dr. Irwin Kellner
Profit from opposing point of view
Which would you rather be? Conventional but wrong or unconventional but right? Most investors insist that it is the latter. But in my experience, most of them actually behave as though the former were the case. See Mark Hulbert
Very little escapes IRS definition of taxable
There's not much the Internal Revenue Service doesn't consider taxable income. Of course, there are the standbys: salaries, wages, tips, commissions, interest and dividends, rent on property you lease out and all the money you make from that photography business on the side. See Daily Tax Tip
Gallagher likes Hutchinson, Advisory Board, Zoll
Vince Gallagher likes his stocks pure. The manager of the Needham Small Cap Growth fund (NAS:NESGX) keeps an eye on stocks that, as he puts it, "don't have any analyst coverage and are not tainted by the mighty Wall Street, so no one is out there flogging [them] to their sales force." See The Stock Pickers
Retirement nest egg protection
Many people rely on historic stock returns (which tend to range between 8 and 13 percent) when calculating how much they will need in retirement. This strategy, however, can be dangerously flawed, especially if you withdraw money from your investments on an annual basis and you fall into a bear market at the wrong time. See Marshall Loeb's Daily Money Tip