Curran Tomko Tarski LLP Labor & Employment Practice Chair Cynthia Marcotte Stamer  the author of three articles in the December  2009 Issue of the American Bar Association Real Property Probate & Trust Section E-Report:

• Department of Labor Announces Plans To Expand Employee Benefits, Wage & Hour, OSHA & Other Reporting & Disclosure Requirements & Implement Other New Employee Benefit Regulation
• Mishandling Employee Benefit Obligations Creates Liabilities For Distressed Businesses & Their Leaders
• Employee Benefit Plan Sponsors & Fiduciaries Urged To Review Bonding, Credentials of Staff & Service Providers Under ERISA

Chair of the American Bar Association RPTE Employee Benefits & Compensation Committee, an ABA Joint Committee on Employee Benefits  Council member, and Chair of the Curran Tomko Tarski Labor, Employment & Employee Benefits Practice, Cynthia Marcotte Stamer is  nationally and internationally recognized for her work assisting businesses, employee benefit plan fiduciaries and vendors, insurers, administrative services providers, governments, and other entities to develop administer and defend cost-effective employee benefit other human resources programs, policies and procedures to meet their budgetary, risk management and compliance and other objectives.  Board certified in Labor & Employment law, Ms. Stamer applies her extensive experience regarding employment, employee benefit, and other related laws to assists clients in a wide range of business and litigation contexts.   The co-founder of the Solutions Law Consortium, Ms. Stamer, also is the publisher of Solutions Law HR & Benefits Update. She speaks and writes extensively about employee benefits and other human resources, compensation and internal controls matters.

If your organization or employee benefit plan needs assistance with employee benefits, labor and employment or other internal controls and risk management matters, please contact Ms. Stamer at cstamer@cttlegal.com, (214) 270-2402; or another Curran Tomko Tarski, LLP attorney of your choice.  For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi, LLP team, see here.

Other Helpful Resources & Information

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here or e-mailing this information to cstamer@cttlegal.com or registering to participate in the distribution of these and other updates on our CTT HR & Employee Benefits Update distributions in blog form via RSS feed here.  You also may be interested in staying abreast of emerging internal controls and compliance challenges by reviewing and registering for our Corporate Compliance, Risk Management & Internal Controls distributions.  For important information concerning this communication click here.  If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to support@cttlegal.com.

©2009 Curran Tomko Tarski LLP.  All rights reserved.

If you have questions about or need assistance evaluating, commenting on or responding to the  Proposed Regulations, the Q&As, or other employment, compensation, employee benefit, workplace health and safety, corporate ethics and compliance practices, concerns or claims, please contact the author of this article, Curran Tomko Tarski LLP Labor & Employment Practice Group Chair Cynthia Marcotte Stamer.  Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization and Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Group, Ms. Stamer is experienced with assisting employers and others about compliance with federal and state equal employment opportunity, compensation and employee benefit, workplace safety, and other labor and employment, as well as advising and defending employers and others against tax, employment discrimination and other labor and employment, and other related audits, investigations and litigation, charges, audits, claims and investigations by the IRS, Department of Labor and other federal and state regulators. Ms. Stamer has advised and represented employers on these and other labor and employment, compensation, employee benefit and other personnel and staffing matters for more than 20 years. Ms. Stamer also speaks and writes extensively on these and other related matters. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.   For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi LLP team, see here.

Other Information & Resources

We hope that this information is useful to you. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here or e-mailing this information here or registering to participate in the distribution of our Solutions Law Press HR & Benefits Update distributions here.  Some other recent updates that may be of interested include the following, which you can access by clicking on the article title:

• IRS Proposes To Update Regulations On Exclusion of Damages Received on Account of Personal Physical Injuries or Physical Sickness To Eliminate Tort Test
• OSHA Final Rule Updates OSHA Personal Protective Equipment Standards
• DOL Proposes Changes To H-2A Temporary & Seasonal Agricultural Nonimmigrant Worker Certification Procedures & Related Rules
• Register Now For HITECH Act Health Data Security & Breach Update: Learn What You Must Do This Month To Comply With New Health Data Breach Regulations
• ADAAA Amendment Broader ADA “Disability” Definition Not Retroactive, Employer Action Needed To Manage Post 1/1/2009 Risks
• New Study Shares Data On Migrant Health Care Challenges Along The Border
• Employer & Other Health Plans & Other HIPAA-Covered Entities & Their Business Associates Must Comply With New HHS Health Information Data Breach Rules By September 23
• Stamer, Others To Discuss Technology Use/Risks in Employee Benefits, Tax & HR Consulting & Administration
• Businesses Cautioned To Strengthen Investigation & Employment Practices To Minimize Potential Exposure To Retaliation Claims In Light Of Recent Supreme Court Retaliation Decision
• OFCCP To Apply Special Procedures, Heightened Scrutiny To Equal Employment Practices of Government Contractors, Subcontractors On ARRA Funded Projects
• With September 8 Deadline For Government Contractors To Use E-Verify, USCIS Invites Comments On E-Verify Program Designated Agent Processr Enforcement

For important information concerning this communication click here.   If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject here.

©2009 Cynthia Marcotte Stamer. All rights reserved.

Risk Management, like Sustainability has become one of the buzz phrases and hot topics in business and management in general. According to wiki:

Risk is defined in ISO31000 as the effect of uncertainty on objectives (whether positive or negative). Risk Management can therefore be considered the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. Risks can come from uncertainty in financial markets, project failures, legal liabilities, credit risk, accidents, natural causes and disasters as well as deliberate attacks from an adversary…

The strategies to manage risk include transferring the risk to another party, avoiding the risk, reducing the negative effect of the risk, and accepting some or all of the consequences of a particular risk.

By definition, risk management involves the methodical identification and analysis of events that may or may not happen. The responsibility of present and future business leaders – as well as industry and government leaders of course – is to ensure the sustainability of the endeavors they oversee. So, should peak oil be considered a risk management scenario? As Kim Clark, former president/dean of Harvard Business School, said “…leaders should bring somebody in to their organizations right away to talk to them about this…if only to say they’ve had a thorough look at the subject and dismiss it. This is something that must appear on the radar screen and be addressed.” Then, after study and analysis they can either write it off as an acceptable risk or act accordingly to minimize its effects…or even monopolize on the opportunities that may arise as a result it.

It is understood that national/central governments have identified (and addressed?) peak oil as a significant risk management scenario, however they may choose to limit their open recognition and handling of the subject for the sake of order and national security. Local and community government – with more manageable sized constituencies – remain largely unaware of the peak oil scenario. This is an unnecessary risk exposure since they could play a key role in creating a responsible level of awareness and developing mitigation measures – IF they deem such actions necessary after a proper risk management analysis.

Business schools, the very institutions where present and future leaders are formed, have also been slow to include peak oil in their many leadership programs about challenging times and sustainability. At a minimum and for the sake of credibility, the topic should appear as a what if leadership challenge in case-studies. The title of the executive leadership program at one of Europe’s most prestigious business schools is – “Creating global leaders capable of taking on the world’s greatest challenges” And I ask…Is the mother of all risk management scenarios included amongst the challenges?

In this November 2009 post on the IIA website, Norman Marks promotes the idea of making risk management a way of life instead of a quarterly exercise. If it doesn’t add value, then it is merely “decoration”, he writes.

I quite enjoyed this example about managing the risks of his daily commute to work – something we call all relate too – and recommend that you have a read. It is an excellent illustration of how one makes risk management a way of life rather than an ad hoc activity.

Please click here to have a read at Norman’s post.

Professor Pinch builds on my blog and shares his thoughts about personal risk management and risk management in general. He writes: “Always (put) yourself in position to control your response to situations – (do) not have them dictated to you by the choices/actions of others.”

That’s going in my Risk Quotes page.

Click here to read the entire post.

I recently read a very interesting article here on Consumer trends for 2010 and I thought I would throw a “risk” lense across each of these trends.

The summary:

• BUSINESS AS UNUSUAL | Forget the recession: the societal changes that will dominate 2010 were set in motion long before we temporarily stared into the abyss. And even when the downturn ends, there won’t be a return to ‘business as usual’.
  • The risk lens is a critical lens in this space as it plays right into the regulation that is going to occur through the GFC.  Corporate governance has long been in the realm of good risk management but with the GFC there will be an even greater emphasis on this being embedded in business practice and decision making.  Risk managers will need to focus on the legislation but continue to focus on engaging in the risk discussion with a view to learning from the past but embracing a “brave new world” where the risk discussion is a forward looking strategic lens.

• URBANY | Extreme urbanization will lead to more sophisticated and demanding consumers around the world. Urban culture is THE culture.
  • The more sophisticated, more demanding,
    but also more try-out-prone, super-wired urban
    consumers are snapping up more ‘daring’ goods, services,
    experiences, campaigns and conversations and hence this will push the risk professional into a space of getting in front of the business desire to snap up these opportunities.  Innovation needs to be the catch cry of the risk manager just as much as the businesses they support.  Things like electronic verification will start to become the accepted norm which will require a complete mind set shift in AML and fraud risks.  The past process of waiting to be pushed into a conversation will not hold and it will be critical to be at the forefront of these discussions and to drive the conversation into a logical and positive path.

• REAL-TIME REVIEWS | Whatever new product or service gets launched in 2010, it will be reviewed in real time. Transparency tyranny (or triumph) is upon us.
  • The worlds of twitter and facebook have brought the real-time conversation to a new level and a broader audience.  Both negative and positive feedback passes across the electronic landscape like a storm passes crosses the countryside.  The risk manager needs to work within these mediums and be at the forefront of the conversation around engaging in these mediums.  Amazingly the last few years have seen risk almost ignore the need to play in this space but with the transparency of information this must change.

• (F)LUXURY | With status symbols becoming more fragmented, luxury is whatever consumers want it to be in 2010.
  • With consumers defining luxury more and more, the consumer will be driving the car of product changes and requirements.  This will challenge the risk manager to re-assess some old idioms that perhaps do not stand up to old practices but require more pro-active forward looking risk analysis and planning.

• MASS MINGLING | Online lifestyles are actually fueling real world meet-ups, shattering all predictions about a virtual and socially isolated future
  • Surprisingly the physical interaction will advance in human need just as much, if not more, than the electronic (in actual fact we are starting to see the two worlds merge where the electronic joins you in the physical – aka phones that now overlay electronic information on a photo / video you are taking live).  This will challenge the risk manager to accept that the consumer may want information pushed  to them.  This will in particular challenge security settings for financial services.

• ECO-EASY | In 2010, corporations and governments will force consumers to be more green by restricting the alternatives. Say goodbye to consumer choice.
  • Clearly the push to more green is going to be driven by both consumer sentiment and regulation.  As the risk manager we will play an important role in ensuring the regulation is adequately addressed.

• TRACKING & ALERTING | Tracking and alerting are the new search. Next year, consumers will further expand their sphere of control.

• • This goes to a point made earlier where the consumer will want the information pushed to them to track and alert them to things and will therefore have implications for risk on privacy, security and data integrity and quality.

• EMBEDDED GENEROSITY | Generosity as a trend will further adapt to the zeitgeist, leading to more pragmatic and collaborative charity.
  • One of the trends that has a lower impact on risk management but still plays a role from two angles.  It will impact the corporate world (as it has been for the past few years) and therefore risk will need to consider the reputation risk impacts of how the corporate responds.  In addition, the risk profession itself will need to consider this for their employees to ensure adequate time is devoted / given to employees to this area.

• PROFILE MYNING | With hundreds of millions of people now nurturing their online profiles, 2010 will be about consumers making money from these profiles, from intention-based
  • This has a huge risk impact, particularly around privacy and data security.  Waiting around and watching this trend will be extremely dangerous for the risk manager and therefore a significant amount of time needs to be devoted to thinking through the implications of this type of analysis.  In particular, the regulatory environment will have the most challenges in this area.

• MATURIALISM | 2010 will be even more opinionated, outspoken and raw than 2009; thank the anything-goes online world for that. Which brands will be equally daring?
  • And lastly this links to other trends detailed above and will be particularly important for the risk manager to consider the innovation in an “anything-goes online universe” and what that means for the risk appetite of the organisation.

This is just the beginning for us all in consider these trends and I have just scratched the proverbial surface of them.  I am sure I will be back to discuss each in more detail as time progresses.

Cheers

Riskovation.

A client recently described an interesting situation – she had purchasing the new ISO31000 risk management standard, she had done the training with her team, conducted a risk identification and assessment workshop, and done the analysis and prioritization.  Yet no one seemed to be managing risks – they were something off to the side that people occasionally looked at.

What else could she do?

Risk management is one of the more overused, misunderstood and abused terms in project management these day.  There is a large body of work on risk management and a plethora of material available on the web to be used.

Yet many projects do not manage risk well.  They record their risks, identify the mitigations/treatments and review them during the project.  But for all of their planning, obvious risks seem to slip through the cracks.

Here are a few ideas that we can use:

Make sure everyone has a common understanding of what constitutes a risk, what constitutes an issue, and the difference between risks/issues and consequences/impacts.  This may seem trivial but different organisations have difference definitions of risk e.g.  “Only risks that we can influence”, “don’t include dependencies or constraints”, “the person who raises a risk deals with it”, ad infinitum

Keep it simple – have 3 ratings – negligible, moderate, project-killer – and review against schedule, scope, cost, technical and people.  Don’t have 5 ratings as it doesn’t really add value. And don’t have percentages as they are disguising a subjective guess with a number that makes it look quantitatively managed.

When introducing risks, don’t argue over the wording or structure – just make it understandable to stakeholders

Focus on mitigation/treatment actions.  These are the most critical component so you must make sure that every action has someone assigned and they understand the action and the deadline and that these actions are done just like any other project task.  Very often risk mitigations are seen as distinct and are reported separately.  No wonder they’re not afforded the appropriate focus.  Out of sight, out of mind.  Out of mind, out of time…

Set the bar lower to start, then as project management practices mature, you can be stricter when it comes to wording, ratings, severity etc.

This is rather cogent:

Frank Rich is a great writer, whether you agree with him or not. It struck me that so little notice has been paid so far to this decade coming to a close, and maybe that’s because we all want to forget it. Why dwell on the negative, after all?

So, if there was a primary klesha (mental affliction) of the aughties, what was it? My vote goes to ignorance, a willful and deep-seated habit to avoid looking truth in the face, even if the false brand creates more havoc than simple honesty ever would.

via Frank Rich Op-Ed: Were The “Aughties” The Age of Willful Ignorance? – One City: A Buddhist Blog for Everyone.

Recently, I read this blog about risk management. One of my tweeps, Lawrence MacDonald had a comment that got me thinking:

I think that’s been a common perception. Because risk management is just like any other skill: if you don’t practice it, you’ll eventually lose the ability to do it. Just look at Lehman. Or you can choose from this list if you need more examples of what not to do.

But is that all there is to it? Risk managers were just being blown off? I wonder if there was more to it. I’m inclined to believe there was a lot of ignorance going around. Largely because people just wanted to avoid facing problems.

Consider family members: how many of us have a member of our family with a chronic health condition that they must control on a hourly/daily basis, yet they refuse to do so? Ignorance and denial are very powerful if left unchecked. As an example, my family’s health history includes fun conditions like cancer (3 folks died of lung cancer, 1 had liver also), high cholesterol, Type I & II diabetes, and high blood pressure. Not pretty. But I don’t smoke, I’m not an alcoholic, and the other risks I control primarily through diet & exercise (although I did a poor job this year). I don’t bring this up to toot my horn or pat myself on the back, but the truth is, I felt it was important enough for me to know what my risks were and how to control them while I still had a choice in the matter.

And that’s the whole point behind effective risk management. Always putting yourself in position to control your response to situations – not have them dictated to you by the choices/actions of others.

I’ve said it before, I’m sure I’ll say it again: collectively, we need to get ourselves and this economy into rehab. The pain will be great as we subject ourselves to the withdrawal symptoms of breaking our habits that have been brought on by cheap liquidity and moral hazard, but we’ll be better off for it once it’s done.

Until then, I just hope we – like a junkie whose been ravaged by the availability of cheap opiates but truly sees themselves in the mirror for the first time – admit we have a problem and admit the way out of this mess will be different than the way we got into it.

We learned some things this week about the US Predator drone program that has some people appalled and indignant – it is the kind of story that makes news.

A Predator drone is an unmanned aerial vehicle (UAV) used by the United States Air Force both for reconnaissance and for offensive operations. It seems that the video downlink from these drones has never been encrypted and it has been possible for those under surveillance to intercept and view the video feed.

This is the kind of news that makes great headlines. People read about it and slap their foreheads, proclaiming in a righteous voice, “What were they thinking? Head’s should roll!”  Stuff like that.

Here is an alternative viewpoint: this whole situation could just be a result of acceptable RISK MANAGEMENT practices.

Read the full article by Eric Fredericksen.

by Steven Rosenblum, for The Harvard Law School Forum at Harvard Law School, December 22, 2009.

Never before in the history of American business has the role of the corporate director been more important or more challenging. Boards today must navigate a tremendously difficult business environment featuring intense competition from foreign manufacturers, weak consumer confidence, growing unemployment, volatility in financial and commodity markets and a host of other complex challenges. At the same time, directors are currently undergoing intense public and political scrutiny of their basic role and functioning at the helm of public companies. As we begin to emerge from the worst recession since the Great Depression, the search for root causes of the economic crisis and second-guessing of corporate decisions has generated a multitude of corporate governance reform proposals, legislative initiatives and rule-making that seek to shift decision-making authority from boards to institutional shareholders and shareholder activists. Despite the stated intention of these initiatives, this shift will impede the ability of boards to resist pressures for short-term gain and tie their hands at a time when the need for effective board leadership is particularly acute…(continue reading)

Lawrence Heim, CPEA, Director with The Elm Consulting Group International LLC, will speak at the 2010 Annual Hospitality Law Conference on February 3-5, 2010 in Houston.

Mr. Heim’s presentation will be part of the “It Ain’t Easy Being Green” track at the annual conference.  The presentation will review business risk concepts to be considered when evaluating when and how to develop and implement a sustainability program in the hospitality sector.  Topics covered include relevant activities and exposures to be condered within such a risk assessment considerations and scoping and ideas for quantifying the economic value of reducing identified environmental, helath and safety (EHS) risks.  In addition to presenting, Elm will also be an exhibtor at the conference, showcasing the company’s EHS and sustainability consulting expertise.

Elm is the only EHS/sustainability consulting service provider partipcating in the exhibition and conference presentations.

The Annual Hospitality Law Conference is a one-of-a-kind opportunity that brings together more than 350 private attorneys, human resource professionals, in-house counsel, loss-prevention personnel, risk managers, and hospitality owners and operators to learn about a host of legal issues pertinent to the hospitality industry.

The 2010 Hospitality Law Conference covers the areas of lodging, food and beverage, human resources, and loss prevention.

There is an old saying in business: “Fail to plan and you plan to fail.” It may sound glib, but those who are serious about being successful, including traders, should follow these eight words as if they were written in stone. Ask any trader who makes money on a consistent basis and they will tell you, “You have two choices: you can either methodically follow a written plan, or fail.”

If you have a written trading or investment plan, congratulations! You are in the minority. While it is still no absolute guarantee of success, you have eliminated one major roadblock. If your plan uses flawed techniques or lacks preparation, your success won’t come immediately, but at least you are in a position to chart and modify your course. By documenting the process, you learn what works and how to avoid repeating costly mistakes.

Whether or not you have a plan now, here are some ideas to help with the process.

Disaster Avoidance 101…
Trading is a business, so you have to treat it as such if you want to succeed. Reading some books, buying a charting program, opening a brokerage account and starting to trade is not a business plan – it is a recipe for disaster. “If you don’t follow a written trading plan, you court disaster every time you enter the market,” says John Novak, an experienced trader and developer of the T-3 Fibs Protrader Program.

John and his wife Melinda, who is also his business partner in Nexgen Software Systems, run a number of educational trading chat rooms to help traders learn how to use their software and, more importantly, learn how to trade. In a nutshell, their software identifies Fibonacci areas of support and resistance in multiple time frames and provides traders with specific areas to enter and exit the market. Once a trader knows where the market has the potential to pause or reverse, he or she must then determine which one it will be and act accordingly.

“Even with the best program, market data and analysis, odds for consistent success range from slim to none without a written plan,” says Novak. The Nexgen website offers examples of trading plans and useful market information for the benefit of both clients and non-clients alike.

“Like the markets, a good trading plan evolves and changes, and should improve over time,” says Melinda Novak.

A plan should be written in stone while you are trading, but subject to re-evaluation once the market has closed. It changes with market conditions and adjusts as the trader’s skill level improves. Each trader should write his or her own plan, taking into account personal trading styles and goals. Using someone else’s plan does not reflect your trading characteristics.

Building the Perfect Master Plan
What are the components of a good trading plan? Here are 10 essentials that every plan should include.

Skill assessment - Are you ready to trade? Have you tested your system by paper trading it and do you have confidence that it works? Can you follow your signals without hesitation? If not, it’s a good idea to read Mark Douglas’s book, “Trading in the Zone”, and do the trading exercises on pages 189–201. This will teach you how to think in terms of probabilities. Trading in the markets is a battle of give and take. The real pros are prepared and they take their profits from the rest of the crowd who, lacking a plan, give their money away through costly mistakes.

Mental preparation – How do you feel? Did you get a good night’s sleep? Do you feel up to the challenge ahead? If you are not emotionally and psychologically ready to do battle in the markets, it is better to take the day off – otherwise, you risk losing your shirt. This is guaranteed to happen if you are angry, hungover, preoccupied or otherwise distracted from the task at hand. Many traders have a market mantra they repeat before the day begins to get them ready. Create one that puts you in the trading zone.

Set risk level – How much of your portfolio should you risk on any one trade? It can range anywhere from around 1% to as much as 5% of your portfolio on a given trading day. That means if you lose that amount at any point in the day, you get out and stay out. This will depend on your trading style and risk tolerance. Better to keep powder dry to fight another day if things aren’t going your way.

Set goals – Before you enter a trade, set realistic profit targets and risk/reward ratios. What is the minimum risk/reward you will accept? Many traders use will not take a trade unless the potential profit is at least three times greater than the risk. For example, if your stop loss is a dollar loss per share, your goal should be a $3 profit. Set weekly, monthly and annual profit goals in dollars or as a percentage of your portfolio, and re-assess them regularly.

Do your homework – Before the market opens, what is going on around the world? Are overseas markets up or down? Are index futures such as the S&P 500 or Nasdaq 100 exchange-traded funds up or down in pre-market? Index futures are a good way of gauging market mood before the market opens. What economic or earnings data is due out and when? Post a list on the wall in front of you and decide whether you want to trade ahead of an important economic report. For most traders, it is better to wait until the report is released than take unnecessary risk. Pros trade based on probabilities. They don’t gamble.

Trade preparation – Before the trading day, reboot your computer(s) to clear the resident memory (RAM). Whatever trading system and program you use, label major and minor support and resistance levels, set alerts for entry and exit signals and make sure all signals can be easily seen or detected with a clear visual or auditory signal. Your trading area should not offer distractions. Remember, this is a business, and distractions can be costly.

Set exit rules – Most traders make the mistake of concentrating 90% or more of their efforts in looking for buy signals but pay very little attention to when and where to exit. Many traders cannot sell if they are down because they don’t want to take a loss. Get over it or you will not make it as a trader. If your stop gets hit, it means you were wrong. Don’t take it personally. Professional traders lose more trades than they win, but by managing money and limiting losses, they still end up making profits.

Before you enter a trade, you should know where your exits are. There are at least two for every trade. First, what is your stop loss if the trade goes against you? It must be written down. Mental stops don’t count. Second, each trade should have a profit target. Once you get there, sell a portion of your position and you can move your stop loss on the rest of your position to break even if you wish. As discussed above in number three, never risk more than a set percentage of your portfolio on any trade.

Set entry rules – This comes after the tips for exit rules for a reason: exits are far more important than entries. A typical entry rule could be worded like this: “If signal A fires and there is a minimum target at least three times as great as my stop loss and we are at support, then buy X contracts or shares here.” Your system should be complicated enough to be effective, but simple enough to facilitate snap decisions. If you have 20 conditions that must be met and many are subjective, you will find it difficult if not impossible to actually make trades. Computers often make better traders than people, which may explain why nearly 50% of all trades that now occur on the New York Stock Exchange are computer-program generated. Computers don’t have to think or feel good to make a trade. If conditions are met, they enter. When the trade goes the wrong way or hits a profit target, they exit. They don’t get angry at the market or feel invincible after making a few good trades. Each decision is based on probabilities.

Keep excellent records – All good traders are also good record keepers. If they win a trade, they want to know exactly why and how. More importantly, they want to know the same when they lose, so they don’t repeat unnecessary mistakes. Write down details such as targets, the entry and exit of each trade, the time, support and resistance levels, daily opening range, market open and close for the day, and record comments about why you made the trade and lessons learned. Also, you should save your trading records so that you can go back and analyze the profit/loss for a particular system, draw-downs (which are amounts lost per trade using a trading system), average time per trade (which is necessary to calculate trade efficiency), and other important factors, and also compare them to a buy-and-hold strategy. Remember, this is a business and you are the accountant.

Perform a post-mortem – After each trading day, adding up the profit or loss is secondary to knowing the why and how. Write down your conclusions in your trading journal so that you can reference them again later.
Parting Notes
“No one should be trading real money until they have at least 30 to 60 profitable paper trades under their belts in real time in real market conditions before risking real money,” says Novak.

Successful paper trading does not guarantee that you will have success when you begin trading real money and emotions come into play. But successful paper trading does give the trader confidence that the system he or she is going to use actually works.

The exercises in “Trading in the Zone” walk the trader through trading a system based on a simple indicator, entering the market when the indicator gives a buy and exiting when it gives a sell. Deciding on a system is less important than gaining enough skill so that you are able to make trades without second guessing or doubting the decision.

There is no way to guarantee that a trade will make money. The trader’s chances are based on his or her skill and system of winning and losing. There is no such thing as winning without losing. Professional traders know before they enter a trade that the odds are in their favor or they wouldn’t be there. By letting his or her profits ride and cutting losses short, a trader may lose some battles, but he or she will win the war. Most traders and investors do the opposite, which is why they never make money.

Traders who win consistently treat trading as a business. While it’s not a guarantee that you will make money, having a plan is crucial if you want to become consistently successful and survive in the trading game.

by Matt Blackman, the host of  TradeSystemGuru.com , is a technical trader, author, keynote speaker and regular contributor to a number of trading publications and investment/trading websites in North America and Europe. He also writes a weekly market letter.

The holidays can be stressful even in the best scenarios, but add some long distance travel in to the mix and things can become overwhelming. Use some of these stress busters below to keep you cheerful and in the holiday spirit.

1.   Book in advance. Beat the rush and avoid the headache of last minute bookings. There are many online travel services, but sometimes a travel agent can save you time and energy.
2. Get plenty of rest. Travel can be exhausting so get a good night sleep before you leave.
3. Drink plenty of water. Dehydration is the number one cause of jet lag! Drink plenty of water before, during and after your flight.
4. If you are traveling with youngsters it’s a good idea to bring along some small surprises for them. Word games, books, and drawing supplies are quiet and don’t take up much space.
5. Keep all of your travel documents together and easy to access.
6. Check your flights for delays and cancellations before you leave for the airport. 
7.  Remember to arrive at the airport early. Check with your local airport to see how early they suggest travelers should arrive.
8. There are new regulations regarding carry one luggage so it’s a good idea to check before you pack.

 Holidays should be fun. Keep things in perspective and remind yourself why you are making the journey. If you keep your head so will the rest of your party. Stay calm, breath deep, and enjoy yourself. For more helpful travel information visit: http://www.travelsense.org

James Pajakowski, EVP of Global Risk Solutions with Protiviti was asked what is most misunderstood today about risk management in Bank Info Security:

You can eliminate all risk in an organization. If you do that you are probably also going to eliminate all upside. So you have to live with risk, and it is just part of the equation, you know, risk and return; we sort of learn that the first day in business class. Sometimes people want to separate those two, and you have to realize that sort of managing the business is managing the risk of the business, and entering into business is entering into risk.

And so I wouldn’t be scared of it; I wouldn’t try to eliminate it all because you can’t. But I do think there is an extraordinary responsibility on those responsible for managing the business for understanding, evaluating and elevating and bringing transparency to the risks that they face, and it is not a bad thing. It’s not something that should be hidden, not discussed, people to be afraid of; it is just the reality that exists when you are in a business venture.

If you don’t have risks, you probably don’t have return. And that is what I would say, and I think that has changed a lot. I remember 10 years ago if you brought up the topic of risk with the Chief Executive Officer, they normally got very uncomfortable and they thought ‘Yeah, here we go we’ll have a negative conversation.’ Now they bring it up, and they want to talk about it because they realize it is just an inherent part of business. And those that understand their risks better and bring them out and discuss them in an open way in their organization and aren’t afraid of them, aren’t afraid of the fact that risks exist and you need to manage it, you know, do better, and so I think that has evolved a lot in the last five to ten years.

by Eduardo Gallardo, for The Harvard Law School Forum at Harvard Law School, December 21, 2009.

At an open meeting held on December 16, 2009, the Securities and Exchange Commission (”SEC”) approved a set of proposed rules to enhance the information provided to shareholders in company proxy statements regarding a number of risk oversight, compensation, board leadership and composition and other corporate governance matters.  The SEC approved the final rules by a 4-to-1 vote, with Commissioner Kathleen Casey dissenting.  The SEC released the text of the final rules on the same date they were adopted, with the 129 page adopting release available here.

The new rules have an effective date of February 28, 2010, except that a rule change on how equity awards are reported in the Summary Compensation Table applies to all companies with fiscal years ending after December 20, 2009.  Because all of the rule changes other than the equity reporting rule call for enhanced disclosures, companies presumably could, but would not be required to, voluntarily comply with all of the new rules even if they file their definitive proxy statements before February 28, 2010…(continue reading)

Na semana passada estava indo para o Rio de Janeiro durante o dia e o piloto fez uma bela rota ao lado do Corcovado, altamente convidativa para uma sessão de fotos. Munido do meu telefone celular devidamente colocado no flight mode, estava começando a registrar algumas imagens quando fui interpelado pela eficiente aeromoça, com a qual tive o seguinte diálogo:

Aeromoça: Senhor, isto é um telefone celular?

Eu: Sim, isto é um telefone celular.

Aeromoça: Senhor, o telefone tem que ficar desligado.

Eu: Mas ele está em flight mode, isso não existe para ser utilizado em avião?

Aeromoça: Senhor, o telefone tem que ficar desligado.

Eu: Moça, você sabe o que é flight mode?

Aeromoça: Senhor, o telefone tem que ficar desligado.

Eu: Ok, vou desligar, me desculpe.

Acredito que tomei a providência mais sensata para quem não queria ser preso ao descer no Aeroporto Santos Dumond, mas lembrei que havia lido em algum lugar que nunca houve uma prova de qualquer risco real de interferência de telefones celulares que pudesse ameaçar a segurança das aeronaves. Em uma busca não tão profunda encontrei algumas referências na Wikipedia que li com o máximo que pude:

• A Boeing realizou diversos testes e nunca foi possível provar em laboratório as prováveis interferências.
• A NASA mantém um programa específico para segurança aeronáutica e nos relatórios que fazem referência ao assunto não existe nada de conclusivo.
• A Qantas Airlines tem uma política bem clara sobre o flight mode, e ainda assim voa desde 1927 sem nenhum acidente fatal.

Eu vou mandar um e-mail para a companhia aérea perguntando, vamos ver se respondem com um motivo claro que não seja o batido e totalmente sem sentido “por motivos de segurança”.

A GAC, or Ground assult team is effectively a tactical road march used to relocate units and troops from one area to another.

Often, the control team knows only which unit is in each convoy and not where the vital equipment or personnel are. This lack of knowledge may result in key equipment being destroyed and key personnel being killed during initial entry operations. If the BCT develops a tracking mechanism for locating personnel and key equipment, the GAC flow can be manipulated to impact the fight. For example, if an Avenger is destroyed, a second Avenger can immediately be placed in the next departing GAC.

This is where a Convoy Tracking solution can help.

Fixed to the vehicles in the Convoy, the GPS Tracking device helps a central team or unit monitor the exact location of the Convoy.  This not only helps to identify the location of the team but also help to avoid any potential crisis situations.

For more information on Convoy Tracking and Crisis Management solutions visit the Track 24 Web site.

To be more successful in helping investors the professionals that provide guidance to wealthy investors need to step up and take control of risk rather than sitting around figuring how to estimate risk using complex models and simulations. All models are necessarily based on a multitude of critical assumptions and if any of those assumptions are wrong, and a few of them always are, then the model is worthless and actually does more harm than good. It’s better to acknowledge that you don’t know the risk rather than to proceed under a false assumption.

(add in rest of chuck’s article)

from Financial Planning :   What We Learned from the Market Collapse

Maybe, just maybe something is wrong with the model.   Maybe there is nothing  standard at all about risk.   Maybe there is nothing normal about returns.   Maybe  risk is not like a little dial we can control on clients’ portfolios like we  tune in a radio…Or maybe, just maybe, reality is wrong   -  More -> http://www.financial-planning.com/fp_issues/2009_9/what-we-learned-from-the-market-collapse-2663727-1.html

There is a huge difference between being risk averse and fearing losses. You must hate to lose. In fact, you can program your brain to find ways to not lose. But not losing is a logical thought-out process, rather than an emotion-based reaction.

Two human-based tendencies come into play. The first is the sunk-cost fallacy and the second is the exaggerated-loss syndrome.

Sunk-cost fallacy

You are in a trade that begins to go against you. You reason that you have already spent a commission, so you have costs to make up for.

Moreover, you have spent time and effort researching and planning this trade. You reckon that time and effort as cost. You have waited for just such an opportunity and you are afraid that now that it has come you will have to miss this trade. The time spent waiting for opportunity is something you also count as
cost. You don’t want to waste all these costs, so you decide to give the trade a little more room. By the time you realize what you’ve done, the pain is almost overwhelming. Finally, you have to take your
loss which is now much larger than it might have been. The size of the loss adds to your fear of ever losing again. The end result is brain lock and inability to pull the trigger on a trade.

Exaggerated-loss syndrome

You give the importance of losing on a trade two to three times the weight of winning on a trade. In your
mind, losses have greater significance than wins. In reality, neither is more or less important than the other. In fact, wins do not have to be as numerous as losses as long as the wins are significantly larger in size than the losses. Of course, best is to have more wins than losses with the wins greater in size than the losses.

What should be done?

Evaluate your trades solely on their potential for future loss or gain. Ask yourself, “what do I stand to gain from this trade, and what do I stand to lose from this trade?” Think the matter through. “What is the
worst thing that can happen to me if I take this trade, and do I have a plan and a strategy for extricating myself long before it happens?” “If I begin to lose, is there a way I can turn things around and come out a winner?” Learn to look at the costs of a trade as part of your business overhead. Try to have a mind set that you will not throw good money after bad. When you give a trade more room, you are doing just that – often throwing away money.

Marketers call this preferential bias. Preferential bias exists among traders. Once they develop a preference for a trade, they often distort additional information to support their view. This is why an otherwise conscientious trader may choose to ignore what the market is really doing. We’ve seen traders convince
themselves that a market was going up when, in fact, it was in an established downtrend. We’ve seen
traders poll their friends and brokers until they obtained an opinion that agreed with their own, and then enter a trade based upon that opinion.

A student of ours, Fran and her husband, John, decided they wanted to go to live in the Missouri Ozarks. Everyone told them that there was no way for them to make a living there.

Everyone they asked advised them not to do it.

Finally, a minister in the Church they proposed to attend told them that they were to serve there. Out of twenty or thirty people they asked, that minister was the only one who told them to come. Of course, it was exactly what they wanted to hear. They sold their home and most of their possessions accumulated over a lifetime. They moved to the Ozarks and went broke within a year. They had to leave and begin all over again. John, who had been semi-retired, now had to find a job. So did Fran. She had to give up a promising start as a trader to go out to put food on the table.

What should be done?

Look at each trade objectively. Do not allow yourself to become married to your opinion. Learn to recognize the difference between what you see, what you feel, and what you think. Then, throw out what you think. Lock out the input of others once you have made up your mind. Don’t let your broker tell you what you want to hear. Never ask your broker, your friends, or your relatives for an opinion. Turn off your TV or radio, you don’t need to see or hear what they have to say. Take all indicators off your chart and just look at the
price bars. If you still see a trade there, then go for it.

Overconfidence is a particular kind of trap that springs shut when people have or think they have special information or personal experience, no matter how limited. That’s why small traders get hurt trading on no more information than “hot-tips.”

Tim is a farmer. He raises hogs and purchases huge amounts of feed to provide for his hogs. Tim has a large farming operation which is quite profitable. He takes 250 hogs a week to market. Because of a steady flow of hogs from his operation to the market, Tim has no need to hedge his hog business because he is able to dollar average the prices he gets for them. But Tim does want to indirectly reduce the cost of the feed he has to buy, so he purchases soy meal futures. Tim listens to weather and farm reports all day long. He attends meetings of other farmers, and tries to gather all the information he can that might help him be more profitable. But Tim has a major problem, called tunnel vision. When he looks out at the grain fields in
the area where he lives, whatever he sees there he extrapolates to the whole world.

In other words, if Tim sees that the surrounding fields are dry, he suspects that all fields everywhere must also be dry. One year Tim witnessed a local drought. He checked with all the local farmers and they said they were truly experiencing drought conditions. He looked at the news on his data feed, and sure enough it said that there was a drought in his area. In fact, the entire state where Tim raises his hogs was undergoing drought.

Tim wasn’t too concerned about his own feed bins. He had plenty of it in his silos from previous bumper crop years. Tim decided to be piggish and speculate on what he considered to be inside information. He called his broker and bought heavily into soy meal futures. Tim was confident. He was sure that soy meal prices would explode upward some time soon, and that he was going to make himself a small fortune. Tim’s greed may have turned him into a hog. However, the futures he purchased started moving down and the value of his investment began to shrink markedly. What Tim failed to do was to have a broader perspective. Everywhere else that grains were grown, farmers were experiencing rain in due season. The drought was localized almost entirely within the state in which Tim did his hog raising. Tim lost because he was confident in the limited knowledge he had.

What should be done?

We all need to broaden our horizons. We need a humble attitude relative to the markets. We can never afford to wallow in overconfidence in what we perceive as special knowledge. A trader can never afford to let his guard down. Tim thought he knew something that others hadn’t yet caught onto. In so doing, Tim made another mistake as well. He heard only what he wanted to hear.