Saturday, January 24, 2009 Exclusive: Interview with Natalie Pace – Part 1 had the pleasure of recently interviewing Natalie Pace, head of her own financial publishing and media company, and author of the book Put Your Money Where Your Heart Is: Investment Strategies for Lifetime Wealth from a #1 Wall Street Stock Picker. She has been a repeat guest on Fox News, Forbes on Fox, Good Morning America, Time Magazine, USA Today, Kiplinger's Personal Finance, and other financial news media. What made you decide to get into stock investing, after losing money on real estate? In other words, why not just put your money in the bank?

Pace: I didn't lose money on real estate, I was underwater and when I did sell my real estate, I sold for a profit. And in the mean time, I was able to live there and not pay rent and got the tax benefits, but it was underwater. I'm glad you asked the question because that's an important message for people today, to realize about their real estate. If they're in trouble and they can find a way to modify their loan and stick it out, their investments return over time, but in the mean time, especially if it is your home, chances are you have a tax benefit staying there, and you get to live in it. Sometimes there are other win-wins out of an investment rather than just the ROI. What made you get into stock investing, in other words why did you really look into how to invest in stocks, choosing stocks, that type of thing.

Pace: Well actually I always thought that you should make money while you sleep. So I had been invested in stocks ever since I began my first real job, when I started making money. But what got me into it even more seriously, which was kind of funny, was when I did make money on that real estate that I sold, I had a chunk of money sitting in a certificate of deposit at 4%.

I wanted it to earn a little more so in August of 2000, I went to a broker that had been referred by my bank and he recommended that I diversify all of my money, every cent plus an additional $500 per month, into four mutual funds, and I can tell you that one was a telecommunications fund anchored by Global Crossing, another was an energy fund anchored by Enron, third was an Internet fund anchored by AOL, and the fourth was an international fund anchored by Japan. I looked at him and I said the telecommunications companies are cooking the books, you can't have 25 cents a minute long distance drop to 4 cents a minute and have profits.

Then there was Enron, and I lived in California when Enron was gouging our energy rates to the point that people were dying; there were old people and poor people during our heat wave that were not able to afford their air conditioning, so I refused to invest in Enron, just on principal.

I had told all my friends that at a 1999 Christmas party, and I lived in Santa Monica so a lot of my friends were very wealthy and very powerful, and they thought I was crazy, and told me that I didn't understand the new economy. I told them that I understand the old economy and if you make 9,000% gains on AOL, you should take your profits, because it cannot last until they start earning money. At any rate, I told everybody to sell and diversity in Christmas of 1999. In 2000 I just said 'No' to mutual fund investments, and in 2001 when stocks that I did like had lost 90% of their value and were trading for a song, I went in and tripled my money in less than four months, another year that people lost a lot of money. So at that point, all the girlfriends who had been listening to me in 1999 started coming back to me and have me teach them what I know. Did you ever think that you would become a stock picker, columnist, and head of your own financial web site?

Pace: Never in my wildest dreams, but it was totally meant to be. I was just a single mom trying to make my own ends meet, and when my girlfriends came to me, it was hilarious, because they said "Will you teach us what you know?" and I said "OK as a philanthropic thing I will teach you as a test group", and within a year, I had submitted a business plan. Then out of the blue, the daughter of the president of Oracle walked in to my life, so I gave him the business plan, and he said "I think you're a genius" and I said "Would you put that in writing?" and he say "Yes" and from there, within a year I was on, interviewing Steve Forbes. They were very supportive, and it just kept growing that fast. Can you tell me what your biggest investment success was, and why it was so successful?

Pace: I am a Forbes, not a Schwab, so my strategies are to provide the news and information for investors to make a lot of money. I can tell you the biggest successes we've had and it's been unbelievable. I have companies of the year and then I have company features of the month. My company of the year in 2003 was Taser International (TASR) and from the time I listed it to its peak, it earned 9,000% gains. So anyone who had invested $12,000 when I first listed it in January of 2003 would have become a millionaire. We took it off the list at a 5,000% gain.

Other big winners I had, I actually picked Google (GOOG) on the IPO and that was on Fox News, and I got to tell you, I was the lone ranger on that one. Everybody did not like Google. At that point they thought it was going to be over-valued, over rated, they didn’t like the way they were conducting their auction for the IPO and letting just anybody invest in it. There have been many, many more.

One other thing that I think is really important for people to know, in 2007, clean energy was the top performer. It earned 60 cents on the dollar and over half of the companies I was featuring each month were green and in that clean energy space. People made a lot of money. Suntech (STP) more than doubled that year, and we did tell people to take their profits early. MEMC Electronic (WFR) tripled that year, and anybody, even if they just had a clean ETF, and were rebalancing once a year, they probably would still be up this year, instead of down.

End of Part 1 of the Interview – Stay tuned for future segments of the interview over the next couple weeks, where Pace discusses her thoughts on her holistic view of investing and new bits of advice since the book was written.

Her latest book, Put Your Money Where Your Heart Is: Investment Strategies for Lifetime Wealth from a #1 Wall Street Stock Picker is available at Amazon. You can also check out Stockerblog's review of the book .

Interviewer does not own any of the above mentioned stocks.

Interview by Fred Fuld at

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