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CNN IN THE MONEY

Nationwide Gas Boycott; Working Moms Celebrate Mother's Day; When is it Time to Sell in the Stock Market?; Warren Buffett Speaks at Shareholders Meeting; Stocks You Should Own

Aired May 12, 2007 - 13:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


FREDRICKA WHITFIELD, CNN CORRESPONDENT: They are looking for three missing members of a U.S. lead patrol. The team came under attack early today west of Mahmoudiya; the U.S. military says five others on the team were killed.
Smoke so thick you can hardly see, as wildfires shut down a number of busy highways along the Florida Georgia state line. Hundreds of thousands of acres have been consumed in both states and hundreds of people have been forced from their homes.

And off California's coast, cool damp weather is helping the firefighters there gain some control over a wildfire on Catalina Island. Thousands of anxious residents are returning to their home today. It appears the main town of Avalon is no longer in danger.

We'll update the top stories at the bottom of the hour. Now time for IN THE MONEY.

ALI VELSHI, CNN CORRESPONDENT, IN THE MONEY: Welcome to IN THE MONEY. I'm Ali Velshi.

CHRISTINE ROMANS, CNN CORRESPONDENT, IN THE MONEY: I'm Christine Romans. Coming up on today's program we'll hear from Warren Buffet. A Wall Street player who is famous for earning big, buy, sitting tight.

VELSHI: And you might have heard about this nationwide gas boycott that is planned for this coming week, it probably not amount to a hill of beans.

ROMANS: We'll tell you why.

And something for working moms to celebrate this Mother's Day weekend and the top ten companies to work for if you're a working mom.

VELSHI: This week has been another record breaking week for the Dow, more records all over the place. We want to bring in someone to join us for the conversation, an old friend, and portfolio manager with Douglas D. Lane & Associates, Sarat Sethi. Good to have you here Sarat.

SARAT SETHI, PORTFOLIO MANAGER: Thank you for having me.

VELSHI: I really just wanted a bigger audience to tell about my trip his week.

ROMANS: Where did you go?

VELSHI: I went to Vegas. I didn't bet a dime.

SETHI: You bet other people's money?

VELSHI: I didn't bet anything. I don't win at gambling. I never win. I'm sometimes up and then I never walk away as a winner.

SETHI: They don't like you there.

VELSHI: They don't like me and it's cheaper trip.

ROMANS: You do need some lessons on when to sell and when to take your money and run. That's what people are asking in this market now, when's it time to sell? If you are sitting here having the conversation, how am I going to sell? Have you broken the rules anyway because you're supposed to have a plan in place? What do you think?

SETHI: I think there are two ways to look at it. One is based on your asset allocation, so if you want a certain percentage of equities versus bonds and your allocation now is not in line, you need to sell. Take the emotion out of selling.

ROMANS: That's easy to say.

SETHI: That's where professionals come in. We manage money, we know the person but stick to certain steadfast rules. If I know a person is in the 70 percent rate bracket of allocation, I will cut it back.

VELSHI: Meaning if I'm supposed to have a certain amount of stocks in my portfolios?

SETHI: A certain amount of equities, then I will take you down to 70 percent, I might let it ride to 75 percent, but I know I will bring it back because over time, that's how you manage the risk in the portfolio. Things will be great. If things are still going to continue and you think they are, you will still do well because you have a percentage of the equities in there.

If things don't go well and you move to cash and bonds, you can always come back later on and reallocate again. Again, that takes emotion. If you take the emotion out and when it comes to stock specifics, there are certain rules we use as well. You buy a stock and you have a portfolio of x. If that stock becomes more than 5 percent of your portfolio, you probably cut it back. At some point it might regress to the mean and you will feel a lot worse when it comes back down. What that gives you; I love to use any analogy of a garden. So you plant your seeds. You have some weeds and you have some flowers. The flowers grow too big, you want to prune them and you want to plant them and get new flowers and pull the weeds out. When you balance it and you have a balanced portfolio, that's what you have to look at.

VELSHI: Before you came on the show, Christine, I was telling her about my gambling history and you told me the story about your gambling history. ROMANS: I won $1700 one time playing Caribbean stud poker. I don't know how, I'm not a very good poker player. My grandpa taught me how to play poker. She won $1700 bucks. What does she do? She stops gambling.

VELSHI: I stopped gambling completely. I wanted to end a winner. In the stock market that doesn't really work because you want to continue to be an investor.

SETHI: But then you also say, it I made enough money, what is my allocation again and how do I want to perceive what the risk is in my portfolio. The other thing when investors look at their portfolio, they might own 15, 20 stocks. If they're all in oil or pharmaceuticals, you're not diversified. It doesn't matter if they're all less than 5 percent, you have too much specifics risk to a certain sector?

VELSHI: So one rule, is if it gets too big for your portfolio, sell it. The other, do you have target price or increase? Some say if your stock goes up 20 percent, you have to sell it.

SETHI: No, we don't look at it that way because market volatility has we have now can move stocks in certain ways that have nothing to do with fundamentals. If a stock goes up a certain amount, if it's still the same reason as to why you bought it and fundamentally, they haven't changed strategy, they haven't changed their management team, the environment, competition hasn't changed, well then you keep it. That's the reason you did your homework before.

The other one is do your homework. A lot of people buy stock on a hunch and then it moves and says, why did I by it. But if you bought it and those reasons are still there and then you can stick by the rules of 5 percent and too much in one sector.

ROMANS: If you're looking at 13,000 above that for the Dow and this great gains that we have seen and you are thinking about getting into the market, how do you look at the market where it's come from already and keep the sell rules?

SETHI: Something we're looking at now with fresh money coming into your clients' portfolios, take your time. You dip your toe in the water. If I was sitting here a year ago, I would say probably be fully invested in three to six months, now, six to nine months, maybe in twelve months. The market is going to give you opportunities over the summer, things are not that great but they are not that bad either and I think the pendulum always swings.

VELSHI: This week, when we saw 150 point drop in a day on the Dow. If you're getting into the market, is that a good time to get in?

SETHI: There might be certain stocks that you might say, look I am going to sit here, I am going to wait for them to come and pull back, because I'm looking for three, ten year period. I might buy one percent position and say OK if it comes back down some more I will buy it. If it doesn't, I've already got a position. You slowly start putting your money into certain stocks that you liked, that you followed, you have done your homework on, but don't do it all yesterday or today, you start saying and I will wait for a couple weeks and spread it around amongst different sectors in stocks.

ROMANS: A lot of companies, your 401(k) s, you can pre-program this so that you don't even have to pay that much attention to what is happening to the market, correct? They'll adjust it for you.

SETHI: You can automatically weight it. One of the things we saw in the last four, five, six years, if you have too much stock in your company 401(k), and they allow you to diversify, do it.

Because if the companies does well you are going to do well.

VELSHI: Because you're employed by them. This was an Enron problem, not that everybody's company is an Enron.

SETHI: It was a GE problem. Remember GE hit $60 several years ago but still hasn't come back. So you get large cap companies that people thought nothing would go wrong with, but if you put too much of your personal wealth in there, you will get hurt if it doesn't go up. You'll do fine on the way up but too much risk.

ROMANS: Sarat Sethi thank you so much for joining us. Always a pleasure to get your rules.

SETHI: Thank you for having me.

ROMANS: When we come back, an investor who made a fortune knowing when to sell and when not to. We'll hear from Warren Buffet.

And later ten stocks that look ready to soar in the next ten years.

(COMMERCIAL BREAK)

ROMANS: Susan Lisovicz joins us now as she does every week from the New York Stock Exchange. She took a field trip last week to the annual Berkshire Hathaway Shareholders meeting, it is also know as the Woodstock for Capitalist. Susan we hear you actually spoke with the oracle of Omaha himself.

SUSAN LISOVICZ, CNN CORRESPONDENT: Yes and you know he spoke to a lot of people, Christine. So this was by no means an exclusive.

ROMANS: Don't downplay it Susan, because any time you can talk to Warren himself, it's an important meeting.

LISOVICZ: It's true, Christina. He was very forthcoming to not only to members of the media but to the 27,000 shareholders who attended. When you think about it, where a chief executive officer, one with an annual rate of return of 23 1/2 percent over the last 42 years, that's pretty remarkable in and of itself. Someone who takes questions for six hours on just about anything, it was not only insightful, it was also very entertaining. Before with the meeting, Buffet did indeed speak to us on a wide variety of topics, ranging from the housing slumps to gas prices to executive pay. (BEGIN VIDEO CLIP) . WARREN BUFFET, CEO, BERKSHIRE HATHAWAY: Housing is sick. Housing will stay sick for quite a while, in my view and particularly certain areas of the country. We have the second largest residential brokerage in the country. I get figures from certain markets. There will be certain markets, where I'm sure it will be sick for at least a couple years and other parts of the country will not be that weak. There were a whole lot of houses brought by people putting very small maybe non- existent down payments, making small initial payments on their mortgages and hoping to flip them in some cases. There are a whole lot more houses around than natural -- than the natural supply at the present time.

LISOVICZ: Gas prices, on the other hand going in a different direction. In fact there are some forecasts say it could hit all time highs. At what point do you think it will reign in consumer spending?

BUFFETT: Well I've have been surprised that it hasn't -- the American economy is always resourceful. When you look at the last century, we had the World War II, nuclear bombs, the Cold War, all these things, but at the end of the century, people are living seven times better than the beginning and gasoline is still cheap compared to costs around the world. We can overcome a lot of things that seem like temporary problems in this country.

LISOVICZ: What about executive pay? You yourself take a meager salary, and despite all the negative press, all the scandals, there hasn't been any significant change. Why is that?

BUFFETT: It's a because the CEOs have a good game and they're not about to give it up. Somebody said the CEO pay is like the honor system. The shareholders have the honor and the CEOs have the system.

Here is a system where an individual CEO cares enormously about how much he gets paid, much more compared to the way other people get paid. On one side, you have one who makes a few dollars a year and then you this ratcheting that occurs because you can look at what everybody else gets paid in the business, and every company sits around and says our CEO is better than their CEO so we will pay them more money, so it's just ratcheted upward. There's no natural check on it. If a company sits down with labor union and negotiates wages, both sides care and they stay up until 2:00 in the morning and they have impasse that last for weeks.

Tell me the last time you heard about an impasse where bargaining had to be suspended for a week or month, cooling-off period between the CEO and his company. So it is just a different sort of thing, there is an inner quality of intensity in the bargaining process.

(END VIDEO CLIP)

LISOVICZ: Something different at this year's Berkshire meeting, some people who attended among the thousands said they would like to succeed him after Buffett's bombshell announce that in March that he is looking for a new chief investment officer. We spoke to a couple of them.

(BEGIN VIDEO CLIP)

BUFFETT: We're looking for a new investment officer at Berkshire. That may mean that I'll be unemployed.

LISOVICZ: Ever the populist, the oracle of Omaha says the talent search will be modeled after the hit show, "American Idol". Are you the Simon Cowell?

BUFFETT: People think I'm a little more like Simon, I think.

LISOVICZ: Buffet can afford to be a tough judge. His astute stock picks have resulted in average annual returns of 23 1/2 percent over the last forty-two years. One aspiring candidate attending the Berkshire Hathaway meeting said he would work for free.

MOHNISH PABRAI, JOB APPLICANT: I would do whatever Warren asked me to do. So if he asked me to sweep the floors, I'd be happy to do that or take the trash out.

LISOVICZ: Another said he would apply his yoga practice as an investment strategy.

KLAUS KOSTENBAUER, JOB APPLICANT: Between patience, development of mastery of your emotions, specifically mastery of greed and fear. By staying with those topics, by centering yourself regularly, you avoid incredibly contagious emotions always in the marketplace.

LISOVICZ: And job applicants will have to keep their cool to impress Buffet who says this job search will be the ultimate survivor.

BUFFETT: I could have them on an Island and keep throwing them off here and there.

LISOVICZ: Buffett is 76 years old, but he doesn't plan on going anywhere soon, he says he is in excellent health that is amazing what Cherry Coke and hamburgers will do for a fellow. That seems to be the case.

VELSHI: What did that one guy say, that one job applicant about mastery of greed?

LISOVICZ: Greed and fear. You kind of need it, right? Those are the two dynamic forces in the marketplace.

VELSHI: Are these real job applicants?

LISOVICZ: They are real job applicants. First of all they are real shareholders. You can't get into the meeting unless you are a shareholder. And as we all know Berkshire Hathaway is pretty much the most expensive stock there is. Class a shares are in excessive of $100,000 a share. Whether they're real candidates, they have a real chance, that's a whole other story.

ROMANS: He made some comments about he is looking for a big elephant and he has a big elephant gun. He'd like to buy something.

VELSHI: I'll put up $500 million.

ROMANS: He is such an easygoing guy and then he talks about taking out a company.

LISOVICZ: He also says he has no job stress, that is one of the reasons why he's in such excellent health. No job stress. He said in letters to shareholders in March and also at the meeting, the last few days, he repeated his stance, he is looking, he has his elephant gun, as you said, and it's loaded. He's looking for game, talking about in excess of $5 billion. Why is that? Because Berkshire has a lot of cash. About $46 billion by some estimates and he is looking to use it. And he is looking all over the world. We know about all these private equity deals in the U.S. and that he is a value investor. He's also made a big play, he won't say which currency but on a single currency, he says he'll let us all know next year and says that his pick will be surprising, in his words.

VELSHI: All right, Susan, thank you so much for joining us.

LISOVICZ: My pleasure. Talk to you next week.

VELSHI: Did you notice in the back of the shot while they were interviewing Warren Buffett?

ROMANS: Camel heads?

VELSHI: I was looking at the bull, is that a symbolical message about the markets?

ROMANS: I don't' know. Susan says maybe he's bullish.

All right. Coming up after the break. There is talk of a gas hike this month and find out why big oil is not running scared.

(COMMERCIAL BREAK)

ROMANS: We talk about record high oil and gasoline prices all the time. It seldom really pushes Congress to do anything with substance; bills come and go that nothing really ever becomes law for high gas prices.

VELSHI: And certainly nothing that ever makes it's easier on the wallet for American buyer. As Bill Tucker tells us, this time it might be different.

(BEGIN VIDEO CLIP)

BILL TUCKER, CNN CORRESPONDENT (voice over): Fewer things maybe voters more angry than high gasoline prices. Those high prices in angry voters in turn inspire politicians to remind voters what they've done.

REP. NANCY PELOSI, (D) HOUSE SPEAKER: In this first 100 hours of the new Congress, the House passed legislation to roll back $14 billion in subsidies to big oil.

TUCKER: That bill now languishes in the Senate. That doesn't mean Congress of course has stopped trying. Lots of hearings are planned.

REP. STENY HOYER, (D) MAJORITY LEADER: I'm pleased we have scheduled seven hearings in the House between now and Memorial Day.

TUCKER: Bills stopping price gouging by oil companies are popular with lawmakers along with bills to raise the average miles per gallon for cars.

SEN. MARIA CANTWELL, (D) WASHINGTON: I think we can get it done and I think it will be the first time in a long time that Congress has pushed so hard for such important legislation for energy.

TUCKER: At the state levels where governors and state legislators are closest to the people, there is an urgent sense that something needs to be done now.

GOVERNOR JODI RELL, (R) CONNECTICUT: When you only have so much and you have to go to the dry-cleaners and you have to pick up groceries and this, adding that gas to the tank right now is a very frustrating experience.

TUCKER: Governor Rell is calling on the National Governors Association to unite across political lines and demand Congress take action now.

Bill Tucker, CNN, New York.

(END VIDEO CLIP)

VELSHI: If congress and the states don't take action, some folks think, do it yourself.

ROMANS: Those are the chain e-mails going around, saying boycott a particular gas station.

VELSHI: My sister sent me one of those. It's organized for this week. She is on every one of these lists that get these nutty things.

ROMANS: If every single person in America doesn't buy gas, it will be a crushing boycott that will send a message about high gas prices right? .

VELSHI: I think we share a view on this and Jennifer Westhoven does too. I don't speak for you; I think it's a crock of malarkey.

JENNIFER WESTHOVEN, "HEADLINE NEWS" CORRESPONDENT: Well I searched it, right. People want to do something. They're so excited about this. I must have gotten six from a lot of people. If you look at the e-mail itself, the claims are really specious. I think, people, when they see, we can get $2.3 billion away from the oil companies. People are mad, they are angry, this is taking money away from them. They want to do something that number, 2.3 billion, analyst's say that is basically made up.

They say there's evidence that this worked in the past. Is there no evidence that in 1997, a gas boycott dropped prices by 30 cents? A lot of claims look really bad and of course really the underlying big picture here is workers need to say, there's no change in underlying demand.

VELSHI: If I don't buy gas when, Wednesday, Tuesday?

WESTHOVEN: Tuesday is the boycott.

VELSHI: So gas prices will go up the next day. We're not telling people to slow up on the consumption of gas.

WESTHOVEN: It even says top off your tank Tuesday or by Thursday. That doesn't help. The other e-mail that is going around, we started doing this on "Headline News," floods of e-mails coming out. Yeah. What if everyone boycotts Exxon, that's really going to work?

VELSHI: No.

WESTHOVEN: Doesn't work either.

ROMANS: But even when you do to the gas pumps and you fill up, you don't know where that gas came from right? I mean don't they gas to each other?

VELSHI: It isn't necessarily where it came from.

ROMANS: We're helpless victims of high-energy prices. Do we just stay home? Everyone call in sick.

VELSHI: We could have an e-mail campaign about how to use less gas.

WESTHOVEN: That's right. It's not easy, right? People are so emotional but it's because they really want to do something. What they have to do is everything that's really worth it, takes an effort.

VELSHI: But even if you thought that kicking the oil companies was the answer, which may or may not be, what you're saying this is not really a kick, it won't hurt anybody.

WESTHOVEN: The way to do it is stay home, have a lights out day.

VELSHI: Take a bus, carpool.

WESTHOVEN: Somebody said what about a carpool celebrity day, where all kinds of celebrities carpool together. Kind of silly. People were thinking.

LISOVICZ: And they would probably spend twice as much gas, the paparazzi getting there and chasing them around. VELSHI: I drive a big truck that uses too much gas. I need to sell it. That's what I'm going to have to do to save gas. It's a bit annoying and not easy to do.

WESTHOVEN: Go back to the motorcycle.

VELSHI: I still have a motorcycle.

ROMANS: You have a motorcycle and truck, one person with two legs in a city with public transportation. Conservation alert to my right.

Jennifer Westhoven, thank you so much Jennifer.

Coming up on IN THE MONEY, get a pad and pen ready; we are going to tell you about a stock that gained 23,000 percent in a decade. We'll name names of stocks you can buy right now and forget about for the next ten years.

(COMMERCIAL BREAK)

WHITFIELD: Hello. I'm Fredricka Whitfield. More of IN THE MONEY after these stories in the news.

Urgent search in Iraq, three members of a U.S. led military force are missing after an ambush. It happened in the dangerous territory south of Baghdad. Five other people, at least four U.S. soldiers were killed in today's attack as well.

Violence in Iraq on another scale. Police and intelligent sources report at least 33 people have been killed in Karachi, that is in Pakistan, not in Iraq. Government demonstrators clashed with opposition party members over the recent ouster of a chief justice by Pakistan president.

And wild fires in north Florida and South Georgia are now on the mover, several Florida communities are threatened today and stretches of Interstates 10 and 75 are closed because of the smoke. The wild fire is just five percent contained in Florida.

Crews have fires on California's Catalina Island under control. Residents there who fled to the mainland are now returning today. The blaze charred six square miles of the resort island.

And Missouri River cresting today at Jefferson City, the high water is expected to reach St. Louis by Monday. The forecasters are lowering the crest forecast. They don't expect serious flooding where the Missouri and the Mississippi Rivers merge.

Coming up at the top of the hour, breaking news on the missing U.S. soldiers and when it happens. And a complete update at the top of the hour.

Now, back to more IN THE MONEY.

VELSHI: Christine told to you get a pen and paper ready because you will want to write this information down.

ROMANS: Yes, you will. Our next guest has ten stocks he says you should own the next ten years. Joining us now, James Stewart, editor at large at "Smart Money" Magazine. OK we are here, we have a pen ready. First tell us what kind of arenas we are talking about. You have four themes.

JAMES STEWART, EDITOR AT LARGE, "SMART MONEY:" The themes are very important. Not just the names of the stocks, it is what led to these stocks. I looked at stocks that have done best over the previous ten years to see what kind of parameters did they have, characteristics and ratios. The one thing that leaked out they had low price to sales ratios, not price to earnings ratio, which most people look at, but price to sales. These are often young company, they are growing their sales, and they are not growing the profits yet, because they are plowing all the money back into the investment. But they are going to grow, so that was the main statistically criteria.

Then I picked trends that I thought will continue over ten years. You might say, what about like Ethanol, that's a trend. That didn't show up because all those ethanol stocks everybody knows that trend, that's already run up it's too expensive. I was looking for trends that haven't yet been reflected in the stock prices. I came up with water purification.

ROMANS: Clean water.

STEWART: And ample water. It hasn't gotten the attention of global warming although it is an outgrowth of global warming. I think water is going to be big. Suddenly, I'm starting to see articles all over the place about water.

Health care is not a new thing. But the aging of the baby booms, you look ten years ago, healthcare was the single biggest theme in the stocks. Demographics suggest it will keep going. Finally, cell phones. Everybody has a cell phone. Do you have the next generation of cell phones? Probably not. There is going to be big changes in cell phones, a lot of growth and continued penetration throughout the world so there are some opportunities there.

ROMANS: In the global growth you pointed too, because as we have been pointing out this program for the last few weeks the growth is coming from overseas for a lot of the big international companies. There are real opportunities there.

STEWART: Absolutely. You can debate until the cows come home, outsourcing and trade agreement. The fact is global trading is going up, up, up and I came two stocks that will fit in that trend.

VELSHI: Let's take a look at some of the stocks you got up there. Lets start with water; we won't go through all of them because we won't have time to. But fundamentally you're looking at small companies. Are these companies that will grow and become profitable or are they companies that are likely to be taken over.

STEWART: I'm looking for growth. My previous efforts have led to some takeovers because other people spot the values here too. But that is not what I am really looking for. I want growth over ten years. That means you have to start small. This list is a smaller cap list than I had in the past. Because lately, it's the small companies who have done the best over a ten-year span. So there is a little more risk in here. These are small.

VELSHI: These are not names that our viewers will necessarily know. Your point is you're looking for undiscovered.

STEWART: Right and of course you have to have companies that the growth potential. In water for example, I picked a water-consulting firm, which is helping communities find water. That's huge, a lot of intellectual capital, they are unbridled. Another makes more technical equipment pumping equipment, high-tech valves. Made it for the dams in China. That to me is going to be big. Some that came up on my list were regulated water utilities. You turn on the tap and out comes the water. Now those companies may be good buys like a utility but they are never going to be one of the biggest performing stocks over the next ten years, so those went out the window.

ROMANS: You also have natural foods distributor, a dental equipment maker. There's some diversity.

STEWART: There is. Like the organic food supplier, a little bit of stretch to call a health company. The organic trend is very much in play. So I love that this company supplies all the big organic chains. Whole foods but also Wal-Mart and grocery stores getting into organic. I think organic is big. I have to love it myself. I will profess my byes but I think that will really continue.

VELSHI: I want to remind our viewers we are going to put those names of the ten stocks up. You can do your own research on these stocks.

STEWART: I recommend it.

You have to buy a diversified group. I'm personally buying all ten. I bought the last ten. Three were complete home runs and three were duds. You can't expect to be going for a home run and have every one succeed.

ROMANS: Or there will be an accounting scandal. You can't know some of the ins and outs.

VELSHI: But to Sarat's point earlier, if you diversify properly, that's OK. If one fully implodes, it's portion.

STEWART: You write that off and more than compensates by the ones that really soar.

ROMANS: Lets talk about the time frame, ten years.

STEWART: That is long-term.

ROMANS: Buy them and forget about it. Patience here is what we're talking about. STEWART: I'm a big believer in that. Warren Buffet he has hardly changed that portfolio over the last ten years. You've got to be patient; I don't pay attention to quarterly results. And by the way it just frees you, I'm not a full time investor, I'm a journalist, I do a lot of other things. I didn't want to spend my time pouring over this and worrying about every announcement or quarterly earnings report. Unless there's major change, I will stay with these stocks because as long the theme is in tact, as long as the trend is continuing, I still think they will still gain.

VELSHI: Keep an eye out for indictments and resignations. Other than that, stick to it.

James great to see you.

STEWART: Nice to see you too.

VELSHI: James Stewart is the editor at large of "Smart Money" Magazine. He didn't tell you those stocks will be home runs, he told you do some work and find out if they will be.

Coming up next on IN THE MONEY on this Mother's Day weekend learn to survive as a working mom by calling for backup.

And later we will have the stories that click this week on MONEY.com. Stay with us.

(COMMERCIAL BREAK)

VELSHI: All right. The Mother's Day holiday is this weekend; it got us thinking about the 26 million working moms in this country. A lot of things I know about, but many things that my colleague, Christine Romans knows more about because she's one of those working moms.

Why don't you do this.

ROMANS: All right. A majority of mother's work but what are companies doing to deal with the challenges families are facing. Joining us now is Carol Evans author of "This is How We Do It" a practical guide for the working mother. Just because you're not a working mother Ali doesn't mean you have no opinions. You work very closely with one.

VELSHI: I do.

ROMANS: Well what are some of the issues? Things have changed so much for women in the workplace. Now you can sort of call your boss and say, I will be 20 minutes late because I have a kid --

CAROL EVANS, AUTHOR, "THIS IS HOW WE DO IT:" That's the flexibility issue, everybody wants flexibility, the number one thing that working mothers want and you know companies found out it's not that hard whether telecommuting, your schedule. You can flex your day, your week, your year, and then you can flex your whole career if you want to and that is where we're getting into exciting work for new mothers. Companies realize the more they allow their employees to be fully engaged and have a full life both at home and the job and they get so much more from them. They get to employ them and retain them.

ROMANS: My baby is 1. What I have found, for the first time in my life, the first time in my career, I have a real compartmentalized view of things. When I'm at work, I'm doing just work. When I'm home, I'm doing just home. I have convinced myself, that I have to do what I am doing right now as best I can because that's what I can do.

EVANS: Well you are reflecting what a lot of working mothers do. They want to be the best mom that they can be. Have you ever met a mom that just wanted to be an OK mom? That won't happen. And they want to be the best employee that they can be, so they get as much out of their work as they can. This desire to be the best leads to a lot of strain but a lot of excellence.

The one thing that I recommend in the book is try to fuse your family and your work a little bit more closer together by acknowledging at work you have a family and acknowledging at home, you have a lot going on during the day but share both sides of the coin in a very positive upbeat manner.

ROMANS: It's clear at work that I have a family. Once I had stuff on here that was baby kiss.

VELSHI: You handle it very well. I saw this week about how some men are resentful of the flex time. My view is any company that is better equipped to handle this change, in the way they look at working moms will generally be more flexible about things, about keeping workers more satisfied. I think it's net gain for men that companies are more flexible.

EVANS: All these great companies know they will offer these benefits to everybody in the company, not just working mothers. Even working father utilizes these benefits and non-fathers. People with stress with elder care situation, pets, just wanting to climb the mountains, they use the flexible programs built for moms.

ROMANS: We can't talk about this without talking about guilt. There is a lot of guilt leaving that baby at home the first time?

EVANS: You probably know about that.

ROMANS: Oh, yeah. Or knowing that your kids are at daycare with other kids and having a crazy experience at work and thinking, I should be home. How do you deal with the guilt?

EVANS: First, I write down my guilt. I have my gallery of guilt, my top ten. I invite everybody to write down the top ten things. What makes me feel guilty? So just acknowledge it. Second of all lets realize that guilt is a negative emotion, and ask ourselves what good does it do us. Does it make us be a better mother? No, I don't think know. Does it make us go home earlier at the end of the day? No. We do those things because we want to go home. We are a good mother because that is our deepest desire. ROMANS: Let me ask you about the reverse guilt, the guilt from the moms who go back to work and saying they are saying I'm so glad to go back to work and have this structure and this goal.

EVANS: That's why we're working. We're working because we want to use our skills and talents?

ROMANS: You don't have to feel guilty about this.

EVANS: Heavens no. You should feel charged up and ready to go for more with that.

ROMANS: You are a good role model for your kids when you are --

EVANS: That is the number two things that our readers love about working is being a role model for their kids and the number one is to use their skills and talent.

ROMANS: All right. Carol Evans, thank you so much for joining us. I feel better already.

EVANS: Thank you very much. Happy Mothers Day.

ROMANS: You too.

VELSHI: Thank you very much. In a second, when we go to our commercial break, we will show you the top companies for working moms to work at. So stay tuned for that.

Coming up next on IN THE MONEY, we are going to have some of this weeks hottest stories from MONEY.com.

(COMMERCIAL BREAK)

ROMANS: So, what were the top stories for the readers at CNNMONEY.com the Web site's managing editor Allen Wastler joins us now to fill us in.

Allen.

ALLEN WASTLER, MANAGING EDITOR, CNNMONEY.COM: Thanks Christine. Now there are three stories, sort of subjects that were very popular. The first was the Fed. The Fed's decision, you always get a little traction out of the Feds decision. This got a lot of attention before, people were saying, what will they do before and a lot of attention afterwards. That was one interesting one.

The other one, this continues the interest in home buying and selling, a look at foreclosures and buying opportunities now. We also had a quick piece on bad things that can happen to your neighborhood after a mortgage default or two and you see those boarded windows going up.

And this is a fun one that people were clicking on, a story how a big company, the one behind Skippy peanut butter decided to fight eating disorders in a different way. They decided to no longer use super skinny models in their ad. That's a new trend.

Speaking as the manager of a Web site, I love Fed decisions. This is the seventh one they stand pat and still I get to see the readers pile in before, didn't do nothing and pile away afterwards. It's a big one, it affects everybody too, your car loan, your mortgage rate, your credit cards.

VELSHI: Not a story you go back to a lot.

WASTLER: Sort of a one-hit wonder.

ROMANS: As close as we get to real drama on Wall Street.

VELSHI: Now let me tell you about these foreclosures, what happens. You talk about what happens in a neighborhood. I live in an apartment in Manhattan. The guy across the hall from me bought an apartment some years ago for cash. And never paid his fees, never lived there, never moved in. I have no idea what he looks like. So there's a sheriff's notice on the door, on blue paper. It's very embarrassing, people come to my house.

ROMANS: You should try to buy it.

VELSHI: I'm trying to buy it. It's quite a process this foreclosure business. I have to explain it away.

WASTLER: It would be worse living in a house.

What happens if it happens in a neighborhood, criminals see it and they go, oh, that's a free place to either get copper plumbing, maybe a few fixtures or let's do a few drug deals there, too? Second, you have a problem with taxes, suddenly, you're not collecting property taxes on that property anymore so the revenues for your township may go down and you don't have enough money to pave roads.

ROMANS: You have to be careful buying those; you don't know what type of liens they have. Back taxes. I think there are a lot of professionals that know how to buy a property. You're talking about the public auction point, the bank says, OK, we're doing it. If the bank can't sell it there, they have to clear out that paperwork and turn it over to professional brokers. Even then we hear about great deals, like in Michigan, where they have a whole set of problems, but deals there. More and more evidence is growing that you can pick up good properties in foreclosure. You're right. You have to go into it eyes open.

VELSHI: How not skinny are Skippy's models?

ROMANS: A hundred and one pounds.

WASTLER: They need to have -- this is the company from Unilever. They have to have a body mass index, your BMI between 18 and 25.

VELSHI: What do most of us have?

WASTLER: Most of us -- VELSHI: I expect Christine's and my body mass--

WASTLER: Below 18 is when you start wondering about anorexia, things like that.

ROMANS: You can be a hair above anorexia.

VELSHI: And get in.

WASTLER: And still put that chunky on the bread, you're there in the picture. It's a nice worthy thing for them to do. We make fun but a fun step.

ROMANS: I had a friend in fashion who told me that the whole thing about skinny models is wrong. They're supposed to be a hanger, not something to emulate, they are just a hanger for the clothes.

VELSHI: Allen thank you my friend.

Today's big ideas require big bucks to become reality. This week's "Life after Work," we meet a retired Microsoft millionaire who is on the hunt for the next great inventor.

(BEGIN VIDEO CLIP)

VELSHI (voice over): Discovery drives everything with Nathan Myhrvold. Discovery of dinosaur bones on the fossil hunts that he finances. Discovery of new subjects for the photographs he takes. His latest quest, discovering inventions.

NATHAN MYHRVOLD, FOUNDER, INTELLECTUAL VENTURES: Our basic idea is we invest in inventions. We make our own inventions and invest in others.

VELSHI: Myhrvold Intellectual Ventures is bankrolling inventors he hopes are the Thomas Edisons of the 21st century. He amassed a fortune during his 14 years at Microsoft, retiring as chief technology officer in 2000. Now the self-described hard-core nerd wants to fill what he calls a void in the market.

MYHRVOLD: Almost no one has business cards as inventors, no business focuses people on saying, what I want you to do is invent new things as your primary job. It's pretty simple. If we focus on that full time, we ought to do better at it than a new sideline.

VELSHI: Myhrvold has recruited 44 inventors so far he says they are patenting about 450 ideas a year. He gave us a first look at the invention lab he's building in a Seattle suburb outfitted primarily with things he bought from online auctions. He's still enjoying the discovery process even though they don't have a major hit.

MYHRVOLD: I love what we're doing. It is a long-term business, if it wasn't fun in the short run, none of that other stuff would actually matter.

(END VIDEO CLIP) VELSHI: What a fun gig, to use the money you've got to encourage other people to invent. We'll take a break, we are coming right back with more IN THE MONEY stay with us.

(COMMERCIAL BREAK)

ROMANS: Remember that nightmare incident at JFK for JetBlue customers I think back in February?

VELSHI: Yes.

ROMANS: It might have forced the airline CEO and founder David Neeleman to step down, or was it?

VELSHI: It's kind of interesting. They had these delays. They came out and I thought they offered a very good apology. It was fast, in all the major newspapers but it was a real customer service nightmare for JetBlue. This company, a very innovative company, Neeleman was the founder. It had some struggles in the last year or so.

ROMANS: It has had some struggles, however, this is the longest serving CEO, longest tenure at one of these companies of all the major seven or eight carriers. He's stepping down. It must hurt a bit because he is the founder of JetBlue. He has been sort of the face of JetBlue and you know the board said we need some better operational expertise. It is also a classic example of the founder and the trajectory before a company -

VELSHI: When you are an innovator in an entrepreneur.

ROMANS: We need executives to who are not the founder.

VELSHI: That is probably better to keep in mind. I don't really believe in the end that it was about the February incident. I think it was about the fact that it is time for that company to move.

ROMANS: A lot of the analysts have said anyone of the airlines the same thing could have happened to at that time back in February.

Anyway, that is something to watch.

VELSHI: Well thank you for joining us for this edition of IN THE MONEY. Make sure you catch Christine on "Lou Dobbs Weekend" later on today, 6:00 p.m. Eastern Time.

ROMANS: And we are going to see you back here next week Saturday at 1:00, Sunday at 3:00. See you then.

(COMMERCIAL BREAK)

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