Investment

Legg Mason Inc.'s renowned money manager Bill Miller wants to avoid a new streak - this time on the losing side. Facing another year of subpar returns, Miller is changing some investments to boost the returns of his record-setting mutual fund that stumbled in 2006 and lags behind its benchmark stock index again this year. Miller said his team at Legg Mason Capital Management has worked since August to "reposition" the Value Trust, one of the most talked-about funds in the industry. He said they hope to capitalize on recent market sell-offs sparked by disruptions in credit markets from the subprime mortgage crisis.

T. Rowe Price Group Inc. reported yesterday that its second-quarter profit rose 20 percent as the Baltimore mutual fund company continued to attract investment dollars from clients. The company had net income of $162 million, or 58 cents a share, up from $136 million, or 49 cents a share, a year earlier and matching the consensus estimate from Wall Street analysts polled by Thomson Financial. It also notched a new record in assets under management, which rose 8.5 percent during the quarter to $380 billion, the result of a surging stock market and clients adding $8 billion.

It's not too late to make New Year's resolutions that stick. By now, I expect that millions of Americans will have broken their New Year's resolutions, including the ever-popular but vague "saving more money" and "getting my finances in order." So why not start fresh and make new and specific resolutions you actually keep? Here are some ideas: Dig up your most recent checking account statement and see how much you forked over to the bank on monthly service charges, automated teller machine fees and any other charges, such as for insufficient funds (that is, bouncing checks)

As the stock market fell and concerns grew yesterday, all was quiet at many financial planning offices. "I'm the loneliest guy in town," said Kenneth R. Solow, chief investment officer at Pinnacle Advisory Group in Columbia. Solow's office helps 500 families invest their money, but as the news screamed of stock plunges and worst single-day performances since 2001, just two of his clients bothered to call in for reassurance. "The fact is that a one-day move tends to be smoothed out over a four-week period," said Solow, who has been counseling clients to expect a drop.

Investment strategists are hoping for higher oil prices, lucrative energy competition and improved hair dryer sales as they bet on which stocks will help make 1999 another year in the longest-running bull market the nation has seen.The 16-year-old bull seemed to be turning into a bear in August, September and October when an economic meltdown in Russia and Asia and the near collapse of a mammoth hedge fund sent stock prices reeling.In six weeks, the Dow dropped nearly 20 percent from its July 17 high.

When Mary Barringer saw the old place in December, she felt proud.The brass was polished, the marble refinished. Murals spanned the walls. Red carpet covered the floor. Barringer had gone to work at 7 E. Redwood St. 36 years earlier, as a clerical worker for First National Bank of Maryland.Barringer, 67, marveled at how the building's lobby had been spiffed up by Monica Coleman, her stockbroker. Coleman had drafted a financial plan for Barringer in 1994, when Barringer was struggling with breast cancer, her husband's death and medical bills.

Oct. 3, 1999To Our Readers:These are challenging times for American investors. Never before have people faced so many complex, confusing and important financial decisions. Among them:Young men and women have to figure out what kind of mortgage is the right one for their first home.Families with young children need guidance on how to save for college, which at some schools costs $130,000 for four years.And baby boomers, now in their 50s, have to plan for retirement and long-term care for their parents.

ONE OF the key issues that has come out of the mayoral campaign is the feeling that it is time for the city to invest in its neighborhoods.The argument is presented that the city has invested millions in downtown development on the theory that the benefits would spill out to the neighborhoods. But, in fact, the neighborhoods are no better off than they were 18 years ago when Harborplace was built. So, it is time to focus on our neighborhoods.We have no other choice. The fate of the neighborhoods and downtown are inextricably linked.

Orion Power Holdings Inc., which acquires and operates power plants, said yesterday that it will receive a $200 million investment from two Japanese companies as the Baltimore-based company eyes going public.Under terms of the agreement, the Japanese trading company Mitsubishi Corp. will invest $120 million and Tokyo Electric Power Corp., Japan's largest utility, will invest $80 million in Orion, a joint venture of the New York investment firm, Goldman Sachs Group Inc., and an affiliate of Constellation Energy Group, the parent of Baltimore Gas and Electric Co.The Japanese companies will jointly appoint an additional member to Orion's five-member board of directors and receive an undisclosed stake in the company, said Jack Fusco, Orion's chief operating officer.

DAY TRADING can be harmful to your financial health. That's the verdict of the North American Securities Administrators Association, which just completed a seven-month study of day-trading accounts.The state securities regulators want tighter restrictions on day trading companies, particularly on advertising and marketing that emphasizes quick riches. That's a fine idea.The NASAA study comes on the heels of Atlanta day trader Mark O. Barton's deadly shooting spree, which left 13 dead. Police believe large day-trading losses may have contributed to Barton's rampage.

Prison construction moves state backward, not forward As community members, how can we be comfortable with the state, already in budget crisis mode, preparing to spend hundreds of millions of dollars on new detention centers and more prison beds, when decades of research from criminal justice analysts to local law enforcement show that prevention and early intervention using less costly community-based services are better for public safety? ("Catching Up," August 20) How can we be comfortable with our elected state officials proclaiming that prisons are a "good investment" because they will produce jobs in construction and hiring of state employees?

Constellation executive pay is a false issue Many Maryland lawmakers support Constellation Energy's joint venture with global nuclear leader EDF Group because they know it represents a unique opportunity for a multibillion-dollar private-sector stimulus program in the midst of a severe recession. Unfortunately, a few, including state Sen. Jim Rosapepe, continue to confuse debate over this venture by focusing on misleading characterizations of Constellation Energy's executive pay provisions, which are entirely unrelated to the transaction (Readers respond, June 17)

DALLAS -- Are target-date mutual funds missing the bull's-eye? It appears the answer is yes for many of these funds, which are designed to smooth a worker's path to retirement by automatically resetting the investments as the investor ages. Typically, a target-date fund changes its asset allocation to become less risky as the investor nears retirement. But because there are crucial differences in the funds' asset allocation, some of the more aggressive have racked up big losses in the recent bear market and have drawn the attention of regulators and lawmakers.

How can tax hikes inspire investment? As a businessman in Baltimore, I wonder how the various federal stimulus packages could possibly encourage me to make greater investments that would lead to more jobs ("Obama lauds stimulus effect," March 7). In this period of reduced demand and great uncertainty in the financial markets, I am being prudent and exercising extreme caution, just as so many other business people are. The value of my liquid assets, like those everyone else holds, has taken a beating, and this reduces my ability to secure new loans.

"Warren Buffett loses out to the French" was the gist of several headlines yesterday on Electricite de France's deal to invest $4.5 billion in Constellation Energy Group. Constellation's board spurned Buffett's competing offer and blocked his plans to merge the Baltimore-based energy seller into another power company based in Iowa. But Buffett rarely loses, and he didn't lose here. At a time when no investor is making profits on anything, his investment in Constellation more than doubled his money in a few months.

A smart financier once remarked that investing was a matter of gambling with the odds tilted in your favor. Smart investors scrutinize and study; they learn from their mistakes, discover what works and doesn't work and gravitate to the winning strategies. What's so infuriating about the latest audit of the Maryland Department of Business and Economic Development is that it appears such scrutiny was severely lacking when appointed officials chose to gamble on marketing strategies on behalf of the state.

The Baltimore Sun's two-part, rigorously documented report on Maryland's emerging knowledge economy is exactly right in predicting that poorly educated high school graduates and dropouts will not be able to succeed in our state's new labor markets ("Sun special report: Shifting fortunes," Oct. 19-Oct. 20). As Gov. Martin O'Malley notes in the article, poverty, illiteracy and poor academic and workplace skills are major barriers that will require thoughtful, cost-effective public investment.

After a New York company acquired Alex. Brown Inc. in 1997, divisions of the venerable Baltimore investment firm - which helped finance companies ranging from the B&O Railroad to Starbucks - began to go their separate ways. And for almost that long, ever since his Brown Advisory division went independent in 1998, Chief Executive Michael D. Hankin has dreamed of bringing some of the brain trust back together. Yesterday, he announced an official reunion: Alex.Brown Investment Management's 25 employees will move from their downtown offices this fall to Fells Point, where they will merge with Hankin's team of about 170 people.

After eight years of struggling to make a success out of MiddleBrook Pharmaceuticals, chief executive and founder Edward M. Rudnic agreed to step down after a management shake-up and a $100 million investment from a private Chicago investment firm. It's the company's latest effort to bring its version of a time-released antibiotic to market. The announcement, made late Tuesday, took a punishing toll on the company's stock, which fell $1.55 - 50.5 percent - yesterday to close at $1.52. Investors had been counting on the ailing Germantown biotech to find a buyer and cash out. Few seemed to expect that MiddleBrook would continue to operate independently, in large part because the company faced such a tough time on its own during the past few years.

In trumpeting his new biotechnology initiative last week, Gov. Martin O'Malley used the word "leverage" eight times to describe the nine-point plan. Clearly, a governor proposing a new, billion-dollar program during a time of fiscal austerity wants Marylanders to see this spending as an investment - one expected to produce a healthy return. He makes a strong case: If figures from the state Department of Business and Economic Development are correct, the state's $1.1 billion commitment will attract an estimated $6.3 billion in federal and private-sector money.