Prosecutor seeks appropriate charges against trader

By JAMEY KEATEN, Associated Press Writer

A Paris prosecutor on Monday asked for preliminary charges of forgery, breach of trust and fraud against a low-level trader accused by Societe Generale bank of orchestrating the largest securities fraud ever by single person.

Prosecutor Jean-Claude Marin said Jerome Kerviel, 31, did not attempt to steal money from the bank or its customers, but was motivated by a desire to be "an exceptional trader" and that he sought performance bonuses.

Kerviel appears to have acted alone, Marin said.

"It's always a bit for money, I'm not sure that was his prime motive," said the prosecutor. "It functions a bit like a drug, it's an addiction ... there's a sort of spiral you can't get out of."

Kerviel told investigators, who just wrapped up 48 hours of questioning, that he expected a bonus of 300,000 euros ($441,150) for 2007.

Societe Generale said it lost 4.82 billion euros ($7.09 billion) after unwinding Kerviel's trades.

Kerviel was set to appear before a judge who will decide whether to proceed with preliminary charges.

Under French law, filing preliminary charges means the judge has determined there is strong evidence to suggest involvement in a crime and gives investigators time to ask for a trial.

The bank's offices were searched Friday and "masses of documents" including computer records were seized, Marin said.

CEO Daniel Bouton said Societe Generale, thought by some experts to be vulnerable to a takeover, has not been approached.

Bank shares fell nearly 4 percent to 70.94 euros ($104.32) Monday.

Meanwhile, questions about how the bank handled the fraud are mounting. A lawyer for a group of Societe Generale shareholders, Frederik Canoy, said a legal complaint had been filed Monday asking investigators to look into possible insider trading.

The complaint was filed after France's market watchdog said in a routine disclosure that a member of Societe Generale's board, Robert A. Day, sold 85.75 million euros ($126.1 million) worth of shares in the bank on Jan. 9 — two weeks before the fraud announcement and well before bank management says it knew about the problem. Day is an investment manager with U.S.-based Trust Company of the West, or TCW, who Forbes magazine says has a net worth is $1.6 billion.

Two foundations linked to Day, the Robert A. Day Foundation and the Kelly Day Foundation, also sold a total of 9.59 million euros ($14.1 million) worth of shares a day later, on Jan. 10, the market watchdog reported. Regulators have made no allegations of wrongdoing.

Telephone calls to both Day foundations and TCW were not immediately returned Monday.

Bouton rejected suggestions from Kerviel's lawyers that Societe Generale was using their client to hide big losses linked to the U.S. subprime mortgage crisis.

"How could you want to imagine that we would have been able to hide a hole by another hole? It's completely stupid," Bouton told Europe-1 radio. He called Kerviel a "remarkable concealer" who had managed to outwit the bank's risk control systems by toggling between real and fictitious positions.

"That's what created this gigantic fraud," he said.

Elisabeth Meyer, one of Kerviel's defense lawyers, said he was "bearing up to the shock."

She disputed Societe Generale claims that Kerviel had committed fraud, saying he was in the black with his trades as of Dec. 31.

"In my view, he was thrown to the lions before being able to explain himself," said Meyer. "It's a lynching."

Another lawyer, Christian Charriere-Bournazel, said on Europe-1 radio that Kerviel made a profit of 1.5 billion euros ($2.2 billion) before his bets went sour.

The prosecutor, however, said the trader only "virtually" made a profit for the bank.

Kerviel could face a maximum seven years imprisonment if convicted under the current charges, the prosecutor said.

A day after the bank sent out a five-page explanation of how the fraud unfolded, analysts still had many questions.

Societe Generale alleges that Kerviel used other people's computer access codes, falsified documents and used other methods to cover his tracks — helped by his previous experience in other offices at the bank that monitor traders. It says he bet some 50 billion euros ($73.53 billion) — more that the bank's market worth — on European markets.

Societe Generale Bank Uncovers $7 billion Fraud by Futures Trader

By Emma Vandore, Associated Press Writer

French bank Societe Generale said Thursday it has uncovered a 4.9 billion euro ($7.14 billion) fraud -- one of history's biggest -- by a single futures trader whose scheme of fictitious transactions was discovered as stock markets began to stumble in recent days.

CEO Daniel Bouton said the trader's motivations were "irrational," netting the trader no personal financial gains. Still, the bank is seeking to have him prosecuted in court.

A person familiar with the case named the trader as Jerome Kerviel. Bank officials said the trader was a Frenchman in his 30s who probably acted alone. The person spoke on condition of anonymity because of the sensitivity of the case.

The bombshell destabilized a major bank already exposed to the subprime crisis. France's second-largest bank by market value said it would be forced to seek euro5.5 billion (US$8.02 billion) in new capital.

Societe Generale filed a complaint Thursday with a court in Nanterre, west of Paris, accusing the trader of fraudulent falsification of banking records, use of such records and computer fraud, the bank said in a statement.

The Paris prosecutor opened a preliminary investigation Thursday based on a complaint filed by a small shareholder concerned about losses incurred because of the fraud, a judicial official said. The Bank of France, the country's central bank, said it was immediately informed of the fraud and was investigating.

Societe Generale's shares, which have lost nearly half their value over the past six months, were suspended in Paris on Thursday morning, then dropped 5.5 percent to 74.77 euros ($108.97) when they resumed trading.

The bank said it detected the fraud -- comparable to a full year of its profits in stable times -- at its French markets division the weekend of Jan. 19-20.

Once uncovered, Bouton said the bank alerted market regulators and moved immediately to close the trader's positions, incurring heavy losses amid sharp declines on world markets.

"This is a bad time for banks and the industry in general. But detecting the fraud over the weekend was problematic because world stock markets on Monday and Tuesday fell hugely around the world. When the positions had to be unwound, the bank did that in a terrible market of falling equities," said Janine Dow, senior director at Fitch Ratings financial institution group in Paris

"In hindsight, it was this guy's superior knowledge of the control system of every aspect of trading at the bank that allowed him to build up fraudulent positions and hide them," she said.

The bank said the trader had misled investors in 2007 and 2008 through a "scheme of elaborate fictitious transactions." The trader, who was not named, used his knowledge of the group's security systems to conceal his fraudulent positions, the statement said.

The man admitted to the fraud, the bank said, and was being dismissed. Four or five of his supervisors were to leave the group. Bouton offered to resign but the board rejected that.

The trader had worked for the bank since 2000 and earned a salary and bonus of less than euro100,000 (US$145,700), executives said.

"I'm convinced he acted alone," said Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking, who interviewed the trader when the fraud was uncovered.

The trader was responsible for basic futures hedging on European equity market indexes, the company said. That means he made bets on how the markets would perform at a future date.

Until last year, the trader had been betting that markets would fall, but then changed his position at the start of this year to bet they would rise, said Kinner Lakhani, an analyst at ABN Amro in London who specializes in Societe Generale shares, citing the bank's management.

He said there had been "daily rumors" this week that something was afoot at Societe Generale. "The market was sniffing something," he said.

Because the trader previously had worked in trading accounting offices, "he would have known how the risk management worked," Lakhani added. In a conference call with analysts on Thursday, bank officials "talked about this guy bypassing systems and setting up false counter-trades."

Societe Generale said the trader was involved in "plain vanilla" forms of hedging. Futures trading began with selling commodities like sugar or oil to be delivered at a future date, but has expanded enormously to many kinds of extremely complex financial instruments.

The fraud appeared to be the largest ever by a single trader. If confirmed, it would far outstrip the Nick Leeson trading scandal in 1995 that forced the collapse of British bank Barings. Leeson, the bank's Singapore general manager of futures trading, lost 860 million pounds -- then worth US$1.38 billion -- on Asian futures markets, wiping out the bank's cash reserves. The company had been in business for more than 230 years.

The fraud was not as big as the 1991 scandal that led to the demise of the Bank of Credit and Commerce International. Claims by depositors and creditors there exceeded US$10 billion at the time. International bank regulators seized BCCI, which had headquarters in Luxembourg, London and the Cayman Islands, acting on auditors' reports that described huge losses from illegal loans to corporate insiders and from trading transactions.

Axel Pierron, senior analyst at Celent, an international financial research and consulting firm, was stunned that 13 years after the Barings collapse, something similar has happened.

"The situation reveals that banks, despite the implementation of sophisticated risk management solutions, are still under the threat that an employee with a good understanding of the risk management processes can getting round them to hide his losses," he said.

At Societe Generale, the announcement came on the back of 2.05 billion euros ($2.99 billion) in write-downs linked to subprime-related difficulties and the crisis in financial markets.

The bank is now planning a capital hike in the "following weeks" by selling shares in a rights offer underwritten by JPMorgan Chase & Co. and Morgan Stanley.

The write-down and losses will lead the company to post a net profit of 600 million euros to 800 million euros ($874 million to $1.16 billion) for all of 2007, the Paris-based bank said. Full-year results will be announced Feb. 21. In 2006, net profit was euro5.2 billion.

Associated Press writers Matt Moore in Davos, Switzerland, Thomas Wagner in London and John Leicester in Paris contributed to this report.

Profitable Jobs You Can Do From Home

Ysolt Usigan, ClassesUSA

In today's world of high connectivity, anyone can do virtually anything from home. In fact, the International Telework Association and Council reports that approximately 23 million people work at home at least part time, a number expected to increase as workplace technology becomes more and more seamless. If clocking in from your kitchen is the right choice for you, read on for telecommuting tips from successful home-office professionals.

Computer Software Production

Scott Testa knew that the competition for landing a convenient telecommuting job was tough, so he used education to distinguish himself.

After earning a Ph.D. in education through Drexel University's online program, Testa founded numerous software companies. He currently works from home as the chief operating officer of Mindbridge Software.

His biggest driver of success? The mindset that working from home must reflect the same initiative and motivation you would have if you were physically in the office. "Dress for work and keep the same hours you typically would in the office," he advises.

Marketing and Public Relations

Shannon Cherry, a marketing and public relations firm owner who does much of her work via e-mail, is accustomed to using the Internet for advancement -- she even earned her master's degree in communications administration from the University of Memphis online.

If you wish to secure an in-demand telecommuting position, Cherry stresses the power of effective communication. "It's important that you learn to brand yourself early on," she asserts. "That means you need to market your uniqueness."

Along with her master's degree, what distinguishes Cherry is her trustworthiness and reliability. "I suggest taking that a step further," she adds. "Market yourself by using stories or testimonials to clients or prospective employers. And network like crazy."

Financial Consulting and Sales

Anthony Shafer, a commercial finance consultant for LoanFight, Inc., usually works in his home office from 10 a.m. to 10 p.m., or even as late as 1 a.m. "With time differences, I have to get a hold of people at all hours of the day," he explains.

Shafer admits that TV can be a distraction, although it's actually a requirement for his job. "I keep CNBC on so I can follow the financial world," he says. Understanding the line between work and play is key to staying focused.

Also important are desire and devotion, says Shafer, who is currently working on his business information systems degree from DeVry Online. "You've got to be a salesman, and do it with a serious desire to please people," he says.

Graphic Design

Most graphic design work available to telecommuters is on a freelance basis, which means missing out on benefits like health insurance, steady salary, and job stability.

Jill Sabato, a recent graduate of the School of Visual Arts, tried freelance design projects when she was in between jobs. "When you've got bills to pay, it's not a good idea to count on the money you'll make from a project," she says. "Who knows when you'll get another assignment?"

If you do find a company with which you're comfortable, be sure to give your best. "If you freelance for a company that knows your work and is happy with it, stick with them," says Sabato. "Keep in contact so they know they can always count on you for projects."

Surprising Jobs With Six-Figure Pay

By Steve McGookin

It's always been true that if you want to earn more money, you should think about going back to school.

But how many people realize that so many teaching posts could carry six-figure salaries?

According to the latest statistics from the U.S. Department of Labor showing average salaries for a range of occupations, six categories of teachers are included in the rankings showing jobs where the average of the top earners (the 90th percentile) is in excess of $100,000 annually.

They range from math teachers to those who impart knowledge about home economics. In math, for example, the official Labor Department definition of jobs done by those in that teaching category is "teach courses and/or pursue academic research pertaining to mathematical concepts, statistics and actuarial science and to the application of mathematics in solving specific problems and situations." So each teaching group specifically includes university and college lecturers at the postsecondary level, rather than high school teachers.

The data also show, of course, that the true average wage for all the teachers included in the data set is between $55,000 and $65,000 a year. But the ranking measure--the average of the higher-earning individuals in each category--puts teachers of certain subjects into the six-figure range.

In order of their average salaries for top earners, the subjects most in demand are computer science, sociology, psychology, mathematics, history, languages and home economics. In terms of numbers as defined, there are 44,570 math teachers and 36,630 computer science teachers, but just 4,330 home economics teachers.

Some of the occupations on the list probably won't seem that much of a surprise. For example, commercial pilots come at the upper end of this particular ranking, with a high-end average of just over $115,000, roughly the same as insurance sales agents. Those are the only two of the listed categories to exceed that average figure.

Market research analysts (those who "research market conditions to determine potential sales of a product or service [and] may gather information on competitors, prices, sales, and methods of marketing and distribution") come next, followed closely by real estate agents.

While commission-based jobs are obviously subject to greater fluctuations in income levels than those that have a graded salary structure, it is certainly interesting--given the often cyclical nature of the home sales market--that loan officers (in addition to real estate sales agents) are highly placed. A loan officer's job is to "evaluate, authorize or recommend approval of commercial, real estate or credit loans [and] advise borrowers. [The category] includes mortgage loan officers and agents, collection analysts, loan servicing officers and loan underwriters."

In terms of the connection between commission and income, also in the ranking--albeit lower down the scale, with a high-end average of $101,030 is the general category of "sales representatives" (definition: "sell goods, for wholesalers or manufacturers, to businesses or groups of individuals"). Sales representatives also make up the biggest single category by number, with 1,488,990 so defined by the Labor Department.

Coming in at the bottom end of the ranking is the category that includes the 3,330 employees defined as "farm, ranch and other agricultural managers." The Labor Department defines them as employees who "manage farms, ranches, aquacultural operations, greenhouses, nurseries, timber tracts, cotton gins, packing houses or other agricultural establishments for employers." Their high-end average is $100,050, just less than double the true average for all employees in that category.

Gas price Web sites see skyrocketing traffic

GasBuddy.com, GasPriceWatch.com seek to serve deal-hunting drivers

By Robert Weller

The higher gasoline prices go, the more money business Web entrepreneur Jason Toewes makes.

He started an Internet site, GasBuddy.com, in 2000 to track daily gasoline prices using volunteers to e-mail what they find. "Hardly anybody ever used it," Toewes, of Brooklyn Park, Minn., recalled.

By 2004, 1 million people were visiting the site daily, although the numbers dropped when prices went down.

But at the pace hits were being recorded Thursday, the site was likely to break its record of 4 million visitors, Toewes said. As gasoline prices have risen, so have the hits on his site and another, GasPriceWatch.com.

"We have had to buy more servers and it looks like we will need more," he said.

GasBuddy.com offers information from 180 locations in the U.S. and Canada, including every major city. The site said the average price nationally in the U.S. was $3.22 for unleaded Thursday afternoon, compared with $2.86 a year ago.

Brad Proctor, founder of GasPriceWatch.com in Centerville, Ohio, said his site has added prices for ethanol, biodiesel, truck diesel and ultra-low-sulfur diesel. Hits on his site have doubled. As many eight people log in every second during peak periods, he said.

Dan Gilligan, president of the Arlington, Va.-based Petroleum Marketers Association of America, said the system is a good idea but warned consumers to remember that if they drive more than 10 miles to save a nickel, they are losing money. He also said there's no guarantee the price will be the same when they arrive.

"Many retailers are getting price increases twice a day. You may have a price increase within six hours," he said.

Other businesses are also tying technology to drivers' increasing efforts to find a deal.

A cell phone provider, Mobio Networks, launched a free service this week telling its customers the cheapest gasoline prices in their area.

BetUS.com, a sports betting Web site, was posting odds of the national average exceeding $3.50 before the end of the year.

Toewes' company, GasBuddy Organization Inc., claims to monitor 900,000 stations with several hundred thousand registered volunteers. GasPriceWatch.com says it tracks 170,000 stations.

People can send a message to gas(at)gasbuddy.com with a ZIP code in the text area, and the site will reply with the cheapest nearby stations.

The Web site also has a national map for those planning trips.

Relying on volunteers for price information does have its flaws. People occasionally make false reports of unrealistically low prices, Toewes said. "We do monitor them and we take them off and ban the person who sent it," he said.

He also gets calls from time to time from stations embarrassed to be on the list with the highest prices. "They don't want to be seen as gouging people," he said.

Supermarkets and stores such as Costco Wholesale Corp. locations often are the cheapest "because they use gas as a loss leader," Toewes said.

Calls and e-mails to the Web site lead him to believe the shock of $3 gasoline has worn off.

"People are budgeting for it," he said. "But many people will just put five bucks in until they can find a cheaper station."

Toewes said despite its increasing number of hits, the Web site has not made millionaires of him or co-founder Dustin Coupal, an ophthalmologist.

"But we do have enough advertising to sustain the operation," he said.

7 Highly Rated Stocks on Sale

By Matt Koppenheffer

I'm always looking for a good deal, whether that means buying an extra box of Cocoa Puffs when they're on sale, or pouncing on undervalued stocks. The idea that anybody would sell a stock for less than its worth may seem silly, but legendary value investor Ben Graham tells us, by way of allegory, how we can look out for these situations.

In The Intelligent Investor, Graham introduces readers to a crazy guy named Mr. Market. Mr. Market's game is to pay you house calls on a daily basis, offering to sell you interests in businesses he owns, or to buy from you interests in businesses you own. Sometimes, Mr. Market will show up at your door very excited, offering you premium prices for your holdings. Other times, he'll be totally depressed about the future, offering to sell you what he has for as low as pennies on the dollar.

To find some of the stocks that Mr. Market is depressed about, I've turned once again to The Motley Fool's CAPS investor community. Each of the companies below had been given a five-star rating (the highest) by our community of investors just 30 days ago:

Stock	30-Day Return	One-Year Return	Current CAPS Rating
ProCentury (Nasdaq: PROS)	(22.28%)	37.30%	****
CT Communications (Nasdaq: CTCI)	(17.87%)	37.21%	*****
Gammon Lake Resources (AMEX: GRS)	(15.93%)	10.96%	***
Northgate Minerals (AMEX: NXG)	(13.9%)	(10.73%)	*****
Aurizon Mines (AMEX: AZK)	(14.07%)	19.57%	*****
United Retail Group (Nasdaq: URGI)	(11.9%)	(13.35%)	****
ICT Group (Nasdaq: ICTG)	(15.4%)	(30.65%)	****

Data from Motley Fool CAPS as of May 22.

As the chart shows, these stocks are all still very well-regarded by the CAPS community despite their underperformance over the past month. While these are not formal recommendations, they could be a great place to kick off some further research. I'll even get you started with some thoughts on ProCentury.

A question of risk
If you face a major financial risk, there's a good chance that you can find an insurer willing to take some of that risk off your hands. Whether it's a car accident, a hurricane, or even death, at least some financial solace can be found for most of life's major mishaps.

Many types of risks, particularly those that businesses take on, do not work well with the one-size-fits-most approach that works for standard lines like life or car insurance. That's where insurers like ProCentury step in. ProCentury is a niche property and casualty insurer covering small and midsize businesses such as day care facilities, retail stores, and fitness centers on risks outside those covered by mainline insurers.

Investors let the company know they weren't happy with its recent earnings announcement by cutting the price on the stock 15%. Though earnings per share met Wall Street's expectations, up 14% year over year, revenue fell short. In particular, gross premiums for the quarter were up just 1% year over year, and net premiums declined slightly.

ProCentury's CEO attributed the slow premium growth to competition, along with tightened underwriting standards on an underperforming program. The competition is worrisome, but it might be encouraging that the company is more willing to show slow growth than try to undercut competitive pricing.

Profitability for the quarter was salvaged by strong growth in investment income and a slightly lower combined ratio -- the percentage of earned premiums spent on losses and operating expenses.

CAPS players seem to see the recent dip as a good opportunity to take a look at ProCentury shares. Damondicus said the company's "excellent fundamentals and long-term growth make this pick easy." Prior to the quarter, CAPS All-Star adprintz saw "very solid fundamentals across the board on [ProCentury]." He added that "I love a lot of the insurers right now because they are cheap compared to historical values."

Is ProCentury done shedding value and ready to take off? Let the community know what you think -- head over to CAPS and share your thoughts with the other 29,000 players currently part of the community. Even if you'd prefer to pass on ProCentury, you can check out a couple of the other stocks listed above, or any of the 4,500 stocks rated on CAPS.

Invest in Shipwrecks and Dead bodies

Odyssey Marine and Premier Exhibitions aren't household names, but thanks to some macabre moneymakers, these small stocks are soaring.

By Toby Shute, The Motley Fool

Sure, the weather's a bit gloomy as I write from mercurial New England, but I promise I haven't suddenly gone Goth on you. Though I really am going to tell you about two small companies that profit from shipwrecks and dead bodies, my proffered investment advice today is figurative.

One of the things the "Motley Fool Hidden Gems" team seeks in an investment is dominant positioning in a profitable niche business.

Sometimes, that means an unusual business, so you ought to keep an open mind when discovering companies that strike you as a little weird, smelly or macabre. This niche idea goes a long way toward explaining why these two companies have absolutely stomped the market over the past five years.

Selling shekels from the seafloor

On Friday, I learned about a fascinating company that extracts riches from the ocean's depths -- but not in the same manner as offshore driller Transocean (RIG, news, msgs). Nope, this company literally finds money lying on the seafloor.

Odyssey Marine Exploration (OMR, news, msgs) is a self-described shipwreck company that has potentially discovered the largest shipwreck treasure cache of all time. Reports place the total number of gold and silver coins recovered from this particular site at north of half a million. I hope none of my readers had casually bet against this quixotic little company either in CAPS or with real coin o' the realm, because the shares spiffy popped upon news of the find. In other words, they rose by more than the amount investors paid for shares as recently as early April.

There were a few clues indicating that Odyssey Marine is no half-baked scheme. For starters, there were some successful people investing -- or perhaps speculating -- here before Odyssey found its treasure. The top shareholder is GLG Partners, a London hedge fund whose principals are all former Goldman Sachs (GS, news, msgs) folks. Fortress Investment Group (FIG, news, msgs), which just recently had its IPO, is second in line.

More crucial is the profile of people involved. A professor of maritime law who has, in private practice, argued federal cases on shipwreck disputes sits on the board of directors.

Both Odyssey co-founders hold substantial personal stakes in the firm and have been plying their trade for decades. Most notably, one of them, Greg Stemm, has been conducting shipwreck excavations since 1986, and the United Nations has tapped him to weigh in on the Draft Convention for the Protection of Underwater Cultural Heritage. This fellow is no mere hobbyist.

Media coverage of the find was ambiguous regarding how Odyssey might monetize its newfound treasure-trove.

But this is where things get even more interesting. The company is emphatically not looking to cash in immediately. There's a separate marketing operation in place intended to maximize the lifetime value of the assets the company acquires. The coins will eventually be appraised, researched and presented to collectors and investors as individual artifacts. This branding initiative will reportedly extend to TV specials and museum exhibitions.

Is the value of the reported discovery a sure thing? Certainly not. The Spanish government, for one, is up in arms, claiming that the company has no right to the wreck site's cultural artifacts. I don't know how this will turn out, but the company does appear to have the right lawyer.

Bodies in motion

Speaking of exhibitions, another oddball company is Premier Exhibitions (PRXI, news, msgs), the operator behind extremely popular exhibits from the RMS Titanic and on human anatomy. Last July, Foolish colleague Ryan Fuhrmann noted that "Premier has obtained exclusive rights to recover objects from the Titanic wreckage off Newfoundland. These recoveries have spawned the related tours, licensing, and merchandise revenue." That's strikingly similar to Odyssey's operating model.

The Titanic business, however, seems to be heading toward an iceberg. Though it holds salvor-in-possession status with regard to the wreck site, Premier has been unable to prevent other operators from photographing and taking video recordings of the site. The company's legal claim to various artifacts recovered to date and its future status as sole salvor both seem to be tenuous over the long term.

Fortunately for Premier, the Titanic exhibits accounted for only 28% of last fiscal year's revenues. Now there's a new exhibit in town . . . or, rather, all over the country and in select cities around the world. Premier has found a major hit with its quite graphic human-anatomy exhibits, billed "Bodies ... The Exhibition" and "Bodies Revealed." Revenues have more than quadrupled since 2005, largely because of the popularity of these exhibits.

Premier has an interesting business model, so despite the challenges it may face in obtaining high-quality human cadavers -- legally, anyway -- I gave the company a thumbs-up in Motley Fool CAPS, the community-intelligence phenomenon that is sweeping Fool Nation. It's been my second-best pick ever, after fellow spiffy-popper aQuantive (AQNT, news, msgs). Do I regret not picking up actual shares? I guess, kinda. But there are reasons to question the long-term investment merit (there is no other kind) of both Premier and Odyssey, as I hope I have made clear.

Diving deeper

At the outset of this piece, I mentioned the rubric that Tom Gardner and the rest of the Hidden Gems crew apply in their search for long-term small-cap winners. Odyssey Marine and Premier Exhibitions fit some of these criteria, but even though they sport solid insider ownership and operate in decidedly niche businesses, neither company has demonstrated the long-term, consistent profitability that typically earns a company a formal nod in the newsletter.

But don't despair. There are hundreds, perhaps thousands, of equally weird small companies out there, many with even brighter prospects. So dive in and see what's lying in the market's depths!

Check out MSN Money's new CAPS stock ratings

Please note that I'm not recommending them for purchase today -- both stocks have moved up dramatically, and a lot of optimism is now priced in. But they do illustrate my broader point.

Check out MSN Money's new CAPS stock ratings

Selling body parts for cash

By Karen Aho

Isn't it time your body earned its keep?

By law, you can't sell your body even after you're dead. But you can get it to slip you a few 20s -- or thousands -- while you're still alive, by "donating" some of the extra pieces. Not too much is marketable, but what is can be offloaded for a price if it's in good condition.

What can you sell?

Plasma can be yellow gold

The 1984 National Organ Transplantation Act makes it illegal to sell human organs, a rule generally applied to tissues. So companies "compensate" donors for their time.

The big market: plasma, the protein-packed liquid component of blood used to manufacture lifesaving clotting factors and immune boosters, among others. These therapeutics comprise a $7.8 billion annual global market, according to the Marketing Research Bureau, with more than 70% of the source plasma originating from inside Americans.

This strong, steady demand simply can't be met by unpaid volunteers. Ten million of the 12 million liters we pump out annually is from paid donors, many of them regulars pocketing $200-plus a month.

"It's easy," said Ryan Elkins, a 26-year-old disabled Iraq war veteran who makes $55 a week for three hours of "sitting still." It's boring, he said, and he'd rather be back on explosives duty. But it helps buy the groceries for his family as he begins taxidermy school in Spokane, Wash.

Donors profiled on the BioLife Plasma Services Web site have sold plasma for decades, accumulating decent sums toward school, kids, home repairs, even missionary work. One woman uses the money to send her husband away on trips. Here's how it works:

• If you can give blood, you can sell plasma -- probably. The eligibility requirements are similar. You must be 18, weigh at least 110 pounds, be free of communicable disease and in basic good health with strong iron levels.
• There is no cross-contamination. Blood is drawn into an apheresis machine -- essentially a centrifuge. As it spins, plasma, the lightest component in blood, separates out and drips into a bag, which you can watch fill and turn yellow as you read the giant informed-consent brochure you just signed. At various intervals the machine thrums to a halt and reverses direction, returning the remaining blood down the same tube along with some saline solution. Your blood comes into contact only with disposable plastic parts.
• Seriously, though, read the brochure. There can be side effects: allergic reactions, dizziness, nausea. (For more, see this FDA letter.) The U.S. Food and Drug Administration limits each donation to between 625 milliliters (1.3 pints) and 880 milliliters (1.9 pints), depending on body weight, at no more than twice a week. In the United States you can give up to 91.5 liters, or 193 pints, a year, far more than other countries allow.
• With a little patience . . . Companies pay extra to bring you back. The first visit in a week might pay $25, the second $35. Plasma is 90% water and regenerates in 48 hours. At each visit, someone checks your vitals, then you recline in the chair for an hour. You cannot sleep, because attendants must know that you've not passed out.
• It's a large-bore needle. Need more be said here?
• Not every state has a paid donation center. Several companies recently pulled out of the business. To see if there's one near you, check the FDA search engine and select "Establishment Type: Plasmapheresis Center." Or visit the Plasma Protein Therapeutics Association.

For men only

It's far easier to get a date than a sperm-donor card. About 95% of men who apply don't make the cut.

For those who do, though, hoo ha! It can mean up to $1,000 a month for 1½ to two years, enough to pay the rent through graduate school.

For every 1,000 men who seek information about the California Cryobank, a leading service with locations near top-tier colleges, only nine become donors.

Applicants complete a 40-page medical history covering three generations, then get culled for buyer preference.

"We make sure he's not too short, too fat, too tall or too ugly," said Dr. Cappy Rothman, a clinic co-founder.

The ideal donor: 6 feet, medium build, medium complexion, blond or brown hair, green or blue eyes, a college background, dimples. This is what women want.

Then there's the sample. Donors must have sperm counts of 400 million to 500 million, twice the norm. And most of these sperm must be faster than an ordinary sperm, more powerful than an ordinary sperm, able to leap tall petri dishes in a single bound! Unfortunately it's supersperm for only one in four men.

Even those who think they're made of steel sometimes choose to opt out of the responsibility: frequent health checks, up to thrice-weekly deposits and periods of abstention. Not to mention the idea of being progenitor to as many as 35 very real human beings.

This isn't an industry that keeps good count. But Dr. Charles Sims, who undertook a survey as chairman of the Reproductive Council of the American Association of Tissue Banks last year, estimates it's an $80 million industry with some 1,500 active sperm donors.

Despite a growing movement toward open donation -- where children can contact their donor parent at 18 -- Sims believes banks can continue to guarantee anonymity.

Seeking young women

The female egg, or ovum, is 90,000 times bigger than the male sperm, so it's worth more. Just how much more is unclear. In an industry that critics charge is underregulated, insiders don't know exactly what most donors are paid or even how many donors are out there.

A recent survey turned up an average of $4,217 per donation, but some clinics didn't participate, and donors frequently claim payments of $10,000 or more. Those targeted -- typically young coeds -- see ads promising tens of thousands from couples in search of that very healthy, tall, bright, beautiful young woman. If she's on a soccer scholarship and just won an arts grant, even better.

Still, the price is projected to remain high. The American Society for Reproductive Medicine says donor eggs or embryos were used in 15,175 artificial reproduction attempts in 2004 and that demand is growing. People are accepting the idea that if someone else's plump, youthful egg has a better shot, why not use it? Meanwhile, women who've been donors and made a good dent in their student loans or credit card debt say they'd do it again.

But that bloated pay figure can be misleading. Egg donation is far more labor intensive than sperm donation and carries health risks. To stimulate the production of extra eggs -- say one or two dozen -- the donor is placed on hormone injections for weeks and the eggs are extracted under anesthesia with a needle. The process can cause ovarian hyperstimulation, which in rare cases can be life-threatening.

Those considering becoming a donor should seek an outside opinion and read the fine print: Make sure any associated health issues will be covered by the buyer.

For more information, visit the Society for Assisted Reproductive Technology.

'I've got my hair'

The self-styled posts on the Internet are intoxicating: asking $600 for long locks of "virgin hair," never colored, never blow-dried, never rooted in the flesh of fatty foods and hard living. But are people really paying?

Renee Sirokman is dubious. She's been buying hair to make wigs for the family business, World of Wigs, for nearly 40 years and has yet to meet such a high bidder. "If this was true," she said, "then wouldn't everybody be selling hair?"

She can, however, guarantee that a wig company will pay up to $5 an ounce for hair that's in decent shape. Most heads would pass muster, as long as the hair is not severely overprocessed, is at least 12 inches long and is packaged properly. A foot-long pony tail weighs 2 to 8 ounces, meaning a year in the hair-growth market might gross you a few bottles of shampoo. But, as Sirokman tells people, "Why would you want the hair to hit the ground if you can sell it?"

But wait, there's more

• Got milk? Breast milk costs $3.50 an ounce, and baby needs 25 ounces a day: A Beverly Hills household-staffing company made news when it hired out wet nurses. There don't appear to be others, according to the La Leche League, nor any public businesses buying breast milk, but experts don't doubt that private sales routinely take place.
• It's true, you can live safely with one kidney. But rumors of $50,000 apiece on the black market overseas are just that; buyers can get one in a village in India, or in Baghdad, for $700.
• "Donate" to research. Tissue didn't make it past the private screeners? Research hospitals and drug companies pay for the same products for studies.
• Don't like the idea of selling yourself? Then actually, really, donate. Give whole blood at a community blood bank. Only 5% of eligible donors do so, and there is a chronic short supply. And there are several breast-milk banks that accept donations to feed babies who can't handle formula.

Video: Sell your body to science

Three bad reasons to buy a home

Yes, we've all heard the reasons that everyone will benefit from homeownership. Here's why that's not necessarily so.

By Liz Pulliam Weston

Fear stampeded a lot of people into buying a home during the recent real estate boom. Now we're seeing the even more fearsome fallout.

People who were terrified about being priced out of the real estate market are now horrified by their ever-rising mortgage payments. People who were afraid of missing out on the "easy money" of home-price appreciation are now anxiously realizing that what goes up can also come down.

Foreclosures are spiking. Sales and prices are stalling. Lenders are finally tightening up ridiculously loose lending standards, just at the point where many people are realizing they can't afford the mortgage they have and desperately need a new one.

Despite all of this, I still hear from people who are pressuring themselves into buying a house even when it's not something they necessarily want or need.

It's a fact that homeownership is a great way for most people to build wealth over time. But that doesn't mean everyone should be a homeowner. It's a bigger commitment and more expensive than most first-time buyers ever realize. You should have a clear idea of what you're getting into before you commit to 30 years of payments -- and you shouldn't let any of the following popular legends guide your decision.

'It's a good investment'

Sometimes yes, sometimes no.

Nationally, home prices rose 50% between 2000 and 2005, and in more than 30 cities -- including San Diego, Los Angeles, Miami and Washington, D.C. -- prices doubled.

But that's not the norm. In the 30 prior years, from 1969 to 1999, the average appreciation for homes exceeded the inflation rate by a little more than 1 percentage point. Compare that to stocks, which bested inflation by 7 percentage points in the same period.

And appreciation isn't a given, as homeowners in Detroit, Santa Barbara, Calif., and Kokomo, Ind., are learning.

So far, the price declines have been pretty mild. Let's hope we don't see a repeat of the real estate recessions that gripped Boston, Dallas, Houston, Anchorage and Southern California in the 1980s and 1990s.

After dropping more than 20% in the 1990s, for example, Los Angeles home prices took almost 10 years to regain their peak, says real estate expert John Karevoll, an analyst with DataQuick Information Systems. Anyone who lived here during that time knows people who were upside down -- owing a bigger mortgage than the home could be sold for. Thousands of people simply walked away from houses they couldn't sell, trashing their credit ratings in the process. Lenders slashed the prices on foreclosed homes to get rid of their burgeoning inventories, which further drove down property values. It was an ugly cycle that, once started, was hard to stop.

Even when prices are perking along normally, though, your home may benefit your bottom line less than you think. Home-price appreciation figures don't take into account the considerable amounts homeowners shell out along the way. The Wall Street Journal once estimated a typical homeowner over 30 years would pay nearly four times the house's purchase price in maintenance, repairs and improvements.

A home is primarily a place to live. Its value as an investment is secondary and certainly is no replacement for a well-diversified portfolio of stocks and bonds.

'I'm tired of throwing away money on rent'

Normally, renting is cheaper than owning. But in some cities, soaring real estate prices have made renting so much cheaper that it's getting really tough to make the case for becoming a homeowner.

For many people, the choice is between renting an affordable place in a good neighborhood and straining to buy either a less desirable place or one that requires a tortuous commute.

And as we're seeing, many people stretched themselves way too far to buy houses. They opted for adjustable mortgages or loans with exotic terms; what initially seemed like reasonable payments suddenly spiked, throwing financial lives into chaos and contributing to the current high delinquency rate.

You're not really throwing money away when you send a check to your landlord, anyway. You're exchanging it for a place to live. You're also getting flexibility and freedom -- things you sacrifice when you buy a home.

When you're a renter, it's the landlord, not you, who is generally responsible for maintenance, repairs and the toilet that blows up in the middle of the night. If the neighborhood should start to slide, or you get or lose a job, you can up and move, often with just a few weeks' notice.

It's true that you may have to deal with rising rents and recalcitrant landlords. Homeowners, however, are often stuck with rising taxes and maintenance costs, as well as recalcitrant neighbors.

Moving is never fun, but moving when you own a home is an expensive, time-consuming process. Finding a buyer can take months in all but the hottest markets, and you should figure selling costs will eat up about 10% of your home's value, once you add agent commissions and moving expenses. On a $250,000 home sale, that's like piling up $25,000 in cash and setting fire to it -- that much of your equity is gone for good.

In other words, homeownership is more like marriage; renting is more like living together. Make sure you're ready to be wedded to a house before you propose to leave behind life as a renter.

'I need the tax deduction'

Buying a house just for the mortgage break would be like giving somebody a buck just to get 35 cents or less in return.

That's because your write-off is limited to your tax bracket. If you're in the top federal tax bracket, every dollar you pay in mortgage interest only saves you 35 cents in taxes. Most people get even less, since they're in the 25% or lower tax brackets.

Don't misunderstand -- the tax break is nice, and you need somewhere to live. But you should make sure you can really afford to own a home before you take the plunge.

Remember that many of the real costs of owning a home aren't deductible. Uncle Sam won't give you a break for insurance, repairs or maintenance, for example -- and those costs can really add up.

Most homeowners should plan to spend at least 1% of their home's purchase price each year on maintenance and repairs, says finance expert Eric Tyson -- and more if they plan to hire someone else to do all the work. Tyson, a co-author of "Home Buying for Dummies," recommends setting aside some money each month in an emergency fund. You may not spend the whole amount every year, but sooner or later a big expense will come along -- a new furnace or roof, for instance -- that will consume several years' worth of savings.

If you fail to maintain your home properly, you'll pay even more when it comes time to sell. Many buyers won't even bid on a property that shows significant neglect. Even in hot markets, buyers are likely to ask for expensive concessions to pay for the repairs you should have been doing all along.

The key tests

The best advice on the issue of whether to buy remains the time-tested version: Do it when it's right for you. That means being able to agree to all the following statements:

I plan to stay put for at least three years. If the real estate market in your area is weak, you may need even longer for price appreciation to offset the costs of selling and moving.

I can swing all the costs involved. That requires, most importantly, having enough cash for a decent down payment (which in today's lending environment may mean at least 5% of the purchase price). I'm also a fan of using good, old-fashioned fixed-rate mortgages -- either the 30-year variety or hybrid loans that are fixed for as long as you plan to remain in the house.

If you can't swing the payments with one of those loans, you probably can't afford the place. (If you are contemplating a less traditional loan, make sure you find out how high the payments can go and determine whether you could afford to pay them.) Then make sure you can afford all the incidental costs, including taxes, insurance, homeownership association dues and assessments, repairs and maintenance. It's not a bad idea to limit your total housing outlay to 25% or 30% of your gross income, especially if you want to have money left over to save for retirement, fund your children's college educations and take the occasional vacation.

I want to be a homeowner. Houses are expensive and complicated to buy, finance and maintain. Appreciation is far from a given. If you don't have a strong desire to own your own walls, and do what it takes to keep them in good shape, you're probably better off remaining a renter -- at least for now.