KLCI Shoots Past 1,400 Points

PETALING JAYA: The KL Composite Index (KLCI) yesterday crossed 1,400 points for the first time as plantation stocks led by IOI Corp Bhd and Kuala Lumpur Kepong Bhd soared after the crude palm oil price breached RM2,900 per tonne.

Other market heavyweights posted sharp gains on strong foreign interest, with Bursa Malaysia Bhd and Bumiputra-Commerce Holdings Bhd among the biggest advancers.

The KLCI surged 13.27 points, or nearly 1%, to 1,411.62 yesterday for the third consecutive day of double-digit gains and the fifth straight session of advances.

Total market turnover rose to 2.12 billion shares worth RM2.57bil, compared with last Friday's volume of 1.9 billion shares valued at RM2.2bil.

Shares in exchange operator Bursa Malaysia led gainers, advancing RM1.60 to a new high of RM16.30 amid expectations that rising trading volume would translate to higher income.

Dealers said local sentiment had been firming up over the past few days, fuelled by growing corporate earnings and improving outlook for the domestic economy.

The local bourse also benefited from rising stock prices across Asia, with the indices in South Korea, Hong Kong, Australia, Indonesia and India closing at record highs yesterday.

A bank-backed brokerage, in its weekly outlook yesterday, said the global equity outlook continued to remain upbeat despite soaring crude oil prices and lingering concerns over the health of the US economy.

Another brokerage, Inter-Pacific Research, sees an exciting week, with a steady flow of economic news hogging the headlines.

Analysts said the market broadly was expecting a further cut in borrowing costs at the US Federal Reserve's policy meeting tomorrow.

The US is also expected to release its third-quarter gross domestic product (GDP) data this week.

An interest rate cut would help boost the sagging US economy, which is facing a slump in the housing sector. Such a move would, however, weaken the dollar and stoke inflation in the world's biggest economy.

The greenback fell to a record low against the euro yesterday and continued to weaken against other currencies, including the ringgit.

Analysts said the weak dollar had contributed to rising crude oil and gold prices.

The Nymex crude oil breached US$93 per barrel for the first time in Asian trade yesterday, while spot gold hit US$793 an ounce – its highest since 1980.

Crude oil – which has surged 63% year-to-date – has fuelled demand for palm oil as an alternative fuel source.

The price of the country's main agricultural commodity export has risen almost 50% this year.

KLCI Rallies To New High On Strong Earnings

By IZWAN IDRIS

PETALING JAYA: Shares on Bursa Malaysia rallied to a new high yesterday, fuelled by improved investor appetite for stocks amid a healthy outlook for corporate earnings and favourable domestic economic conditions.

Plantations companies IOI Corp Bhd and Kuala Lumpur Kepong Bhd advanced after the benchmark crude palm oil (CPO) futures contract hit RM2,800 a tonne for the first time.

Other top gainers included SP Setia Bhd and exchange operator Bursa Malaysia Bhd, partly on speculation that foreign funds were buying in as the appreciating ringgit raised the appeal of quality local companies.

The benchmark KL Composite Index rose 20.08 points, or 1.46%, to close at 1,398.35 yesterday.

“Some of the results announced by blue-chip companies during this reporting season were fantastic,'' MIDF Amanah Investment Bank analyst S. Sharath said.

Bursa, Public Bank Bhd and DiGi.com Bhd were among the top companies that reported strong profits for their most recent quarter. All three stocks were traded to record highs yesterday.

But heavyweight Tenaga Nasional Bhd (TNB) shares were down 20 sen at RM9.25, despite reporting on Thursday a big jump in earnings for the year ended Aug 30.

Most analysts, however, maintained their “buy'' call on the counter, largely due to the company's cheap valuation versus other big-cap stocks on the bourse.

TNB shares have fallen 15% year-to-date against the KLCI's 25% rise during the same period.

Shares in Hong Leong Bank Bhd also gained yesterday, putting on 35 sen to RM6.25, after the bank said it would take a stake in a small-sized commercial bank in China.

Rising share prices around the region also boosted local sentiment, despite record high crude oil prices and the sluggish performance of US stocks overnight.

All major regional indices were up except New Zealand and Vietnam's. South Korea's Kospi Index led the advances with a 2.6% gain.

In Hong Kong, the Hang Seng Index powered to a fresh high of 30,405 points, or up 1.8%.

The Nymex crude oil futures contract spiked up to above US$92 a barrel in Asian trade yesterday, ahead of the US session. In London, the Brent was above US$88 per barrel in early trading.

Service Charge, Management Fee, Trustee Fee and Fund Expenses (Unit Trust)

I've found out that many are still confused with charges and fees imposed in unit trust investment. To make it simple, service charges are directly related to investors while other fees are indirectly related. Why do I say so? This is because investors have the right to know how's the net income is calculated for a particular fund and what are the expenses involved.

Service charge of up to 6.5% of NAV per unit (equity and balanced) or 0.25% of NAV per unit (bond and money market) is applicable upon the purchase of units of the fund by investors [Initial Investment(II)]. (This include also during "Standing Instruction"(SI) / "Direct Debit Instruction"(DDI) / "Additional Investment" (AI).)

As for other fees imposed are subjected to the annual operating expenses involved in running a fund. These expenses are deducted from the gross income of the fund.

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Take for example:
Public Ittikal Fund (P ITTIKAL)
Annual Management Fee: 1.5% per annum of NAV
Annual Trustee Fee: 0.07% per annum of NAV (min RM18K, max RM600K)

Based on "Accountants' Report" in Master Prospectus of Public Series of Shariah-Based Funds expires on 29 April 2008 (pg. 128). Statement of Income and Expenditure for the years ended 31 May.

The investment income for the fund for year 2007 is RM240,515,000

The expenditure needed:
Trustee's fee = RM463,000
Management fee = RM22,261,000
Audit fee = RM6,000
Other expenses = RM396,000

Total expenditure accumulates to RM23,126,000

Net Income Before Taxation = Investment Income - Total Expenditure
RM240,515,000 - RM23,126,000 = RM217,389,000

Taxation amounted to RM6,729,000

Net Income After Taxation = RM217,389,000 - RM6,729,000 = RM210,660,000

From here we noticed that 9.62% of the investment income is deducted for expenditure and 2.8% of the investment income is deducted for taxation.

Based on the percentage deducted from the income achieved, I'm sure most doesn't bother much regarding the fees. This is due to the fact that in a business, everyone work for salary. For a small amount to pay for the profit we can make in return, in my opinion is well deserved.

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If anyone wants to know more about Public Mutual funds or anything related, don't hesitate to contact me.

12 Steps To Become A Millionaire

You don't have to own the company or be a CEO. Here's how to build a rich nest egg one paycheck at a time.

By Kiplinger's Personal Finance Magazine

A number of the people profiled in "Millionaires tell how they did it" made their millions as entrepreneurs. But working for the Man doesn't mean you have to be a wage slave or resort to buying lottery tickets to strike it rich. The trick is to maximize your income on the job (and know when to move on), make the most of your employee benefits and tax breaks and use that extra money to start investing.

1. Keep your eyes peeled for better ways to do your job. Streamline a procedure, shave costs, create a new profit center, become an expert on a specific topic, volunteer for a company committee -- anything that will make you stand out as a prime candidate for a promotion or a pay boost.

2. Don't be afraid to negotiate. In a study of master's degree graduates from her university, Carnegie Mellon economics professor Linda Babcock found that those who negotiated their first salary boosted their pay by 7.4% compared with those who didn't bargain.

3. Get your ducks in a row and your numbers on paper. If possible, quantify how much your efforts add to the company's bottom line. If that's not feasible, spotlight your value with comparable salaries for workers in your position from a Web site, such as Salary.com, or from a professional association.

4. Plot your strategy when it's time to move on. Create a professional-looking page on MySpace that tells prospective employers why you're an exceptional candidate, recommends John Challenger of the outplacement firm Challenger, Gray & Christmas. And don't neglect more conventional networking: Join a professional association or show up at school reunions toting business cards.

Milk your benefits
5. Contribute as much as you can to your 401(k) and other tax-deferred retirement plans. You'll not only build a bigger nest egg, but you'll also cut your tax bill. In the 25% federal tax bracket, every $1,000 you contribute to a 401(k) trims your taxes by $250. And you'll save on state income taxes, too.

6. Flex your tax-saving muscle. Contribute pretax dollars to a flexible spending account to pay for dependent care or out-of-pocket medical expenses. If you set aside $1,500 per year and you're in the 25% bracket, avoiding federal income and Social Security taxes means Uncle Sam will subsidize almost $500 of your expenses.

7. Review your tax withholding. If you're expecting a refund this spring, you're having too much tax withheld from your paycheck -- and making an interest-free loan to Uncle Sam. That's no way to become a millionaire. Put more money in your pocket by using Kiplinger's withholding calculator and then filling out a new Form W-4.

8. Stash savings in a Roth IRA if you're eligible. Withdrawals in retirement, including decades of compounded earnings, will be tax-free. This year, income-eligibility limits for a Roth increase to $114,000 for individuals and $166,000 for married couples.

Invest like crazy
9. Don't delay. The quicker you get a jump on putting money aside, the easier it will be to stuff a seven-figure cushion. If you start at age 25, for example, investing $286 per month will get you $1 million by age 65, assuming you earn 8% annually.

10. Invest automatically, either through your employer's retirement plan or by setting up a regular deposit to a mutual fund or broker. You'll never miss the money, and you'll avoid two big mistakes: buying too much when stock prices are high and not buying at all when prices fall.

11. Watch for fund fees. The more you pay, the tougher it is to earn an above-average return. The typical hedge fund, for example, takes 20% of any gains, a huge hurdle to overcome. A better bet: no-load mutual funds with expense ratios of 1% or less. If you trade individual stocks, watch those commissions.

12. Keep it simple. Be wary of get-rich-quick schemes or sales pitches for complex investments, such as oil-and-gas partnerships, that trade on the millionaire cachet to lure investors into buying high-fee products they don't understand. Most millionaire households accumulate their wealth over the long term by sticking to a regular investing plan in a balanced portfolio.

Published Feb. 27, 2007

China A Strong Buffer

CAPITAL TALK
By i Capital

The US subprime problem will not be catastrophic because central banks and monetary policy have become more sophisticated and anticipatory. Sources of US economic growth have also broadened due to the change in forces shaping the global economic structure. One of the most important forces is the rise of China

CHINA is now the world's fourth largest economy and is projected to overtake Germany as the third largest soon. China contributed 17% to the world’s gross domestic product (GDP) growth in the last five years as opposed to 16% from the US. The emergence of China has a significant impact on the world economy.

First, commodity prices have surged due to a large extent to China’s strong growth. Commodity-producing countries have benefited tremendously from the persistently high commodity prices. Second, the world economy had been experiencing low inflation rate despite the sustained strong global economic growth and high commodity prices in the past seven to eight years.

This in turn enabled central banks to maintain a low interest rate environment, which facilitated economic expansion. China’s huge and cheap manufacturing capacity played an important role in creating this favourable condition.

Third, China’s rapid economic growth has lifted her purchasing power tremendously. China is now the world’s third largest importer. This has made her an important destination for many countries’ exports, hence lifting the growth rates of these countries. China's rise has made the world’s economic structure more balanced. The US has dominated the world economy since World War Two, giving rise to the phrase “when the US economy sneezes, the world catches a cold”.

With China becoming a major source of world economic growth, the world need not worry so much that the global economy will collapse should the subprime problem cause the US economy to slow down sharply.

Although China is still unable to take the place of the US completely, the impact of a US slowdown will be significantly reduced. The last time the US economy fell into a recession in 2001, China’s economy expanded by 8.3% and the world economy expanded 2.5%.

Some people may argue that exports are playing an increasingly important role in China’s economy, and a slowdown in the US economy will affect China’s growth significantly, hence limiting her ability to support the world economy.

Well, from 2002 to 2006 when the Chinese economy expanded above 9%, with the exception of 2005 and 2006, net exports contributed less than 10% to China’s real GDP growth. Consumption and investment were the main growth contributors, accounting for 80% to 90% of overall GDP growth.

In addition, US’ share in China’s exports has been rather constant in the last six years, hovering around 21%. Exports to the US account for about 7.7% of China’s GDP. Hence, a 10% fall in China’s exports to the US would shed only 0.77 percentage point off China’s GDP growth.

In 2001, China’s exports to the US still managed to grow 4.2% although the rate of growth was substantially slower than the 24.2% increase in 2000. Therefore, a substantial slowdown in the US economic growth is not expected to have a major impact on China’s economic growth.

While a number of Chinese banks have some exposure to the US subprime market, losses are expected to be small; hence, no material impact is expected on the economy. With China’s surging inflationary pressure, investors are also worried that the People’s Bank of China (PBC) will tighten monetary policy so aggressively that China’s economy will hard land.

i Capital thinks chances of this happening are almost zero. First, the inflationary pressure came mainly from food, whereby supply was affected by bad weather conditions and a disease outbreak.

In the first half of 2007, the core inflation rate, which excluded food and energy prices, stood at a mere 0.9%. Hence, the PBC is unlikely to raise interest rates aggressively in response to this temporary spike in inflationary pressure.

Second, while China’s stock market is still in a frothy state, the Chinese government is more likely to introduce direct measures to deal with the condition rather than implement indirect measures, such as an aggressive interest rate hike.

Third, 2007 and 2008 are very important years for China. The 17th National Congress of the Communist Party of China will be held next month. This is a very important meeting as new leaders will be elected to lead the country for the next five years. Hence, party leaders cannot afford to let the economy tank.

China will host the Olympics in 2008, a highly important event to boost her international standing. It is unlikely the Chinese government will let her economy slow down so much that social stability will be undermined.

Hence, taking all factors into consideration, as the subprime problem continues to unfold, i Capital believes that China will be able to play the stabiliser role she had played so well during the Great Asian Crisis. The world economy will still be able to grow reasonably well in the face of a sharp US economic slowdown.

An Inspiration To All

FROM BAIKONUR
By JANE RITIKOS

BAIKONUR (Kazakhstan): Dr Sheikh Muszaphar Shukor’s childhood dream came true when he blasted off into space, but his hope, before leaving Earth, was that he would be just the first of many more Malaysian Angkasawan to come.

“I’ve dreamt of this since I was 10 years old, and now I am living the dream of all Malaysians,” he said, just hours before launching into space at 9.22pm (Malaysian time) yesterday.

The dashing cosmonaut hopes his “impossible dream”, once it comes true, will make young boys and girls believe they can reach for the stars.

“I want to inspire them as the first Malaysian in space, just like Yuri Gagarin (the first man in space) and Neil Armstrong (first man on the moon) still inspire many today.

“I hope to make them believe in their capabilities and get them interested in science, mathematics and engineering.

“Hopefully after me, there will be more Angkasawan in the future,” he said.


Dr Sheikh Muszaphar smiling from inside the spacecraft minutes after the launch on Wednesday.

The orthopaedic surgeon, however, admits he expected to be the chosen one.

“To be honest I was not really surprised because I worked hard, was focused and motivated. I sacrificed everything – my life, surgery, business, my loved ones and modelling,” he said.

Dr Sheikh Muszaphar, however, believes that his trip to space is secondary to what he will learn and bring back from the experience.

“More important is what I can contribute to Malaysia, such as the technologies I learned from Russia that I hope to share with our scientists.

“I hope Malaysia will rally to enter a new era and one day, we’ll have our own space rocket and become a leader in the aerospace arena,” he said.

On a personal level, he looks forward to the life-changing experience in space, including gaining new spiritual experience in the skies.

“I want to share my experience of fasting and praying in space with Malaysians and all Muslims. I think space will change my life perception,” he said.

Fully trained and prepared, Dr Sheikh Muszaphar was calm and ready the night before his big day.

He spent his time reading the Quran and conducting sembahyang hajat, and calling his family and loved one.

He wants to succeed in his mission so as not to let down the scientists who had spent three years preparing for the experiments he will conduct.

Customising Portfolio Of Investment

Today's article explains the importance of having an investment plan and ways to devise an appropriate investment portfolio

EVERY investor aspires to earn the highest possible returns but this approach often ignores the need for an investor to first accept the volatility risk that comes with earning high returns.

It is best for investors, before making an investment, to ask themselves how much volatility they are able to withstand and work backwards to obtain a reasonable level of expected returns based on their risk appetite. If investors want higher returns, they should be prepared to take on greater volatility risk.

To better manage their expectations, investors first need to understand their behaviour towards volatility. This can be achieved by answering the following questions: the extent of losses one can bear in the short term before an investment earns a return; the time one has to stay invested; the need for the investment to provide immediate liquidity; familiarity with the investment and financial markets; available time for managing and learning about investments; and the expectations on returns.

Why is this important? Understanding oneself is a prerequisite to devising a personal investment plan and portfolio. Having a customised investment plan keeps the end objective of investing in focus.

It also helps counter pressure to go after what is hot in the market and avoid panic when markets suddenly turn downwards.

Aligning investment plans to risk profile

An investor can be generally classified into one of three risk behaviour profiles: aggressive, balanced and conservative.

An aggressive investor generally has the highest tolerance of volatility. He would, therefore, be comfortable staying invested in an instrument that may be making losses in the short term, but which could perform well in the longer run.

A conservative investor prefers minimal or no exposure to volatility and would be uncomfortable with short-term negative returns.



The profile of a balanced investor is between that of an aggressive and a conservative.

Once an investor has ascertained his risk behaviour profile, he can determine how much to invest in equities and fixed income or capital protected type of investments by adopting the “Strategic Asset Allocation” strategy. This tool forms the basis of allocating assets based on an investor’s risk profile independent of market condition (See Table 1).

An investor can maximise returns in the short to medium term by varying the allocation to each asset class, depending on the equity market environment. This can be done using the “Tactical Asset Allocation” strategy as shown in Table 2.

As the strategy requires active management of the portfolio, a great deal of insight and conjecture about the economy, financial markets and investments, investors are advised to work with financial advisers.

The next step is to select investment products in each asset class with attention to understanding the respective return, volatility and correlation profile with other investments.

As covered in the previous article, a superior portfolio is one that maximises return for a given level of volatility risk. That involves diversifying into various investments that have low or negative correlation to one another. Table 3 shows the various types of investments classified into different categories.

Given the current uncertain outlook for equities, investors should focus on investments that have less volatility in returns and low correlation to equity returns.

Examples of the former include fixed-income securities, under-researched growth stocks and structured products. And for the latter, commodities and foreign exchange.

Rebalancing portfolio



The final but often neglected or forgotten part to investing is to periodically re-balance the investment portfolio. Re-balancing involves buying and selling investments in the portfolio to bring the asset allocation for each asset class back to either the Strategic or the Tactical level.

Re-balancing automatically results in cutting back on performing investments and adding to under-performing investments, provided the case for investing in the latter is still valid.

Investing should involve proper planning, knowing one’s behaviour towards volatility and understanding the reasons for changes made in portfolio, because failure to do so could lead to unfulfilled expectation on investing.

Source: TheStar October 4, 2007

Confidence Returns To Most Markets

PETALING JAYA: Investor confidence appears to have returned in most stock markets after the Dow Jones Industrial Average hit a record 14,088 points on Monday.

This is following suggestions from former US Federal Reserve chairman Alan Greenspan and Citigroup Inc that the credit slump might be coming to an end.

The Hong Kong and Singapore bourses continued to reach all-time highs yesterday, with the Hang Seng Index closing up a whopping 3.9% to 28,200 points and the Straits Times Index jumping more than 1% to 3,794 points.

The KL Composite Index (KLCI), meanwhile, rose for the fifth consecutive trading day, surging 21.7 points, or 1.6%, to 1,368.7 points while the second board index gained 0.34-point to 106.28.

Market breadth was healthy, as gainers outnumbered losers 605 to 253 while 284 counters were unchanged. About 1.6 billion shares valued at some RM2.9bil changed hands.

Buying was selective and based on themes like oil and gas, plantation, construction and property-based companies.



Among the top gainers were IOI Properties Bhd and Malaysian Airline System Bhd, which jumped RM1 and 75 sen to RM13.90 and RM5.30 respectively.

MIMB Investment Bank head of equity research Pong Teng Siew said liquidity had returned to the market although not broadly, thanks to buying by the local funds.

Meanwhile, he said, markets in Brazil, India and China continued to attract the interest of foreign funds.

“Asia has little exposure to the US sub-prime mortgage market and still has great growth stories,” he said, noting that credit growth remained strong in Asian countries. He said their monetary systems were insulated from the US' credit woes compared with European banks, which had a greater degree of exposure.

Pong is optimistic that the KLCI looked set to breach a new high of more than 1,400 points by year-end.

Nonetheless, investors should exercise caution towards year-end, as fund managers were unlikely to maintain the buying momentum for long, he said.

“Fund managers may take a break and not be overly aggressive as it would make their job of outperforming in the following year more difficult,'' he added.

OSK Investment Bank head of research Kenny Yee said sentiment had definitely improved despite indications of lower earnings from international investment banks.

“Things are more visible and out in the open. The element of uncertainty has been lifted,” he said, adding that investors had already factored in the losses.

“There are no more surprises. As long the US economy does not fall into a recession, the situation is anticipated to remain stable,” Yee said.

TA Securities head of research Kaladher Govindan concurred, saying that market perception had changed as investors were now relieved that the sub-prime issue was not going to delay economic growth in the US.

“They can see the magnitude of the problem and expect a recovery soon,” he said, adding that it was only a matter of time that the KLCI would reach a new high like other regional bourses.

TA, he said, was maintaining its 12-month target of 1,520 points.

Source: TheStar 0ctober 3, 2007

999 For All Emergencies (Malaysia)

By DEVID RAJAH

devid@thestar.com.my

PUTRAJAYA: It's back to 999 to report all forms of emergencies.

And callers can expect their calls to be answered within 10 seconds or after four rings.

Cellular phone users who had been dialling 112 could also dial the 999 numbers to reach the emergency call centre.

Unlike before people need not dial three sets of numbers (999, 994, 991 and 112 - for cellular phone users) to reach the different emergency and rescue service providers in the country.

Deputy Energy, Water and Communications Minister Datuk Shaziman Abu Mansor said specially-trained professionals from the 999 Emergency Call Service Centre would handle all emergency calls and reroute them, complete with digital data on the type of emergency and location.

The calls would then be handled by the respective emergency service providers like the police, ambulance, fire stations and civil defence rescue units.

Shaziman said the 999 call centre would be fully managed by Telekom Malaysia (TM) Bhd and a nationwide campaign on the use of a single number was being carried out.

“By January next year, the 991 and 994 numbers will not be used anymore, but those who still use it to call emergency service will be rerouted to the emergency call centre located throughout the country,” he told reporters during a soft launch of the single emergency number and awareness campaign called Satu Negara Satu Nombor – 999.

Shaziman said the problem of emergency calls not being answered should not arise as the unattended calls would be passed to the next available call centre.

There are a total of eight emergency call centres in the country, with the latest centre opening in Malacca.

Parallel emergency numbers, such as 991 for the Civil Defence Department and 994 for Fire and Rescue, were introduced in 1991, so that such calls could be handled directly by the departments concerned.

Before that, a single emergency number 999 was used to report all emergencies.

Shaziman said the Government decided to develop an efficient system to regroup it back to 999 after public complaints over the four emergency numbers and the many disturbing crimes in the country.

“It is not easy to remember several emergency numbers when a person is in distress. Even I am confused at times,” he said.

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I think it's a good move since there won't be so many phone numbers for us to remember anymore. When emergency arises, we don't actually have that much time to think of that. :) " Satu Negara, Satu Nombor "

10 Financial Urban Legends

Writing checks in red ink won't prolong the float, and yes, you really do have to pay income tax. Here's a look at these and other lingering myths.

By Bankrate.com

Every now and then you read about a retiree snookered in a Nigerian bank scam, or some nitwit marched off to jail while still insisting the income tax is illegal, and you just shake your head and wonder who could believe that guff.

Unfortunately, a lot of people.

Just ask Barbara Mikkelson, co-founder and researcher at Snopes.com, a Web site dedicated to the destruction of urban myths. Mikkelson spends a lot of time getting to the bottom of financial tall tales that she encounters.

So does Catherine Williams, vice president of financial literacy at the nonprofit credit counseling agency, Money Management International. Williams has a slew of oddball beliefs folks have shared with her during the company's educational seminars.

"We get into situations where we can't pay our bills, and we become like 3-year-olds: the 'dog ate my homework' routine," she says of Americans' willingness to latch onto urban legends. "We want to believe there is some excuse, and something will bail us out of still owing the money."

Legends and tall tales

It doesn't help that rooted in many myths is the tiniest grain of reality, she adds. The trick is extracting that truth. Check out this collection of legends:

• Myth No. 1: You can float a check longer if you write in red ink. The theory is that a bank's equipment can't scan red ink, so it takes longer to process the check.

Poppycock, says Williams. The color of the ink makes no difference.

"However, gel ink doesn't image well, which makes it difficult to verify the signature and the check," says Tracey Mills, of the American Bankers Association. "As a result, the paying bank cannot authorize the transaction, and chances are the check will be returned to the creditor or merchant."

Then, instead of getting some extra time on the float, you are socked with a returned-check fee.

• Myth No. 2: You don't have to pay income tax -- it's illegal. Only foreign income is subject to Uncle Sam's cut, the story runs, and there's a form you can file to exempt yourself. But no one will tell you about it.

The truth is, there is no form.

"I have this flat spot on my forehead because I'm constantly striking it with the palm of my hand," Williams says. "Somebody has way too much time on his hands, usually because he's either done something illegal or he hasn't followed the rules of the game. So he looks for something that might get him off the hook for a period of time."

Sorry, Charlie: You must fill out your IRS forms before April 15.

• Myth No. 3: I'm under 18, so I can't be held accountable for a debt. (Variation: Credit-card debts are wiped out when you turn 19.) Spring-breakers love to use this one to justify running up a cruise or resort-hotel bill on their credit cards.

This one is only partly myth, because it is true that people younger than 18 cannot sign a legally binding contract. So they can't take out a loan or sign a credit-card agreement. "You are legally an infant until you are age 18," Williams says. However, credit-card companies will allow a minor to have a card -- if an adult has co-signed the agreement or added the minor to their account as an authorized user.

So someone will pay -- the adult who signed on the dotted line.

• Myth No. 4: My hotel key card has my credit-card information. The ramification is that you'd better clutch it tightly or a con will decode it and rack up a big bill.

This urban legend has an actual source: the police in Pasadena, Calif. A fraud-detection team had honed in on one such hotel key and notified each other before verifying whether it was standard practice in the industry. It wasn't, but they didn't find out until after the information leaked to the public and spread like wildfire.

The Pasadena Police Department now has devoted a page to this accidental myth at its Web site. It says, "Detectives have contacted several large hotels and computer companies using plastic card key technology and they assure us that personal information, especially credit card information, is not included on their key cards. The one incident referred to appears to be several years old, and with today's newer technology, it would appear that no hotels engage in the practice of storing personal information on key cards."

Luckily, the news has risen only to the annoyance level throughout the hotel industry, says Joe McInerney, president and CEO of the American Hotel and Lodging Association. "It seems to crop up in 18-month cycles. But people are still staying in hotel rooms."

The manufacturers who churn out these magnetic-strip room-key cards employ three embedded and encrypted tracks. Most hoteliers use track three, which contains locked information listing the guest's room number and check in/out dates. The remaining tracks -- if supplied by the hotel's property-management system -- provide additional, limited guest information like a folio number or name to identify guests at point-of-sale terminals located throughout the hotel.

"Worst that ever happens to me is the key stops working promptly at 12:01 and I have to go to the reception desk to get back in my room," McInerney says.

• Myth No. 5: Boycotting a few gasoline brands brings gas prices down. Poor Exxon and Mobil. They often show up as the bad guys in a mass e-mail urging Americans to avoid their pumps on a particular day.

Its easy-to-understand language makes the plea plausible. The trouble lies in the fact it's too simple -- and economics don't work that way. For starters, gasoline is what's known as a fungible commodity -- if one company has an oversupply, it sells it to a competitor. No matter who you buy from, the basic supply numbers remain the same.

Furthermore, prices at all the nonboycotted outlets would rise, thanks to the temporarily limited supply and increased demand, making the original prices look cheap by comparison, according to Snopes.com.

Besides, the industry is too large for a boycott of two companies to make a dent, says Stephen Ciccone, University of New Hampshire assistant professor of finance.

Unsigned credit-card danger

• Myth No. 6: It's better if you don't sign the back of your credit card. Some well-meaning pigeon decided one day this would protect him from identify theft.

Unfortunately, in the real world, it only "protects" you from having the merchant accept your payment at the checkout counter, says Mills. Not to mention that an unsigned card in the hands of fraudsters is much easier to use for unauthorized purchases. They can just sign the card themselves. Then their signature will always match the receipt signature.

• Myth No. 7: You can make a pile of dough by helping a foreigner solve his money problems. "Hello, my name is unpronounceable, and I need to get money out of my country. Will you let me use your bank account?" is the gist of this e-mail plea.

It's called the Nigerian bank scam, and it's among Mikkelson's favorites, mainly because the number of people asking about it is huge. "It is impossible for the average person to figure out what is going on unless they know there is such a thing as a Nigerian scam," she says.

For one, the back-story changes constantly to reflect current events. Expect a new variation every time a foreign leader dies or is deposed. Presently, Yassar Arafat's widow is supposedly seeking help moving his secret bank account out of enemy hands, and the sergeant who found Saddam Hussein's hidden gold wants help keeping it out of insurgent hands.

• Myth No. 8: You can now opt out of having credit bureaus give your information to anyone who asks. Just call (888) 567-8688 and give them the Social Security numbers of everyone in the household in a single call, says the message. But hurry -- you only have 60 days to take advantage of this ability.

The credit-reporting bureaus are working hard to debunk this one, if only to stop people from calling that number. It merely connects you to an operator who can help you opt out of receiving pre-approved credit offers. Keep in mind that if they weren't allowed to give out credit information on you, they wouldn't exist.

The grain of truth lies in the fact that companies are required by law to inform their customers of their privacy policies. (Remember the flood of confusing legalese that showed up in your mailbox from every department store credit card prior to July 1, 2000?) If you don't want them to sell your personal information, you must call them directly -- one by one -- to halt the practice.

• Myth No. 9: You can buy your way out of points on a speeding ticket. If you pay a bit more than your fine actually is, the state will send you a refund check for the difference.

Don't cash it and they can't assess points because the transaction isn't complete.

Hmmm, sounds good -- a way to circumvent rising insurance rates for a mere $5. But when Mikkelson checked into it, she discovered the popular e-mail advice originated in Australia. Maybe it works for Aussies, but Americans aren't so lucky.

• Myth No. 10: Hotel Bibles often have $100 bills tucked into them. Heard the one that Gideons leave $100 bills in their hotel Bibles to reward folks who turn to the Good Book?

Mikkelson rejoiced when she actually discovered such a treasure during her honeymoon -- and found out a few hours later that her new husband was pretending to be God. The only thing Gideons leave behind is the book.