LONDON (AP) -- Cadbury PLC revealed Monday it has received approaches from The Hershey Co. and Italy's Ferrero International SA as it launched a robust defense against a hostile 9.8 billion pound ($16.3 billion) from Kraft Foods Inc.

Cadbury Chairman Roger Carr said the statements of intent from Hershey and Ferrero were too preliminary to start proper talks as he warned shareholders not to let Kraft "steal your company with its derisory offer."

The British chocolate and gum maker also raised its long-term performance targets to play up its position as a strong independent company.

The prospect of the 195-year-old company falling into foreign ownership has caused some consternation in Britain were it is a much-loved brand -- a member of Cadbury's founding family has been publicly critical and the country's leading labor union fears large-scale job losses.

But Carr left open the door for some kind of tie-up, saying that Cadbury was open to discussion with any potential suitor -- Kraft included -- that made a compelling offer that fully valued the company.

"As yet, we've only had one offer, which is far from compelling, it is ... derisory on a good day because it's falling, and we've had a statement of intent from two people that are yet to come forward with an offer," Carr told reporters.

"We have told them very clearly what the rules of the game are, but until they come forward ... that

Everyone knows the secret to investment success is to buy low and sell high. The problem is most of us lack clairvoyance.

We weigh in on some of the most common mistakes investors make, and while it's easy to see that chasing hot stocks -- the most frequently cited mistake -- would be an exercise in futility, there are other pitfalls to watch out for on the road to retirement.

There are never any guarantees when investing, but avoiding these seven missteps will better your chances of success.

Mismatching Investment With Goal

Need that money for retirement in the next couple years? Don't put it in a hot emerging-markets fund.

Consider when you'll need access to your money. This will help you avoid unnecessary transaction fees, penalties and risk.

For some goals, such as paying for college, it may make sense to use a mix of investments, says Gail MarksJarvis, author of "Saving for Retirement (Without Living Like a Pauper or Winning the Lottery)."

"If you are saving for college and your child is within three years of going to college, you've still got seven years until that last year of college," she says.

So while the bulk of short-term college savings should probably be very safe in CDs or short-term bonds or

If you want to be rich, you need to stop acting like you have money in the bank and start living beneath your means. That's the message in the most recent book from Thomas J. Stanley, author of "The Millionaire Mind" and the "The Millionaire Next Door."

Bankrate asked Stanley to explain what's fueling America's hyper-consumptive ways and unquenchable thirst for top-shelf brand vodka -- among other indulgences.

Q: In your book "Stop Acting Rich...and Start Living like a Real Millionaire," you say that rich people don't necessarily act the way that the rest of us might think they do. In fact, millionaires are more likely to be extremely frugal. Why is that?

A: There are many factors that explain frugality among the rich.

First, their parents tended to be not only frugal, but well-disciplined. Most millionaires today came from middle-class backgrounds. Their parents were not wealthy, but somewhat comfortable. Millionaires tell me that they never felt embarrassed by where they lived or the type of home they had. To a considerable degree, it is the uniquely American upward socioeconomic mobility that fuels much of the hyper-consuming engine of the market for luxury goods, prestige products, upscale brands, expensive homes and so on.

Beyond income, one's vocation has much to do with accumulating wealth. Educators, engineers, business owners and retail store managers have a tendency to live below their means and to be quite efficient in

SAN DIEGO (ETFguide.com) - Warren Buffett is finally spending some of Berkshire Hathaway's cash hoard. And he's buying a railroad company. As the greatest investor of our generation, does his latest acquisition signal a market bottom?

Dissecting the Deal

Buffett's firm, Berkshire Hathaway (NYSE: BRK-A), agreed to buy Burlington Northern Santa Fe Corp. (NYSE: BNI) for $100 a share valuing the deal at $44 billion.

Over the past year, Burlington's stock price has lagged the performance of its peer benchmark, the Dow Jones Transportation Average (NYSEArca: IYT).

How much did Buffett pay?

The analysts surveyed by Bloomberg, say he paid 18.2 times Burlington's 2010 estimated earnings, which is higher than the S&P 500's multiple according to the same analysts. Not very Buffett like, especially considering he rarely pays a premium when putting new capital to work. The only other plausible explanation is that Buffett sees hidden value in Burlington.

A Consummate Contrarian

As a contrarian to the bone, Buffett decided to pull the trigger on a company within an ailing industry

Back in 1999, Robert G. Hagstrom wrote a book about the legendary investor Warren Buffett, entitled "The Warren Buffett Portfolio". What's so great about the book, and what makes it different from the countless other books and articles written about the "Oracle of Omaha" is that it offers the reader valuable insight into how Buffett actually thinks about investments. In other words, the book delves into the psychological mindset that has made Buffett so fabulously wealthy. (For more on Warren Buffett and his current holdings, check out Coattail Investor.)

Although investors could benefit from reading the entire book, we've selected a bite-sized sampling of the tips and suggestions regarding the investor mindset and ways that an investor can improve their stock selection that will help you get inside Buffett's head.

1. Think of Stocks as a Business

Many investors think of stocks and the stock market in general as nothing more than little pieces of paper being traded back and forth among investors, which might help prevent investors from becoming too emotional over a given position but it doesn't necessarily allow them to make the best possible investment decisions.

That's why Buffett has stated he believes stockholders should think of themselves as "part owners" of the business in which they are investing. By thinking that way, both Hagstrom and Buffett argue that investors will tend to avoid making off-the-cuff investment decisions, and become more focused on the longer term. Furthermore, longer-term "owners" also tend to analyze situations in greater detail and then put a great eal of thought into buy and sell decisions. Hagstrom says this increased thought and analysis

NEW YORK (AP) -- Warren Buffett has made bets on railroads before, but now he's all in. The billionaire investor's Berkshire Hathaway Inc. on Tuesday agreed to buy Burlington Northern Santa Fe Corp., making a $34 billion bet on the future of the U.S. economy.

Burlington Northern, the nation's second-largest railroad, is the biggest hauler of food products like corn, and coal for electricity, making it an indicator of the country's economic health. The railroad also ships a large amount of consumer goods -- including items imported from Asia -- from big Western ports like Los Angeles and Seattle.

Analysts say Buffett is planting both feet in an industry that is poised to grow as the economy gets back on solid ground. It would be the biggest acquisition ever for Berkshire Hathaway Inc.

Berkshire Hathaway already owns about 22 percent of Burlington Northern, and will pay $100 a share in cash and stock for the rest of the company. That was 31.5 percent premium on Burlington Northern's Monday closing price. The stock shot up over 28 percent Tuesday, to $97.66 in afternoon trading.

Shareholders have the option to convert their stock for a cash payment of $100 per share or receive Berkshire Class A or Class B common stock. Up to 60 percent of the deal is cash and 40 percent is in stock.

"Berkshire's $34 billion investment in BNSF is a huge bet on that company, CEO Matt Rose and his team, and the railroad industry," Buffett said in a statement.

"Most important of all, however, it's an all-in wager on the economic future of the United States. I love

DEARBORN, Mich. (AP) -- Ford, the only Detroit automaker to dodge direct government aid and bankruptcy court, surprised investors with net income of nearly $1 billion in the third quarter and forecast a "solidly profitable" 2011.

The automaker said Monday earnings were fueled by U.S. market share gains, cost cuts and the Cash for Clunkers program, which drew flocks of buyers to showrooms this summer. Ford's shares rose 53 cents, or 7.6 percent, to $7.53 in afternoon trading.

The latest results signal that Ford's turnaround is on more solid ground. The company lost more than $14.6 billion last year and hasn't posted a full-year profit since 2005. While it made a profit in the second quarter, that was mainly due to debt reductions that cut its interest payments.

Ford, based in Dearborn, Mich., reported third-quarter net income of $997 million, or 29 cents per share. Its profit forecast for 2011 was a step above previous guidance of break-even or better for the year.

Ford's key North American car and truck division posted a pretax profit of $357 million, the division's first quarter in the black since early 2005. Ford cited higher pricing, lower material costs and increased market share for the improvement.

Excluding one-time items, Ford earned 26 cents per share, blowing away analysts' expectations of a loss

NEW YORK (AP) -- The dollar recovered from a fresh 14-month low against the euro on Friday after a pullback in U.S. equity markets spurred some greenback buying.

In midday trading, the 16-nation euro was at $1.5035 down from a new 14-month high of $1.5060 in overnight dealings. It changed hands at $1.5026 late Thursday.

The buck has taken a beating lately as strong earnings from some U.S. drug, technology and manufacturing companies spurred investors to sell the low-yielding "safe" dollar and buy riskier currencies that give higher returns.

That's been the ongoing trend since spring, as investors feel more comfortable with the idea of a global recovery from the recession. Instead of keeping money parked in super-safe U.S. Treasurys, they have been hunting for riskier investments that have the potential for bigger payoffs.

The euro broke above the psychologically important level of $1.50 on Wednesday for the first time since August 2008, despite statements of support from European finance ministers and European Central Bank officials in favor of a strong dollar.

But on Friday, a sense of caution gripped markets after mixed results from major corporations this week. The Dow industrials were down about 85 points at 9,996 in early afternoon trading. That helped the dollar.

The dollar rose to 91.87 Japanese yen from 91.29 yen. The British pound tumbled to $1.6347 from

Starting in 2010, anyone can convert a traditional Individual Retirement Account to a Roth I.R.A. That’s great news for people who previously were shut out of a Roth because their adjusted gross income was more than $100,000.

Especially if you want to leave retirement assets to family or friends, a Roth conversion is one of the simplest, best planning tools available. You avoid the requirement to take yearly minimum distributions starting at age 70 1/2, and that can leave more for beneficiaries if you don’t use the money yourself. And subject to certain restrictions, no tax is assessed when the money is withdrawn, so income can compound tax-free.

But this technique has a hefty price tag. You owe income tax on the amount you convert, which can be the entire account balance or part of it. And some people worry about what might happen years from now if Congress eliminates the Roth.

One possibility is that those who have already converted will have their gains untaxed, said Christopher R. Hoyt, a professor at University of Missouri-Kansas City School of Law. Another is that only the investment earnings — not the amount converted — will then be taxable.

For now, many lawyers and financial advisers have put that thought aside and are strongly recommending Roth conversions to clients who can afford to pay the income tax. Yet this advice can be hard medicine to take, for it goes against the conventional wisdom that one shouldn’t pay a penny of tax sooner than necessary, and the idea of writing large checks to the Internal Revenue Service for an uncertain future

If you've ever thumbed through a stock analysts' report, you will have probably come across a stock valuation technique called discounted cash flow analysis, or DCF for short. DCF entails forecasting future company cash flows, applying a discount rate according to the company's risk, and coming up with a precise valuation or "target price" for the stock.

The trouble is that the job of predicting future cash flows requires a healthy dose of guesswork. However, there is a way to get around this problem. By working backwards - starting with the current share price - we can figure out how much cash flow the company would be expected to make in order to generate its current valuation. Depending on the plausibility of the cash flows, we can decide whether the stock is worth its going price.

DCF Sets Target Prices
There are basically two ways of valuing a stock. The first, "relative valuation" involves comparing a company with others in the same area of business, often using a price ratio such as price/earnings, price/sales, price/book value and so on. It is a good approach for helping analysts decide whether a stock is cheaper or more expensive than its peers. However, it's a less reliable method of determining what the stock is really worth on its own.

As a consequence, many analysts prefer the second approach, DCF analysis, which is supposed to deliver an "absolute valuation" or bona fide price on the stock. The approach involves explaining how much free cash flow the company will produce for investors, over, say, the next 10 years, and then calculating how much investors should pay for that stream of free cash flows based on an appropriate discount rate. Depending on whether it is above or below the stock's current market price, the DCF-produced target

MILWAUKEE (AP) -- Bearing in mind that consumers will remain focused on low prices even when the recession ends, soft drink and snack maker PepsiCo Inc. said Thursday that it's creating new products at lower prices and plans to continue offering discounts in its Frito-Lay and beverage businesses.

The effort seems to be working for PepsiCo's Frito-Lay business, which posted revenue and volume gains in the third quarter. But the beverage business, with brands like Pepsi cola, continued to slump as consumers cut their spending and continued switching to healthier juices and teas.

Overall, the Purchase, N.Y.-based company said its fiscal third-quarter profit rose 9 percent, thanks in part to cost-cutting, even as revenue slipped 1 percent.

Chief Financial Officer Richard Goodman said PepsiCo has been offering more promotions at the end of each month, when consumers' budgets become more constrained. For instance, bags of chips may be promoted at two for $5 early in the month but fall to $2 each by the end of the month.

"We want to be able to make sure that at the beginning of the month or at the end of the month, they're buying our products," Goodman told reporters in a conference call after the company released its earnings report Thursday.

Consumers are so focused on cost they are willing to forgo getting more for a given price. PepsiCo's promotion to boost volume -- with no price increase -- on certain chips failed to gain traction and will be

Move your money to a higher-yielding account without sacrificing safety.

Still have cash parked in a money-market mutual fund? It's time to move it out. A year ago, when the stock market was in free fall and investors were seeking refuge, money funds were earning 2% or more. Now the yields, which track short-term Treasuries, are below 0.4%. Yet money funds still hold $3.5 trillion in assets, just about the same amount as they held a year ago, according to Money Fund Report newsletter. Prospects for higher rates are better at a bank, but even if you're willing to tie up your money for five years in a certificate of deposit, you'll be hard-pressed to find yields higher than 3.5%. And top one-year yields are only 2% or so.

Even as market forces undermine the earning power of your savings, don't let inertia add insult to injury. To find decent, supersafe yields now, you have to think outside the box. For example, you'll find some of the highest interest rates at community banks and credit unions. And your money is safe, as long as you know the limits of deposit insurance. If you're willing to step up the risk pyramid for a decent shot at higher returns, consider a short-term bond fund.

Safety Plus High Yields

You can earn as much as 5% on balances up to $25,000 (and sometimes more) at a community bank or credit union. For example, Union State Bank in Atchison, Kan., pays 5.01% on up to $25,000 in its My Rewards checking account. And you need a deposit of just $25 to open an account. (To find banks and

For most people, each and every day involves some type of financial decision. So how do you feel about your financial decision-making skills? If you think you are making sound choices, ask yourself this: Have you weighed the consequences of your choices against their apparent benefits? In many cases, the answer is no.

Let's take a look at six common financial choices that sound like smart moves, but could leave you scratching your head wondering where you went wrong.

1. Applying for a Line of Credit
Advantages: Starting a line of credit will diversify your credit sources, which is good news for your credit score. It also allows you to access funds you may need for large purchases, like buying a car, without having to scramble to arrange the funds when you decide to buy.

Consequences: A line of credit is too often treated like free money. In many cases, such easy access to funds leads borrowers to rack up consumer debt for things they don't really need. And there's nothing free about this cash injection: borrowers have to make minimum payments on the line's outstanding balance. In addition, a balance will limit borrowing power on other loans, such as a mortgage.

2. Withdrawing From Your 401(k) or Retirement Savings to Pay Down Debt
Advantages: If you have a big debt to pay off, you may choose to either put off contributing to a retirement or savings fund, or to withdraw money from an existing fund. The upside to this is that paying down debt is a good thing, and the sooner it is paid off, the greater the savings in interest expenses for the borrower.

Consequences: By withdrawing funds set aside for retirement, you are robbing yourself of the benefits of

Amazon.com recently listed more than 200,000 titles under the keyword "investing." Some of those books are useful. Others are a waste of time. And many, designed to exploit our ignorance and greed, are downright dangerous.

How do you approach this slew of investment information without getting overwhelmed? Every month, financial writers and journalists churn out hundreds of articles that aim to explain the financial world to ordinary investors. The financial media is full of investment picks, ideas, strategies and other advice.

Books still play an important role, however, in mastering the art of intelligent investing. Selecting the right tome can be a daunting proposition. The first place to start is with the basics. The best investment books avoid the sleazy manipulation of the get-rich-quick schemes you'll find in many books, magazines and, newsletters. Instead, they seek to impart the hard-won wisdom of the great investors to readers like us.

Which books should you read?

Books can serve to strengthen your fundamental investing knowledge while providing you with an important historical prospective.

In addition to several guides and anthologies that offer timeless advice, a number of books about Warren Buffett's philosophy provide a valuable foundation for any long-term investor.

While Warren Buffett has never penned his own book of investing advice, several stand-out books have

While many Americans have valid reasons for raiding their 401(k) during their working years, these early withdrawals can have dire consequences in retirement. Fees and penalties for early distributions can further eat away at your retirement account balance. About 15 percent of 401(k) participants spend some of their nest egg before they’re ready to leave the workforce, according to new Government Accountability Office report. The study identifies 3 major ways money leaks out of 401(k)s before retirement and how much each one affects your financial security.

Cashouts

When you leave your job you are given an opportunity to cash out your 401(k). American workers took about $74 billion from their retirement accounts when they job hopped in 2006. But when you cash out a 401(k), typically 20 percent of your account balance is withheld by your employer to pay for federal and state income taxes now due on the amount withdrawn and account holders under age 59.5 must also pay a 10 percent early withdrawal penalty.

401(k) participants who voluntarily cashed out their entire account balance at the time of job separation experienced a larger reduction in their retirement savings over their career than any other type of 401(k) withdrawal, GAO found. For example, a 401(k) participant born in 1970 who began saving 6 percent of his pay annually for retirement at age 21 plus a 3 percent employer match would typically accumulate $588,049 by age 65, according to GAO calculations. But if that same participant cashed out his nest egg at age 35 when he changed careers and paid the resulting tax penalties, he would have only $404,431 at retirement age. And that’s assuming he immediately gets a new job and saves the same amount with an