Those are the questions millions of investors will be asking themselves as they peruse their November brokerage statements.

Verizon, one of America’s most widely held stocks, has now spun off one share of IDEARC per every 20 of its own. As a result, IDEARC’s ownership base is now equally gargantuan.

The one-for-every-20 ratio guarantees a share price high enough for institutions to own IDEARC. Unfortunately, it’s going to create a lot of odd lots, as well as fractional shares. Those holding 100 shares of Verizon, for example, now own five of IDEARC. Meanwhile, anyone owning 250 shares of Verizon now owns an even more unwieldy 12.5 shares.

In deals like these, the issuing company usually (eventually) offers to buy up the odd lots and fractional shares. Given the huge cash flows it generates, there’s every reason to expect IDEARC will eventually do the same. Unfortunately, it’s impossible to predict the timing. And with alternatives for economically selling fractional shares few, most of us will have no choice but to keep holding them, or else eat an exorbitant brokerage fee.

The good news: There’s no real reason to do anything with IDEARC shares at the moment. In fact, there’s a very good chance odd-lot holders will be better off hanging on even if there is an offering in the near future.

Except for those who desperately need the money from a sale, the best idea is just to stick with IDEARC shares.

THE CASE FOR HOLDING

First, I should disclose that I own Verizon shares myself and have for a number of years. Consequently, thanks to the spinoff, I’m now an odd-lot shareholder of IDEARC.

I’m an admitted fan of buying and holding what I believe to be undervalued companies, and I can be a bit stubborn when it comes to sticking with them. In most cases, that’s paid off. With Verizon, it’s been a decidedly up-and-down situation over the years, as the company has battled fierce competition, tough regulation and intense Wall Street skepticism as it’s built a dominant franchise in American communications. And there’s still a ways to go.

When Verizon completes its FiOS network of extremely high-speed, high-capacity fiber optic cable, it will have by far the country’s best, most advanced landline network to go with its already leading wireless network. Spinning out the yellow pages unit will eliminate up to $10 billion in debt from its balance sheet, greatly enhancing flexibility.

Wall Street, however, remains extraordinarily skeptical. Adjusting for the IDEARC’s spinoff value of roughly $1.40 per share, Verizon shares are still well up for the year. But they’ve lagged well behind rival AT&T (NYSE: T), largely because of the Verizon’s much more substantial capital spending plans.

Despite Verizon’s strong third quarter numbers, most commentary focused only on the company’s continuing loss of conventional copper wireline customers and/or the cost of the FiOS buildout. That in itself is a step up from the concerns of prior quarters, such as whether or not the company would be able to win the necessary cable television franchises to fully compete with the cable companies (a question, by the way, Verizon has answered by winning franchise agreements well ahead of expectations).

In addition, the company and other Big Tel peers are now projected to outpace Big Cable in broadband additions next year, a marked reversal from just a couple of years ago. It’s also a definitive answer to the charge the Verizon and the like simply can’t compete with COMCAST (NSDQ: CMCSA) and its ilk.

But while Verizon has and will likely take a while longer to pan out, IDEARC may offer a more immediate payoff. As the example of Canadian trust YELLOW PAGES INCOME FUND (TSX: YLO.UN, OTC: YLWPF) shows, the business model is extremely vibrant.

Yellow Pages posted revenue growth of 33 percent in the third quarter. That paced an 11 percent increase in its distributable cash flow, the best measurement of Canadian trusts’ profitability. At the core was steady performance for its print advertising and traditional yellow pages. But the trust also posted another quarter of very rapid growth for its Internet operations, as it continues to build a presence in cyberspace.

Yellow Pages’ model is so powerful that it’s generated cash to acquire virtually every major print directory franchise in Canada, as well as advertising guides for a variety of popular items such as automobiles. And, despite the prospect of paying corporate taxes beginning in 2011, management has pledged to maintain both its trust structure indefinitely and defend its dividend. This it announced in mid-November along with a 6 percent dividend increase.

To match Yellow Pages’ performance, IDEARC will have to do the same things Kohlberg Kravis Roberts did when it first purchased the print directory business of phone giant BCE (NYSE: BCE) and repackaged them as a vibrant trust. That means first of all cutting costs and revving up advertising. But it also means looking for innovative ways to boost the company’s Internet presence, which is ultimately the future of the business.

As part of Verizon, IDEARC was clearly not managed for growth, but rather as a cash cow business to support its parent’s moves in wireless, business and now broadband communications. Sales were steady, but nonetheless declined 12 percent from 2001 through 2005, while net income followed a similar pattern.

That should change with the likes of former Valor Communications CEO John J, Mueller as chairman--and former presidents and CEOs of CONVERGYS (NYSE: CVG), TiVO and INTERVOICE (NSDQ: INTV) rounding out the board of directors. The company expects revenue to be flat next but resume growth thereafter, as it boosts advertising sales, with a particular eye to the Internet. And as the example of Yellow Pages’ accelerating growth shows, things should just get better from there.

IDEARC shares may also get a lift in coming months from a potential takeover offer. The yellow pages business remains very competitive, particularly given the host of rivals and potential foes on the Internet for traditional print advertising. The best defense is economies of scale that can best leverage the business transition to yellow pages.

IDEARC currently publishes 1,218 directories in 35 US states and Washington. It also has Internet pages frequented by 17.8 million visitors a month. That’s a very strong base from which to start. And despite a surge in the share price following a Barron’s article last month, IDEARC only trades at a little over 10 times projected full year 2007 earnings, making it cheap enough to attract at least some attention.

A third reason to favor holding onto IDEARC is the potential to pay dividends. To date, there’s been no announcement from the company on that front. And it may well be that management will want to shepherd capital for growth, rather than dish it out to shareholders.

On the other hand, however, telephone advertising is a huge cash generating business. And with Yellow Pages paying such a lofty dividend--even after the proposed tax change to Canadian trusts is taken into account--there’s bound to be pressure at some point to pay up.

I’m not recommending that anyone buy IDEARC shares at this time.

Yellow Pages is a far better vehicle, due to its high yield and proven ability to grow cash flow at a rapid pace. BUT THERE ARE PLENTY OF REASONS TO HOLD ONTO IDEARC WHILE WE WAIT FOR AMERICA’S LATEST MAJOR COMPANY TO SHOW US WHAT IT’S MADE OF.

THE SLOWDOWN

For most of 2006, Wall Street has worried about a slowdown in the US economy. Now it looks like it might be getting one, at least in some segments of the economy.

The housing market, softening in recent months, appears to be getting even softer. The US automobile industry is growing ever-weaker, the latest evidence FORD’S (NYSE: F) decision to essentially leverage all of its US plant with new secured debt. And the consumer is becoming gloomier and with some exceptions is spending less, as WAL-MART’S (NYSE: WMT) lame post-Thanksgiving sales attest.

With today’s announcement of a steep drop in the Purchasing Managers Index to just 49.5 percent, even manufacturing appears to have taken a turn for the worse. Any reading below 50 percent is decidedly negative for the economy. Also worrisome is the fact that economists were forecasting a reading of 51.5 percent.

Federal Reserve Chairman Ben Bernanke and the other Fed governors have been adamant in recent statements that inflation pressures are their primary worry. And though politicians are adept at speaking out of both sides of their mouths, given the Fed’s recent actions there’s no reason to expect them to do anything now but try to keep the downward pressure on inflation.

The federal funds futures rate is currently forecasting a rate cut by March of next year. But despite the recent evidence of moderating growth, it still makes sense to bet that rate cuts will come later, rather than sooner.

For income investments, the prognosis from this is decidedly mixed.

Prices of everything from utilities and real estate investment trusts (REITs) to limited partnerships (LPs) and bonds arguably now at least partly reflect the expectation that the Fed will begin cutting rates by early spring 2007 at the latest. If that doesn’t happen, there could be some reaction in prices, especially considering the high valuations of Wall Street favorites in these sectors.

A slowing economy could also be devastating for income investments that are more aggressively leveraged to growth. Junk bonds are one area that immediately comes to mind, particularly given their attraction to indiscriminate yield chasers. Outside of a good fund like NORTHEAST INVESTORS TRUST (NTHEX) or comeback utility bonds, these are probably best avoided.

Tight global energy supplies may spare Super Oils and stronger Canadian trusts from taking a spill in the wake of slower growth, as weakness here won’t necessarily contract worldwide demand by that much. But now red-hot office property REITs are certainly vulnerable to a slowdown at today’s takeover speculation-driven valuations.

The bottom line is quality. It’s absolutely essential that everything you hold in an income portfolio meets a very high standard as an operating business. Sacrificing a point or two of yield will save you tenfold if things do slow down. And you’ll do better in good times as well, as growth in profits spurs increasing dividends.

Again, the idea is to hold something from a wide range of sectors:

Energy utilities, telecoms, water stocks, REITs, bond funds, preferred stocks, Super Oils, LPs, foreign dividend payers, Canadian trusts, bank stocks, big pharmaceuticals and so on.

If there’s weakness in one sector, it will be offset by strength in another. Meanwhile, high quality businesses will continue to gain strength, pushing up the overall portfolio value year after year.

200 AND COUNTING

This month, I review earnings for each of the 215 companies tracked, as well as how their prospects changed with the November midterm elections. I also analyze the situation with the Canadian trusts I track, particularly how they should fare under the proposed tax changes.