I try never to forget that that only reason that I can write this and the only reason that you can read this is because of brave men and women who fought, killed, died, and were wounded fighting for our right to have this simple gift of being able to write and read what we want, when we want without censure, threat of imprisonment, torture, or even death.

So, I want to give a big thanks to all of the brave men and women that have and are serving in the free militaries around the world who actually put their lives on the lines for freedom. Thank you from the bottom of my heart and know that I do not take it for granted and that I do appreciate the job you are doing.

Thank you!

Andrew Anderson

The National Association Of Realtors released numbers today saying the pending home sales dropped to a record low in February. As compared to what? There in lies the rub.

Here is a link to the Yahoo Article.

This is a quote from the article that I love -

“Wall Street economists surveyed by Thomson/IFR had predicted the index would inch up to a reading of 86.3. “

Who are these goobers and what does 86.3 mean really? OK, let us try and forget that we had the worst weather in 30 years hit the Mid-West in February. So much for Global Warming….LOL I will let you in on another little secret code word.

Wall Street Economists = The dude or dudette that isn’t bright enough to be trading on their own data and making millions, but needs a day job to pay off student loans and needs to have you believe that what he/she says it gospel even though it will kill your returns. (more…)

Ok, here you go. If you could take a sec and just click on a button that would be great and you will be helping yourself.

Now the statistic is that about 99.99 percent or even less of you won’t select one of these but I want to see if the readership here is different about voting.

I need at least 2 people to vote. If you do not see what you want, just leave a comment.

Cheers!

In my article on Richard Branson and Virgin Charter just a few days ago, at the end of it I said this:

“Overall, you can look at energy prices continuing to rise at least 10% short term and I predict we might see oil top $110, to even $120 a barrel before the year is out. ”

Well, it hit $110 today. Was I ever off on timing. How far can it go? I looked again and I have to say that we could hit $130 to $140 before demand starts to wane.

But think about it, with 70 million people being born every year, 85% of known reserves in the US being kept from being explored by the state and federal government, demand for India and China growing at a fast clip and with the epitaph for alternative fuels being written by the latest energy bill that was just signed into law, is it any wonder that the prices are going to continue to rise?

Capitalism

You can be any color, any sex, any religion, any race, any age, have any amount of schooling or education, even be a high school dropout, come from any financial background, and be successful as a Capitalist and own your very own business or be an investor in someone else’s.

Capitalism is totally blind, deaf, and dumb. She rewards you for exactly what you are worth, what you produce, and the quality and quantity of service you offer, and it can be long term and quick. Both ability and stupidity is rewarded without bias and with equal measure. Because of this it is a magnet to some, and abhorred by others.

Capitalism in her purest form has done more good for people than all other institutions combined and yet far too many blame her for problems they themselves and their followers create. This is in part because they truly fear the value placed on them and their ideas by a system that has no bias and only rewards results, not good intentions, and in fact punishes the lazy, the idle, the loons, and those that would force ideas without merit on others.

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The Inefficiencies Of Government Economic Intervention

Happened to turn on the boob tube at lunch and see what it was on Cspan. State of the State Address by Ohio State Governor (D) Ted Strickland. He was talking about the State Government’s Initiative to save and create jobs. By those statements alone, I knew that it should be an entertaining show as last time I remember from Economics 101, state involvement by spending taxpayer money is usually the least inefficient method to create jobs known to man.
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I have pulled together just some of my favorite quotes on Money, Government, and the Economy. I hope that you enjoy them as much as I do. If you have others, please feel free to share in the comments section.

Many of these are from the writer, Ayn Rand whom coming from Communist Russia, had the clarity of one that does not take something for granted.

Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it, If it keeps moving, regulate it. And if it stops moving, subsidize it. — Ronald Reagan (1986)

In general, the art of government consists in taking as much money as possible from one party of the citizens to give to the other. — Voltaire (1764)

I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle. — Winston Churchill

A government big enough to give you everything you want, is strong enough to take everything you have. — Thomas Jefferson

In a truly free capitalistic society, inefficiency usually gets solved by someone making a profit for solving it! –Andrew Anderson

“Let me define the difference between economic power and political power: economic power is exercised by means of a positive, by offering men a reward, an incentive, a payment, a value; political power is exercised by means of a negative, by the threat of punishment, injury, imprisonment, destruction. The businessman’s tool is values; the bureaucrat’s tool is fear.” — Ayn Rand

“If you ask me to name the proudest distinction of Americans, I would choose… the fact that they were the people who created the phrase “to make money.” No other language or nation had ever used these words before… Americans were the first to understand that wealth has to be created.” Ayn Rand

Capitalism is the only system that functions in a way which rewards rationality and penalizes all forms of irrationality….It is capitalism that gave mankind its first steps toward freedom and a rational way of life. It is capitalism that broke through national and racial barriers, by means of free trade. It is capitalism that abolished serfdom and slavery in all the civilized countries of the world.”
Ayn Rand

If you think health care is expensive now, wait until you see what it costs when it’s free. — P.J. O’Rourke

“The economy depends about as much on economists as the weather does on weather forecasters.” Unknown

Wealth is the product of man’s capacity to think.
Ayn Rand

“America’s abundance was not created
by public sacrifices to ‘the common
good’ but by the productive genius of
free men who pursued their own
personal interests and the making of
their own private fortunes.” - Ayn Rand

“The politicians say “we” can’t afford a tax cut. Maybe we can’t afford the politicians.” - Steve Forbes

Yahoo, well not so much. With Yahoo saying that they think their stock is worth $40, it is a bit like like trying to fob off an abused Rental Car that has had the odometer turned back as brand new one some unsuspecting old lady. If the company is worth that much, then why hasn’t the current management convinced million of stock buyers of that fact?

Do they think that Microsoft is really that stupid? The fact that Yahoo has not been able to capitalize on it’s assets says it all.

This is what I love about Capitalism as a whole!

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Well, what a group of names that is and what does it have to do with Investing? Quite a bit actually, and for those of you that do watch TV, you would undoubtedly recognize this cast of characters from “Celebrity Apprentice”.

As you may know by my previous story, The Apprentice, Gene Simmons & Kodak
my favorite of the bunch Gene Simmons got knocked out early because he chose to stick to his ethics rather than agreeing with some execs of Kodak and not acquiescing with Donald Trump’s not so subtle hints about bringing back in Nely Galán with him so Donald could fire her. (more…)

Once again we are showing what could be a vastly different number for home sales than what the NAR or National Associate of Realtors just released for December Home Sales according to Bloomberg. My spot number shows that there appears to be as much as a 4.5% increase in homes sales from November to December rather than the stated 1.5% decline in home sales.

If you go back to my other article about how the data is pulled by the NAR, they only use homes that are listed with Real Estate Agents and not those that are sold privately, and as I showed you using data from the Franklin County Ohio Auditor’s own conveyance numbers this number is off by several factors. (more…)

Opportunities abound in Chaos and Kevlar Umbrellas

I recently wrote this for another website I work on but, I felt that it really has much more relevance for us investors. This was originally published for readers of the Muse Blueprint which helps people start their own business or want to take an existing one to the next level.

If you listen to the news and I suggest that you don’t very often, you would think that the sky is falling with the economy. Well, parts of it actually are but it does not have to be so for you. I suggest that you think of yourself as the person selling Kevlar Umbrellas, like I do.

While you should be aware of economic trends such as the US dollar’s values falling like a rock with no end in site, it does open up opportunities.

I will give you just a couple of examples. As gas prices keep going up (and they will but more on that later) , it is going to make locally made products and services more competitive against those that are not local.

Do you have a product or service that can save people from driving for instance? Do you know where one is to invest in?

Here are two of my Muses or other Businesses that I have recently picked up (another strategy I will cover is buying small businesses) that do exactly that, www.888360Pixs.com and www.888EZToOwn.com . The first is a service that provides pictures, virtual tours, and Videos of Real Estate, Boats, Cars and just about everything else. The second provides FREE Real Estate Advertising.

Ok, time out here. Here is the Definition of a Muse from my Book, The Muse Blueprint.

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Is Eeyore gone for good?  (see previous post ) Well, he might not be gone permantly, but he does seem to be looking for better pastures today. With the Dow up about 100 points with less than an hour to go in the trading day, we will just have to see if he turns around.

This is why I gave up day trading for a living. That, and I wanted to keep my hair from falling out. But, it could bode well for momentum players and those taking profits on their Shorts.

The Eeyore’s were on the run today. The Markets are going to need some time to settle it would appear but all of the doom and gloomers are a bit befuddled. What does this mean for most of us? Not a whole lot. Most people are not in a panic about the retirement funds or their holdings. The little guy is not selling off for the most part, nor going crazy buying either.

Overall, I give the individual for more credit than the news media does and they just can figure we all don’t act like idiots most of the time.

With the Dow up almost 300 points today it did put a stick in the spokes of the Bear unicycle for the time being.

Basically I think it is just some long overdue house cleaning. The good companies with solid earnings will probably continue to do well and the flash in the pans and those that are going along on a hope and a promise of big earnings are going to get whacked. Also, some of the Dinosaurs are going to become extinct if they don’t adapt. I can think of at least many examples in this category with two of them being GM and Ford. I think both could end up losing another 20% of their value shortly. But, we shall see.
While these two have been making strides, they really need to pick up the pace of change, cost cutting and just dealing with reality. If they don’t, their slide will continue and both may get no longer be in the top three and on the road to follow in the path of Edsel.

This goes for dozens of other companies that can’t or won’t change fast enough in the new fast moving economies of the world.

What this does is open up room for smaller more nimble companies that can change tactics, products and services quickly to meet customer and market demands.

This is where I see the best opportunity for growth. What new companies have a different way of doing things in some of the older more established niches?

Find them and you will be well rewarded. I will revisit this and give you a couple of examples that you might not have heard of. Do you have one that you think is a great play? Let us know and we will let everyone else know about it as well and let them know that you told them about it too.

Happy Investing

This will be the first in an ongoing series that I and others will be writing on the how and why of getting at least 20% returns.

For some of you this sounds like a pipe dream and yet for others, you stick you nose up at only 20%. But, if you are a serious investor, this a worthy goal for you to shoot for.

With some vehicles this is a bit easier than with others. Without going off on too many tangents, 20% is what Warren Buffet shoots for so, why not you?

If you can hit the magical 20% number you have a pretty good chance of retiring with a nice nest egg. For those of you that are a bit skeptical about hitting this number on a regular basis there are numerous ways to do so.

You can do it through and with or without leverage of various types. You can trade on margin, using options, or just plain borrow money, or last but not least, figure out how to purchase your investments on a wholesale basis. Then, you don’t even need to use leverage at all.

I am not going to attempt to go over every way to do this in the first installment but I do want to show you at least one way to do this in each one.

The first way that I will show you virtually anyone can do with a little bit of education and know how. The fact that it is so easy is perhaps that is why it is overlooked so often. That plus the fact that it is in no way shape or form sexy and does not make great copy. Well it does, but only for those of us that interested in results that end up in our wallet.

What I like about this is that you can do this tax free in your IRA or just pay taxes on it and do it however you want. The IRA is preferred way to do this though. I will touch upon this and get into more details later on.

The first way I will explain how to do this is with Real Estate.

Ok, quite yawning and don’t tell me that the Real Estate Market is tanking.

This is in fact one of the best times to do this. Have figured out that the best time to get into something is when everyone else is getting out?

This image to the left is from an actual deal that I was involved with late last year. Look at the numbers, they don’t lie. The truth of the matter is that instead of renting this out, you could easily sell it right away and gain at least 20% in less than 60 days. Yes, you can sell deals like this even in the current Real Estate Market.

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Have you ever worked around someone that I call an Eeyore? You know the Donkey from Winnie the Pooh. The person that that always sees the glass as half empty, they are constantly gloomy, never ever really upbeat, or happy. If you have ever spent any time around them you too start to get gloomy and negative and thinks start not to look too good. Even sunny days start to appear dark.

Well, not that that this totally explains what is going on, but I do think it is part of what is happening with the US and World economy. While we do have problems, the press over the past 10 years has gotten gloomier and gloomier. Everything is a crisis, and the economy has become the proverbial football in this US election season.

The Democratic candidates seem like they are trying to make it seem even worse as they try and pitch the various new government sponsored fixes for everything from your teeth, your oil changes, to the way you raise your children. The government is the answer supposedly. They have apparently named Eeyore as their official mascot.

They want the government in every part of your businesses. So, of course for you to allow them to take over control of all of those decisions, things have to be bad and getting worse by the minute and in need of fixing. There has to be a crisis.

To be fair, some of the Republicans candidates are in the same boat.

Just a friendly reminder, economic crisis’s are causes by government interference in free markets, they are not the fix for them normally.

The best thing for them to do is to get out of the way. Not play with interest rates, not do a myriad of other things to tinker with the economy.

They are caused by governments taking away the ability or incentive of the market to make good decisions. This goes way; way back with perhaps the two worst US government blunders are the Fordney-McCumber Act and the Smoot-Hawley Act.

There were several other stupid moves leading up to this that helped as well, but we will save those for another time. This is only a few decades after the government promised to implement income taxes in the US as an emergency measure to be put in place only until the crisis was over. The crisis of politicians spending your money unwisely is apparently ongoing.

If you don’t know what Fordney-McCumber Act or Smoot-Hawley was, here is a direct excerpt with a decent explanation from the US Department of State.

The Smoot-Hawley Tariff Act of June 1930 raised U.S. tariffs to historically high levels. The original intention behind the legislation was to increase the protection afforded domestic farmers against foreign agricultural imports. Massive expansion in the agricultural production sector outside of Europe during World War I led, with the postwar recovery of European producers, to massive agricultural overproduction during the 1920s. This in turn led to declining farm prices during the second half of the decade. During the 1928 election campaign, Republican Presidential candidate Herbert Hoover pledged to help the beleaguered farmer by, among other things, raising tariff levels on agricultural products. But once the tariff schedule revision process got started, it proved impossible to stop. Calls for increased protection flooded in from industrial sector special interest groups and soon a bill meant to provide relief for farmers became a means to raise tariffs in all sectors of the economy. When the dust had settled, Congress had agreed to tariff levels that exceeded the already high rates established by the 1922 Fordney-McCumber Act and represented among the most protectionist tariffs in U.S. history.

The Smoot-Hawley Tariff was more a consequence of the onset of the Great Depression than an initial cause. But while the tariff might not have caused the Depression, it certainly did not make it any better. It provoked a storm of foreign retaliatory measures and came to stand as a symbol of the ‘beggar-thy-neighbor’ policies (policies designed to improve one’s own lot at the expense of that of others) of the 1930s. Such policies contributed to a drastic decline in international trade. For example, U.S. imports from Europe declined from a 1929 high of $1,334 million to just $390 million in 1932, while U.S. exports to Europe fell from $2,341 million in 1929 to $784 million in 1932. Overall, world trade declined by some 66% between 1929 and 1934. More generally, Smoot-Hawley did nothing to foster trust and cooperation among nations in either the political or economic realm during a perilous era in international relations.

While there has been a fix offered by Bush, there are many that think that the market should be allowed to sort itself out. Be that as it may, the treasury is whipping up the printers to turn out more money and lower interest rates which could help devalue the dollar even further.

Apparently none of the World markets liked what they heard or did they? Is Eeyore out there braying for everyone to hear that will listen? It does make a good cover story for sure.

I guess we will have to wait and see what happens. The only advice I can offer is that if you have not figured out how to play the short side of the market, you are missing more than half of some of the best investment opportunities out there. If you are long stock, you should at the very least be selling covered calls if they are available.

The next few months will tell what is going on. Oh and by the way, the best defense against Eeyore is to not allow him anywhere near you. Because with him braying so loud, it can be hard to figure out what is really going on. Let him ruin someone else’s day.

The slide of the equities markets, at least here in the US will continue in my opinion.  Even though the government is talking about a stimulus package, I think the slide will continue.  How much more?  I think than another 1,000 points on the DOW is quite possible.

I went on record on Sunday to a Hedge Fund manager that I know, that 8% is not out of the question.  We are part of the way their already.

If you have the ability to go short through buying some puts, you can still do well.  The Spiders might be well worth buying to watch them go down the drain and turn green for you while they do it.

OK, if you must know, I don’t watch all that much TV…at all. But, I did manage to catch Gene Simmons of KISS on the Apprentice and he still ROCKS!

He was one of the team leaders in the episode and the goal was to come up with a new slogan for Kodak. In case you don’t know this, Gene is one of the true brilliant minds in marketing in my opinion. His company Simmons Abramson Marketing came up with the slogan ” I Am Indy” for Indy Racing. He is one of those few people that “Get it”. He has a host of other companies that he does marketing for and he has his own reality TV show as well.

What does all of this have to do with you as and Investor? I will get there in a moment, I promise. (more…)