Time to sell the banks…
I was golfing with Michael Masterson and his brother-in-law Sunday.
The conversation turned to the markets. Michael and I were surprised when he told us he had made back all his losses from last year. In fact, he said proudly, his portfolio was up 115% since March.
He was very excited. Desperate to make some money back, he got on the Internet and started reading everything he could about the markets.
He loaded up on bank stocks at their lows, and has seen his retirement account go to higher levels than ever before.
We both complimented him on his success. And then, simultaneously, we said, “Sell!”
Your retirement account is not something to gamble with. And while investing in banks early this year was a winning play, the inherent risks are growing, not shrinking.
The banking sector is an exciting market right now. With prices so low, it seems impossible that they won’t eventually go back to where they were. But it’s a sucker’s bet.
Read on to find out why and learn how to make a very selective killing in the future.
Banks are failing at an alarming rate and they want your sympathy.
The New York Times wants you to believe that the bank failures are not because of highly-leveraged bets, toxic mortgages and a gamblers mentality.
“Banks are now losing money and going broke the old-fashioned way: They made loans that will never be repaid,” says Floyd Norris, the author of the article.
“There were no CDOs, or SIVs or AAA-rated ’supersenior tranches’ that turned out to have little value,” he states.
Perhaps not. But the defaults that are happening now (and will probably increase sharply in the future) are still the result of highly-leveraged risk taking. The bulk of the defaults today were caused by a frenzied free-for-all. Insolvent buyers were being given all sorts of stated-income loans, no-income no-asset loans, and loans that would have never been made years before, when bankers were more responsible.
Banks have gotten used to taking money and gambling with it to boost their profits. There is little in the news today that indicates they have changed their ways. And even if they do, it will take a good, long time to clear out the trillions of bad mortgages that are still under cover in the system.
How a Starving Peasant Went From Living at the YMCA to a Net Worth of Over $8.2 Million Ted P. was $40K in debt. He had to get a loan so he could eat. Now, with a net worth of over $8 million, Ted has agreed to share the powerful secret that helped him amass a fortune.
For years banks were lulled into a sense of safety by low default rates.
To satisfy their irresponsible profit goals, banks lowered lending standards to boost their loan portfolio. They were abetted in this Ponzi scheme by real estate appraisers and economists who treated the hyper-inflation of property values as if they were real.
Warren Buffett famously said that when the tide goes out you see who was swimming naked. The tide is receding, my friend, and we haven’t seen the entirety of the banks that were swimming naked. Analysts at the Royal Bank of Canada believe the U.S. still has banking failures “in the thousands” ahead.
Mortgage holders feel cheated now that they are holding loans that are greater than the value of their properties. But they were rushing to the banks for their loans then. They should have been paying attention to their common sense. Or they could have simply listened to our warnings.
Once your money goes to the bank, it’s out of your hands. They can do with it what they wish. So when you borrow money – for a real estate investment or a business or for any other reason – you have to be sure that you will be able to pay it back.
In Automatic Wealth, Michael Masterson said that a smart investor never bets on assets whose maintenance costs are greater than their net worth.
Buying real estate only makes sense, he argued, when the rental income is sufficient to pay for all the expenses.
Investing in the later stages of the real estate bubble – when prices were so clearly overvalued – was a fool’s game. Ask an investor who was doing it and he would tell you, “I’m not worried about that. I’ll sell the property when the price goes up and make a fortune.”
This is called the greater fool theory. “Yes, I’m an idiot for overpaying, but I’m sure there will be another idiot that will come along and pay an even more ridiculous price later on.”
Playing that game is like passing a burning match from one person to another. But blindfolded. Somebody is going to get burned. And if you can’t see the match when you take it, it’s likely to be you.
“Wall Street’s Forbidden Retirement Plan” Could Pay You $7,792 Every 90 Days for the Rest of Your Life. Wall Street firms don’t want you to know about what could be the most lucrative retirement program in existence, because they can’t make a penny when you sign up. Learn how you could multiply your wealth and even earn yields of 20% or more on some of the world’s safest stocks…
Speaking of banks increasing risk to chase higher returns…
Wall Street has not been chastened by the Great Recession. It is encouraging some banks to start taking bigger risks.
Following a recent Morgan Stanley conference call, two analysts suggested that the company needs to take on more risk.
After the bank reported a 3rd straight quarter of losses, Analyst Steve Delmacha and Amy Debone of FBR Capital Markets wrote, “Absent a more risk tolerant posture, we do not expect Morgan Stanley to sustainably achieve mid teen ROEs”
Translation: Unless they take on more risk, they won’t make more money.
The writing is on the wall of these quarterly reports, my friend. Heed it.
Despite the bad service we’ve received, it’s getting more expensive to be a bank customer lately.
Our Managing Editor Christian Hill learned the lesson recently. He let an old checking account linger. Eventually monthly fees drove the balance to a negative $2.15. This triggered $40 in fees from his bank, Wachovia.
“Instead of just closing the account when it went negative, they charged me $40 for having a delinquent account. Now I have to pay $42.15. to close an un-used account”
Christian’s not the only one getting hit by increased fees. A recent Financial Times article reports that banks are going to collect over $50 billion in fees this year for customer over-drafts. This is almost double the amount collected in 2000.
You want a stimulus plan? How about keeping $50 billion in American’s pockets to spend instead of the coffers of banks that got bailouts.
Banks are clearly trying to find any way they can to make more money. And it’s not just the over-draft fees. All across the board the fees are increasing, from maintaining a checking account, to withdrawing money from another banks’ ATMs. And it’s only going to get worse.
Bernie Madoff has been smoking a pipe…
Another rumor is spreading about Bernie Madoff, America’s most celebrated scam artist.
The rumor is that he has pancreatic cancer. If true, that means he will almost certainly be dead within a year. Pancreatic cancer is the most fatal of all cancers. More than ninety percent of its victims die within months of diagnosis.
And what was the reaction to this news at IDE’s research table yesterday morning?
“It’s proof that there is a Jewish god” says our value investing expert Andrew Gordon.
While the Bureau of Prisons states that the reports are false, Madoff seems to be worried about something. True or not, the story may have started when it was learned that Madoff joined a “Native American religious purification ceremony” that uses prayer, heated rocks, and smoking from a ceremonial pipe.
If he is dying, one has to wonder if he will finally come clean about the scam and tell us where all the hidden money is.
Monday, August 31, 2009
Small Capital Investor
Dear Small Cap Investor,
As of 2:00 p.m. Eastern Time press time, stocks in the Dow and S&P 500 were trading up, while the Nasdaq was slightly down. The Dow was trading at 9,550, up 10 points; the S&P 500 at 1,028, up 0.27 points; and the Nasdaq was down 0.80 points, trading at 2,023.
The Russell 2000, an index of the leading small-cap stocks, was down 1.32 points at 582.
Declines lead advances across all three major exchanges at a ratio of about 5 ½ to 4.
Leading small-cap price gainers trading over 1 million shares include Vonage (NYSE:VG), up 37%; Nymox Pharmaceutical Corp. (Nasdaq:NYMX), up 29%; TravelCenters of America (Amex:TA), up 30%; and Trident Microsystems (Nasdaq:TRID), up 18%.
Vonage saw shares surge on growing consensus that the company would survive the recession. One of the first firms to offer Internet-based calling services, Vonage has been challenged with high costs and competition from telephone and cable operators have increasing begun offering bundled services of video, Internet and phone services.
Shares of Vonage are up over 400% since Monday's open.
*****Yesterday, I mentioned that I thought the Cash for Clunkers was a pretty decent idea, as far as stimulus plans go. Rather than simply hand the automakers cash, the government came up with the Cash for Clunkers program that not only got some desperately needed extra cash in the automakers pockets and also took a few low-MPG cars off the streets. It also put cash into the hands of car dealers who have been struggling and a small percentage of that money into local economies.
Of course, the Cash for Clunker program ended Monday. But it occurred to me last night that the rally we've enjoyed since March could well be called the Cash for Clunker Stock rally…
*****There's no way the government can simply replace the wealth that was lost during the financial crisis. Not only would it have to absorb the banks losses, the government would have to reimburse investors for their investment losses and put around 3 million people on its payroll.
No, America must earn its way back to prosperity. And the government has created an environment where many companies can do just that. For banks, accounting rules were changed so that what once was a loss can now be treated as an asset. Without these rule changes, Bank of America (NYSE:BAC) and Citigroup (NYSE:C) would still be clunkers.
Credit card companies have been allowed to jack fees for even their best customers. Government backed efforts to modify mortgages has slowed the foreclosure rate dramatically, and the lag time of foreclosed homes coming to market has allowed prices to stabilize in many areas.
Government guarantees fixed the money markets. And the weak U.S. dollar has put a floor under oil and commodity stocks, even as demand has fallen steadily. (Note: if you're interested in how a continually weak dollar and coming inflation are fuelling a commodities boom and enriching investors, CLICK HERE.)
Amazingly, banks even rejected one of the sweetest Cash for Clunker Stock programs - TARP. TARP would have actually given banks money for their toxic mortgage assets. Imagine that!
*****The Cash for Clunker Stock program has also returned a lot of wealth that Americans lost in the stock market. The government has bent over backward to make it possible for companies to start earning their way out of the hole, and investors are enjoying much improved brokerage reports.
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It's no coincidence that some of the best gains during this rally have been achieved by some of the biggest clunker stocks. Bank of America has rallied from a low of $2.53 to $17.75, a 601% move. Citigroup has run from $0.97 to $4.90, a 405% move.
Heck, even walking dead, ward of the state companies Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) have doubled in the last week. Doubled! These two stocks have virtually no purpose except to provide a buyer of last resort for mortgages and make token payments on government loans. And investors are acting like these two companies are actually good investments!
*****Case in point, on Monday and Tuesday this week, Reuters reports that these four stocks - Bank of America, Citigroup, Fannie and Freddie - accounted for 40% of the trading volume at the New York Stock Exchange.
One commentator said, "No one is buying them based on their fundamentals, they're buying based on what the government might do keep them alive."
Yes that's what's moving the stock market these days - the firm understanding that the government has removed risk from even the clunkiest of clunkers.
Reuters is also reporting that short interest for Bank of America is up 28% in August to 118 million shares and at Citigroup, the short position is up 82% to 624 million shares. Makes sense, but I'm not sure I want to take that bet. At least, not until I know the Cash for Clunker Stock program is over.
*****It's Newsletter Advisor Wednesday. Please enjoy the following interview with Jim Nelson of Penny Sleuth.
They tried to keep him quiet… Former Elitist Wallstreet Insider Pulls Back the Curtain… And Reveals How Average Investors Can Make Quick Profits tha
Hi, I apologize for the “theatrics.”
But, the fact is that there are a lot of people who are outraged. They’re furious that I’ve broken ranks and I am sharing their insider wealth secrets.
It’s amazing to me that for so long this group of privileged insiders have filled their fat coffers with piles of cash, day after day, while the rest of the world is totally oblivious to it. Well, now it’s going to be your turn to go to the well and pillage some wealth for yourself.
So, who are these aristocratic few? How do I know them?
They are the Wallstreet Money Bags and I used to be one of them.
In the next five minutes I’m going to share with you some highly classified information. But let me tell you straight up. If you’re looking for a guy you might see on CNBC or Bloomberg, I’m not the guy to listen to.
But, if you want to hear about a guy that ran with the big dogs in the financial world and decided to head down his own path, becoming a millionaire investor in only a few years…then I’m your man.
If you feel comfortable following the herd using the same failed strategies that have allowed folks to watch their life savings vaporize, then DON’T read any further
The information that I’m about to reveal to you has always been under lock and key. I don’t want to be sharing this with someone that isn’t absolutely serious about getting rich.
The secrets that I’m going to reveal to you will be startling. My revealing this information to you is like putting a knife in the back of the upper echelon of money men. It gives you the combination to the vault that will unlock wealth like you won’t believe.
I’m going to show you just how easy it is to make money no matter which way the markets are going to go. But, please be aware…
A Certain Amount of Discretion Will Be Required
One thing you must understand about the secret strategy I’m going share with you is that we don’t want to get too crazy with greed. While I’m not scared of these old money bastards, the fact is they have a lot of power. If we upset their applecart too much, they may try and change the rules.
If we get too greedy, the radar will go off and the powers that be will become more outraged than they already are. That’s why we’re going to just pluck out small stacks of cash.
I’m going to recommend that you limit your profits to no more than $5000 per trade.
I know five thousand dollars doesn’t sound like life changing money, but if you do it once a week, that’s over $250,000 a year…for working maybe a half an hour a day from your home computer.
Besides the amateurs who try and go for the “big payday” always end up losing whether they’re in the financial markets or a casino. I’m satisfied staying in the shadows as my bank account fills up.
This is the way to go…small sensible investments with nice tidy profits. My big rule is not to lose money. We want to keep our risk low so that all the odds are in our favor.
Now, just in case you’re thinking that five grand a week is small potatoes, let me tell you how you can double your profits without any additional risk.
Use The Multiplier Effect
You’ll have two choices when you begin using my strategy. Either you can siphon off all your profits to live on, or you choose to take some of those profits and reinvest them.
What happens is that you’ll be making profits off of your profits, so you won’t be risking any of your original principal. Soon, your “take” will rapidly advance to where it will be double! I don’t recommend making profits of more than $10,000 a week just to keep flying under the radar.
Your biggest problem is going to be to figure out what else you can do with all this cash you’ll be making besides filling up suitcases with stacks of hundred dollar bills.
The elitists are seething that I’ve broken ranks!
This information isn’t supposed to be for average folks to know about….to them, this information is only for a certain “kind.”
But I’m not scared. I’m 6’5”, 265 lbs. and I was a Division I, college football player. I don’t scare easily. I don’t want to alarm you. I’m really a “teddy bear,” but if someone gets on my wrong side, they better watch out.
I’m going to give you some information that nobody else is talking about. Why? Because they don’t have the guts to do it. So, it’s up to me.
Now, there’s nothing illegal or immoral that I’m going to share with you. I’m a rough and tumble kind of guy, but just like when I played ball…I play by the rules.
I was able to bust through the heavily armored gates and now I’m going to enable YOU to follow my tracks toward early retirement.
Revealed: How the Big Boys are Playing You For a Sucker.
…While the Rest of the World Plays the Standard Stock Market Games,
These self appointed group of “good old boys” work under a whole different set of rules.
Do feel like you’ve been given the short stick in the stock market? Well, you should!
Let me guess. Here and there you’ve made a good trade and made a nice profit. Then, some others didn’t do so well. If you’re lucky maybe you’ve made a small return or managed not to lose money.
All the while your broker tells you to hold on “for the long term.”
What does he care? He’s made a commission either way.
But, where will you be in five or ten years?
That’s how it works. The unknowing masses pour their meager holdings into the stock market where all of the financial professionals get their “taste.”
Look, I’m not some radical ranting about a “big conspiracy.” But I know that all of those people involved in the game want you to just keep being a sheep and adding to their coffers of wealth while they take some profits off the top over and over.
This creates a treasure chest of wealth that is so large it’s almost incomprehensible that until now only a chosen few get to make withdrawals from it.
I want you to imagine a unique new club that will open it’s membership to average folks that work hard for their money and are tired of being taken.
How My Humble Beginning Will Tear Down
the Velvet Ropes For All of Us…
I certainly wasn’t born with a silver spoon in my mouth. I was the son of an immigrant. My dad managed to keep a roof over our heads, but not much more. He worked hard and saved. Just like so many other working class folks he tried to make investments.
Some of them made a small return and others were a bust. The financial markets were just too tricky for him. He wanted to give us the good life…but we had to settle for just getting by.
Luckily, he did something more important. He instilled in me the American dream of starting with nothing and becoming successful.
By the time I was a college student I was an entrepreneur promoting my own club parties and making so much money I realized I needed to start investing it. Then, a buddy’s father who was a stockbroker suggested I make some stock market investments.
I fell in love. The magic of buying and selling in financial markets enamored me. Truthfully, when I see a ticker tape on the bottom of a television screen I still can’t help but suddenly feel excited.
Long story short…my friend’s dad gave me my first job at a stock brokerage. I worked my way up from the bottom. It wasn’t too long at all before I was living life large.
I had the $1500 suits, the $10,000 watch and all the rest of the glitz that goes with running with the financial royalty. But after awhile, I felt troubled. Every time my clients bought and sold I made money.
But, more than half the time, the client lost money. It gnawed at my insides!
Everyone in the finance business makes money on the back of the little guy when he buys and sells. It’s not only the commissions that the financial jackals take on each trade…they’ve got average investors using misguided investment strategies that are doomed to fail from the start.
Unknowing investors are duped into plunging money into investments that line the pockets of the chosen few who are using a whole different playbook.
The problem was that I couldn’t figure out how they were doing it.
I was on a trip to Vegas squandering a little play money when I stumbled into the casino. I watched with interest as the players sat at the tables happy to lose their money. There was a similarity to financial investment markets that made me do some more research.
Sometimes they went up. Sometimes they went down. But almost all of casino patrons always walked away losers.
Then, there were those few that weren’t losing.
Those Few Winners Hiding
in the Shadows Like Ghosts
There are those few that aren’t playing by the same rules as the masses. They’re using a whole different set of criteria for their decisions.
Whether it’s card counting or mathematical algorithms, these few big winners are making bets contrary to the accepted rules. Quietly in the background they reap their profits without anyone noticing. As long as they don’t get too greedy, they are allowed to take their piece of the action.
It was so simple it was like a piano fell on my head. I realized that for investors to make large and regular profits in the stock market, they also had to make investments contrary to what the conventional school of thought was.
When I went back and looked at the “fat cats” in my Wall Street world that were making wealth beyond what you and I can even imagine, I could now see what they were doing.
They weren’t betting on particular stocks.
They were anticipating moves in the market.
Stock Market Myth:
Find Great Companies and Invest for the Long Haul.
If you read almost any high priced stock investment letter that’s what they talk about. It sounds like a good plan, but it’s only a good plan if you’re goal is to not make money.
These greedy insiders are counting on all the common investors buying into this fairy tale.
My heart was pounding as I went back into history and saw that the proof was there.
To hell with finding good companies and hoping that their stocks went up based on the company’s performance. Sure, sometimes that happens. Other times a company can be reporting a nice profit for the quarter and the stock can still tumble.
A stock can dive bomb because of something as simple as a few pompous analysts declare that the profit wasn’t high enough per share.
The stock price tanks and you lose your shirt.
It’s so insane because the company is still earning a good profit and its future looks bright. But, because these suits say it’s a problem, your portfolio just had thousands plucked from your wallet just like if they’d reaching into your pants pocket themselves.
But this didn’t matter anymore to me.
I’d stumbled across a combination to a vault
30 times the size of anything I’d ever dreamed of.
I felt indignation. Here are these elitist blue bloods who spend their days struggling to decide whether they should spend the summer in the Hamptons or on the French Riviera and they’re doing it on the backs of folks like my dad.
Shrouded discreetly within all the cock and bull lies
an encrypted map to riches.
The members of the private club guard this map ruthlessly!
Don’t delude yourself into thinking that these investors and their partner companies don’t have every reason in the world to keep this information away from you.
Luckily for me, I’m not the kind of guy who a suit takes a swing at too quickly because I know there are more than a few that would love to have the chance. But I didn’t care.
I made my decision. I didn’t want to play on their team anymore.
Sure, I wanted to continue to make a nice living. (I was pretty used to those expensive suits!)
But, I wanted to be able to look myself in the mirror at night too. I stopped taking commissions from other investors and started doing my own investing.
In under six months I transformed myself from an
employee into a successful investor.
Instead of working in an office for 12 hours a day, I spend
30 minutes in front of the computer in my home office.
Would you like to do the same?
I love my life now. Whenever I feel I need to add to my bank account, I go to the treasure chest and make a withdrawal.
But, something’s still been eating at me. Sure, I’m making a great living and I’m not making it on the back of the average Joe. But, what am I doing to give the regular man…guys like my dad, a hand up?
Up until now, nothing. However, that’s all about to change because I am spilling the beans. I know there’s going to be a lot guys out there that aren’t going to pay any attention. These sheep will just keep following their marching orders and letting the finance insiders feed off of them.
I’m hoping that you’re not one of the sheep, so, I can share these secrets with you that only a chosen few know exists.
Remember when I talked about casinos a few minutes ago? Well, this strategy has nothing to do with games of chance, but imagine this scenario:
What if every time you sat down at the black jack table the dealer
allowed only you to peek at his cards?
You’d know when the dealer was going to bust and you’d know when you didn’t care because you already had him beat. That’s essentially what these blue blood insiders are doing. They don’t care if a stock goes up or down.
They make money either way!
And so do I.
A Road Map to Riches That Anyone Can Read
If you’ve ever invested in the stock market or done any research I’m sure you’ve at least heard of terms like options, margins…going long and short, etc.
Maybe you’ve even experimented with some of them. For most outsider investors they seem like complicated mechanisms. Truth is if you don’t understand the right way to use them, they can be tricky.
A .357 Magnum is a powerful weapon for self defense against a home intruder. But, if you don’t know how to use it, you could end up shooting yourself in the foot or worse!
That’s how these financial tools are…very powerful if used correctly…very dangerous if used improperly.
Let Me Share Just a Sampling of Real Profits I’ve Made Using “The Money Vault”
| Bought 10 puts Freemont General Corp. for 1.35….. | SOLD for 4.00 | Profit: $2650 |
| Bought 5 Puts New Century Financial Corp $4.50. | SOLD for 14.40 | Profit:$4960 |
| Bought 10 calls China Telecom for 2.40 | SOLD for 5.90 | Profit: $3500 |
| Bought 10 calls on Cephalonic for .60 | SOLD for 1.50 | Profit: $900 |
| Bought 20 calls on ETF (Brazilian Exchange) for 6.00 | SOLD for 24.90 | Profit: $37,800 |
Those are just a sampling to make you see how real and simple this program really is.
It’s an Incredible Life!
Imagine this as your daily schedule. First, no early morning alarm…no rush to get dressed…no more gobbling down some breakfast and scrambling to the office.
You’ll be getting up when you choose. When you’re ready you’ll amble over to your computer to see if you’ve made any profits since you checked yesterday…most days, you’ll be smiling after you check.
Sometime during the day, you’ll need to take a half an hour to explore the markets and maybe place an order.
Oh and by the way, I’ll be showing you onscreen exactly what I do and how you can do just the same. (I’ll tell you more about that in just a few minutes.)
You’ll no longer answer to anyone…
nobody else will control what you do.
This is a money making strategy that can produce huge steady streams of income for the rest of your life.
With that flow of cash comes the security of never needing to worry about your future. You can not only support your loved ones in first class style but you’ll be able to actually spend time with them because you won’t need to work more than thirty minutes a day.
It Won’t Matter if Stocks are Up or Down!
Regardless of what the economy is doing…if there is a housing slump, if oil prices are soaring…the interest rate is raised or lowered…inflation is up or down.
One thing that is certain is that the market never stays the same. It is always rising or falling and whenever it does, you’ll be siphoning off your take.
It’s mind boggling how the masses have so much of their wealth tied up in things they don’t really understand. They’re busy breathlessly going online and checking to see if the company their broker told them about is going to shoot up the way they were promised.
Or maybe they were told they need to stick all of their hard earned cash into some solid blue chip stocks like the General Motors of the world. These poor folks will be lucky if they don’t see their principal get sliced away…much less see a decent return.
All the while you and I will be doing just what the “old money” jackals have been doing all of these years. We’ll be taking our profits whether times are good or bad.
Do you think all of those blue blood families care if the economy is up or down? Absolutely not. They’re filling their coffers with new cash while they jet set around the world and attend lavish parties and pose for the photographers.
Now, you and I may not be at those parties, but we’ll be smiling just the same as we’ll be at the more important party…the one where all the insiders line up at the vault to cart away their new profits.
No Previous Experience, Knowledge or Education Needed
And You Can Start on a Shoestring of Capital!
I’m going to prove it to you.
With my assistance you absolutely don’t need any previous knowledge of trading in financial markets. To tell you the truth, I think you might be better off if you don’t know a thing. (this way you won’t have to unlearn so much.)
Plus, you can actually get going with as little as a couple of hundred bucks in start up capital. Whatever amount of capital you begin with, it should rapidly grow into a nice chunk of change.
I don’t want you to get the idea that I’m a big time high roller, investing fat wads of cash. Nothing could be further from the truth. All I invest is a few thousand at a time…if you do the same you can make the same kind of obscene profits!
So, are you ready to rock?
Let Me lntroduce You to“The Money Vault” Strategy
Step by Step…In the Privacy of Your Own Home You’ll Learn All of My Secret Investment Strategies
It’s really not rocket science. You’ll follow my lead as I show you what to track and how to take your profits out of the market…no matter whether it’s a bear or bull market.
I’ve been doing this a long time. I’m a professional at it and I want to make sure that you’re going to be successful.
In order to do this I’ve used the latest technology to create CD ROMS which will allow you to hear me speak to you while I show you step by step on your computer how I do it and for you to do the same.
You’re Going to Know What Took Me a Lifetime to Know….
How to Avoid the Mistakes I Made Early On and How to Capitalize on the Opportunities that the Average Investor Doesn’t Know Exists.
I’m sharing with you a method that has taken me years to fine tune and hone to make it what I believe is the world’s best trading strategy.
You’ll be able to sit back, relax and learn on your computer as I show you all the ropes. I’d be lying if I didn’t admit that I’m rather proud of the job I’ve done. I’ve taken all the jargon and the complicated data out of the picture.
I’ll be explaining this all to you in terms that an eighth grader can understand. In fact, I know an eighth grader can understand it because I’ve got a niece and I tested everything with her first.
You are going to be blown away the simplicity of it all. Instead of rambling on and on in front of a camera, I show you on the computer screen all the stuff you need to know to extract your profits just like I taught myself to do.
When your program arrives don’t think that you’ll be overwhelmed with voluminous books and manuals…quite to the contrary. It’s just a set of 10 CD ROMS. All created in sequence so you just follow the order. And 1…2…3 you are in the game.
I’m Sure You Have a Few Questions So I’ve Tried
to Answer Some of the More Obvious Ones
Q) Why aren’t you just making the profits for yourself instead of sharing it and angering all of these “money people” by showing the method to outsiders?
I am using it. I use it everyday. And I’ll continue to keep using it. But why shouldn’t I let a few select others take their fair share as well? I’ll make my take regardless. This way others make their money and I make a little extra for sharing my expertise. In other words…win-win.
Q) Am I going to have to risk a lot to make this program work?
Absolutely not! In fact, I strongly advise against taking big risks. The way I do it and you should too is to make small strategic investments that will make quick tidy profits. If you want to take big risks or gambles go to Vegas. Losers go ahead and take big gambles…on the advice of so called “experts” who make a profit even if you lose your shirt.
I’m talking about making tactical surgical strikes. You move into a position based on the market signals and before anyone else knows what’s hit them, you’ve left no footprints as you whisk away your take.
If you want to make strategic investments that use a method that consistently reaps profits no matter what the market is doing then this method is for you.
Q) Taking small regular profits sounds good, but won’t broker fees and other charges wipe out my profits?
Not at all. The genius of this strategy is that there are very few actual system-generated trades and thus few commissions. In fact, quite often other investors will be paying you a profit (this is covered in Volume #3). The people that eat away all of their profits on transaction costs are busy overtrading. You’ll be doing those stealth strikes. In and out…profits in hand. I like to clear $5000 a week after transaction fees.
Q) This all sounds so complicated and tricky. Can a little guy like me really make profits the way these “old money” people do?
That’s exactly the impression that Wall Street money bags want you to think, but nothing could be further from the truth! All you need to do is follow my lead and we’ll all be taking our cut just like those insiders. Once you see what to do you can set up an account in ten minutes with only a few bucks and be making your first trades and profits.
Q) I don’t understand how I can make money when the market falls?
Again, that’s what the financial sharks are counting on. They give the devices that allow you to do this fancy names. But it’s all founded on basics that my niece can understand. Instead of only making investments hoping stocks will go up, sometimes you’ll be making plays that make you money when shares go down. Other times you’ll be making investments on both sides of the street, so whichever way the stock goes…you can make a profit.
Just like the example of the insider in the casino who gets to see the cards the dealer has, you’ll be using my strategy which will let you see the “cards” the market is holding. With this insider knowledge, you’ll know which maneuver to make…with the profits right behind.
Q) Am I going to need to learn complicated math and statistics?
Let me be blunt. All this talk about fancy mathematical algorithms is a big myth that fast talking air bags came up with to justify their huge salaries. The strategy I’ll be sharing with you will only require that you can read and do math at the level of an eighth grader.
Q) How can I be sure that I can really make money with this?
It’s quite simple. I’m going to guarantee it. (I’ll tell you more about the guarantee in a few moments.) But most importantly this isn’t a program where after you get the program you get a hearty slap on the back and told “good luck and goodbye!”
To the contrary…this is a program where you’ll be able to get support from our advisory staff with a simple e-mail or phone call. Finally, if you’re still a little apprehensive, then I suggest you make your first trades only on paper. This way, you can see how much profit you’ll be able to make before you actually risk even a nickel of capital.
Q) I’ve tried other trading systems before and they didn’t work. Why is this one different?
I’m truly embarrassed by all of the vultures that are out there preying on innocent average folks with promises based on empty shells. Most of the programs are just downright stupid and they’re created by people who don’t actually make money using their own system.
I’ve shown you samples of actual trades I’ve made that made the profits I’m talking about. I’m not another windbag touting false claims. I make my living doing this….a very nice living. I’ve been doing this for awhile and I learned the secrets from being on the inside. That’s what makes my program different.
Q) What exactly will I get and how do I use it?
Your program will contain 10 CD ROMs. These go into any ordinary computer. Anyone who can manage to use e-mail has enough computer savvy to have no problem using the program. You’ll follow me step by step as I teach you in plain English how to work the method just like the money professionals do.
It doesn’t stop there because like I said my team’s door will always be open.
You’ll have unlimited customer support!
As a member of The Money Vault inner circle you’ll be able to call or send an e-mail whenever you want and get answers to your questions.
Think about this. If I wasn’t totally confident would I be offering this kind of access? These other so called experts don’t do this and the reason is obvious. They don’t want to hear from you again because they know you won’t be making anything.
The Money Vault is a whole different story. You’re going to become a member of my trusted inner circle and together we’re going to strike one for the every day man.
Imagine a Money Printer in Your Living Room.
It won’t matter if you were out all day lying out at the pool or on the golf course (I spend a lot of my days this way) because you’ll have spent your half an hour checking out market factors and already made your moves.
When you walk in the door, you’ll click onto the Internet and see how much money you’ve made. Your buy and sell orders will already have been placed, so there’s no frantic decision making needed.
So you’ve got to decide what you would really pay for something that will change your life the way The Money Vault will.
I’m not going to sit here and play coy games with you on the price. We both know that there is almost no way to place a value on something like this. Obviously, even a $50,000 price tag wouldn’t be crazy.
The real question for me was to come up with an equitable number…After a great deal of soul searching I came to the conclusion that a fair price is $795.
I could come up with half a different dozen little bonuses as many marketers do, but I’m not going to do that. This is an offer for serious people. I’m not going to insult you or myself by getting into a big song and dance to make it sound like it’s less than it is.
One thing I know in life is that you get what you pay for. So, I hope you see this as not an expense but as an investment. After all, one successful trade will could than pay for the program. After that it’s all profit.
It’ll be like you’ve just created your own money printer. All you do is boot it up, press the start button and create some cash. If you follow the program’s simple instructions (remember my niece finds it easy), you could already have more than enough profits to pay the bill when your credit card statement comes in at the end of the month.
I’m so confident that once you take that step, get the program and get started that you’ll realize that your life is at a turning point…that once you put the program into action that you’re whole life is going to profoundly change…
You Can See For Yourself and
I’ll Bear the Entire Risk!
I know this program works…I’ve shown you the proof with my own trades. If you’re fortunate enough to secure one of the places that are left in my inner circle, it can work for you. All you’ll need to do is follow the step by step instructions that I’ve created for you.
I went to immense trouble to make sure that it’s so simple a kid can understand it. It’s all there on screen visually, so you don’t need to try and read dry books with bleary eyes after a long day at your day job (which you’ll likely be leaving very soon).
As I confided to you in the beginning, there are a lot of angry blue bloods out there who are steaming that I’m opening up the door for some regular folks. This is how the rich get richer regardless of what’s happening with economy.
So, you know this program works. It’s not debatable. Nevertheless, I know there are some people that would just feel better if they had some reassurance…so here it is:
A 100% Iron Clad Money Back Guarantee
I’m going to allow you to try The Money Vault program for a full 30 day period with no risk. Because if for any reason you aren’t able to make the kind of amazing profits I’m talking about, I’ll return your full purchase price, no questions asked.
And I want you to remember that 30 days is more than enough time to try this program. In fact, I fully expect you to have made enough profits to pay the credit card bill off in full and have a nice wad of cash left over.
Okay, so now I’ve given you no reason not to make the decision to change your life. Once you get your program and start, you’ll know you made the right decision. Isn’t it time to stop being on the outside looking in?
There is one point of concern.
I am thrilled to be sharing the wealth with regular folks…people who like my dad didn’t have their money spoon fed to them. Still, there is a limit to how many people I can have in my inner circle. Like I’ve repeatedly said, there are very powerful people that are up in arms about me changing sides.
If we remain in the shadows and extract our taste without creating an uproar, the indignation will subside and we’ll be left in peace to pile up cash in our coffers just like the “the old money” folks. To make sure that the profit making doesn’t get out of hand, I’ve got to make sure that there aren’t too many of us.
For this reason this offer to become part of the elite inner circle of men and women who no longer follow the sheep, but pave their own path to riches and a life only a precious few can ever dream of having, must be restricted to a limited number of folks.
After all, I certainly want to still keep withdrawing cash from the money printer myself and continue to enjoy all the personal time I’ve gotten so accustomed to having.
Wednesday, August 26, 2009
5 Tips for Reaching the Rich
A question I'm often asked is, "What are the TV shows, cable networks and radio formats that rich people prefer?" Unfortunately, that's a question that has no answer. The simple truth is that mass media reaches the masses far better than it targets the rich.
Few advertisers realize the degree to which wealthy people are insulated from the marketing efforts that target them. Who do you suppose is most likely to own a TiVo device that allows them to fast-forward through TV commercials? Who is most likely to have a satellite radio in their car, along with a state-of-the-art CD player and a vast collection of commercial-free CDs? Who do you think has a secretary to screen their incoming calls and open their mail and throw away all the solicitations?
You guessed it: the rich.
Content Continues Below
Time and money are interchangeable. You can always save one by spending more of the other. The rich have always had more money than time. And now they've accumulated these new technologies that allow them to better hide from unwanted intrusions.
To be able to reach the rich, you must learn to pull instead of push. Here's how to do it:
1. Hang out in their hangouts. Familiarity is the product of repetitious proximity. In 1924, young and destitute Aristotle Onassis found the investment capital he needed after becoming a regular in an exclusive bar. The clothing he purchased and the drinks he bought to fit in took all the money he had, but his bizarre gamble paid off. Backed by the cash of his new pals, Onassis became the Bill Gates of his generation.
2. Become useful to them. If you can't be where the rich and famous are, be in a position to do them favors. America knows the name Harry Winston because of the spectacular diamond necklaces he loans to young starlets to wear at the Academy Awards. The hugely expensive necklaces always get media attention. The canny result is that his jewelry store gets far more effective exposure each year than he might have purchased with $10 million dollars in advertising.
3. Put your product where they can see it. In a May 29, 2005, story in The New York Times, Jennifer Steinhauer quotes Juliet B. Schor, a professor of sociology at Boston College: "In the last 30 years or so, as people have become increasingly isolated from their neighbors, a barrage of magazines and television shows celebrating the toys and totems of the rich has fostered a whole new level of desire across class groups..."
The fastest growing category in the world of marketing is called "product placement." For a price, your product can be written into the script of a TV show or major motion picture. Do you remember the year James Bond began driving a new BMW convertible? Or the Seinfeld episode where George buys a cashmere sweater in a trendy boutique? These things don't happen by accident. And when your product is in the show instead of in an ad, you're immune from TiVo fast-forwarding.
4. Target through copy. In your product category, what are the phrases the rich will likely type into a search engine? Have you seeded these phrases throughout your website? Pre-purchase research is increasingly being done online instead of in the store. So think of your site as a half step between the homes of the rich and your front door. How strong is the magnetism of your site?
5. Pull, don't push. Wealthy people are constantly assaulted by hype and overstatement from advertisers who get anxious and nervous, thinking, "Now's my big chance." But patience is the key to success with this group. Do you have what it takes?
Now that I've told you how to reach the rich, let me tell you why it isn't necessary. In that New York Times story mentioned earlier, Jennifer Steinhauer goes on to say that "Social class, once so easily assessed by the car in the driveway or the purse on the arm, has become harder to see in the things Americans buy. Rising incomes, flattening prices and easily available credit have given so many Americans access to such a wide array of high-end goods that traditional markers of status have lost much of their meaning."
According to Professor Schor, "A 'horizontal desire,' coveting a neighbor's goods, has been replaced by a 'vertical desire,' coveting the goods of the rich and the powerful seen on television. The old system was keeping up with the Joneses. The new system is keeping up with the Gateses."
Today a middle-income office manager may save her money to buy a single luxury item, like a Chanel jacket, the same one worn by a wealthy woman who has a dozen others like it in her $2.5 million house. While it may feel good to have the truly rich woman as a customer, you don't want to lose sight of the fact that for every one of her, there are at least 250 of those middle-income managers anxious to buy that same Chanel jacket.
Will you sell to the classes and live with the masses? Or will you sell to the masses and live with the classes? It's your decision.
LIFE SPAN OF AN ENTREPRENEUR
Years 2 to 5: Time to Grow
After your first year, re-read the business plan you started with. One reason to review it now is to update and, if necessary, revise your goals or schedules. Re-reading your business plan also re-acquaints you with the goals you had in the beginning but may have lost touch with during the hectic startup days. Fix these goals in mind as you enter years two through five.
Now is the time to begin formalizing the processes and procedures you've developed during your first year. The basic goal is to get information out of people's heads and onto paper. Writing down operations procedures in a manual also helps you think through the elements of critical tasks in the company. Having a system that's rational and repeatable is invaluable as you plan for your first sustained growth phase.
As you enter this first growth phase, you may hire your first employees or begin bringing on new people in greater numbers than before. Foolproof this process by writing job descriptions for all positions new and old. Well thought-out job descriptions help you hire the right people for the right jobs. They'll also guide you in developing training that provides additional skills to people already hired.
Sales and marketing processes also cry out for standardization. Carefully consider the face you want to present to customers. Codify the messages, images and other marketing materials used to present it. Look at everything--from the way service reps answer your phones to the color of your company trucks. A standardized marketing message is vital for differentiating yourself from your competitors and establishing brand identity.
At some point, your company is likely to grow too large to manage in the hands-on way you may have used successfully in the beginning. It's time to hire a management team, which may mean anyone from a supervisor who will oversee the night shift to a COO responsible for a wide array of day-to-day decisions. Either way, you'll have to let go and delegate some authority, and that's often difficult for entrepreneurs used to signing every check and approving every expense. Make it easier by asking yourself what kind of person you can work with and creating highly specific job descriptions for managers you can truly have faith in.
Personal savings, friends-and-family money and bootstrapping suffice to start many a new enterprise, but as your company grows, its needs for capital are likely to outstrip those initial funding sources. The good news is that now you have a track record, you'll be much more attractive to banks, angel investors and other financing sources.
And while you may have been able to borrow from a family member with nothing more than a handshake, it's important to know that institutional financial sources require more documentation. Prepare for near-future financing needs by moving as soon as possible to institute solid bookkeeping procedures. Generate regular and accurate accounting reports including income statements, cash flow projections and balance sheets.
Bear in mind that banks are most concerned with feeling certain their loan will be repaid, while venture investors are willing to gamble with a higher risk of failure in return for the chance to earn annual rates of return of 35 percent or more through a sale or merger within three to five years. Angel investors, another source of capital for firms at this stage, may be motivated by any combination of those two, along with the simple desire to help an entrepreneur like you to succeed.
Years 5 to 10: Growing to the Next Level
After several years in business, it's not uncommon to find sales slowing, demand slackening and growth stalling as you extract potential from the products, services, customers and markets you began with. One option at this point is to abandon these tiring horses and go in search of fresher mounts in the form of completely new products, services and markets.
It makes more sense, however, for many firms to consider incremental expansion in the form of extensions of existing products and services. Developing a different size, color or packaging is much less risky than coming up with an entirely new product. And slight changes can allow you to sell to significant numbers of new customers in old markets, as well as sell more to existing customers.
Companies sometimes change locations to follow markets, customers and even suppliers, but the biggest reason for relocationis the simple requirement for more room. Employees need space to work, inventory needs space to be stored and, at some point, no amount of shoehorning can hide that it's time to get a bigger place. If you're considering a new facility, carefully analyze the labor force, transportation, communication, customer markets and other infrastructure issues that will affect the move's success.
These middle years are also a good time to turn the focus away from merely increasing sales and start spending more time and energy reducing costs. Larger organizations contain larger amounts of waste, so the bigger you are, the more you can benefit from improving your productivity. Pencil and paper are your biggest allies here, as you create flow charts, step-by-step instructions and systems diagrams to find out where the bottlenecks are, how you can cut waste and which processes may be eliminated entirely. And unlike sales increases, which only turn into profits after the costs of those sales are subtracted, cost cuts go directly to the bottom line.
Only after you really understand your business's systems should you consider turning to technology as a productivity booster. New computers and more sophisticated software laid over a dysfunctional business system will result in higher costs rather than higher productivity. Once you thoroughly analyze your systems and select technology that will help make them run more smoothly, don't forget the training. Much of the cost of new technology comes from having to train employees in its use, but so does much of the benefit.
Who's going to pay for these new facilities, new technology and product development efforts? As a relatively mature company with a lengthy track record, you're now squarely in the sweet spot of banks and private investors. You can negotiate better terms than before, and you may well find financiers competing to do business with your solid, well-established firm. The public markets also open up around this time. While up-front costs are high, initial public offeringsgive you access to the lowest-cost capital source of all, the stock and bond markets.
Years 10 to Retirement: Managing Maturity
With the maturity of becoming a decade-old company comes stability. That's the good news. The bad news is that while your company stabilizes, markets continue to change, competitors arise, technologies disrupt and the world otherwise evolves. So the primary growth challenge in this era is to keep innovating.
You've spent years building systems to formalize the way your company is run. Now take a look at what you've made with an eye to tearing at least some of it down. Channels of communication that worked well for years will be found to leave important constituencies out of the loop. Department leaders will be seen as more concerned with turf wars than growing the company. Policies that once promoted growth will be recognized as growth-retardants. Markets that once seemed they would expand forever suddenly mature themselves and become slow- or no-growth ventures.
This is often a hard phase for entrepreneurs to endure because everything they've built is now being re-evaluated. But the way you've always done it may no longer be good enough. Given that, it's fortunate that now is the time for entrepreneurs to begin grooming a potential successor and initiate the process of stepping back from day-to-day operations. With new leadership coming on board and the founding entrepreneur taking a smaller role, it will be easier and more natural for the organization to embrace new ways of being.
The tendency of many entrepreneurs is to select a successor who will do things just the way the entrepreneur would have done them. If the organization is having trouble adjusting to change, however, this is usually the wrong approach. The question is not what kind of person the founder is. The question is what kind of person the company needs. A visionary entrepreneur who can grasp the whole picture but isn't good with specifics may have founded a company that is now in a mature industry and needs a detail-minded manager to squeeze all possible efficiency from the enterprise. Often the entrepreneur can't properly ask or answer the question of what the company needs now and should assemble a group of people from inside and outside the company to research it.
Even the perfect successor can rarely step into a company and run it as well as someone who has spent time learning how the company does things, what the problems with its products and markets may be, and what solutions have been tried. Of course, sometimes a complete new perspective unclouded by past events is beneficial. But usually a successor performs better if they're trained in a broad spectrum of jobs within the company in various departments and at various levels over a period of years before he or she is ready to step into the lead role.
Identifying and grooming a new successor is the first and most critical step to allowing an entrepreneur to step back from day-to-day company affairs. But it's not the only one and, in many ways, it's not the most difficult either. Many an heir apparent has turned out to be more apparent than heir because, when the moment arrived, the entrepreneur had not prepared either herself or the organization by moving toward the change in stages. One way to do this is to start taking vacations--real vacations--of increasing length, during which the successor is left in charge and the entrepreneur is only contacted if absolutely necessary.
After your first year, re-read the business plan you started with. One reason to review it now is to update and, if necessary, revise your goals or schedules. Re-reading your business plan also re-acquaints you with the goals you had in the beginning but may have lost touch with during the hectic startup days. Fix these goals in mind as you enter years two through five.
Now is the time to begin formalizing the processes and procedures you've developed during your first year. The basic goal is to get information out of people's heads and onto paper. Writing down operations procedures in a manual also helps you think through the elements of critical tasks in the company. Having a system that's rational and repeatable is invaluable as you plan for your first sustained growth phase.
As you enter this first growth phase, you may hire your first employees or begin bringing on new people in greater numbers than before. Foolproof this process by writing job descriptions for all positions new and old. Well thought-out job descriptions help you hire the right people for the right jobs. They'll also guide you in developing training that provides additional skills to people already hired.
Sales and marketing processes also cry out for standardization. Carefully consider the face you want to present to customers. Codify the messages, images and other marketing materials used to present it. Look at everything--from the way service reps answer your phones to the color of your company trucks. A standardized marketing message is vital for differentiating yourself from your competitors and establishing brand identity.
At some point, your company is likely to grow too large to manage in the hands-on way you may have used successfully in the beginning. It's time to hire a management team, which may mean anyone from a supervisor who will oversee the night shift to a COO responsible for a wide array of day-to-day decisions. Either way, you'll have to let go and delegate some authority, and that's often difficult for entrepreneurs used to signing every check and approving every expense. Make it easier by asking yourself what kind of person you can work with and creating highly specific job descriptions for managers you can truly have faith in.
Personal savings, friends-and-family money and bootstrapping suffice to start many a new enterprise, but as your company grows, its needs for capital are likely to outstrip those initial funding sources. The good news is that now you have a track record, you'll be much more attractive to banks, angel investors and other financing sources.
And while you may have been able to borrow from a family member with nothing more than a handshake, it's important to know that institutional financial sources require more documentation. Prepare for near-future financing needs by moving as soon as possible to institute solid bookkeeping procedures. Generate regular and accurate accounting reports including income statements, cash flow projections and balance sheets.
Bear in mind that banks are most concerned with feeling certain their loan will be repaid, while venture investors are willing to gamble with a higher risk of failure in return for the chance to earn annual rates of return of 35 percent or more through a sale or merger within three to five years. Angel investors, another source of capital for firms at this stage, may be motivated by any combination of those two, along with the simple desire to help an entrepreneur like you to succeed.
Years 5 to 10: Growing to the Next Level
After several years in business, it's not uncommon to find sales slowing, demand slackening and growth stalling as you extract potential from the products, services, customers and markets you began with. One option at this point is to abandon these tiring horses and go in search of fresher mounts in the form of completely new products, services and markets.
It makes more sense, however, for many firms to consider incremental expansion in the form of extensions of existing products and services. Developing a different size, color or packaging is much less risky than coming up with an entirely new product. And slight changes can allow you to sell to significant numbers of new customers in old markets, as well as sell more to existing customers.
Companies sometimes change locations to follow markets, customers and even suppliers, but the biggest reason for relocationis the simple requirement for more room. Employees need space to work, inventory needs space to be stored and, at some point, no amount of shoehorning can hide that it's time to get a bigger place. If you're considering a new facility, carefully analyze the labor force, transportation, communication, customer markets and other infrastructure issues that will affect the move's success.
These middle years are also a good time to turn the focus away from merely increasing sales and start spending more time and energy reducing costs. Larger organizations contain larger amounts of waste, so the bigger you are, the more you can benefit from improving your productivity. Pencil and paper are your biggest allies here, as you create flow charts, step-by-step instructions and systems diagrams to find out where the bottlenecks are, how you can cut waste and which processes may be eliminated entirely. And unlike sales increases, which only turn into profits after the costs of those sales are subtracted, cost cuts go directly to the bottom line.
Only after you really understand your business's systems should you consider turning to technology as a productivity booster. New computers and more sophisticated software laid over a dysfunctional business system will result in higher costs rather than higher productivity. Once you thoroughly analyze your systems and select technology that will help make them run more smoothly, don't forget the training. Much of the cost of new technology comes from having to train employees in its use, but so does much of the benefit.
Who's going to pay for these new facilities, new technology and product development efforts? As a relatively mature company with a lengthy track record, you're now squarely in the sweet spot of banks and private investors. You can negotiate better terms than before, and you may well find financiers competing to do business with your solid, well-established firm. The public markets also open up around this time. While up-front costs are high, initial public offeringsgive you access to the lowest-cost capital source of all, the stock and bond markets.
Years 10 to Retirement: Managing Maturity
With the maturity of becoming a decade-old company comes stability. That's the good news. The bad news is that while your company stabilizes, markets continue to change, competitors arise, technologies disrupt and the world otherwise evolves. So the primary growth challenge in this era is to keep innovating.
You've spent years building systems to formalize the way your company is run. Now take a look at what you've made with an eye to tearing at least some of it down. Channels of communication that worked well for years will be found to leave important constituencies out of the loop. Department leaders will be seen as more concerned with turf wars than growing the company. Policies that once promoted growth will be recognized as growth-retardants. Markets that once seemed they would expand forever suddenly mature themselves and become slow- or no-growth ventures.
This is often a hard phase for entrepreneurs to endure because everything they've built is now being re-evaluated. But the way you've always done it may no longer be good enough. Given that, it's fortunate that now is the time for entrepreneurs to begin grooming a potential successor and initiate the process of stepping back from day-to-day operations. With new leadership coming on board and the founding entrepreneur taking a smaller role, it will be easier and more natural for the organization to embrace new ways of being.
The tendency of many entrepreneurs is to select a successor who will do things just the way the entrepreneur would have done them. If the organization is having trouble adjusting to change, however, this is usually the wrong approach. The question is not what kind of person the founder is. The question is what kind of person the company needs. A visionary entrepreneur who can grasp the whole picture but isn't good with specifics may have founded a company that is now in a mature industry and needs a detail-minded manager to squeeze all possible efficiency from the enterprise. Often the entrepreneur can't properly ask or answer the question of what the company needs now and should assemble a group of people from inside and outside the company to research it.
Even the perfect successor can rarely step into a company and run it as well as someone who has spent time learning how the company does things, what the problems with its products and markets may be, and what solutions have been tried. Of course, sometimes a complete new perspective unclouded by past events is beneficial. But usually a successor performs better if they're trained in a broad spectrum of jobs within the company in various departments and at various levels over a period of years before he or she is ready to step into the lead role.
Identifying and grooming a new successor is the first and most critical step to allowing an entrepreneur to step back from day-to-day company affairs. But it's not the only one and, in many ways, it's not the most difficult either. Many an heir apparent has turned out to be more apparent than heir because, when the moment arrived, the entrepreneur had not prepared either herself or the organization by moving toward the change in stages. One way to do this is to start taking vacations--real vacations--of increasing length, during which the successor is left in charge and the entrepreneur is only contacted if absolutely necessary.
Investments
| “This tiny company has developed a new way The cure rate can be 90% to 95%. This is NOT a theory — they’ve already done it! "Here’s why I see this $0.80 stock hitting $28 in twelve months…”
Dear Investor: To understand what I’m about to tell you, you have to almost think in military terms for a moment. Then it all becomes crystal clear. It will take you two minutes and the payoff can be so huge, MabCure (MBCI) could easily be the greatest gainer you’ve ever bought. Sure, Alpharma went from $3 to $61, turning $5,000 into $101,500—and Chattem soared from $2 to $79, producing a $197,500 gain on a $5,000 investment. But even these giants have not matched the accomplishment of this tiny, unknown enterprise—revolutionizing the attack on cancer to the point where this illness could be taken off the most feared list. MabCure (MBCI) is just $0.80 a share at the time of this writing, and I’m predicting it can reach $28 in the next twelve months. Here’s why it could actually go much, much higher. Let’s return to my military example so you can quickly understand the enormity of their accomplishment. You’re fighting an enemy that you can defeat. You have vastly superior firepower. And when you catch them, you always win. It’s like guerrilla warfare. The problem is catching them. They’re evasive, shrewd and very difficult to detect before they strike with devastating effectiveness. Now imagine this. You developed a way that lets you locate every single one of them well before they can harm you. I’d say that you’ve won the war. That’s precisely what MabCure (MBCI) has done for melanoma, prostate and ovarian cancer. The Rules Have Changed: You’ve Stripped Away their Hiding Places, Turned the Light On, They’re Cornered. You’re Finally Winning the War MabCure (MBCI) has developed a series of antibodies that can mark cancer cells at their earliest stages. I’m going to assume that your knowledge of medical terms equals mine—you need things explained so you can understand them. An antibody is simply a protein molecule that attaches itself to a cancer cell so the cancer cell can then be found. Think of the antibody as a friend planting a bright orange “flag” in the target so it can be destroyed using existing treatments. This extremely specific, safe, no-side-effects targeting of cancer cells has HUGE benefits. What options do we have today for killing these cells? Chemotherapy is a non-specific method of attack. This simply means that it destroys all the cells it touches, including healthy ones, weakening the immune system. This is one reason why patients get so sick. When You Find Out What Chemotherapy Really I asked a doctor friend of mine why So many people are on chemotherapy. His answer greatly surprised me. He said, “When a family member gets sick, the family expects us to do something. This is the best we have at the moment.” Chemotherapy is the country’s most popular way of “fighting back.” However, when you learn the facts by looking at the statistics, it’s truly appalling. Its side effects are awful and its success rate is so low, it’s eye-opening. This is very important because it gives you a sense just how valuable MabCure’s discovery is. We now have a new and better option that locates only cancer cells. Chemotherapy works by targeting ALL cells, including the healthy ones. That’s like getting rid of the criminals on a city block by leveling the entire block with endless carpet bombing. It makes no sense. Here’s what experienced doctors and institutions report…
• Chemotherapists admit that they wouldn’t take Chemotherapy: Dr. Mercola reports, “It’s especially telling that in a number of surveys, most chemotherapists have said that they would not take chemotherapy themselves or recommend it for their families.” • John Hopkins University calls it a real failure: “Destroying cells with whole body chemotherapy has a dismal record…” • Dr. Ulrich Abel reports on the “appalling” results: “Success of most chemotherapy is appalling. There is no scientific evidence for its ability to extend in any appreciable way the lives of patients…” • Dr. Ralph Moss says there’s no proof it works: “There is no proof that chemotherapy in the vast majority of cases actually extends life…” • The non-profit medical organization, Alternative Medicine says it will kill you first: “Chemotherapy strong enough to kill the cancer would have to be strong enough to kill us first.” Compare this approach to the one MabCure (MBCI) invented. The MabCure breakthrough can target only cancer cells for elimination and there are NO terrible side effects like chemotherapy which poisons every cell, including healthy ones. When I say that MabCure is going to revolutionize this field, this is exactly what I mean. It’s not a slogan or a far-off hope. It’s not a grand dream of mankind. It’s already been invented, it’s here and the results are beyond impressive. This is why I’m so convinced that shares in MBCI could rocket as high as $28 a share. I urge you to read more about MabCure by following the link below and to consider adding MabCure shares to your portfolio.
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“Is this for free?”
I looked up from my laptop. A dreary looking blonde in a chintzy dress -- not the kind of lady that typically graces Joe’s Cigar Bar – was taking a handful of match boxes from a bowl on the counter.
Joe, who was fixing me an espresso at the end of the bar, turned and gave her a puzzled look.
“All my cash is tied up right now,” she said.
“That’s a good one,” I thought. “I bet your cash is tied up.”
She looked at me and back again at Joe. “Hey,” she said. “You got a phone I can use?”
Joe walked by her and put the espresso on the coffee table in front of me. “Yes, I have a phone,” he said. “But it's for business and you can't use it.”
Just then a phone began ringing. The lady pulled a cell phone from her pocket and answered it. “Whatever,” I thought. I went back to my cigar and laptop.
”Hello there,” she said.
She was now directly in front of me. She bent forward, smiling at me, and picked up a copy of Cigar Aficionado from the stack on the coffee table. She glanced through it and then put it in her plastic shopping bag.
“Put the magazine down! “Joe yelled.
“Why?” she shouted back. “They‘re free. “
“No, they are not free,” Joe said. “And I'm going to have to ask you to leave.” He came toward us, presumably to walk the lady out.
“If you touch me, I'll call the cops!” she said.
I closed my laptop and sat back to enjoy the drama.
Go ahead “Joe said “call the cops.”
“Why don't you call the cops?” she retorted.
“I don't have to” said Joe. And with that, Lewis, an off-duty cop who'd been sitting at the bar, walked up to the woman and flashed his badge.
“Put the magazine back and leave now,” he commanded.
She did as she was told. With tradition and order restored, I went back to my writing.
Tradition and order would seem to have been restored in the equity markets as well. But just like at Joe's, an idyllic environment can change dramatically with the introduction of an unexpected visitor.
What buzz killer is coming to call on Mr. Market? Read on.
Is it Time to “Get even and get out?”
After the big move off the bottom in March, many investors are considering wading back in to the water. Some believe the stage has been set for a new bull market. I don’t buy it. Take a look at the chart below, particularly, the volume.
As you can see, despite the surge in the markets, trading volume is low and has been declining. Low volume suggests there are simply not a lot of buyers.
The foundation of a new bull market is not built on low volume. The key to this rally has been the tapering off of aggressive selling. Why? Investors are waiting for higher prices.
Taking a loss is difficult for most investors. Investors typically bring a “get even and get out” attitude to their portfolios after they’ve suffered big losses. Look for these buyers to start selling again, the closer they get to “even”. On the other hand should this rally falter look for these “even and outers” to lose hope and resume selling. Either way, we will see more selling than buying down the road. Not exactly a prescription for a rising market.
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“I’ll gladly pay you Tuesday for a hamburger today.”
The current headlines are soothing. Ben Bernanke says prospects for near-term growth appear good. Existing home sales rise a surprising 7.2%. GM is rehiring workers and even paying overtime to meet new demand.
Good news? Maybe if your name is Wimpy, Popeye’s sidekick, who is quoted above.
The government has simply shifted future demand to the present. The “Cash for Clunkers” program has taken a legion of potential car buyers out of the market for a new car for 7.1 years! That’s the average period of car ownership. The $8,000 tax credit for first time home buyers has done the same thing for potential homeowners.
Of course, borrowing from the future to pay for something today is something that Wimpy and the government have in common. And as the lady whose cash was all tied up found out at Joe’s Cigar Bar, nothing is for free.
On Friday, we asked for your thoughts on Bernanke’s re-appointment campaign and you didn’t disappoint…
Around here, we don’t think too much of the guy… and even less of the usurping organization he represents. But our own Christian Hill thinks Bernanke should get another appointment. “He got us into this mess. Let him get us out of it.”
Subscriber, PJ, agrees. “Helicopter Ben should be re-appointed,” he writes. “I think by the end of next year we will have Obamageddon. Ben should be around to face the music.”
But these two mixed endorsements were the only love Ben could muster from the IDE readership.
RL says, “Fire his stupid, incompetent ass!” JDZ put it in a slightly different way. “Fire his rotten, lying ass!”
He goes on to write, “This is the guy who is part of the problem, who doesn't give a damn for the electorate or our government. Keeping him on board will only prolong the access that the Huns and Visigoths have to plunder taxpayers' money. Hell no, he shouldn't stay!”
According to SB, the entire issue of Bernanke’s re-appointment is a diversion.
“European central bankers have been on course for global dominion through debt for over a quarter of a millennium. What possible difference could it make who they decide to place in the driver's seat at the Fed? The Fed chairman is a hired bus driver. He no more chooses the route than do “world leaders.”
“Bernanke can't use a hanky without permission, and the same would be true of any replacement. Anyone suggesting otherwise is at least one of three things: disingenuous, deluded, or a dolt.”
Well, SB, our own Jon Herring agrees. Here is what he said today when we met to review the news:
“Bernanke might be the “Chairman” of the Fed, but he is nothing but a lackey. He receives his orders from those higher up. And those “higher ups” are a supranational banking elite who care nothing about U.S. sovereignty. To express your preference for one Fed Chairman over another is akin to quibbling over which robber you would prefer to burglarize your house.”
On that note, we’ll leave you with some advice…
The U.S. dollar has lost more than 90% of its value since 1913, when the Federal Reserve Bank was created. It has lost more than 50% of its value since 1987, when “Easy Money Al” Greenspan began his tenure at the bank.It would not surprise us to see this trend to continue. In fact, considering the recent massive expansion of the money supply, it might quicken.
There are investment opportunities out there – even in the banking industry. But those are for the speculative portion of your portfolio. Take action now to protect the bulk of your wealth.
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