Posts
Now is a great time to be looking at growth stock candidates, believe it or not, the risk is much greater at a market bottom than at a market top. Now is a great time to be cherry picking stocks that you think will be home-runs in the future, and with already depressed prices you can better diversify and have a better chance at picking the next Microsoft. I have 3 picks of what I feel will be great growth candidate industries:
1. Companies that are in the market of developing "products" using stem cells; such as STEM. Stem cell research is the wave of the near future. Companies are aggressive trying to find ways to use stem cells to clone organs; Imagine a world where you can smoke as many cigarettes as you want with impunity, knowing full well when you get a malignant tumor you can simply go to the 'stem cell store' and have a cloned lung replace your old worn out one. What would people pay for something like this? The answer is "whatever it costs". It is very difficult to put a price tag on longer and healthier lives, and people will be willing to spend whatever it costs to prolong their existence. Stem Cell research has been set back 8 years (thank you W.) but now these companies are going to be quickly making up for lost time. Stem Cell companies make a great choice for a Growth stock Candidate.
2. Companies that our going to be involed with make Medical Electronic records is also going to be a winner, check out http://en.wikipedia.org/wiki/Electronic_Medical_Records for an idea of the companies that service this field. President Obama is making it his goal to have all American medical records be electronic by 2012. Will this happen? Most likely. The question is what companies are going to benefit the most from this system going online. That I don't have an answer for unfortunately, but with a little research you can make your own best guess as to which is more likely to succeed (If you don't feel like doing that much work, don't worry, I am in the proccess of making a list of my favorites that will be the subject of another post.)
3. My last choice for a groth industry, and the one you may say "eh I don't think so", is companies with the rights to Carbon Nanotubes (as of right now IBM is the biggest one that comes to mind). What are Carbon Nantubes you may ask? Essentially it is a Ultra-high strength and light weight material which is also heat resistant. Carbon Nanotubes (CNTs) can be used in lots of practical situations, but the one thing that they me best at is if SPACE TRAVEL ever becomes routine. No I am not referring to Star Trek style space travel, but rather airliners that travel to the edge of outerspace in order to travel significantly faster than planes flying at convential altitudes. CNTs can make this a reality as the biggest obstacle to space flight is both the going up, and the re-entry. Because CNTs are so lightweight it will be much easier to get to outerspace at a lesser fuel cost than is currently demanded; and because they are ultra-resitant to heat, re-entry would become quite easy and there will be less worry about being scorched on the return trip. Is space travel the next big thing, well I hope so, and if I'm right I'd love to profit off it.
Stem Cells, Electronic Medical Records, and Carbon Nanotubes are the 3 growth industries that I am looking to invest in for my long term portfolio. I believe you too would be wise in doing the same thing. I have intentionally been vague on giving actual stock selections as I myself have not completed my research and don't know which stocks I am going to invest in yet. As I get more in depth with my analysis I will post some more specific choices, but I urge you to go out and look up some of these options on your own.
Good Luck!
Showing posts with label Stocks. Show all posts
Showing posts with label Stocks. Show all posts
Thursday, February 12, 2009
Stimulus Package
For the past 8 years the American public has been critical of Republican spending, on that thought they ousted the conservative leadership, voted in a democrat, and one month into his tenure, guess what? "The package dwarfs the military budget and exceeds the cost of the entire Iraq war since the invasion of 2003." according to an article by Jonathon Weisman in The Wall Street Journal
Unreal. That is the only word that I can utter after reading the details of this stimulus package. Might as well burn the 789 Billion. This is going to accomplish nothing. I don't know how else to adequately phrase my feelings on this. I know the market is not going to like this plan, and am predicting, yet another, down day.
First of all, just Monday night, all Obama could keep talking about was how "I don't care how we have to do it but we are creating 4 million jobs!" Guess what? He has ALREADY conceded defeat on his #1 issue, now the stimulus plan, at best, hopes to create 3 million jobs. I guess I could just go over every piece of this bill that disgusts me but that wouldn't be worthwhile, I'm going to pick the largest oversight of this plan:
That is the lack of a tax-rebate for home buyers. Why is that so important? Great question! Because until the housing market finds a bottom America is not coming out of this recession; plain and simple, no amount of debate can change this, and no amount of foolish spending (doesn't matter where your throwing the money) can stop the tailspin our economy is currently experiencing. This was the one part of the package that could not be compromised. A $15,000 tax credit for first time home buyers appeared to be all but a shoe-in to get passage from congress. This would have absolutely put a bottom on the housing market and signaled the bottom of our overall economy. Without this provision the whole package is a waste. Almost a trillion dollars, $7,000 per family, will just dissappear do to frivolous spending.
Unreal. That is the only word that I can utter after reading the details of this stimulus package. Might as well burn the 789 Billion. This is going to accomplish nothing. I don't know how else to adequately phrase my feelings on this. I know the market is not going to like this plan, and am predicting, yet another, down day.
First of all, just Monday night, all Obama could keep talking about was how "I don't care how we have to do it but we are creating 4 million jobs!" Guess what? He has ALREADY conceded defeat on his #1 issue, now the stimulus plan, at best, hopes to create 3 million jobs. I guess I could just go over every piece of this bill that disgusts me but that wouldn't be worthwhile, I'm going to pick the largest oversight of this plan:
That is the lack of a tax-rebate for home buyers. Why is that so important? Great question! Because until the housing market finds a bottom America is not coming out of this recession; plain and simple, no amount of debate can change this, and no amount of foolish spending (doesn't matter where your throwing the money) can stop the tailspin our economy is currently experiencing. This was the one part of the package that could not be compromised. A $15,000 tax credit for first time home buyers appeared to be all but a shoe-in to get passage from congress. This would have absolutely put a bottom on the housing market and signaled the bottom of our overall economy. Without this provision the whole package is a waste. Almost a trillion dollars, $7,000 per family, will just dissappear do to frivolous spending.
Wednesday, February 11, 2009
WWE Wrestling
Ok as risk to my credibility I am pushing an entertainment stock as a long term value investment, and not just any entertainment stock but WWE Wrestling!
Why, if you are a value investor, you should buy:
#1 They have no debt! This is always a good thing, and with a price to book ratio of 1.80 that means even if the company went into bankruptcy, which i strongly believe they are in no danger of doing, this means you would lose less than half of what you put into it. They have a Price to earnings ratio of 12.50, which in historical terms is a low valuation. And perhaps the most attractive thing of all is that their dividend yeild is over 15%. Now a prudent investor would say that level is too high and in danger of a cut, however WWE came out today and said that they will not cut their dividend (great if true!). I think that it is realistic that they will continue their dividend as they offer a quality product that people are "addicted" to, people continue to watch their product every week, and they run shows 3 nights per week. The reason that their stock has been battered down over the past year is that they have been hurt just like every other entertainment industry. No one is completely immune, and the biggest losses the WWE has taken our in their Pay Per View buyrates. And this may prove to be their biggest flaw; WWE runs PPVs once a month, and sometimes even sooner, at $30 a clip it is an expensive hobby for most people and one that is the first to be cast off. What they would be smart in doing is cutting back the number of PPV events and raising the price on the remaining one's (creates more of an interest in the product). Their TV ratings have been consistant for the past 10 years, and they have little to no competition (some argue UFC has taken away some of their demographic, I don'y see why, WWE is a men's soap opera, very few people would consider it an actually sport give that its cheorgraphed). This company has alot of things going for them and their is no reason to think that their dominance in the field of "sports entertainment" will change over time. As a matter of fact, with the success of the movie The Wrestler it is possible that wrestling today appeals to an even broader swath of society.
Why, if you are a value investor, you should buy:
#1 They have no debt! This is always a good thing, and with a price to book ratio of 1.80 that means even if the company went into bankruptcy, which i strongly believe they are in no danger of doing, this means you would lose less than half of what you put into it. They have a Price to earnings ratio of 12.50, which in historical terms is a low valuation. And perhaps the most attractive thing of all is that their dividend yeild is over 15%. Now a prudent investor would say that level is too high and in danger of a cut, however WWE came out today and said that they will not cut their dividend (great if true!). I think that it is realistic that they will continue their dividend as they offer a quality product that people are "addicted" to, people continue to watch their product every week, and they run shows 3 nights per week. The reason that their stock has been battered down over the past year is that they have been hurt just like every other entertainment industry. No one is completely immune, and the biggest losses the WWE has taken our in their Pay Per View buyrates. And this may prove to be their biggest flaw; WWE runs PPVs once a month, and sometimes even sooner, at $30 a clip it is an expensive hobby for most people and one that is the first to be cast off. What they would be smart in doing is cutting back the number of PPV events and raising the price on the remaining one's (creates more of an interest in the product). Their TV ratings have been consistant for the past 10 years, and they have little to no competition (some argue UFC has taken away some of their demographic, I don'y see why, WWE is a men's soap opera, very few people would consider it an actually sport give that its cheorgraphed). This company has alot of things going for them and their is no reason to think that their dominance in the field of "sports entertainment" will change over time. As a matter of fact, with the success of the movie The Wrestler it is possible that wrestling today appeals to an even broader swath of society.
Tuesday, February 10, 2009
Trickle Down Economics
Ok now this may not make me the most popular person in the world but I firmly believe that the trickle down theory of economics works. What our current administration should be doing is giving tax breaks to businesses that will in turn be able to redistribute that money back down the food chain.
When corporations get more money in their pockets via tax breaks it benefits society as a whole. With more money to spend companies can either hire more employees and/or cut the price that consumers pay for their goods. Either way this in extremely beneficial to society. If the company gives a man a job he is essentially creating another consumer, which in turn helps stimulate the economy. If the company passes the money down by cutting the price of their goods, they make it so that more people will be able to purchase said item.
Now, if the government instead gives money directly back to the lower classes what will they do with the money? Well they will either spend it to neccessitate their immediate survival or they will save the money in the bank for "a rainy day." Neither of these things accomplishes anything long term for the good of the country.
The truth of the matter is the top 1% of the country effect the economy more than the 99% of "lower class" people. Whats sad is that most people agree with that statistic but over 40% of the people in this country think they are part of the 1% at the top.
Sorry this is getting a little bit rambly (not a word, but it should be). Moral of this story, give money to the rich, yes they can fix this country, they are the only people who can fix this country. When the government goes out playing Sherwood Forest with rich persons money to give to the poor it puts us one step closer to socialism.
When corporations get more money in their pockets via tax breaks it benefits society as a whole. With more money to spend companies can either hire more employees and/or cut the price that consumers pay for their goods. Either way this in extremely beneficial to society. If the company gives a man a job he is essentially creating another consumer, which in turn helps stimulate the economy. If the company passes the money down by cutting the price of their goods, they make it so that more people will be able to purchase said item.
Now, if the government instead gives money directly back to the lower classes what will they do with the money? Well they will either spend it to neccessitate their immediate survival or they will save the money in the bank for "a rainy day." Neither of these things accomplishes anything long term for the good of the country.
The truth of the matter is the top 1% of the country effect the economy more than the 99% of "lower class" people. Whats sad is that most people agree with that statistic but over 40% of the people in this country think they are part of the 1% at the top.
Sorry this is getting a little bit rambly (not a word, but it should be). Moral of this story, give money to the rich, yes they can fix this country, they are the only people who can fix this country. When the government goes out playing Sherwood Forest with rich persons money to give to the poor it puts us one step closer to socialism.
Disney-Dreamworks
Once upon a time in a far away land there lived a young prince named Michael Eisner, all he had everything his heart desired he was spoiled selfish and unkind....
Ok so this isnt beauty and the beast but in the 80's Michael Eisner wasnt appointed CEO of the Disney Company. The man did tremendous things for Disney and really turned them around at a time when it was unclear as to whether or not they would survive. One of his most creative people was Jeffrey Katzenberg, he was directly responsible for creating many of the movies that we now consider classics. His masterpiece was the Lion King. Eisner and Katzenberg had a great thing going but unfortunately Mr. Eisner was a very jealous person and eventually got rid of Katzenberg because he feared that someday he would succeed him as CEO. Instead he hired, what he consider a dummy, Bob Iger. Katzenberg went on to form Dreamworks SKG with Speilberg and Geffen, and they enjoyed tremendous success putting out some quality movies under their brand.
(see I tried to write it like a Disney story/didnt really work I know but I thought it added a little something to the narrative)
Dreamworks deal with Universal has fallen through and now Katzenberg has had to go back to from where he was cast off a decade ago. Thankfully, Eisner is no longer CEO there or he would've really made Katzenberg eat crow for having to come back and beg for money.
But in reality this deal is great for bot Disney and Dreamworks. These companies are an absolute match made in heaven. Now that Disney is going to be able to bring Dreamworks movies under its wing such as Madagascar and Shrek it really going to add another dimension to these franchises. If there is one thing that the Disney company can do exceedingly well its merchandise, and these 2 series fall perfectly in line with Disney's other products. I dont think it will be hard to imagine seeing a Madagascar ride at Disney's Animal Kingdom in the near future.
Anyways back to what all this has to do with Wall Street:
I think that this will do a wonder for the long term prospects of the Disney stock (not that it really needed this to thrive in the future). Disney is in a battered industry, entertainment, and the stock itself was battered on bad earnings announcements last week. To value investors across the world this is a great time to consider taking up a position in the company. I personally already took a position at 19 and am looking to add more at 17.50 and if it goes down to 15 I see that as getting one heck of a deal. I think when you look at the outlooks of this company you have to realise that Disney has branched out into so many different places that it would be impossible to imagine a world without the Disney brand, they are in no danger of going under, they are expanding almost constantly, and the have the one thing that money cannot buy....a "feeling." People literally feel something at the mention of the Disney name, and that may be the best reason to buy of all.
Ok so this isnt beauty and the beast but in the 80's Michael Eisner wasnt appointed CEO of the Disney Company. The man did tremendous things for Disney and really turned them around at a time when it was unclear as to whether or not they would survive. One of his most creative people was Jeffrey Katzenberg, he was directly responsible for creating many of the movies that we now consider classics. His masterpiece was the Lion King. Eisner and Katzenberg had a great thing going but unfortunately Mr. Eisner was a very jealous person and eventually got rid of Katzenberg because he feared that someday he would succeed him as CEO. Instead he hired, what he consider a dummy, Bob Iger. Katzenberg went on to form Dreamworks SKG with Speilberg and Geffen, and they enjoyed tremendous success putting out some quality movies under their brand.
(see I tried to write it like a Disney story/didnt really work I know but I thought it added a little something to the narrative)
Dreamworks deal with Universal has fallen through and now Katzenberg has had to go back to from where he was cast off a decade ago. Thankfully, Eisner is no longer CEO there or he would've really made Katzenberg eat crow for having to come back and beg for money.
But in reality this deal is great for bot Disney and Dreamworks. These companies are an absolute match made in heaven. Now that Disney is going to be able to bring Dreamworks movies under its wing such as Madagascar and Shrek it really going to add another dimension to these franchises. If there is one thing that the Disney company can do exceedingly well its merchandise, and these 2 series fall perfectly in line with Disney's other products. I dont think it will be hard to imagine seeing a Madagascar ride at Disney's Animal Kingdom in the near future.
Anyways back to what all this has to do with Wall Street:
I think that this will do a wonder for the long term prospects of the Disney stock (not that it really needed this to thrive in the future). Disney is in a battered industry, entertainment, and the stock itself was battered on bad earnings announcements last week. To value investors across the world this is a great time to consider taking up a position in the company. I personally already took a position at 19 and am looking to add more at 17.50 and if it goes down to 15 I see that as getting one heck of a deal. I think when you look at the outlooks of this company you have to realise that Disney has branched out into so many different places that it would be impossible to imagine a world without the Disney brand, they are in no danger of going under, they are expanding almost constantly, and the have the one thing that money cannot buy....a "feeling." People literally feel something at the mention of the Disney name, and that may be the best reason to buy of all.
Financial Bailout/General Complaints
How frustrating is this administration for the stock market. Last night Obama comes out and tells us nothing about the future of our economy other than "we need to creat 4 million jobs". His big talking point was about Iran, now no one in America cares about Iran today, people just want to hear about domestic issues for the time being and believe you me there is plenty to discuss.
Now as for Tim Geithner, first of all this man is essentially a crook, he cheated on his taxes, as soon as he was nominated he "realized" it and paid them off... looks at least a little suspicious to me. But anyways, my real complaint about him is that today there is a big press conference and we are going to be rolling out the plans to save our financial institutions....and guess what? He didn't tell us anything new, we have no in depth plans for how the banks are going to be saved. And now we are seeing this reflected in the stock market.
I must say I thought the Obama administration was going to be bad for the stock market long term, not because they weren't going to throw money at it, lord knows, to quote Obama, "he's all ginned up to spend taxpayer money." No we thought he would be bad because of his false impression that helping the poor directly helps the economy in the long term. this is the equivalent of giving a man a fish. We need to have tax breaks for the rich because the trickle down theory of economic does work. As soon as Americans realized Obama was going to be president, and trust me people knew about it in the summer (at least those of us with half a brain did; a giraffe could've beaten a republican candidate this year), the market really started to turn downward. OK we can't blame it all on Obama, but him coming in guns blazing with talks about raising the capital gains tax certainly didn't helop things any.
Obama and Administration hear me:
Tell the public something good, tell them in a clear and precise manner exactly what we will be doing to save our financial industry, as an investor I need to know before I am able to (accurately) decide what I should do with my money
Now as for Tim Geithner, first of all this man is essentially a crook, he cheated on his taxes, as soon as he was nominated he "realized" it and paid them off... looks at least a little suspicious to me. But anyways, my real complaint about him is that today there is a big press conference and we are going to be rolling out the plans to save our financial institutions....and guess what? He didn't tell us anything new, we have no in depth plans for how the banks are going to be saved. And now we are seeing this reflected in the stock market.
I must say I thought the Obama administration was going to be bad for the stock market long term, not because they weren't going to throw money at it, lord knows, to quote Obama, "he's all ginned up to spend taxpayer money." No we thought he would be bad because of his false impression that helping the poor directly helps the economy in the long term. this is the equivalent of giving a man a fish. We need to have tax breaks for the rich because the trickle down theory of economic does work. As soon as Americans realized Obama was going to be president, and trust me people knew about it in the summer (at least those of us with half a brain did; a giraffe could've beaten a republican candidate this year), the market really started to turn downward. OK we can't blame it all on Obama, but him coming in guns blazing with talks about raising the capital gains tax certainly didn't helop things any.
Obama and Administration hear me:
Tell the public something good, tell them in a clear and precise manner exactly what we will be doing to save our financial industry, as an investor I need to know before I am able to (accurately) decide what I should do with my money
Subscribe to:
Posts (Atom)