There was a time, not long ago, when you could sum up each company quite neatly: Apple made consumer electronics, Google ran a search engine, Amazon was a web store, and Facebook was a social network. How quaint that assessment seems today.

The four American companies that have come to define 21st-century information technology and entertainment are on the verge of war. Over the next two years, Amazon, Apple, Facebook, and Google will increasingly collide in the markets for mobile phones and tablets, mobile apps, social networking, and more. This competition will be intense. Each of the four has shown competitive excellence, strategic genius, and superb execution that have left the rest of the world in the dust.

Jeff Bezos, who was ahead of the curve in creating a cloud data service, is pushing Amazon into digital media, book publishing, and, with his highly buzzed-about new line of Kindle tablets, including the $199 Fire, a direct assault on the iPad. Amazon almost doubled in size from 2008 to 2010, when it hit $34 billion in annual revenue; analysts expect it to reach $100 billion in annual revenue by 2015, faster than any company ever.

Facebook, meanwhile, is now more than just the world’s biggest social network; it is the world’s most expansive enabler of human communication. It has changed the ways in which we interact (witness its new Timeline interface); it has redefined the way we share–personal info, pictures (more than 250 million a day), and now news, music, TV, and movies. With access to the “Likes” of more than 800 million people, CEO Mark Zuckerberg has an unequaled trove of data on individual consumer behavior that he can use to personalize both media and advertising.

1. The Road Map: Amazon, Apple, Facebook, and Google do not talk about their plans. Coca-Cola would tweet its secret formula before any of them would even hint at what’s next. “That is a part of the magic of Apple,” says new CEO Tim Cook.

2. The Inevitable War: Hardware. Media. Data. With each company sharing a vision dependent on these three big ideas, conflict over pretty much every strategic move seems guaranteed. Amazon, for example, needs a better media tablet to drive more customers to its Kindle, MP3, and app stores. But how to avoid an HP-like disaster?

3. The Profit Game: Late in 2010, Jobs made a surprise visit to Apple’s quarterly earnings call. The purported reason was to celebrate Apple’s first $20 billion quarter, but Jobs clearly had something else on his mind: Android. At the time, Google’s free mobile operating system was beginning to eclipse the iPhone’s market share.

4. The Living Room: In the spring of 2010, Rishi Chandra, a Google product manager, took to the stage at the company’s developer conference to announce Google’s next victim: the TV business.

5. The Phone Barrier: One industry stands directly between the Fab Four and global domination. It’s an industry that frustrates you every day, one that consistently ranks at the bottom of consumer satisfaction surveys, that poster child for stifling innovation and creativity: your phone carrier. And your cable or DSL firm. For Amazon, Apple, Facebook, and Google, the world’s wireless and broadband companies are a blessing and a curse.

Source: So, who will win in 2012?

Most people think that China’s current economic status is a mirage created by government stimulus and relies on exports. However, examination of China’s economic growth over time reveals that consumption and gross capital formation are the two pillars lifting China to the top.

Balance is also a crucial goal for China’s economy – the economy must not grow too quickly or risk a sharp correction. Just this year, China has weathered an epic battle with inflation, drought and floods, poor global macroeconomic conditions, massive accounting/corruption scandals and a tragic accident on one of its marquee achievements-the country’s high speed rail system.

China remains the beacon of hope for the global economy, the largest and, many times, the “sole engine of the world economy,” BCA Research says. China’s real gross domestic product (GDP) is forecasted to grow 8.9% in 2011 and 7.8% in 2012, according to ISI Group. This is a slower rate of growth compared to recent years but “doesn’t look like an economy struggling under tighter credit conditions,” research says.

Ending the country’s dependence on exports is the “professed pursuit of quality over quantity,” says GaveKal and became an immediate necessity for China to maintain economic stability after exports collapsed by 40% from September 2008 to January 2009, triggering a sharp slowdown in growth, BCA says. Recent data shows China has kicked the habit as exports have contributed little to the country’s growth in 2011. Net exports accounted for 18% of China’s total 14.2% GDP growth in 2007, according to CLSA’s Andy Rothman. During the first half of 2011, exports have a negative contribution of -0.7% of China’s 9.6% GDP growth and accounted for only 12% of total industrial sales revenues. We’ll debunk more tall tales of China’s export economy in a moment.

Transitioning Workforce and the Importance of Housing in China

While China’s “ghost cities” have stolen headlines, China’s real estate market sits on a much stronger foundation than China bears would have you believe. In reality, the property market is actually in a much healthier position than it was at the start of the year. CLSA says the government’s focus on keeping housing price growth under control and limiting the availability of mortgages has resulted in “none of the 70 cities monitored by NBS price increases of more than 1%” on a month-over-month basis in July.

Despite this relatively tame market, GaveKal cites Nouriel Roubini as saying these “ghost towns” are evidence that China’s excessive investment in capital stock has crossed a critical threshold – a bubble.

There are many questions surrounding the global market but the Chinese economy remains headed toward the moon. The country, of course, remains vulnerable to external forces but we believe the economy’s strong momentum will be enough to carry the country through, should volatile times persist.

Source: MoneyMorning

Fast food can be an occasional unhealthy indulgence – but fast food stocks can be a healthy dose of profit for your portfolio.

Imagine you were one of the first to buy shares of McDonald’s Corp. (NYSE: MCD), the world’s largest publicly traded fast food company.

When the “golden arches” opened its doors in 1960, it offered just six menu items – including a 15-cent burger and five-cent fries – at its 102 locations. Now it operates more than 33,000 restaurants in 118 countries and serves more than 64 million customers a day.

McDonald’s went public in 1965, selling its shares for $22.50; now its stock trades around $90 a share.

That means today, after 12 stocks splits, 100 shares of the original McDonald’s stock that cost you $2,250 would have grown to 74,360 shares worth roughly $6.7 million – and that doesn’t even count dividends paid out by the company.

No other restaurant chain has matched McDonald’s success, but others have shown phenomenal growth with impressive profits – and I’m going to show you how to find them.

Four Must-Have Factors for Fast Food Stocks
To find a winning fast food stock we have to look at what will drive growth – and related profits – in the future. There are four dominant themes you need to look for.

McDonald’s Corp. (NYSE: MCD), recent price $90.79 – This may be an obvious choice, but it’s hard to argue with success. Mickey D’s strong second-quarter earnings pushed the stock up almost $5 a share in July, and it held most of the gain in spite of the debt-ceiling debacle and resulting market plunge. The company’s profit rose 19%, earning $1.41 billion, or $1.35 a share, on revenue of $6.91 billion.

Year-over-year growth in international revenue grew 5.4% despite a shaky global economy. McDonald’s is making a major push in China, with plans to double its number of franchises over the next three years. It’s also among the first to offer drive-thru service, recognizing China’s recent climb to No. 1 in the world auto market, as well as a “McDelivery” service in dense metropolitan markets.

The company is trying to increase U.S. revenue by remodeling restaurants, adding more playgrounds, and redesigning drive-thru operations to increase efficiency. It broadened the menu to include gourmet coffees and milkshakes, and healthier options like putting fruit rather than fries in kids’ Happy Meals. McDonald’s is also targeting a slightly richer demographic these days, looking to capture some mid-range diners who are scaling back to save money.

Current analyst estimates project full-year earnings for McDonald’s to hit $5.21 a share this year and $5.73 in 2012. The $2.44 dividend provides a current yield of 2.7%, and the median one-year price estimate for the stock is $99.00 a share.

Source: Larry D. Spears, Money Morning

When Groupon sells a Groupon–say, a $25 coupon for $50 of belly-waxing services–Groupon collects the $25 immediately (from the subscriber’s credit card). Then, sometime later, the subscriber generally goes to the belly-waxing salon and gets his or her belly waxed. And, sometime after that, Groupon remits a portion of the $25 to the belly-waxing salon.

What this means is that, when Groupon is growing rapidly, as it is now, it collects a ton of cash from its subscribers long before it has to deliver some of the cash to its merchant partners. And that generates positive cash flow.

This is how Groupon can generate cash even when it is “losing money” on its income statement.

The full-year cash flow statement for 2010 illustrates this.

Groupon “lost” $413 million in 2010 on its income statement. In the same year, however, it generated $72 million of cash.

So What?

The benefit of positive cash flow is that Groupon’s operations can fund the company’s growth even while the company is losing money.

Of course, the benefits of this positive “cash-cycle” won’t last forever. When Groupon’s growth slows, the cash that it has to deliver to the merchants that did Groupons last quarter will start to equal (or even exceed) the cash that Groupon collects from customers who buy Groupons this quarter, and the company’s cash-flow statement will look more like its income statement.

(Amazon went through this transition, too, and it can be a painful one.)

In other words, at some point, unless/until it turns profitable on an income statement basis, Groupon will have a cash hole to fill. And the only way it can sustain its positive cash flow while losing money on the income statement is to keep growing rapidly. If the growth stalls before the company turns profitable, cash flow will turn sharply negative.

But, for now, even though Groupon is “losing money,” it is generating cash. And it can use this cash to fund operations and growth.

Source: businessinsider.com

In a stock market bubble, investors stop thinking about what they’re buying and start looking around them to see who else is buying it.

Joe Investor sees a sizable group of other investors piling into a stock or sector, driving the price higher. He figures they’ve thought things through, so he’ll go along for the ride.

Jill takes Joe’s lead, figuring he knows what he’s doing. Jerry follows Jill. Julie follows Jerry. The blind are leading the blind.

Well guess what?

There are marketing bubbles too…

Some marketing tactic or strategy is hyped beyond all reasonable expectation… newbies who don’t know any better jump in… and a bubble is born. As the hype grows, it creates a kind of vortex that sucks in more and more people. The number of dupes and the number of promoters both skyrocket.

Some investment analysts are calling the recent LinkedIn IPO a warning sign that a new tech bubble might be upon us. The stock debuted at $45 and immediately started gyrating between $80 and $120, hundreds of times 2010 earnings. In plain English, there was no justification for these prices.

Groupon and Facebook are planning IPOs as well, and they will most certainly garner the same kind of senseless, nosebleed valuations. The bubble will balloon and burst. And overnight, billions of dollars will change hands, just as they did during the dot-bomb bust of the late nineties. Foolish investors holding these stocks will get the shirts ripped from their backs.

With marketing bubbles, the damage is subtler…

Bubble stuff. All about Facebook and Twitter and mobile marketing and Groupon and other so called “game changers.” Now I’m not saying there is no value in these things. It’s just that they are hyped into the ozone… out of all proportion… beyond anything even remotely real.

In the world of investing, the basics are things like earnings growth, return on equity, and profit margins. The boring, common sense stuff that allows you to rationally compare one stock to another. In the marketing world, it’s return on resources invested (RORI). Is marketing this way worth my investment? Is it the best use of my resources?

The fact that there are umpteen million users with a Facebook account makes for great hype. Heck, if it were a country it would be the third-biggest. But what does that mean in terms of the RORI for your particular business?

Most people who market with social media haven’t a clue. Their behavior is driven purely by peer pressure.

And then there’s the whole Groupon thing…

We’re seeing Groupon copycats popping up everywhere, like Whac-a-Mole. They’re hyping the slashing and burning of prices to blue blazes. There are even Groupon wannabes for information products. I’m willing to bet that if it hasn’t happened already, you’re about to get pitched by one of them.

“Let us expose your company to the multitudes,” they say. “You’ll gain hundreds, perhaps thousands, of brand-new customers. All you have to do is let us sell your $1,000 info-product digitally for $17 bucks and pay us a commission.” Come again?

Let your decision on all things bubbly be based on good old-fashioned RORI, not peer pressure.

Source: Daniel Levis

Or was it having the reserve currency of the world since 1945?
No, that would not have been enough. Was it taking that reserve currency off the gold standard on August 15th 1971? And then being able to simply double her debt every seven and a half years for the past four decades?

America is the most powerful county this Earth has ever known. Not even the Ming Dynasty came close to the power and influence that modern day America has.
So how did this happen?

Are Americans smarter, taller, faster or better looking than the rest of the world? Maybe Americans just work harder or longer than anyone else on this planet, maybe that’s it. Or maybe Americans are just better at educating their kids…maybe that’s it?

Well, I went looking to figure out if there was one thing, one thing that set America and Americans apart from the rest of the planet.
And guess what? I found it.

I found the one thing that Americans have over every other county. They didn’t always have this “one thing”. But once America acquired it, they exploited it.
And I mean America exploited it, like Sarah Palin exploited her Vice President nomination in 2008.

So what is this “one thing”?

What do you think? Was that what made the difference?

Let me ask another question, do you think the world will allow America to double her debt again (read: will they continue to buy America’s debt)?

What does this mean for the stock market? The bond market? The commodities market? The price of houses sitting in the middle of two of America’s deserts (Las Vegas and Phoenix)?

What does it mean for the conventional big box financial advisors’ clients? And what should I do? If the US cannot or is not allowed to double their debt again, what does it mean for people’s retirement…and for the future of the US?

I want to be clear. There are a few people that are not only avoiding the pain but are getting richer. Their accounts are growing and their retirement has never looked better. Just because the US is detoxing doesn’t mean you have to.

What happens to the American Miracle when America can no longer take on more debt?

Source: RC Peck

You can use dry ice for a lot – keeping a picnic lunch cool, generating fog for backyard karaoke. Now it’s about to revolutionize computing all over again.

More important, it’s going to touch off a scramble for a wonder substance that’s in high demand, and produced mostly in China. If you feel you missed out on the rare earth boom, you’re on the cusp of something equally lucrative.

The story begins with two breakthroughs, both revealed in the last 10 days.

Researchers at IBM announced this month they’ve built the first integrated circuit made of something called graphene.

The wafer you’re looking at is as thin as humanly possible — exactly one atom layer thick. And yet it’s powerful enough to…

Make mobile phones work in places they can’t now
Make almost any electronic device run faster, with less electricity
Power devices that can see inside the human body without harmful X-rays.

You can’t do that with the stuff that’s made up integrated circuits for the last 40 years — silicon. Graphene is on its way to becoming “the new silicon.”

Also this month, researchers at Northern Illinois University made a parallel breakthrough, equally important: They hit on a way to manufacture graphene in high volumes.

Instead of previous methods — splitting graphite crystals with tape, or heating silicon carbide to high temperatures — the NIU scientists came up with something so simple your teenager could do it in the garage (although we wouldn’t advise it) — burning magnesium in dry ice.

“Up until now,” says professor Narayan Hosmane, “graphene has been synthesized by various methods utilizing hazardous chemicals and tedious techniques. This new method is simple, green and cost-effective.”

Graphene is derived from graphite — which itself is derived from the humble carbon atom. The two scientists at the University of Manchester who isolated graphene in 2004 won the Nobel Prize for physics in 2010.

“As a material, it is completely new,” declared the Royal Swedish Academy of Sciences upon bestowing the prize. “As a conductor of electricity, it performs as well as copper. As a conductor of heat, it outperforms all other known materials.

“It is almost completely transparent, yet so dense that not even helium, the smallest gas atom, can pass through it.

“It is not only the thinnest material in the world,” adds The New York Times, “but also the strongest: a sheet of it stretched over a coffee cup could support the weight of a truck bearing down on a pencil point.”

So it will have uses other than electronics. Physicist Michio Kaku from City University of New York envisions more lightweight aircraft and stronger plastics, among other innovations.

Here’s the rub: “Good graphite is not that easy to find,” says our natural resource maven Byron King. “Graphite prices have more than doubled in recent years.” No graphite, no graphene.

On top of that, Byron continues, “China controls 80% of the global graphite market — just like China runs 97% of the world supply of rare earths.” And China’s reserves are dwindling.

So not only are we looking at “the new silicon” in terms of potential… we’re also looking at “the next rare earths” in terms of scarcity. And yes, just as with rare earths, the rush is on to find new sources outside China.

Many lie in developing countries run by dictators who’d love nothing more than to nationalize a big graphite find as soon as some company does the hard work of proving it up. But one of the largest is in North America — 8 million tons — controlled by a tiny firm Byron recently uncovered.

It can produce graphite for $400 a ton and sell it for $2,000. That’s $12.8 billion of potential for a company with a market cap of $58 million.

Source: Agora Financial: The Great Rare Earth Supply Crunch

This is the fifth consecutive month that commodities have outperformed the stock market — their longest streak since 1997.

The key reason commodities outperformed stocks and bonds is the weak dollar.

In the midst of the longest commodity boom since 1997 (see below), the hottest commodities right now are, alas, without a corresponding ETF.

Nor can sophisticated investors trade it in the futures market. But there is a way you can still make money in what appears to be an aggressive uptrend:

The blue line represents the price of neodymium — used in everything from portable headphones to hybrid cars. The red is samarium — an essential metal for precision-guided missiles.

Both are rare earth elements — under the tidy production grip of our friends in China. You’ll recall China slashed rare earth export quotas 35% at the start of this year… on top of a 40% cut six months earlier. World prices for many of these minerals have doubled in 2011… on top of a fourfold increase last year.

New developments make it look as if this trend is with us to stay.

As we’ve been detailing, one after another, attempts to break the Chinese stranglehold are smacking head-on into obstacle

• Lynas, an Australian firm, and a former Byron King favorite, attempted to open the world’s largest rare earth refinery in Malaysia but ran headlong into stubborn regulators. An operating permit is being withheld as protesters raise alarms about the rare earth ore’s radioactive contamination — which is naturally occurring, and low level. Approval has been delayed six months
• Toyota’s running into its own regulatory roadblocks trying to partner up with companies to mine and refine rare earths in Vietnam. The deal was announced last fall, but now production won’t get under way till 2013
• In Japan, Dowa Holding’s attempts to recycle rare earths from old electronics is proving more difficult than first thought. Its factory is up and running, recycling 19 metals — but no rare earths.

The Chinese have even upped the ante again too. As of April 1, new taxes on rare earth miners were imposed. What used to cost producer 50 cents per kilogram of refined product now costs $8.

So the scramble to bring rare earths into production outside China moves into higher gear. Industry darling Molycorp — which is gearing up to reopen a rare earth mine in California — recently made investors do a double take when it bought a 90% stake in a rare earths producer in Estonia.

“Does this mean,” wonders our Byron King, “that Molycorp is hedging its bets? Things might not go as well as planned with the California schedule? It’s possible.”

Readers of Byron’s premium advisory Energy & Scarcity Investor have already made hay with Molycorp, collecting 178% in a scant four months. They collected 109% in two months on another of the sector’s “usual suspects”… and they have open gains of 93% and 147% on other rare earth developers.

But for the biggest potential gains, Byron remains focused the big question — who will be the first outside China to go into production?

Source: Addison Wiggin – The 5 Min. Forecast

Earlier this month, the trio demonstrated just how serious they were, with the Peruvian and Colombian stock exchanges entering into a full-blown merger agreement. These are the three best-run countries in Latin America, with a combined gross domestic product (GDP) of more than $500 billion.

If they get their act together, it’ll be these three countries – and not Brazil, that much-ballyhooed “BRIC” country – that are the “must-have” havens for our money.

Colombia, Peru and Chile have benefited enormously from the zooming surge in commodities and energy prices.

Peru is a commodities bonanza, with major potential in everything from gold to fish. Colombia, on the other hand, is already a significant oil exporter. And in recent years the country has caused the curve of its oil production to turn sharply upward – it produced about 760,000 barrels a day in 2010, and production is increasing at about 10% annually. And Chile is a world leader in copper.

Each of the three countries is larger than any country in the European Union (EU), but their total population is relatively modest at 92 million. Total GDP was $528 million in 2009, but growth is rapid: Colombia grew at 4.4% in 2010, Chile at 5.1% and Peru at an extraordinary 8.7%. While all three countries have excellent relations with the United States (Chile has a free-trade agreement and Colombia has negotiated one subject to ratification by the U.S. Congress).

Also worth noting: China is active as an investor in all three countries, especially Peru.

The real secret to the success of these three countries is that they are competently run and have kept their public sectors under control. Chile, for example, has a public sector (as a share of GDP) that’s about half the size of Brazil.

The big question for investors is whether the countries’ free-market orientation will be maintained. The outlook is the most solid in Chile, where the social democrat government that left office in March 2010 was quite market oriented, and the new government of President Sebastian Piñera is even more so.

In Colombia, a free-market government led by Alvaro Uribe has been replaced by another free market government led by Juan Manuel Santos, in office until 2014.

In Peru, the outlook was cloudy at the time of the last election in 2006. But the prosperity that the country has seen since then has improved matters. Three of the four leading candidates for the April 2011 presidential election are free market in outlook; should one of these candidates win, the collaboration with Colombia and Chile can be expected to continue.

The main gain for the three countries from working together is the ability to achieve economic scale.

Combined, Colombia, Chile and Peru have GDP of about 1% of the world’s total, so if they can persuade investors that they really do represent a single bloc, they will attract a renewed flow of both direct investment by big companies and portfolio investments by the largest institutions.

The stock market merger that I outlined above is the first – and easiest – way for them to cooperate. And it should bring in a flood of new money once it’s completed.

Source: Martin Hutchinson

To counter deflation’s bad effects, and to stimulate the economy – the US plans to spend billions of dollars over the next few years.

Since, the US runs a large deficit, it can finance this stimulus in only two ways:
1. Issuing Debt
2. Printing Money

As the global recession tightens its grips on countries across the world, the appetite for US debt is getting smaller. The yields on US government debt are already at all time lows, and then there is the small matter of – the stimulus that other countries need.

Countries like China, India, Japan, Russia etc. also need to stimulate their domestic economies. They plan to do this by using their dollar reserves, and buying more debt at this time is hardly feasible.

The other option for US to finance this debt is by printing money. Many countries ranging from Germany to Argentina to Zimbabwe have already done this throughout the history of the world. While, you may not see a 100 billion dollar US banknote, inflation is the natural consequence of printing money or quantitative easing and is unavoidable in the current circumstances.

Domestic Inflation effectively reduces the ability of American consumers to buy Chinese goods, Russian oil and Indian software, among other things. As prices rise, people can afford lesser goods and services.

More importantly, domestic inflation reduces the ability of the Chinese, Indian and Russian exporters to sell their stuff to US, and keep their own domestic economy going.

Inflate or Die

Faced with the increased supply of dollars in the market, other countries have two options:

1. Let the values of their own currencies rise, relative to the dollar.
2. Print more domestic currency to match the depreciating dollar.

If the central bankers allow their domestic currencies to rise, then many exporters will lose their competitive edge, and ultimately shut shop.

What if they let the dollar fall?

Developed countries like Canada who are also major exporters to the US can in fact, let the dollar fall, and allow their domestic currencies to rise. This will contain inflation, although it will impact exports, and slow the growth of their economy. Since, Canada is already a developed and rich country – it can allow that.

Countries in the developing world can’t allow a hit on their growth – because that will have severe social and political consequences.

So, there you have it, inflation export – from one country to another – due to the tightly integrated financial markets, and the reserve currency of these markets – dollar.

Source: OneMint

This reminds me of the valuations being assigned to Internet companies leading up to the “dot.bomb” crash. There’s no way a company that relies on nothing more than bits of information – the vast majority of which are summarily ignored by the community that supposedly finds it so compelling – should have a valuation approaching The Walt Disney Co. (NYSE: DIS), equal to The Boeing Co. (NYSE: BA), and greater than Time Warner Inc. (NYSE: TWX).

Still, for the sake of argument, let’s play along and suppose that the $500 million capital infusion is for real and that the $50 billion valuation it implies is correct. Then the question becomes: What does the transaction say about Goldman Sachs, which arranged the deal, and the regulators supposedly overseeing it?

Nothing good that’s for sure.

The way I understand the deal is structured, Digital Sky is investing $50 million and Goldman is investing $450 million for a stake in Facebook that they plan to package and resell to investors. That makes Goldman a principal in the deal, which means in very plain terms that they can no longer claim any obligation to the investor (their customer) who bought the other side. It’s important to keep that in mind.

Now let’s move on to the valuation.

I wonder exactly what the Russians are getting for their money, because Facebook is still a private company, which means nothing it does is reportable.

Reports suggest that some 1/12 of the world’s population gathers together on the popular social networking site – which now ranks ahead of Google as the world’s most-trafficked Web site – and that the collection of human data that’s stored there makes Facebook the largest, self-fueled marketing database in human history.

That point is well taken.

But exactly what is Facebook going to do with all of that data? The presumption appears to be that Internet advertising is the “golden egg.” Unfortunately, that theory’s been dead – or at least passé – for years.

Even if there are products for sale, which to date is not the case, the backlash that’s building about sharing sensitive information online could kill the company overnight – $50 billion or not. Then there’s the fact that people are losing interest in the two-way drivel that at the end of the day becomes nothing more than another e-mail platform cloaked under the guise of “social media.”

Sure, Facebook has a lot of people trolling through its site, but the important question is how do they monetize that traffic? In other words, they face the same old dilemma salesmen have faced since the beginning of time: How do you convert the “tire-kickers” into buyers.

Personally, I think the more interesting aspect to this transaction is Goldman’s involvement. By helping raise $500 million, the firm is doing more than simply pocketing huge fees. Goldman is positioning itself for the eventual initial public offering (IPO), which this fund raising postpones – at least for the moment.

It would not surprise me in the least to learn that Goldman Sachs has a contractual right to be the manager of Facebook’s IPO. If that proves to be the case, it would mean Goldman has effectively fronted Facebook $450 million for the privilege of orchestrating the company’s forthcoming IPO – and then gotten its money back by selling its stake in the company off to high-end clients looking to get a piece of the social media giant.

But let’s not get ahead of ourselves.

For the moment, Facebook remains a private company and does not have to discuss anything it does – such as the costs it incurs, the mounting complaints regarding personal data, or where it spends its money. Nor does Goldman have to disclose how it’s profiting from the deal or acknowledge related trading positions it’s establishing in the process.

Speaking of which, the other thing that catches my attention when it comes to this entire matter is that Goldman reportedly wants to create another of its “special investment vehicles” – one that would allow a select few additional investors to put as much as $1.5 billion into Facebook. That would mean more fees for Goldman, while also ensuring that it keeps its “investors” outside of the Security and Exchange Commission’s (SEC) public disclosure rules.

Sound familiar?

It should, given that special investment vehicles and limited disclosure played a key role in creating the financial crisis that’s still not over and from which Main Street is still reeling. Never mind the irony that – thanks to a taxpayer funded bailout – Wall Street bonuses are bigger than ever and that it’s already back to business as usual.

All is not lost, though.

Several sources are now reporting that Facebook may already be over the 499-investor limit threshold that requires public disclosure. If this is true, Goldman and Facebook could both be dragged kicking and screaming into a hostile court of public opinion that will highlight just how stacked the deck is.

And speaking of stacked decks, let’s talk about conflicts of interest for a minute. According to the one page investment profile Goldman sent to its wealthiest clients, “GS Group may at any time further reduce its exposure to its investment in Facebook without notice to the fund or investors in the fund.”

If that’s not a conflict of interest, I don’t know what is.

This clause would allow Goldman to hedge or trade against the very same clients it’s now putting into the deal. That, in turn, means the firm can exit or burn the house down without warning!

Of course, I love the small print, which also states that the content of the offering “is not guaranteed as to accuracy or completeness.” Maybe that’s why there’s another line near the very bottom that advises potential clients: “Do not contact Facebook.”

Could you imagine investing your hard earned money into a prospective stock offering and agreeing not to talk to the issuer to do due diligence? What ever happened to the Prudent Man Test – or at the very least common sense?

Sadly, though, my guess is that Goldman will find a way to steer clear of the entire shooting match at all costs to avoid disclosing its business practices – the same way it paid a $550 million fine last year to settle charges of securities fraud related to mortgage investments.

Incidentally, the SEC was very proud of its pound of flesh and the $550 million penalty –apparently they didn’t realize that Goldman booked more than $13 billion in the process.

Source: Keith Fitz-Gerald

Thus, doing the rare earths gig is far more than basic exploration, mining and crushing. Doing rare earths correctly involves being really good in chemistry and chemical engineering as well. There’s nothing easy about it.

The big rare earths story for 2010 was how an otherwise obscure sector of the mining and processing industry became a destination point for billions of dollars of new investment. As 2010 drew to a close, we were in a market mania, in some respects, with some rare earth stocks “melting up.” The story was driven by China and its precipitous reductions in export quotas – front page news across the globe.

You may have seen the statistic that China controls about 97% of the world’s rare earths supply. Let’s not quibble about the exact number – a few fractions one way or the other. And when China ratcheted down its rare earths quotas during 2010 – part of a long-range strategic industrial policy, I must add – it shook the Western world to its industrial foundations. It’s all been a shock to the global trading system.

This shock has produced some shockingly large gains in the shares of rare earth mining companies. A lot of these stocks have become very volatile and frothy. So caution is warranted. But the rare earth story is very real and very exciting.

Don’t miss this one!

Source: Byron King

The audience snickered when she pointed to the recent lower unemployment figures as proof that reform isn’t the job killer that many have made it out to be. Although DeParle cited various facts and figures, she probably didn’t convert any opponents.

But the fact that the Affordable Care Act didn’t cause complaint from the CEOs of the companies directly impacted by it is crucial. On the contrary, they seemed to embrace it – and that’s why I believe it’s going to stick.

The Republicans can fight all they want to get it repealed, but mark my words, as long as the industry is in favor of it, reform is here to stay.

I’ve argued in the past that healthcare reform is President Obama’s legacy and he won’t back down. And perhaps most importantly, with the endorsement from the healthcare sector and the huge lobbying dollars it dishes out, members of Congress will revert to form: Listen to the money talk.

It appears that healthcare companies got what they wanted from reform, which is why they’re not complaining about it. Executives would rather deal with the devil they know rather than the unknown.

I expect some companies to emerge as big winners in the new climate of healthcare reform. Which ones?

Two Winners From Healthcare Reform… And One Trying to Sneak Around It

WellPoint (NYSE: WLP), the largest health benefits provider in the United States, is well positioned to handle both the new influx of patients and regulations. Due to reform and the expansion of Medicaid, WellPoint expects to gain 10 million new customers by 2015.

But Molina Health (NYSE: MOH) might end up as the biggest winner. The company is focused exclusively on government-sponsored healthcare for low-income families – right in the sweet spot of what reform is trying to accomplish.

In 2010, the company expects its medical loss ratio (the percentage of revenue spent on healthcare for its customers) to come in at 85.4%, above the 85% mandated threshold.

Conversely, Healthspring (NYSE: HS) sits below 85%. And rather than discuss any efforts to comply with the requirement, management instead discussed accounting tricks to get above it. Watch for the company’s future guidance on February 17… I suspect it won’t be pretty.

One other point on healthcare reform here: As part of the deal that the industry struck with the government, drug companies will pay an excise fee. However, not one executive I saw appeared annoyed about it. I wouldn’t even call it begrudging acceptance. Rather, they were pragmatic and suggested that these fees are simply part of the agreement – one that they’re satisfied with.

For example, Amgen (Nasdaq: AMGN) CEO Kevin Sharer said his company will pay a fee of $150 million to $200 million after tax. But the upside is that reform “protects innovation and sets a framework for follow-on biologics that’s fair.” In other words, in order to protect his company’ patents, he was willing to pay the fee.

And that leads me to another key theme – and the second of the big three trends that will dominate in 2011…

How to Profit From the “Patent Cliff”

The “patent cliff” situation has loomed large now for the past few years. And today, it’s finally here.

Simply put, the concept refers to the number of everyday blockbuster drugs whose patents are about to expire. As I mentioned in last week’s column, this includes Pfizer’s (NYSE: PFE) cholesterol drug, Lipitor and Merck’s (NYSE: MRK) Singulair, which tackles asthma.

The subject has been a constant topic of conversation this week – and it’s one that gives investors an excellent chance to capitalize. Understandably, though, large pharmaceutical companies like Pfizer, Merck and Bristol-Myers Squibb (NYSE: BMY) didn’t want to focus their presentations on the ominous topic.

But the fact remains that generic companies like TEVA Pharmaceuticals (Nasdaq: TEVA) and Impax Laboratories (Nasdaq: IPXL) are set to take advantage of the enormous opportunities that the patent cliff represents – and spent time at the conference discussing how their robust pipelines will facilitate that.

Source: Marc Lichtenfeld

The world energy landscape has changed with new developments in extracting natural gas from shale beds and tight sands. Innovative extraction technologies have dramatically altered the economics of natural gas extraction in North America. South Africa’s Sasol Corp., for example, is teaming up with Talisman (NYSE:TLM) to turn otherwise stranded gas into liquid fuel in northern British Columbia. It’s a truly revolutionary process – a point that The New York Times made a few days after I mentioned this joint-venture to the subscribers of Outstanding Investments.

Companies like Consol Energy (NYSE:CNX) and MarkWest Energy (NYSE:MWE) are also benefitting from US, Canadian and now global shale gas development. Even our friends the Chinese are coming to the US, to learn how we’re cracking shale for gas, so they can duplicate the effort back in the Motherland.

At the same time, the technology for freeing shale gas is finding its way into the oil patch, with companies like Venoco (NYSE:VQ) working to turn California’s Monterey Shale into a vast new oil resource. There are a lot of hydrocarbon molecules out there. The trick is to harvest them.

Forward-looking investors should not ignore the fact that shale gas development will provide enormous opportunities for the oil service guys, particularly Schlumberger (NYSE:SLB), Halliburton (NYSE:HAL) and Baker Hughes (NYSE:BHI).

There’s much more to come with the shale gas revolution. We’re just in the early innings on this one. There’s plenty of good investing ahead, and a lot of hydrocarbon molecules yet to be sucked out of the crust.

Source: Byron King

Dell calls it the “Streak.” HP has their own version – the “Touchsmart.” Samsung has the Galaxy Tab. Apple of course has the iPad. There’s also the “Ideos” from a Chinese company called Huawei, and the “Edge” from a Virginia company called Entourage.

In some parts of India, they’re calling this technology the “Adam.”

Many of these versions of the “Chi–Tab” started hitting U.S. stores as early as last spring. Others are on their way…

Like the “Cruz” by a company named Velocity Micro…

If you haven’t seen one yet, just head down to your local Best Buy. Or check out the consumer electronics stores in your local mall. In most cities, you’ll already find them for sale.

In the U.S. – and everywhere else in the world – this trend is still in its infancy…

Mainly hard–core techies and research–intensive businesses have started buying into the trend…

Medtronic, Bausch & Lomb, Wells Fargo, Hyatt Hotels, the University of Chicago Medical Center and the Denver Fire Department, to name a few.

But the much bigger story, we believe, is China’s market… the world’s most fertile ground for a computer revolution like the “Chi–Tab”.

And, as I’ll show you in a few minutes, the Chinese Government may be putting a plan in motion that could turn this already phenomenal opportunity into what may be the biggest trend we’ve ever seen.

Who owns the ‘Chi–Tab?’

As I mentioned earlier, no one single person or company has claim to this technology.

How’s this possible?

Well, let’s consider another technology that has spread to China… and take another quick look at the mobile phone.

Sure, Chinese companies like China Mobile, China Unicom, and China Telecom have their own patented phones and software… and are battling it out for control of the Chinese market…

But mobile phone technology is the application of an idea, which has and always will be up for grabs.

Likewise, right now, companies are battling it out for control of the “Chi–Tab” market… but no one single company or individual has sole claim on the “Chi–Tab” technology either…

So how could you get rich from this trend, regardless of who wins this market?

Well, big cell phone companies did do quite well in China…

China Mobile – the biggest cell phone company in China with over 500 million subscribers saw its stock climb 651%. And China Telecom is up 307%.

But the real winners – the companies that have made an absolute fortune in the Chinese cell phone market, are the tiny companies most people have never heard of, who specialize and control key parts of the technology.

Companies like Cypress Semiconductor, which makes microchips and touch screens for cell phones and holds over 700 patents on its technology.

Most likely you’ve never heard of this obscure company, and neither have the 650 million Chinese who use cell phones… but that doesn’t matter because early investors could have made 2,407% so far.

Then there’s Microsemi, a company that makes a proprietary filter–less audio amplifier for cell phones (to help you hear better.) So far, this stock is up a staggering 4,965%.

Or consider ARM Holdings, which designs microprocessors that are used in more than 95% of the world’s cell phones. Their stock has already shot up 1,213%.

My point is, the same thing that happened with cell phones is happening right now with the “Chi–Tab” market.

Source: Stansberry Research

In a word, No!

If gold is in a bubble, then it’s one heck of a bubble. Not even the 2008, economy-wrecking market crash could pop it. Gold is not in a bubble; it’s in a big bull market, plain and simple.

As stories about quantitative easing and other forms of overt currency debasement crossed the newswires last year, investors became increasingly concerned about the value of the paper they call “wealth.” Increasingly, these concerned investors have been shifting some of their wealth from paper to gold…and other hard assets.

Plus, it’s easier than ever to “own” gold (so to speak) via the rise of exchange-traded funds (ETFs) like SPDR Gold Trust (NYSE:GLD). With a click of your mouse, you can buy into the new gold rush – although in many respects it’s better to buy real gold and take delivery, a point that I’ve made over and over.

At the same time, the world’s gold buyers are chasing declining mine output. That is, despite the rising price of gold, the world is likely past the point of Peak Gold output. All the output from new mines isn’t replacing the decline in output from older mines.

But demand is the main story in the gold market…demand for real money, not the paper kind. The monetary universe is changing in a fundamental way, with the price of gold serving as the barometer, thermometer and inclinometer. The cozy old economic order – post World War II, with the US dollar as the world’s reserve currency – is passing away, and things won’t ever go back to the long, lost “good old days.”

I’ve had endless discussions with skeptics about “why gold prices are rising.” Of course, the skeptics can deny, up and down, the meaning of rising gold prices. But at the end of the day, investors and savers around the globe are becoming increasingly fearful of holding paper currencies.

I won’t even go into the monetary problems that national governments across the world are facing with fiat currencies. Just accept the fact that mankind’s monetary default position is gold, and that’s been the case for 5,000 years or more. Don’t fight history.

Here at Agora Financial, we’ve been recommending that readers buy gold since the late 1990s, when it was selling for under $300 per ounce. We still like it at $1,375 an ounce.

When it comes to gold, there’s one key idea to take into 2011: Gold is money. And gold makes better money than the government-issued kind. The big risk of owning currency and bonds is that any Tom, Dick & Harry – OK, the politicians and bankers – can create as much of it as they want. This year and next, your biggest risk is in not understanding that concept.

Source: Byron King

* Words sell and words repel
* Words lead and words impede
* Words heal and words kill

Aspire will help you understand what words mean in their purest sense and unlock their importance as you develop a new leadership vocabulary.

From a fateful encounter with a wise shopkeeper in Vienna to a serendipitous introduction to an esteemed etymologist residing in a senior home, Kevin Hall discovers the secret power inherent in words, and invites us all on the journey.

Discovering your purpose through the Power of Words is almost an understatement to this book. Will you find your purpose? I don’t know, but what I do know is that you will be inspired to find your purpose and will have encouragement to turn to again and again as you struggle through the path.

The meaning of ten words:
1. Genshai (not treating anyone, including yourself, small)
2. Pathfinder (leader)
3. Namaste (respecting each person’s authenticity and uniqueness)
4. Passion (suffering for what you value)
5. Sapere Vedere (visioning)
6. Humility (being teachable)
7. Inspire (breathing life into)
8. Empathy (walking the path of another)
9. Coach (mentoring another)
10. Integrity (being congruent)

Source: Kevin Hall “Aspire”

The Chilean miners’ experience reminded us once again of the huge gulf between countries that work and countries that don’t. Just as the Chilean earthquake last February caused only 521 casualties compared to the 200,000 in Haiti the previous month, so the Chilean mine disaster brought together expertise from all over the world in a remarkably effective and competently managed rescue effort. It is a distinction that does not simply measure the difference between rich countries and poor countries: the 2008 Sichuan Chinese earthquake killed an estimated 90,000 people, while the Russian coal mine disaster in May killed 90 people both in countries of comparable wealth per capita to Chile.

Earthquakes are terrifying and mining is a dangerous job anywhere, but you’re much more likely to survive an earthquake or a mine disaster in some countries than in others. Indeed Chile’s performance both in the earthquake and this mine disaster was of the highest quality probably only in Germany, Scandinavia and maybe Singapore could one reliably expect public rescue services to work so effectively.

For investors, the Chilean earthquake and mine disaster experiences have an important lesson: Countries with really good management should be promoted sharply up investor league tables, for a number of reasons.

First, they are likely to enjoy better economic results. Their efficiency will use resources and labor better, there will be fewer sink-holes of value destruction in the public sector and the uncompetitive private sector and they will generally be more open to new ideas and new techniques. The mine rescue for example used people and equipment from all over the world a drill rig and drill bits from Schramm of Pennsylvania, a German-designed rescue pod and video equipment from Japan. Chile’s ability to assemble a state-of-the-art operation for a unique situation demonstrated the country’s ability to flourish in a competitive globalized market.

While there are other countries with Chile’s management capability though not many they do not have Chile’s wealth of natural resources and they generally have labor costs a substantial multiple of Chile’s. Chile has shown itself well managed under governments of both its political parties, but its current pro-business regime seems likely to be more active in removing obstacles to growth and encouraging the investment needed for it. Since it has the capabilities and resources of a much richer country, Chile seems likely to become one in pretty short order, and investors in Chile should benefit from the rapid growth that this emergence will bring.

Investors seeking exposure to the overall Chilean economy should first consider the iShares MSCI Chile Investible Market Index Fund (NYSE: ECH), which invests in the overall Chilean market index. At $500 million, this is large enough to be decently liquid and has an expense ratio of only 0.86%, very reasonable for a single country fund. Its main disadvantage, as for the Chilean market in general, is a price/earnings (P/E) ratio of 25 and a yield of only 1.1%, but you should remember that Chilean trailing earnings currently include the recession of 2009 and the difficult post-earthquake period, so even without rapid economic growth an earnings rebound would be likely.

For a higher yield, you should look at Vina Concha y Toro SA (NYSE:VCO) the country’s largest wine producer, which although trading on 21 times earnings has a dividend yield of 3.9%. Chilean wine has a quality advantage over most other producers in that the country’s remoteness allowed it to avoid the 1873 phylloxera blight, so its grapes are generally considered of exceptional quality. VCO is thus a leader in the country’s exceptional agribusiness sector, selling a product that is marketable at a premium above other commoditized wine producers.

It’s difficult to get direct exposure to Chilean mining because the dominant copper producer, Codelco, is state owned, while the smaller Chilean mining companies like the San Esteban company which owned the San Jose mine where the rescue took place have generally suffered from low investment and have sub-standard safety records. However one major participant in Chile’s mining is Freeport McMoran Copper and Gold (NYSE: FCX) which has three copper/gold mines in Chile and is investing $700 million in expansion of its El Abra project. FCX’s stock price has run up in the last few weeks, as with most mining companies, but at a 12.64 times trailing P/E ratio it remains good value.

Chile isn’t just a spice for your investment portfolio; it’s an essential ingredient!

Source: Martin Hutchinson, Money Morning

The number one sin of all marketing is to be “Boring.” In fact, 72% of all Direct Mail (which this book addresses) is sorted over a wastebasket.

Bill shows page after page of outrageous marketing that never gets thrown away. Such as yellow legal-paper letters, little kids crayon letters, lumpy mail with nickels pasted to them, holiday cards that show a turkey saying, “Eat Ham!” Now that’s funny; I don’t care who you are!

However, what I like best is that Bill is not just some ordinary consultant or guru who only tells you how to do it. He’s actually done it all himself! Bill has owned the number one men’s retail store in Baltimore and many of the examples are from his very successful campaigns.
Everyone will enjoy these fun filled, exciting marketing ideas that will make their marketing stand out from the crowd.

Outrageous Advertising That’s Outrageously Successful: Created for the 99% of Small Business Owners Who are Dissatisfied with the Results They Get From Their Current Advertising by Bill Glazer is available for an outrageous price of $4.95 but I don’t know for how long.

Best marketing strategy from Bill Glazer

Small business marketing strategies with Bill Glazer

This isn’t easy to do. But when you look at it over history, a simple pattern does emerge…

Each generation, the pattern switches.

One generation gets obliterated by the stock market, knocking everyone out of stocks. Then the next generation lives through a soaring stock market.

It’s not clockwork… but it seems there’s more at work than just chance. Take a look:

If you had lived through the Great Depression – if you had lived through an entire generation where stocks lost money (17 years from 1930-1947) – would you ever consider buying stocks again?

Probably not. Yet that’s when you should have bought… Stocks rose by more than 500% in the next generation, from 1947 to 1965.

Folks who invested heavily throughout the 1970s learned you could “never” make money in stocks. You needed real assets, like real estate and gold. Boy, were they wrong in the 1980s and 1990s. Gold fell in half from its 1980 peak to 1999.

If the last investment generation ended around 1999, and if the pattern holds, then we could see stocks do poorly for something like 17 years… or until roughly 2016. That’s pretty close to what Shiller is saying.

The popular wisdom in 1999 was that you always want to be invested in stocks. Nobody wanted gold. But since the end of 1999, stocks (as measured by the S&P 500 index) are down, as I’m sure you’re well aware. Meanwhile, commodities (as measured by the CRB Index) are up over 100%.

The last generation of stock investors is still holding some love for stocks. And they’re still a bit afraid to commit to commodities like gold. But they will. History suggests they’ll have given up on stocks and be fully loaded in commodities… by 2016.

Looking at the last time we were in a similar cycle, I have two important points to share with you…

1) The March 2009 bottom may be the ultimate bottom in stocks, not 2016. In the last great bear market (’65-’81), the ultimate bottom was in 1974, not ’81. Investors spent the next few years giving up on stocks and looking to “the action” in commodities.

2) Commodity prices could go “parabolic” in the coming years. They did in the late 1970s, at the very end of their bull market. It’s what happens at the end of great bull markets. It’s just like stocks in the late 1990s – they “went parabolic” at the end of their bull market.

So there is some good news…

Commodities could go parabolic from here. And stocks may have already bottomed. So even though it could be years (until roughly 2016) before another rip-roaring bull market in stocks arrives, we may have seen the lows for this generation.

Or none of this could be true, of course… But it has worked roughly this way for the last 100 years.

Source: Dr. Steve Sjuggerud