August 2014 Issue is Released

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Investment Opportunity 1 – Decent Return Possibility with Little Risk

Company 1 is an investment idea that at first does not look appealing. However, after you look at it closely, you realize that it gives you an opportunity to earn a decent return in a relatively short period of time without taking on too much risk.

The bad thing is that this idea is not something that will give you multi-bagger returns, but in this market multi-baggers are pretty much nonexistent.

Investment Opportunity 2 – Major Shareholders Said Enough is Enough

When you earn your own money, you can do whatever you want with it. You can invest it, you can save it, or you can spend it in whatever way you want. There is no one that is in control of it but you. However, when you take someone else’s money, then that money always comes with strings attached.

This is especially true with publicly traded companies that are owned by various shareholders. When these individuals invest their capital, they expect results. Consequently, the managers of publicly traded companies cannot spend money the same way they would if it belonged to them personally. If they ignore the shareholders, one day, they may wake up and have the rug pulled out from underneath them.

This is exactly what happened with the management of Company 2. For years, shareholders kept watching the company’s cash being wasted by the management. Finally, they said, enough is enough. We want control.

Investment Opportunity 3 – The Founder Took the Reins

Usually when change is needed, it is an activist hedge fund that shakes things up through a proxy fight. In the case of Company 3, change was definitely needed because too many promises were broken. However, instead of a hedge fund, it was the founder himself that removed the board of directors and forced the CEO to step down so that he could execute on a strategy that would unlock shareholders’ value.

The reason why change was needed was because the company was not reaching its potential. It was providing successful products to a wonderful client base, but this was not enough to be profitable.

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Another Sign of a Bottom

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Rick Santelli on CNBC

Porn to Pay for College Education

When I went to college, the tuition was not as ridiculous as it is right now so I was able to work part-time to pay for it. But right now with the help of the government that is driving tuition costs, some young people have to turn to porn to pay for it. Our leaders should be proud of themselves.

Why GDP for the Second Quarter 2014 Will Be Bad

Yesterday, the GDP numbers for the first quarter 2014 came out and they were unexpectedly worse than anyone expected. By anyone meaning clueless economists. Anyway, I had a conversation with a friend and he said, “This quarter they blamed it on weather. Next quarter, they will blame it on the FIFA World Cup.”

Today, we have ABC News come up with the article “World Cup Taking a Bite Out of Worker Productivity.”

You really cannot make this stuff up.

Economy in First Quarter Was Worse Than Everybody Thought

The beginning of the year was not just bad for the United States economy: It was, on paper at least, the worst quarter since the last recession ended five years ago.

The Commerce Department revised its estimates of first-quarter gross domestic product Wednesday to show that the economy contracted at a 2.9 percent annual rate. A combination of shrinking business inventories, terrible winter weather and a surprise contraction in health care spending drove the first-quarter decline, which is the worst since the first quarter of 2009, when the economy shrank at a 5.4 percent rate.

What makes the sharply negative number all the more stunning is that it didn’t feel like an economic contraction at all in the first quarter. Employers kept adding jobs. Many measures of business activity and consumer confidence were stable. And forecasters are expecting a healthy pop of growth in the second quarter, which ends next week.

To read the rest, click here.

Of Course There is No Inflation but Only Noise

What the Heck Just Happened to Gold and Precious Metals?

Mr. Market rediscovered gold and other precious metals on Thursday, resulting in the metal’s biggest one-day rise in more than half a year. It was the 14th biggest single-day move in the price of the most popular gold ETF and a day that one trader termed ”frantic” for repositioning and short covering.

Okay, then. Why? Strategists are pointing to the Federal Reserve and its decision this week to stand pat on monetary policy. Not convinced? Neither are these strategists very convinced — except when a few of them are declaring that the market is growing increasingly skeptical of the Fed. If skepticism’s the driver, then the turn toward anti-Fed assets like gold would make more sense.

To read the rest of the article, click here.

The Fed Just Lost Any Shred of Credibility on Inflation

Those High Chicken Prices are just Noise – Tell that to the Cashier
The Fed today in their press conference lost any credibility on a number of issues, and it really goes to show that they have no clue what they are doing at this point. First they called the overheating inflation in the economy Noise, yes you heard right NOISE which is now showing up even in the watered down indexes used to track it by the Fed, and already above their target of 2% on a year over year basis and rising, (wait until you see the next two month`s CPI reports on a spike in gasoline prices as we enter the summer driving season).

45% Appreciation is Normal Price Discovery & In-Line with Historical Norms

Then Janet Yellen says she sees no signs of a bubble in equity prices after a 35% appreciation followed by what looks like another 10% plus year of appreciation in the cards for 2014. It is one thing to be dovish, but when one goes out of their way to mischaracterize the data to such an extreme that it makes one lose any credibility just to justify a given monetary policy, that is when the proverbial shit hits the fan.
No Clue at this Point!

To read the rest of the article, click here.

Scorpio Gold May 2014 Tour

Part 1

Part 2

Part 3

Part 4