The Long Term Investor

LOTS of GREAT news today driving stock futures up as we near the open of this last market day of the week. The BIG STORY:

U.S. job growth accelerates in June; unemployment rate falls

https://www.reuters.com/article/us-...in-june-unemployment-rate-falls-idUSKBN2430FF

(BOLD is my opinion OR what I consider important content)

"WASHINGTON (Reuters) - The U.S. economy created jobs at a record clip in June as more restaurants and bars resumed operations, further evidence that the COVID-19 recession was probably over, though a surge in cases of the coronavirus threatens the fledgling recovery.

Nonfarm payrolls increased by 4.8 million jobs in June, the Labor Department’s closely watched monthly employment showed on Thursday. That was the most since the government started keeping records in 1939. Payrolls rebounded 2.699 million in May.

Economists polled by Reuters had forecast payrolls increasing by 3 million jobs in June.

The job gains added to a stream of data, including consumer spending, showing a sharp rebound in activity. But the reopening of businesses after being shuttered in mid-March has unleashed a wave of coronavirus infections in large parts of the country, including the populous California, Florida and Texas.

Several states have been scaling back or pausing reopenings since late June and sent some workers home. The impact of these decisions did not show up in the employment data as the government surveyed businesses in the middle of the month.

Federal Reserve Chair Jerome Powell this week acknowledged the rebound in activity, saying the economy had “entered an important new phase and (had) done so sooner than expected.” But Powell cautioned the outlook “is extraordinarily uncertain” and would depend on “our success in containing the virus.”

The unemployment rate fell to 11.1% last month from 13.3% in May. Employment is increasing largely as companies rehire workers laid off when non-essential businesses like restaurants, bars, gyms and dental offices among others were closed to slow the spread of COVID-19.

Economists have attributed the burst in job gains to the government’s Paycheck Protection Program, which gives businesses loans that can be partially forgiven if used for wages. Those funds are drying up.

In an economy that had already fallen into recession as of February, many companies, including some not initially impacted by lockdown measures, are struggling with weak demand.

Economists and industry watchers say this, together with the exhaustion of the PPP loans, has triggered a new wave of layoffs that is keeping weekly new applications for unemployment benefits extraordinarily high.

In another report on Thursday, the Labor Department said initial claims for state unemployment benefits totaled a seasonally adjusted 1.427 million in the week ended June 27, down from 1.482 million in the prior week."

MY COMMENT

OF COURSE the.......economists.......had no clue. After all they ONLY missed this by 1.8 MILLION expected jobs. I ALSO find it interesting that the writer of this article spends MORE time trying to talk down the report with all the negativity about the reopening, etc, etc. THIS market WILL NOT be talked down.....at least today.

 

AND.......on the MICRO level here is the other BIG NEWS:

Tesla delivered more than 90,000 cars last quarter

https://www.cnn.com/2020/07/02/tech/tesla-sales/index.html

(BOLD is my opinion OR what I consider important content)

"Tesla sales and production were hurt by the Covid-19 pandemic and lockdowns. But not as much as some other automakers.
The electric car company reported Thursday it delivered 90,650 cars to customers during the quarter. That's down 5% from a year ago, but far less than the drops of 30% or more reported by other automakers on Wednesday.

Tesla's second-quarter sales were up a bit from the 88,400 cars it delivered in the first quarter.
Production was down, though, falling 20% from the first quarter, as Tesla's factory in Fremont, California, was shut for a couple of months. CEO Elon Musk strongly objected to the orders to remain closed, calling stay-at-home orders "fascist" in a call with investors in late April. Tesla filed a lawsuit to get the factory open once again in mid-May.

The solid sales number was good news for those hoping that Tesla would be able to maintain its path of profitability despite the Covid-19 pandemic. Tesla's stock, which had been up 6% in premarket trading before the sales and production release, climbed even higher on the news.

Shares have been on a run recently, making Tesla the most valuable automaker in the world, despite still having only a fraction of the sales of the established automakers. Shares are up 168% this year, through Wednesday's close."

MY COMMENT

BOOM. FIRST leg of my TRIPLE is in the books. At the moment the stock is UP $181 per share. Next big events will be the second quarter financials. After that it will be the inclusion in the SP500. LOOKING GOOD for all the TESLA MANIACS out there.

 

BUT.....the above is nice news.....we will see if it translates into a HUGE day for the markets. I think a lot of this was anticipated......at least by those that are market professionals and insiders. I anticipate a positive day........BUT......perhaps ONLY in the 250 to 500 point range by the close. If we get a lot of........SELL THE NEWS.......and profit taking by the professionals and traders it is even possible to end up flat or slightly negative for the day. BUT....for long term investors.....this news will help to drive the markets and WILL help to keep us from seeing a retest of the prior market lows.

 

HERE.......of course.......is the headline in the New York Times.

Tesla Deliveries Slipped in Second Quarter as Pandemic Hit

I think it must have been written by their DELUSIONAL ECONOMIST.......Paul Krugman. The POSTER CHILD for all the ECONOMISTS that the surveys always seem to quote and talk about.

I REALLY dont have anything against......economists. BUT....I find it CRAZY that the MEDIA and others constantly quote the mythical.......SURVEY OF ECONOMISTS......as support for and against the economy in general and the markets specifically. I cant say I have EVER known ANY investor that looks to see what.......THE ECONOMISTS.....are saying and doing before making a buy of a stock. I post this as a warning to ANYONE that is a young or new investor. I suspect that if anyone ever bothered to look at the actual investing results of economists.....they would SUCK. Probably even more than physicians. Going off topic......over my life the WORST general group of investors that I have ever known are physicians. BUT......I am sure they would totally kick ass on the economists. What counts is........REAL........BUSINESS FUNDAMENTALS.

 

I just looked at one of my accounts realized that I have been posting some incorrect info. I will post a correction. I have 15 shares of Tesla in the one account NOT ten. So...8 in one account and 15 in the other. I have inadvertently posted a few time on here that there was 8 and 10 shares.

In any event doing nicely. LOOKS like there is a good amount of profit taking today that is holding the markets down a bit. It will be interesting to see if this accelerates into the afternoon as we head to the close and a three day weekend. If I had to GUESS......I would say we will probably end up with a gain BUT not too big of a gain perhaps 100 to 200 points on the DOW. Perhaps about 1% max on the SP500.

 

On a NON-INVESTING topic........at least stock investing. I mentioned in a recent post that I would be attending an art auction this past weekend. I DID make it and ended up buying two pieces of art. A friend of mine had a piece for sale in the auction. I thought the auction results were on the low end. For me that was GOOD NEWS since I paid less for both the pieces that I bought then they sold for in 2015 at a national auction house. Talking to my friend yesterday.......he did not attend.......he also thought the prices were SOFT at this particular auction. It seems like TWO things impacted this auction.......first the virus and all the negativity lately. Second.....and probably most important.......the auction line-up of items for the sale was WEAK. In the art and collectables world it is TOP QUALITY that is on fire right now. On the positive side......they did seem to sell everything. I did not see any items that were passed.

I will ADD.....as to the art and collectable world right now. Besides top quality in all fields, it is things connected to males in particular and people in general in the 20-45 age group. Comic books, collectable cards, collectable video games, baseball cards, Star Wars, and memorabilia, mid century modern, etc, etc, etc. Space program memorabilia is very hot right now.

In the art world Contemporary Art is very hot and has been for a while. In general I would say that the art market is very strong right now. BIG Western art auctions like The Coeur D'Alene Art Auction and Scottsdale Auction bring in tens of millions every year and set new records nearly every year. American impressionistic art from the 1890 to about 1960 is doing well.....especially.......on a regional level like California or Texas or New England Impressionistic Art. Classic Illustration Art is doing very nicely as is Science Fiction Illustration Art.

BUT......in any area......quality, quality, quality is the key. One of my primary rules of collecting is to always buy the BEST QUALITY you can afford. One item of SUPERIOR QUALITY will be worth more in the long run than two or three lesser items. of course, I dont buy art or collectables as an investment. BUT.....well selected items will go up in value.

 

"Look up Frank Frazetta.. A fantasy art master, inspired many in the field and collaborated with a ton of film makers. George Lucas said that if it wasn’t for Frazetta’s Weird Science Fantasy covers he wouldn’t have created Star Wars. Imagine that.
Frank’s Egyptian Queen, a piece he painted in 1969, sold for 5.4 mil last year. A new all time high for his painting and for a comic book cover in general."

YES.....Zukodany. I know his work well. He is probably the PREMIER fantasy illustrator of all time. His work is exceptionally sought after. I remember that Egyptian Queen painting. It was a masterpiece. If my memory is right it was sold by Heritage Auctions. I get all their Illustration Art catalogs including the fantasy art. Now an artist like this......there are lesser priced pieces. Small studies or lesser illustrations. They will still probably be a good investment..........whoops, art is not an investment..........especially if you buy something like the first painting on this page. I would guess that the minimum price for a nice painting by Frazetta would be at a minimum, $30,000 to $45,000. At the link below is some of his items for sale including a very nice painting that is going to be sold by heritage in September.

https://comicarttracker.com/frank-frazetta-original-art-for-sale

I will say.......that for me art is an investment. I enjoy and love what I own, but it is also an investment. I LIKE to buy art, furniture, musical equipment, etc, etc, that I love to own and use and when I am done with them I can sell and at the minimum get all my money back. I dont think I have ever sold a painting that I did not make a profit.........once I became a serious collector about 30 years ago.

I think this piece is a good piece for someone looking for good quality at a reasonable price from the great Frank Frazetta. It has the added bonus of the pencil drawing on the back. It will be sold by Heritage in September Illustration Art Auction:

(See last item in the link above)
"Frank Frazetta Death Dealer #6 Preliminary Cover Original Art (early 1990s). Finished Death Dealer paintings are murderously expensive, if you'll pardon the expression. We should know, having auctioned the finished Death Dealer #6 painting for over a million dollars. This prelim will be considerably more affordable, and for the price you get a unique Frazetta image that differs from the final version of #6 or any other issue. Note that the back of the piece has preliminary pencil sketches of the Death Dealer's steed which are impressive in their own right. Watercolor on paper. The image area measures 5" x 5.5" with and overall matted size of 11" x 13.5". The sheet has notes below the image area. The page has wear and is toned, and there are stains on edges. In Very Good condition.

"The main thing is to buy what you love, because you love it, and profit is an added bonus"

 

ANOTHER KILLER WEEK.....for long term investors that are in quality companies. ALL green today for my accounts. AND....a SP500 beat of .33%. SP500 is PLUS 1.5% for the past five days.........and.......MINUS 3.12% for the year to date.

Oh yes......Tesla......nice gain..........putting me at PLUS 20.31% since June 23, 2020. NO DOUBT......I will sooner or later ride a lot......if not all......that gain back down in the short term. BUT.....I am looking at and considering this company as a potential long term holding.

 

Have a GREAT 4th of July everyone.

 

FINALLY.......here is an ACTUAL, SCIENTIFIC, statistically significant, published in a major journal, study showing that..........GASP......hydroxychloroquine works. NOT only does it work, the results of the study are MASSIVELY statistically significant. BUT.......WTF.......now that we are allowing politics and the media to determine treatment modalities for disease......who cares. THIS is the FIRST study I have seen of ANY of them to date that is an actual, scientific study. This is ALSO the largest study to date.

Hydroxychloroquine helps coronavirus patients recover, new study shows
Patients treated with drug had 13% mortality rate, those not treated with the drug had 36% mortality rate

https://www.foxbusiness.com/lifesty...-coronavirus-patients-recover-new-study-shows

(BOLD is my opinion OR what I consider important content)

Coronavirus patients treated with hydroxychloroquine (HCQ), as well as a combination of the malaria drug with an antibiotic, had higher survival rates than those who were not treated with the drug, a new study has found.

Researchers at Henry Ford Hospital in Detroit saw a "significant reduction" in mortality rates with patients who were hospitalized between March 10 and May 2 and treated with the drug compared to those who were not. Hydroxychloroquine has been a topic of controversy since President Trump touted its effectiveness as early as March. The president also said he had been taking the drug.

"The results of this study demonstrate that in a strictly monitored protocol-driven in-hospital setting, treatment with hydroxychloroquine alone and hydroxychloroquine [and] azithromycin was associated with a significant reduction in mortality among patients hospitalized with COVID-19," researchers wrote in the study published July 1 in the International Journal of Infectious Diseases.

The experiment's COVID-19 hospital patient cohort was "among one of the largest...assembled in a single institution," the study notes.

More than 2,500 COVID-19 patients with a median age of 64 were included in the study. The mortality rate for patients who were treated with HCQ alone was 13.5 percent; those treated with HCQ and azithromycin had a 20.1 percent mortality rate; and those who were not treated with either drug had a 26.4 percent mortality rate, the study found.

The primary cause of death was respiratory failure (88 percent), followed by cardiopulmonary arrest and multi-organ failure (8 percent) and cardiac arrest (4 percent).

These findings come after researchers at Oxford University found no "beneficial effect" in treating patients with HCQ in a study of 1,542 COVID-19 patients published June 5 as part of the school's virus study called the "RECOVERY Trial."

"We have concluded that there is no beneficial effect of hydroxychloroquine in patients hospitalised with COVID-19," wrote professors Peter Horby and Martin Landray, chief investigators of the RECOVERY Trial. "We have therefore decided to stop enrolling participants to the hydroxychloroquine arm of the RECOVERY Trial with immediate effect."

After the study got significant media coverage, the World Health Organization, National Institutes of Health and generic HCQ producer Novartis also stopped their hydroxychloroquine trials, citing a lack of benefits for patients and issues with patient enrollment.

Sanofi, a French pharmaceutical company that produces the anti-malaria drug, also stopped its clinical trial of HCQ.

Moves by these chief organizations and companies to stop their HCQ trials have led many to believe the drug was no longer an option for an effective COVID-19 treatment, but doctors and recovered COVID-19 patients alike continue to tout the drug's effectiveness despite studies that have found no benefits or an increase in mortality rates.

Henry Ford researchers attribute the difference between the effectiveness of HCQ in their study compared to the ineffectiveness of the drug in other studies to timing and procedure.

"The benefits of hydroxychloroquine in our cohort as compared to previous studies may be related to its use early in the disease course with standardized, and safe dosing, inclusion criteria, comorbidities, or larger cohort. ... Later therapy in patients that have already experienced hyperimmune response or critical illness is less likely to be of benefit," they wrote.

Daily HCQ and azithromycin production costs are also significantly lower than what it costs to produce remdesivir, another COVID-19 drug that has shown promising results in patients, according to a study published in the Journal of Virus Eradication.

Gilead Sciences Inc., which produces remdesivir, said it would charge U.S. hospitals $3,120 per patient with typical commercial insurance, The Wall Street Journal reported Monday.

MY COMMENT

I "personally" ATTRIBUTE the difference in effectiveness to..........BIAS on the part of the various other studies. (just my personal opinion) The study above is the LARGEST study to use REAL SCIENCE..........ie:...........with STRICT controls and procedures. The differences in outcome they found with the treatment are MASSIVELY STATISTICALLY SIGNIFICANT. GOOD NEWS for the American public on the eve of JULY 4.

 

HERE is the ACTUAL RELEASE from the Hospital and Physicians. This story is even more compelling and important then the general media is reporting. NOT due to some bias.......but I presume from dumbing down the results to fit into a basic news article.

"DETROIT – Treatment with hydroxychloroquine cut the death rate significantly in sick patients hospitalized with COVID-19 – and without heart-related side-effects, according to a new study published by Henry Ford Health System.

In a large-scale retrospective analysis of 2,541 patients hospitalized between March 10 and May 2, 2020 across the system’s six hospitals, the study found 13% of those treated with hydroxychloroquine alone died compared to 26.4% not treated with hydroxychloroquine. None of the patients had documented serious heart abnormalities; however, patients were monitored for a heart condition routinely pointed to as a reason to avoid the drug as a treatment for COVID-19.

The study was published today in the International Journal of Infectious Diseases, the peer-reviewed, open-access online publication of the International Society of Infectious Diseases (ISID.org).

Patients treated with hydroxychloroquine at Henry Ford met specific protocol criteria as outlined by the hospital system’s Division of Infectious Diseases. The vast majority received the drug soon after admission; 82% within 24 hours and 91% within 48 hours of admission. All patients in the study were 18 or over with a median age of 64 years; 51% were men and 56% African American.

“The findings have been highly analyzed and peer-reviewed,” said Dr. Marcus Zervos, division head of Infectious Disease for Henry Ford Health System, who co-authored the study with Henry Ford epidemiologist Dr. Samia Arshad. “We attribute our findings that differ from other studies to early treatment, and part of a combination of interventions that were done in supportive care of patients, including careful cardiac monitoring. Our dosing also differed from other studies not showing a benefit of the drug. And other studies are either not peer reviewed, have limited numbers of patients, different patient populations or other differences from our patients.”

Zervos said the potential for a surge in the fall or sooner, and infections continuing worldwide, show an urgency to identifying inexpensive and effective therapies and preventions.

“We’re glad to add to the scientific knowledge base on the role and how best to use therapies as we work around the world to provide insight,” he said. “Considered in the context of current studies on the use of hydroxychloroquine for COVID-19, our results suggest that the drug may have an important role to play in reducing COVID-19 mortality.”

The study also found those treated with azithromycin alone or a combination of hydroxychloroquine and azithromycin also fared slightly better than those not treated with the drugs, according to the Henry Ford data. The analysis found 22.4% of those treated only with azithromycin died, and 20.1% treated with a combination of azithromycin and hydroxychloroquine died, compared to 26.4% of patients dying who were not treated with either medication.

“Our analysis shows that using hydroxychloroquine helped saves lives,” said neurosurgeon Dr. Steven Kalkanis, CEO, Henry Ford Medical Group and Senior Vice President and Chief Academic Officer of Henry Ford Health System. “As doctors and scientists, we look to the data for insight. And the data here is clear that there was benefit to using the drug as a treatment for sick, hospitalized patients.”

Overall, hospital system patients in the study experienced an 18.1% in-hospital mortality rate. Regardless of treatment, mortality was highest in:

• Patients older than 65,
• Patients who identified as Caucasian,
• Patients admitted with reduced oxygen levels,
• Patients who required ICU admission.

Patients who died commonly had serious underlying diseases, including chronic kidney and lung disease, with 88% dying from respiratory failure. Globally, the overall mortality from SARS-COV-2 is estimated to be approximately 6% to 7%, with mortality in hospitalized patients ranging between 10% and 30%, according to the study. Mortality as high as 58% has been seen among patients requiring ICU care and mechanical ventilation.

According to the U.S. Centers for Disease Control & Prevention, hydroxychloroquine (also known as hydroxychloroquine sulfate) is a U.S. Food & Drug Administration (FDA)-approved arthritis medicine that also can be used to prevent or treat malaria. It is available in the United States by prescription only. The drug is sold under the brand name Plaquenil and it is also sold as a generic medicine. It is commonly used by patients with arthritis, lupus or other rheumatic conditions.

Dr. Zervos also pointed out, as does the paper, that the study results should be interpreted with some caution, should not be applied to patients treated outside of hospital settings and require further confirmation in prospective, randomized controlled trials that rigorously evaluate the safety and efficacy of hydroxychloroquine therapy for COVID-19.

“Currently, the drug should be used only in hospitalized patients with appropriate monitoring, and as part of study protocols, in accordance with all relevant federal regulations,” Dr. Zervos said.

Henry Ford Health System, as one of the region’s major academic medical centers with more than $100 million in annual research funding, is involved in numerous COVID-19 trials with national and international partners.

Henry Ford Health System is currently also involved in a prophylactic hydroxychloroquine study: “Will Hydroxychloroquine Impede or Prevent COVID-19,” or WHIP COVID-19. The study is a 3,000-person, randomized, double-blinded look at whether hydroxychloroquine prevents healthcare and frontline workers from contracting the COVID-19 virus. The WHIP COVID-19 team is working on expanding study sites while there is a lull in the number of COVID-19 cases in Southeast Michigan. This is in preparation for a potential increase of COVID-19 cases as Fall flu season approaches, with additional sites available for convenient enrollment of healthcare workers and first responders. The WHIP COVID-19 team is also taking this gift of time to reach out to other areas of the world that are seeing a blossoming of cases: Brazil and Argentina. There are currently 619 people enrolled in the study, out of a target of 3,000.

###

About Henry Ford Health System:

Under the leadership of President and CEO Wright L. Lassiter, III, Henry Ford Health System is a $6.5 billion integrated health system comprised of six hospitals, a health plan, and 250+ sites including medical centers, walk-in and urgent care clinics, pharmacy, eye care facilities and other healthcare retail. Established in 1915 by auto industry pioneer Henry Ford, the health system now has 32,000 employees and remains home to the 1,900-member Henry Ford Medical Group, one of the nation’s oldest physician groups. An additional 2,200 physicians are also affiliated with the health system through the Henry Ford Physician Network. An active participant in medical education and training, the health system has trained nearly 40% of physicians currently practicing in the state and also provides education and training for other health professionals including nurses, pharmacists, radiology and respiratory technicians.

 

AND......for those that really like to get down into the weeds........HERE.........is the ACTUAL JOURNAL ARTICLE:

https://www.ijidonline.com/article/S1201-9712(20)30534-8/fulltext

ANYWAY..........

 

HERE is a little article from Morningstar. The topic is the long term economic recovery. Although......their definition of long term is a little bit short......I DO agree.

We're Forecasting a Strong Long-Run Economic Recovery

https://www.morningstar.com/articles/989371/were-forecasting-a-strong-long-run-economic-recovery

(BOLD is my opinion OR what I consider important content)

"The Morningstar US Market Index has come thundering back since its late March nadir and is now down merely 7% year to date, even as the coronavirus pandemic persists. While many investors are wondering if the market is exhibiting irrational exuberance, we think the rebound has been broadly warranted, as we forecast a strong long-run recovery in the U.S. economy. We expect U.S. GDP to drop 5.1% in 2020 but surge back in 2021 and experience further catch-up growth in following years. By 2024, we think U.S. GDP will recover to just 1% below our expectations before the pandemic.


U.S. GDP will fall sharply in 2020, but we expect rapid catch-up afterward. - source: Morningstar

Though we agree with consensus forecasts that second-quarter U.S. GDP will be brutal, we're expecting a much quicker recovery. Even while social distancing weighs heavily on some industries, we think the rest of the economy can recover substantially in the second half of 2020. Retail sales, employment, and other data show that this recovery has already begun for the U.S. We expect broad availability of a vaccine to erase the coronavirus' direct impact on the U.S. and global economies by mid-2021.


GDP can bounce back substantially, even while some industries lag. - source: Morningstar

The most important question for investors is what the long-run impact of the pandemic will be on the economy. Our analysis shows the typical stock valuation is drastically more sensitive to the long-run impact on GDP than the short-run impact. We've examined the history of global recessions for clues on the coronavirus recession's impact on long-run economic growth and found that many recessions don't have a long-run impact on the economy. The worst recessions in terms of long-run impact (the Great Depression or the Great Recession) are generally the product of persistent economic policy error.


Long-run GDP impact is the most important question for investors. - source: Morningstar

We've distilled what we learned on what causes recessions to go wrong into a long-run impact scorecard, where we rate the coronavirus' recession. Most important, policy response has been extremely impressive, especially the United States' historically large fiscal stimulus. Likewise, we think risks of a financial crisis are small currently, as central bankers are unconstrained by the moral hazard quandary. Underlying structural issues going into this recession pale compared with the economic distortions before the Great Recession. We forecast a long-run impact on U.S. and global GDP of just negative 1%.


Earlier recessions suggest only a mild long-run hit from the coronavirus. - source: Morningstar"

MY COMMENT

I......believe....that this analysis is accurate. AND.......actually.....I believe it may even be too pessimistic. I DO NOT use Morningstar for my investing analysis. Not for any particular reason.....I just rarely look at their site........other than for financial data. AS ALWAYS in any financial situation there are two sides.......the pessimistic and the optimistic. I am TOTALLY optimistic when it comes to the medium.............1-2 years..........and the long term........2-10 years.

BUT....that DOES NOT mean that you can just go out and throw money at anything in any way. The SAME rules that have always applied to reasonable and realistic investing will STILL apply going forward...........

 

Just got done watching a documentary on the company......Theranos. "The Inventor: Out For Blood In Silicon Valley". I HIGHLY recommend this for anyone some day when you have nothing to do and want to kill some time.

UNFORTUNATELY an age old story of sociopathic and fraudulent behavior in the business world. I RECOMMEND this documentary to any investor. As you watch it.....look at the faces and fervor of the young people working at the company. Look at the HUGE facilities. Look at the important people surrounding and involved in the company. Look at all the high powered attorneys and political hangers-on that surround the company. Look at the fawning MEDIA that supports and drives the company. Look at the attempts to CRUSH those trying to tell the truth.

THIS sort of situation is a BIG danger for investors. Look at Bernie Madoff and how long he survived and thrived. Look at Enron.

I remember Enron well. I was often in Houston........weekly.........and Enron was a BIG presence. They were in ALL the media and were a darling in the press......especially the business press. They EXPLODED onto the business and investing world. At one point I looked at them as a potential BUY. They were WILDLY SUCCESSFUL in energy.....a traditional safe and conservative and secure investment area. So, I looked at their stock as a potential buy for ALL my portfolios.......my mother, my relatives, my children. I remember going through their financial data and reports and........at the end........I could not figure out how they were doing what they were doing. They looked extremely speculative to me. So I moved on. Later.......well we all know what happened. I was not smart enough to know that they were a fraud.....but something about their data just gave me enough nagging doubt to NOT buy the stock.

About 20 years ago I was part of a nonprofit group that NEARLY got sucked into a PONZI SCHEME. We were a medium size non profit group looking for a way to fund-raise. The leadership wanted to get involved with a particular product and fundraising scheme. It sounded great. BUT.....to me.....the numbers to buy the product and sell the product and ship the product and pay our group just seemed IMPOSSIBLE. AND....they were. I was able to talk the group out of the scheme. BUT.........I saw first hand the power of greed and BELIEF. Even after the company was prosecuted (not due to us).......people in our little group.....STILL wanted to believe and there was a little bit of hostility at me for being uncomfortable with proceeding. EVEN in the face of a prosecution for being a PONZI SCHEME the desire to.....BELIEVE.....was STILL strong in many of the people in the group.

The message......BUYER BEWARE. Believe NOTHING that you read and see when it comes to business. Dont get caught up in the mania and fervor of making money. AND.......as always......if it is too good to be true.......IT IS.

SO......as soon as I typed the above and posted it.....I turned on Maria Bartiromo. She was talking about China and mentioned a BIG investment manager she interviewed that said........."it is not my job to call out the good guys and the bad guys....if the money is in China that is where I will go". She was also discussing short term corporate thinking focused on stock options and GREED versus the long term future of a company.

I have said many times on here.......I WILL NOT buy Chinese companies..........DUE to.......rampant fraud, fake financials, stealing of American technology and products and the fact that any Chinese company that is available to stock investors is totally linked to the Chinese government......pure evil. In fact it is also my opinion that any company.......including some that I own.....that does manufacturing in China SHOULD be sued by their shareholders for the loss of TRILLIONS of dollars in corporate value due to the stealing of technology and loss of trade secrets inherent in doing business with the Chinese. These BIG companies KNOW that over the long term they are being RAPED by the Chinese. YET....they go along for short term profits and management GREED. Those golden stock options.

 

Futures are STRONG tonight. We will see tomorrow if this week follows some of the recent weeks where the markets are strong the first few days of the week and than lose the gains the last few days of the week. I dont put a lot of store in the futures. They are often all over the place......what counts is the actual open. It is fun to watch though.

 

post moved to next page....by me....for context.

 

post moved to next page......by me.....for context.