Underground Investing For Fun And Profits

$100 Oil!!!!: "Not necessarily very high."

noreply@blogger.com (Patrick Clark) — Tue, 08 Jan 2008 15:06:00 +0000

$100 oil is “not necessarily very high,” said OPEC president Chakib Khelil on Sunday.

The new leader of the world’s largest oil cartel believes inflation-adjusted highs in the 1980s were “between $102-110.” Thus, $100 in 2008 is no big deal.

"The surge in price will probably go on until the end of the first quarter of 2008,” Khelil predicted, “before stabilizing during the second quarter.” How he comes by this view… he didn’t say.

“It would take a lot of economic slowing to arrest the squeeze between growing demand trends and depleting supplies,” notes our own oil adviser, Byron King. “Oil supplies are so tight… between sabotage in Nigeria, bad management in Venezuela, raw depletion in Mexico, Peak Oil in the Middle East.... the slightest amount of bad news -- a hurricane in Gulf of Mexico, a pipeline leak in Alaska, a bomb blast in Iraq… would send prices up even further.”

The new President of OPEC (Oil Producing Exporting Countries), Chakib Khelil said this in a recent speech. He predicted that the "surge in price will probably go on until the end of the first quarter of 2008, before stabilizing."

So, OPEC has now gotten used to the idea of $100 oil and are thinking..."hmmm....how can we squeeze a little bit more..."

Well, expect $100 oil to be a fact of life and remember that inflation-adjusted highs in the 1980s were as high as $110/barrel, so if this is going to be a true record-setting surge, $110+ is not out of the question.

In fact, it may only take one slight bit of bad news like a hurricane in the Gulf of Mexica, a burst pipe in Alaska, increased bombings in the Middle East to send prices to...oh let's say...$125/barrel. Hey, if OPEC can pull numbers out of their keister, why can't I?

Is the high price of oil all about the Middle East and the weak dollar? No. It is also about trouble in Nigeria, increased demand from India and China, depleting supplies in Mexico, bad management in Venezuela, environmental laws, etc. Oil is complicated. A lot of factors are in play, but it only takes one random act to make all of the factors important and in play.

But remember, while some pundits are crying that the sky is falling with Peak Oil, new discoveries are being made, technology is allowing more oil to be had from existing and once thought dead oil fields.

Notes From The Underground:
Dow - 12,818.14 -9.35
Gold - 875.10 +15.10
Silver - 15.57 +0.36
Oil - 96.77 +1.68
Wheat - 9.25 +0.22

To Your Investment Success,

Patrick

Heroes

noreply@blogger.com (Patrick Clark) — Fri, 28 Dec 2007 15:04:00 +0000

Thanksgiving is the time of year where we give thanks for what we have...

Christmas is the time of year where we give to those less fortunate than ourselves.

As many of you know, I am good friends with Jim Canale and a Platinum member of his CashFlow Now! Mentoring Group. Well, Jim is hosting a wonderful, stand up event on January 4 to raise money for the Hero Scholarship Fund of Philadelphia. At this event we will be playing Robert Kiyosaki's Cashflow Game and raising $14,000 for the Hero Scholarship Fund.

The Hero Scholarship Fund is a charity that pays the college tuition for kids of cops who have been killed in the line of duty.

In the past 14 years, 14 police officers in the City of Philadelphia have been killed in the line of duty. The life insurance that the city provides the family is paltry. And the pension benefits to widows, especially if the officer has not been in the force for very long, is pitiful. Long story short, the death of a police officer is a body slam to the family left behind and every little bit that we can do to help officers and their families helps.

Remember, police officers put their lives on the line every single day defending where many of us live and invest.

Go to www.cashflowforcops.com to read more and to register for the event on January 4 where we will play Robert Kiyosaki's Cashflow Game for this wonderful cause and also to further our financial educations, as well as network.

Notes From The Underground:
Dow - 13,361.56 +1.54
Gold - 839.50 +11.00
Silver - 14.81 +0.10
Oil - 97.31 +0.69
Wheat - 8.88 -0.27

To Your Investing Success,

Patrick

PS I will be closing the year out on Monday on Jim Canale's Real Estate Lifestyle Radio Show where I will give my outlook for the stock market in 2008. The show can be heard live at 10:00 am on AM860 in Philadelphia.

PPS If you want a copy of my 2008 Stock Market Outlook Report, titled "The 5 Investment Choices You Need To Make In 2008 For Fun And Profit", send me an email to me at patrickclark@undergroundinvestingforfunandprofits.com. The report will be released on January 2, 2008.

PPPS I will be back on regular schedule after the New Year providing insights on a daily basis. I hope that everyone had a very Merry Christmas and have a Happy New Year!

Absolut Proof of Inflation!

noreply@blogger.com (Patrick Clark) — Tue, 18 Dec 2007 15:04:00 +0000

First, I apologize for the near week off from delivering you with your daily dose of financial education. Between the flu kickin' my ass, holiday parties (including mine last Saturday), and putting together some of the exciting announcements that will kick off the New Year, I was exhausted.

However, I do have something for you today!

Last week, as I was purchasing libations for the annual KlineClark Xmas Extravaganza Party, I noticed that the price of Absolut vodka had soared some 20% from the prior year (I noticed because the price was still on last year's bottle). Now, since Absolut is an import (from Scandanavia), so I figured that all of the imported spirits were up by approximately the same 20%. I also deduced that domestic spirits had probably risen as well, though I had no basis to figure out by how much. But here is the thing, I went home to see how sales were going for the PA Liquor Control Board, they were up by some 13% for the year. So, prices up, sales up. Makes sense since alcohol is one of those products like food and cigarettes that tend to be unaffected by economic conditions. People need to eat, and if they are not celebrating, they are drowning out sorrows.

Now, some of you may be saying that I am off of my rocker and that the meds are talking.

Well, there were 2, count 'em 2 significant economic events that you should take note from last week.

The first is the fact that WHEAT, yes WHEAT went over the $10 per bushel market FOR THE FIRST TIME EVER on Thursday at $10.09! Wheat and corn is in virtually every foodstuff in our food supply. The obvious are cereals and breads. However, remember that cattle, chickens, pigs, all form of livestock that provide us with meat, cheese, eggs, and milk products are fed with variants of corn and wheat. Unless you can survive solely on fish, veggies, and fruit, you are affected by the price of wheat which has quadrupled in the last 5 years. And food manufacturers and distributors are only now starting to raise prices in any significant amounts to notice. They are still operating on the smaller profit margins brought about by the rise in wheat and corn. Don't you think that they are going to want there big payday soon?

The second event to occur last week was the release of the CPI and PPI. The Consumer Price Index for November clocked in at 4.3% since November of 2006! That is a huge increase considering that previous months year over year inflation numbers were released at 2.8% and 3.2%. In fact, the government (we're here to help) was declaring that inflation was being kept in check! Hah! If you add in the 7% hidden inflation that the government never seems to add in, we are looking at 11.3%!

The Producer Price Index (the price that manufacturers pay) was up 7.2%! This is the largest increase in the PPI in 26 years! If you are old enough remember 26 years ago (if you are not go to the history books), it was 1981! In 1981, the country was going through the middle of a recession, real inflation rates were in double digits still as a result of the oil embargo of the early to mid-70s. The Reagan Administration was still trying to repair the economic policies enacted by the Carter Administration. The 30 Year Treasury Bond was yielding 13%, the Fed under then Chairman Paul Volcker had as its mandate to get inflation under control any way, any how, even if it meant allowing economic cycles to occur and the country to go into recession (which it did). Inflation was eventually put in check and the 1980s became one of the most prosperous decades in history!

Fast forward to today, the 30 Year Treasury Bond is yielding 4.6%, the country is in recession (even if not recognized by the Fed) and the Fed has as its mandate preventing recession at any cost. Even if that means allowing inflation to become rampant. Well, since the Fed no longer acknowledges food and energy in its primary measure of inflation (wheat quadrupled in 5 years, gas up 34.8% in a year), the Fed also cannot acknowledge the fact that we are already experiencing rampant inflation, so they can justify pumping more and more dollars into the money supply, exasperating the inflation scenario...all in the name of preventing recession. Well, if you cannot acknowledge rampant inflation, you cannot fight recession. And since you cannot fight recession, you allow it to occur. Therefore, the Fed under chairman Ben Bernanke and Alan Greenspan before him has FAILED this country and this economy!

It is time for reform at the Fed. Count everything that is pertinent to this society when measuring inflation. This includes food and energy. Place business leaders, former CEOs, in Fed seats, people who know the real impact of their decisions. Eliminate the monopoly of the Fed seats by bankers and academics.

Notes From The Underground:
Dow - 13,177.44 +10.24
Gold - 799.20 +3.90
Silver - 13.92 +0.06
Oil - 91.52 +0.89

To Your Investing Success,

Patrick

Manage Expectations

noreply@blogger.com (Patrick Clark) — Thu, 13 Dec 2007 15:03:00 +0000

Well, the Fed did it!

And the markets went in the exact opposite direction of the Fed's intention.

Why?

One huge part of the movement of the stock market is the management of expectations. When analysts (word means something, not the word "anal") expect a certain action, number, etc. often, investments and trades are made by Wall Street with the expectation of that result. If the result falls short of expectations...anarchy! If the result exceeds the expectations...off to the races!

That is why the markets fell off sharply after the Fed announcement of "only" a .25% cut in rates. Anal-ysts were expecting .50% cuts.

That is also why a company gets taken behind the wood shed a shot by traders if it falls short of earnings by a couple of pennies...even if it is better than last year. In anal-yst/Wall Street world, a better this year than last year is not good enough. It must be a better number than expectations.

Which is why a stock can also actually go up if it loses less than what was expected...it still lost money, just not as much as expected.

Now the smart investor comes in after a stock or the market misses some expectation or other and evaluates if it is a trend that is likely to continue or not. Then acts accordingly. Many values and great returns can be found in buying a stock that misses expectations, but the fundamentals and technicals of the company are still sound. Particularly if it pays a nice dividend while waiting.

Notes From The Underground:

Dow - 13,413.66 -60.24
Gold - 801.50 -12.50
Silver - 14.33 -0.36
Oil - 93.30 -1.09

To Your Investing Success,

Patrick

The Economy Has The Flu...And So Do I!

noreply@blogger.com (Patrick Clark) — Tue, 11 Dec 2007 15:02:00 +0000

The poor, poor economy. It has gotten sick and Papa Fed keeps trying to give it the same old medicine.

While the Fed seems to only have one prescription in it's medical kit, it seems that it has ceased to have the same effectiveness that it once had.

B-squard, Ben Bernanke and his fellow Fed bankers lowered both the Fed Funds and the Discount rate today by 1/4% to 4.25% and 4.75% respectively. The market proceeded to tank, losing 294 points on the day.

What happened? Rate cuts are supposed to prop up the stock market, not drive it down. While I was calling for a 1/4% cut in the rate, most of Wall Street was anticipating...in fact they were already banking on...a 1/2% decrease in rates.

Mind you, I may be a bit harsh on the Fed and rushing to judgement too quickly here since you have to give these rate cuts time to filter through, but who has time to wait nowadays.

Besides, commercial banks like the rate cut as they immediately trimmed their prime lending rates to 7.25%, the lowest rate in 2 years. This is a boon for real estate investors who are looking to either refinance properties, or get financing for new deals.

However, the thing with Wall Street is that they want what they want...AND THEY WANT IT NOW!

Sometimes even Wall Street does not get what it wants.

Unfortunately, this effects the individual investor, unless...the investor gets creative.

While, all of this is effecting many paper assets negatively, it is opening the window further on others.

One of the initial fuels to the real estate boom was the low interest rates in Japan. In the early part of the decade, interest rates on loans in Japan were hovering around 1%...yeah, that is right....1%!!!! Real estate developers from around the world, and the US in particular were going to Japanese banks and borrowing Japanese Yen, converting it to US Dollars and getting involved in the real estate boom. This was called the carry trade. Many of these loans are either ARMs or short-term development loans. Well, many of these loans are now coming due and the US Dollars are going to be sold to purchase Japanese Yen to pay back the loans.

What does this mean to you as an investor?

Well, there are 2 ways that this can be played. Either calls can be bought in the ForEx markets on the Japanese Yen, OR an investor can buy shares in the Japanese Yen Trust ETF (Symbol: FXY) that closed the day at 90.22. The Japanese Yen Trust ETF holds Japanese Yen and trades on the New York Stock Exchange. It is designed to track the performance of the Japanese Yen.

But wait, there is yet another way that you can play the Japanese Yen. The ETF also trades options. Now the options and the futures supply leverage to the trade and are much more volatile than the ETF.

So, there you have it...3 ways to play the selling of US Dollars for Japanese Yen for FUN and PROFITS!

Notes From The Underground:
Dow - 13,432.77 -294.26
Gold - 812.30 +4.00
Silver - 14.72 +0.03
Oil - 89.15 +1.29

SLV - 143.50 -2.12
FXY - 90.22 +0.71

To Your Investing Success,

Patrick

Is the Ground Full of Money?

noreply@blogger.com (Patrick Clark) — Wed, 05 Dec 2007 15:01:00 +0000

Yes!

And it is getting more valuable!

China and India are growing far beyond what analysts ever thought...with no end in sight.

Imagine whole nations with newly minted middle class citizens larger than the United States.

Over half a billion citizens demanding all of the goods that we currently enjoy. All of these goods use minerals from the ground for at least part of their production.

Indian citizens are clamoring for gold. New roads are be paved throughout the country.

China is building infrastructure all over the country...million population cities are being built from small villages in a matter of 6-12 months, in addition to millions of new automobile drivers.

Many of the natural resources are being mined quicker than new reserves can be found, proven, and defined.

South Africa, the world's largest gold producer, is having its lowest production year since 1926.

Silver mining also cannot keep up with demand both on a consumer and an industrial level.

Copper and Lead mines are being shut down by the dozens throughtout South America because there just is no more left in the mines.

This decrease in supply along with increased demand alone can cause prices to skyrocket. Couple this with a declining dollar and prices have the ability to increase even further than they already have!

Notes From The Underground:
Dow - 13,445.20 +196.47
Gold - 797.90 -3.90
Silver - 14.35 +0.03
Oil - 87.16 -0.33

To Your Investing Success,

Patrick

Waiting on OPEC...

noreply@blogger.com (Patrick Clark) — Tue, 04 Dec 2007 15:00:00 +0000

Waiting on OPEC (Organization of Pertroleum Exporting Countries) to make a decision on increasing/decreasing the supply of oil is a lot like waiting on the Fed to make an interest rate decision.

You generally know what the decision is going to be BEFORE the decision is actually announced. Except that OPEC is more unpredictable. All of the delegates make speeches at various conferences and meetings that they attend. These meetings almost always have reporters and news cameras. The delegates take advantage of this to "spill" a little of their thoughts on the upcoming decision to be made. Voila! The market has the opening to start trading over a decision that may not actually be made for another month or so...opportunity to make money calling!

Oil ministers from the various OPEC nations have been indicating that they would vote for increased production for some time now. The next OPEC meeting is tomorrow! The law of supply states that as supply goes up, price goes down. Well, oil has come of off it's highs of 99 and change to 87.74 over the course of a few weeks because of these indications. Traders have used this news as an excuse to take some profits off the table.

Some analysts are looking at the charts and saying that this "correction" could continue down to $70/barrel. While this would be nice and I would like to see it happen, I am not banking on it.

Remember, China and India are still growing near double digits, our own demand for the black stuff keeps going up and up much to the chagrin of environmentalists. And while the former chairman of Exxon says that oil should be price at $40/barrel, he is not the one in charge of making that decision.

A bunch of shiekhs, princes, and despots are.

So, back to the law of supply...when supply increases, price decreases. Combine this with the law of demand...when demand increases, price increases, especially when supply is not increased, or it is not increased enough to meet increased demand. Now combine this with people in control of that decision who either A) don't like us are looking to make as much money as possible or C) Both.

What will happen is that supply will be increased to a level that satisfies consumers for a time...but inevitably demand will increase again and will outstrip the new supply level, leading to...higher oil prices.

Notes From The Underground:
Dow - 13,248.73 -6.84
Oil - 87.74 -1.57
Gold - 803.80 +5.70
Silver - 14.30 +0.03

To Your Investing Success,

Patrick

Where To Turn? What To Do?

noreply@blogger.com (Unknown) — Mon, 03 Dec 2007 14:56:00 +0000

Now that the Dow seems to be coming back full force, what is an investor to do?

Obviously, the bulls are back and they are running hard!

I like the fact that the market is going back up, but because I treat my investments as a business, I need to look strategically first, before I can take advantage of the opportunities that present themselves.

What was driving the market down?

Well, the declining dollar, rising oil prices due to increased demand, rising commodity prices due to both increased demand and the declining dollar, falling real estate sector due to the credit crunch.

Over the next four days - Monday, Tuesday, Wednesday, and Thursday - I will take a look at each of these reasons and show you why they are still relevant even though the stock market is trying to say that they are not.

The fact of the matter is that the market will be increasingly volatile for some time. We are also in the middle of a great bull market for stocks as baby boomers and the near baby boomers are stuffing as much money as they can into investments to prepare for retirement. The thing is, these same boomers are also looking at asset classes such as real estate and commodities also. So, if you combine the buying power of these individuals with the demand across the world for financial instruments, we are truly in a great era of investing, volatile as it may be.

And that is why you must understand the various asset classes and markets so that you can make money regardless of the direction of the investment, the market cycle, or the level of volatility.

The US Dollar is declining at a rate not seen since 1992. In 1992, the US Dollar had reached an ALL-TIME LOW, that has since been trumped by today's US Dollar. The Loonie (Canadian Dollar) has reached par with the US Dollar and surpassed it in value. C$1 now buys $1.05 US. This is a level not seen since the early 1960s. The Australian Dollar is at a 23 year high and is about to reach par to the greenback. Virtually every foreign currency that you look at is at or near and all-time high for the dollar.

What is causing this devaluation of the dollar is the near continual pumping of money since 9/11 by the Fed and the US Treasury. The Fed, under the direction of Yoda (Alan Greenspan) and B-Squared (Ben Bernanke) has defined as its mission to keep the economy out of recession - NO MATTER WHAT! Even if this causes inflation (which we will discuss when we talk about commodities) and even if it makes our assets more attractive to foreign corporate and sovereign funds.

There have been two separate benefits to stock investors because of inflation.

One, US assets have become more attractive and cheaper to buy for foreign corporations and sovereign funds. (As an aside, sovereign funds are surplus currency assets held by foreign governments) Just look at the recent purchase of Commerce Bank by the RBC Bank of Canada, the purchase of 20% of the NASDAQ by the Government of Abu Dhabi, and 4.9% investment into Citigroup by Abu Dhabi. Many of these foreign corporations are taking aim at financial assets here in the US.

For more on sovereign funds, go to my post from today on the Real Estate Lifestyle Public Forum (www.realestatelifestyle.com).

Second, US based companies that do a great deal of business abroad. Exporters and multinationals are able to sell more goods abroad due to the fact that foreign currencies can purchase more dollars, thus our goods are cheaper to buy. Look to big multinationals like Altria that are able to derive 1/3 to 2/3 of there business outside of the US.

Now, the big downside to the devaluation of the US Dollar is the rumbles around the world that oil and commodities may begin to be purchased in foreign currencies like the Euro. The US Dollar is THE standard currency for all commodity transactions worldwide. They are priced in dollars, they are sold for dollars, they are bought for dollars. Once these transactions can be decoupled from the dollar, why would foreign countries need to hold so many dollars in reserves? Sure, to buy US assets, but the purchase of US assets are not their primary use. China has the largest sovereign fund in the world, somewhere between $400 billion and $1 trillion. China has no interest in buying US companies directly. In fact, they are helping there own corporations grow and purchase foreign assets. If nations do not have to hold so many dollars, they will dump them on the open market AND then the value of the dollar will truely plummet.

What to do then?

In addition to what you would normally hold in US stocks, an investor should also be holding a near equivalent amount of quality foreign stock holdings. Many of them actually trade on US stock exchanges like the New York Stock Exchange (NYSE) and the Nasdaq.

Until tomorrow.

Notes From The Underground:
Dow - 13,374.40 +2.68
Gold - 785.90 +3.10
Silver - 14.10 +0.14
Oil - $87.83 -0.88

To Your Investing Success,

Patrick

Happy! Happy! Joy! Joy!

noreply@blogger.com (Unknown) — Fri, 30 Nov 2007 14:55:00 +0000

Happy, Happy, Joy, Joy!

Happy, Happy.......uh, why did the music stop?

Early next year, this is what may happen once individual investors and consumers realize that they have been duped by B-squared, Ben Bernanke.

He and his colleagues at the Fed Reserve have been speaking out and making comments suggesting a further rate cut. This has led to mass buying of stocks across the board. Now, realize that most of the smart money had been buying under the radar before these guys decided to pipe up (usually at the insistence of the guys at places like Goldman Sachs, Lehman Brothers, etc. the guys who are the primary advisors to big, smart money).

Now that the "news" is unofficially out that the Fed has all but decided to cut interest rates, everyone else is in a feeding frenzy to buy, buy, buy. Where do you think the supply of shares is coming from? I won't answer that; I will let you come to your own conclusion.

What will happen come next year, consumers and individual investors will realize that the latest round of rate cuts will further erode the buying power of the dollar (inflation) and gas, gold, and everything else will renew it's march up in price.

How far down will the price of oil and gold "correct? Well, some of the analysts that I know are calling for oil to drop to $70 and gold to "retest" $650. I SAY THAT THEY ARE WRONG!

Why?

Well, we are having this rally in stocks due to rate cuts. Rate cuts are inflationary. Inflation also means that the Fed must pump up liquidity. This means that the printing presses must continue running. Gold, silver, and oil are inflation hedges.

The #1 job, as the Fed sees it, is to prevent the economy from going into a recession. We may or may not already be in one. Recessions are tough to say that you are in it. They are usually declared once they are half over. But of course, depending on what you do, and what your outlook on life is, you may be in a perpetual recession (I know that is nobody that is reading this, otherwise you wouldn't be reading this). There can be no inflationary slowdown while all of this is going on. The Fed only cares about keeping back inflation. Wall Street is appeased because it gets short term profits from all of the activity.

But here is the rub, if you inflate too much, too fast, a recession will become a self-fulfilling prophecy. Consumers will say enough and stop buying in the amounts that they are buying.

Remember, salaries are not keeping up with the REAL inflation rate (not what the government tells us) AND credit is tightening for consumers. This will cause a slow down in consumption of non-necessity items. This could take us to recession.

Credit for investment purposes (real estate and cash flowing businesses) is still readily available because banks are in the business of loaning out money, after all.

And for stock market investors, I would not be making bets on the general market, but this volatility will lend itself to many, many special situations.

Stay tuned because I will have a very special offer for all of you in time for you to start your portfolios off right in the New Year.

Notes From the Underground:
Dow: 13,390.25 +78.52
Oil: 89.50 -1.51
Gold: 783.60 -12.30
Silver: 13.93 -0.35

To Your Investing Success,

Patrick

I'm Confused...

noreply@blogger.com (Unknown) — Wed, 28 Nov 2007 14:54:00 +0000

What is the Fed doing?

The markets got hammered all of the past 2 weeks and on Monday. Today and yesterday the markets went gang busters on the way up!

Several factors are at play to explain the sharp upswings that we are experiencing. One being the mini-correction on the price of oil that may or may not continue. I know that one of my colleagues that is looking for a correction all the way back to $70/barrel before bouncing back. He may get help in that prediction from OPEC which is starting to discuss increasing production. Increased production equals lower prices. I feel that a correction is due, but the days of cheap oil are over. If not now, the next bounce from the price of oil WILL get the price up and over $100/barrel.

Another factor are the sovereign funds (surplus funds of a country used for investment) and foreign corporate investors are actively looking to purchase assets here in the U.S. Just look at Royal Bank of Canada's buy out of Commerce Bank and the recently 4.9% stake that the government of Abu Dhabi has purchased in Citigroup.

But the big reason is the Fed. Fed Vice Chairman (B-squareds right hand man) Donald Kohn was speaking in front of the Council on Foreign Relations that the recent financial volatility has reversed the improvement seen by the markets in recent weeks and could eventually squeeze credit for individuals and businesses and that "the tight financial conditions of the banks may merit offsetting policy from the central bank."

In English what he just said was that the down swing of the market in recent weeks offset the improvements that the markets made from the February drop AND that the tighter policies that the banks are putting on loans may require that the Fed lower rates.

Basically, the Fed is more interested in propping up the financial markets (particularly the stock market) and preventing a recession than in keeping the consumer from racking up higher debt loads and from rising inflation.

This is nutso thinking!!!!!!!!!

Now, while it is each individual's personal responsibility to stay out of bad debt, it is absolutely ludicrous to purposely inflate the price of goods in order to prevent recession.

Why? You might ask.

Because by triggering inflation through the printing of money (which essentially is what the Fed is doing by lowering rates) the Fed may cause a short-term spike in the prices of financial assets such as stocks, in the long run it will cause an even greater recession than if it would have just let the recession happen!!!!

Besides, isn't the loosening of the reigns of the printing presses and of credit what got this country in the condition it is in right now!?!?!?!

You know the whole "credit crunch" "mortgage mess" thingy!

Laissez faire (let the economy run its course) is a thing of the past both literally and rhetorically...Oh, those were the days.

The micromanaging of the Fed is going to make things worse not better. And even though it is now Ben Bernanke at the reigns...it will be Alan Greenspan's lasting legacy.

Notes from the Underground:
Dow - 13,212.47 +254.03
Gold - 802.50 -11.50
Silver - 14.40 -0.16
Oil - 92.04 -2.38

To Your Investing Success,

Patrick

Vice is Nice!

noreply@blogger.com (Unknown) — Tue, 27 Nov 2007 14:53:00 +0000

You know the Fund, the one that invests in booze, gambling, tobacco, and aerospace and defense. Basically, if it is non-PC, it is fair game for the guys at The Vice Fund (VICEX). The fund that does well even when the market tanks.
This fund has done 21.7% annually for the last 5 years. It is up over 23% this year.

How does the Vice Fund put up these numbers?

Well, you can't stop people from drinking, gambling, and smoking no matter what the economy is doing...and since most of the big booze and tobacco companies are also diversified into food, well, people still need to eat.

Top this off with the wild card play of aerospace and defense, which mind you, even when not in a war, new equipment needs to be bought and old equipment maintained, you have the makings of a portfolio that can kick ass!

The industries that the Vice Fund invests in Alcohol, Gaming, Tobacco, Defense are all considered defensive stocks. When the market gets unpredictable, institutions and smart investors flock to these stocks with the money that they keep in the stock market.

Oh, and by the way, because these industries are generally CASH COWS, they also pay NICE DIVIDENDS! And anyone who has spoken to me about stock investing knows how much I like that!

However, I am generally not a fan of mutual funds because of their costs both published and implied. However, sometimes exceptions have to be made. Even after subtracting published expense rates of 1.75% and implied expenses like trading and taxes that can take the overall expenses to 4%, you must admit that when you are returning 21.7% annually over 5 years, a net return in the high teens is not something to sneeze at when investing in stocks.

Besides just watching and listening to the guys at the Vice Fund and talking about the Vice Fund is well, FUN!

You see, these are the kinds of stock investors that I study. Guys that return over 20% on a regular basis like clockwork. These are also the insights that I will be passing along to you through www.UndergroundInvestingForFunAndProfits.com in the coming weeks and months. So go register for regular updates as well as special updates as more resources are added to the site. Coming plans include a hard copy newsletter, a stock selection service, and much, much more.

To Your Investing Success,

Patrick

Yes, Virginia, Dividends DO Matter!

noreply@blogger.com (Unknown) — Mon, 26 Nov 2007 14:52:00 +0000

Happy Monday to one and all!

While at the gym this morning, I watched a news item about today being Cyber Monday. The first business day after Black Friday. While many people were out shopping on Friday for Christmas gifts, there were many who do not (yours truly among them). However, a new trend has emerged that today, Cyber Monday, is the biggest sales day online.

It is estimated that 75% of all office workers will shop online today, WHILE AT WORK! So, while nothing gets done of Friday because everyone takes a day off of work, nothing gets done today either. So, if you are not among the shopping AND you cannot get your work done because certain items are being delayed because of Cyber Monday shoppers, then don't join the ranks of the unproductive; bone up on your financial education.

******************************************************************************************

Now, I also want my stock portfolio, particularly the core portion of my portfolio, to be productive just like employees. You see, I look at stocks like a look at properties. I want to form a core group of dividend paying stocks (rent) and then round out my trading with short term plays and options (flips and wholesales).

And yes, those dividends do indeed matter!

According to research conducted by Jeremy J Siegel, Wharton Professor and author of several stock investing books including The Future For Investors, reinvested dividends account for 97% of the total return on stocks. Capital Gains account for a mere 3%! Professor Siegel's researched covers all of the stocks that traded on the exchanges going back to 1871. Going back 50 years, when ranking stocks by dividend yield, the top 20% (meaning the stocks that paid the highest % dividends) return 14.3% annualized while the 20% of stocks with the lowest yields (meaning that they paid no dividends) return 9.5%. This is quite a difference. In fact, on a $1,000 investment made in 1958, the dividend portfolio would have grown to $462,750; while the non-dividend portfolio would only have accumulated $64,930.

So, YES DIVIDENDS DO MATTER!

In fact, dividends will matter even more NOW! It has been shown through numerous studies that dividend paying stocks perform even better in down markets than they do in up markets relative to other stocks. So, for this purpose dividend paying stocks act as protection in a down market. Dividend paying stocks are often purchased by institutional investors in large quantities when they feel that the market is about to go into a poor performing environment. This is what is known as a "flight to quality." When the market is down, my investments still SHOW ME THE MONEY! And often, when investors start to return, they are typically buying dividend paying stocks first.

Buying on top of buying leads to higher stock prices.

Notes from the Underground:
Dow 13,003.15 +22.27
Gold 826.60 +3.50
Silver 14.81 +0.02
Oil 97.47 -0.71

To Your Investing Success,

Patrick

Lessons From A 3-Year Old!

noreply@blogger.com (Unknown) — Sat, 24 Nov 2007 14:51:00 +0000

Jen and I just got back from Thanksgiving with her family in Scotch Plains NJ.

All 30 of them!!!

I loved every moment of it.

Particularly spending time with our nieces and nephew. Yep, just one nephew among 18 nieces and cousins under the age of 16, poor guy.

This morning was the best though!

Our niece, Dominique is all of 3 years old AND a story teller.

She woke Jen and I up by sneaking into our bedroom and bombing us (jumping up on the bed unexpectedly)!

She proceeded to take the next 30 minutes and tell us all about Casper the Friendly Ghost to the point that we believed that she actually knew him personally and he was real. She knew him personally! Now, we know that Casper is not real, but the story that Dominique was telling us was believeable.

This is what we all must be doing on a day to day basis. Telling stories about our products and services AND making it sound like our buyer already has the product or service that we are offering. If you own a business, they are YOUR products and services. If you work for someone else, they are still YOUR products and services and the amount that gets sold determines your bonus, commission, and sometimes even if you get to keep your job! If you are a real estate investor, it is YOUR real estate that you have to sell to a potential buyer, or to the bank for financing.

Now the difference between Casper and our products and services is that our products and services are real. So, how do we make them seem more real to the person on the other side? That is where marketing comes in. We need to go out and find a way to market our products and services more effectively BOTH online and offline.

The best way to do this is to make it personal is to market you first. For example, look at what I am doing here on this site. My picture is here (a better one will be up soon), I talk about my family, I give you my take on my product (investments), and so forth. I do this all of the time. I do it here online at www.UndergroundInvestingForFunAndProfits.com , I do it at virtually every business and networking event that I attend, and I even do it with family and friends. Basically, be yourself but don't be afraid to promote yourself.

You see, there are lessons to be learned from our 3 year old nieces.

To Your Investing Success,

Patrick

Short Day - POST TURKEY

noreply@blogger.com (Unknown) — Fri, 23 Nov 2007 14:51:00 +0000

I do not know about you, but I had a bit too much turkey yesterday and I am stuffed!

Fortunately, I am on Weight Watchers (WTW - $48.25 +0.77) Core program, so I can eat as much turkey as I want! I can eat as much meat, fruit, and veggies as I want and not have to count it up. I was still able to have a decent amount of stuffing and even a slice of pumpkin pie! I said a slice, not the 3 or 4 that I would have had in the past. I have lost 26 lbs. in the last 6 months. I love those guys.

But what it really was about was spending time with my family, finally settling in and watching The Shaggy Dog (Tim Allen) with my 11 nieces, 1 nephew, my dog, and my sister-in-laws 2 dogs. No other adults, just me! Pure joy, set me back to when I was a kid. They love their Uncle Patrick! They also keep asking about when Jen and I are going to add to the list of cousins with one of our own. I tell them that we are just waiting now, the adoption can happen anytime between know and the end of next year. Good Times!

On to today.

On a traditionally light trading day, the Dow finished up 181.43 points from Wednesday's disastrous close. The Dow did this in spite of Gold rallying back above 820 and the Euro reaching yet another all-time high compared to the Dollar.

Today's up day is a complete mirror image from the rah-rah days of the past. Normally, bulls (those who are playing into a market rally) would take a shortened day like today off, leaving the bears (those who think that the market is overpriced) to have their way for one day. Well, since the bears and short-term opportunists are the ones making money these days, they took the Friday after Thanksgiving off. The bulls needed to go to work today!

But investors are learning quicker than they used to that they need to have the ability to make money regardless of market conditions. That is why many people are trying to learn how to make money in commodities, Forex (currencies), real estate, options, and stocks. These asset classes all have trends that play off of and counter one another. And one of my missions is to bring you the best educational opportunities in each of these key asset classes, as well as some business skills.

I am a real estate investor and a stock portfolio manager. My primary expertise is in stocks and options. I know many experts in all these asset classes and will be bring them to you in the coming weeks.

Since today is a shortened market day, I will stay short also and end our conversation here.

Notes from the Underground:
Dow - 12,980.88 +181.43
Gold - 824.00 +26.40
Silver - 14.72 +0.32
Oil - 98.19 +0.90

To Your Investing Success,

Patrick

Happy Thanksgiving!

noreply@blogger.com (Unknown) — Thu, 22 Nov 2007 14:50:00 +0000

Happy Thanksgiving to One and All!

There is a lot to be thankful for in this life and we should all take time every day, not just today to give thanks.

A simple thank you to someone who is doing you a favor, or performing a service for you would suffice.

My contractors, vendors, and clients all get simple verbal thank yous every time that I speak to them and they seem genuinely touched when I tell them.

Give your loved ones a hug every day too. It will make your relationship closer.

If you are not the touchy feely type, then just nod your head and say something nice.

Being thankful makes both the giver and the receiver feel better.

And lastly, many of us talk of it, but how many do it...Give to Charity!

My favorites are the Twilight Wish Foundation and the Lower Bucks Family YMCA. Not only do I donate to them, but I also sit on their board of directors.

Today is the day of feasting and thanking with family and friends. Tomorrow, we will be back Underground finding the dirt, news, emerging strategies, and investments that anyone can execute.

To Your Investment Success,

Patrick

$100 OIL!!!!

noreply@blogger.com (Unknown) — Wed, 21 Nov 2007 14:49:00 +0000

We could hit $100 oil...Today!

After closing at $98.03 in New York yesterday, the price Black Gold peaked at $99.29 in overnight trading. This morning oil opened at $98.63 in New York, however, with today and then Friday being light trading days due to the Thanksgiving Holiday volatility will reign.

Also, remember, that overseas trading has no holiday. They will continue to trade the gooey stuff overnight.

Then there are the concerns that China and India's rapid development and increased demand will put further strain on oil supplies. Refineries are already starting to complain that they aren't getting enough of it. They have exhausted the surplus that has kept gasoline prices at the sub $3/gallon mark.

Currently, oil producers are pumping 85 million barrels a day out of the ground. The US Department of Energy says that consumption is between 85 and 86 million barrels per day. And remember, they are the government, they are here to help, and I have a few grains of salt to throw at their numbers.

On a positive note for the stock market (it needs a few hundred of these right now), it looks like the Fed may be cutting rates again due to what they perceive as slow growth. 2008 forcasts are showing US economic growth between 1.8 and 2.5%. They are also saying that inflation will fall to between 1.8 and 2.1%. Remember that inflation never falls...it just goes up at a slower rate.

Again, are you willing to believe the Fed's numbers when the price of gas is breaking $3/gallon, heating oil is supposed to be 25% higher than last year, and wheat has tripled in the last four years (but producers of foodstuffs have not acted accordingly, yet).

Wall Street did not like the Fed projections. Combined with higher oil prices, the credit crunch, and how it is affecting financial stocks, the Dow is down this morning at 12,925.77 DOWN 84.37 points.

That is all that I have. There are many, many buying opportunities out there. I am going to ferret them out and get back to you soon. Look in your mailbox for updates and notice of these opportunities soon.

Notes from the Underground:

Dow - 12,925.77 -84.37
Gold - 802.50 +12.20
Silver - 14.48 EVEN
Oil - 98.63 +0.60

To your ultimate investment success,

Patrick

Yoda is at it Again!

noreply@blogger.com (Unknown) — Tue, 20 Nov 2007 14:48:00 +0000

Alan Greenspan was on Fox Business Network recently pitching his book and looking back at his career as the Federal Reserve Chairman, defending his actions and blaming the current situation on everyone and anyone but him.

Then he closed the interview with the following:

Fox: “So why do we need a central bank?”

Greenspan: “Well, the question is a very interesting one. We have, at this particular stage, a fiat money, which is essentially money printed by a government, and it's usually the central bank which is authorized to do so. Some mechanism has got to be in place that restricts the amount of money which is produced, either a gold standard or currency board or something of that nature, because unless you do that, all of history suggests that inflation will take hold with very deleterious effects on economic activity...There are numbers of us, myself included, who strongly believe that we did very well in the 1870-1914 period with an international gold standard.”

Fox: “We did well without the Federal Reserve. People forget that.”

But he also says in the interview that the housing and credit crunch, the upswing in commodities, and inflationary pressures were NOT a result of his lowering rates down to 1%, jerking them back up, and jerking them down again and cranking printing presses at the Fed, but rather a delayed reaction to the Fall of the Berlin Wall and the Soviet System. !@#$!@#!$%$ What? If anything, this should have brought commodity prices DOWN since the former Soviet countries hold some of the most lucrative mineral and energy mines and fields, in addition to being the #2 producer of many agricultural products, including wheat! He says that the decrease in rates was merely a coincidence.

Let's see, US government coming out of recession, new consumers and goods coming to market, need to stoke the fires of economic growth? Don't all of those signs usually lead to a decrease in rates? Oh, and he is not the cause for the printing presses running either. There was no mechanism for him to stop. !@$@@$@#! He WAS the mechanism by being the Chairman of the Federal Reserve, the MOST POWERFUL CENTRAL BANK IN THE WORLD!!!!

Oh, and by the way, the Dow is was back up over 13,000 this morning after dropping 218 points yesterday. At its high, the Dow was up 120 points. It has since given back almost all of its gains.

Notes from the Underground:

Dow - 12,959.75 +1.31
Gold - 792.90 +16.10
Silver - 14.136 EVEN
Oil - 97.18 +2.54

Patrick

WARNING: READ THIS AT THE BREAKFAST TABLE AT YOUR OWN RISK!!!!!

noreply@blogger.com (Unknown) — Mon, 19 Nov 2007 14:47:00 +0000

Well, you are reading this, which means one of two things:

Either, you listened to me and you are reading this at Starbucks with Double Dolce Latte Supremo Thingo Thingy Venti with Extra Whip OR

You did not listen to me and you are sitting at your desk reading this.

Well, if your are among those who did not listen, go ahead and READ this NOW...then PRINT it out and READ this AGAIN TOMORROW MORNING over a traditional American breakfast of bacon and eggs with toast.

Those that did not follow instructions (probably most of you ) missed out on a good breakfast, but not a GOOD ECONOMIC LESSON!

This is my Bacon 'n Eggs Economics Lesson of the Day:

Start by drinking your Orange Juice. Orange Juice is up 19% for the past 12 months AND growers expect a shortfall of 10% in this year's harvest. Have you seen the price go up in the supermarket yet?

Your Cornbread and Toast is next, slap on some butter if you need to. If you are on the Atkins Diet, don't eat, but this is important to you as an investor. Corn costs 15% more and Wheat is up 61.7% in 12 months!!! Corn is being used as a substitute for wheat in feed grain because Russia has been limiting exports on it's wheat...this tied in with the ethanol boom has caused greater demand and tightened supply for these two commodities.

You want eggs? 33.7% in 12 months. Milk? 21%. Primarily because of higher grain and corn costs to feed the chickens and cows, in addition to higher fuel costs to run the farm and ship to market.

For the meat lovers, bacon and ham prices should be seeing hefty increases for the same reasons.

We are beginning to see increased costs for our breakfast at the supermarket, but nothing near what the commodity costs have increased. When the price at market starts reflecting the commodity costs...look out!!! Is this an opportunity? Think about it and send me your thoughts.

Let me add this - as the dollar drops, our costs for these goods are going to increase, HOWEVER, these goods cost less in foreign countries where these goods are being bought with foreign currencies. Do you think that there is opportunity yet? Send me your thoughts.

NAMELY INDIA & CHINA!!!!! These 2 countries comprise 40% of the world population and guess what? The growing affluent and middle classes in these countries are moving AWAY from their traditional vegetarian breakfasts AND turning toward American breakfast foods!!!!

So, increased demand is going to have to be met with more supply & higher prices...this equals more demand for manufacturers and distributors of food, as well as equipment makers to the food and farming industry. NOW, DO YOU THINK THAT THERE IS OPPORTUNITY? Send me your thoughts.

Guns, Grub, and Ground (in this case Grub) are just as important investments in the stock market as dividend paying stocks are.

Where is the Economy Heading? Follow the Transports.

noreply@blogger.com (Unknown) — Fri, 16 Nov 2007 14:47:00 +0000

Have you ever wanted to read a crystal ball, read the tea leaves, consult an astrologer, etc. to find out what the direction of the economy is going to be?

Well, you don't have to go that far. You can have something much, much more concrete.

Some months ago on Jim Canale's Real Estate Lifestyle website forum, I wrote about the troubles that YTC, the former Yellow Transportation was going through with lower shipping volume and higher fuel costs. The CEO was making the case that the Fed did indeed need to lower interest rates because the economy was at the beginning of a period of increased inflation AND lower economic output. Well, today FedEx came out with lowered expectations on future profits because of....you guessed it, lower shipping volume and higher fuel costs.

Lower shipping volume indicates that there are not as many goods being produced by manufacturers which leads directly to lower profits for everyone. When combined with higher transportation costs, profits all around drop for everyone. The transportation companies, the manufacturers, and the financials. The financials get hit because if their is less economic output, companies are less likely to borrow for expansion that is not needed.

This has been reflected by the drop in the Dow Jones Transportation Index which has fallen some 950 points since its July high to 4563.84. A 17% drop! This is much greater than the 7% drop in the Dow Jones Industrial Average.

So, follow the transports as a leading indicator on the economy.

For now,

Notes from the Underground:
DJIA - 13,176.94 +66.74
Gold - 793.60 -19.40
Silver - 14.483 +0.031
Oil - 95.10 +1.67

Dow Jones Transports - 4,563.84 -74.85

Patrick

Leaving $30,000 On The Table? You Are If You Aren't Jumping At These Deals!!!!!

noreply@blogger.com (Unknown) — Thu, 15 Nov 2007 14:45:00 +0000

Today is Real Estate Day! So all that you are going to see are the deals that me and my friends have available RIGHT NOW!!!!!

Both deals are in Philadelphia, one is a rental that is actually 2 properties in one deal. The other is a rehab & flip in an up and coming neighborhood.

Both deals can be seen at www.cheapassrealestate.com. When you register for your password be sure to put my name in as the referral. This tracking is vital to seeing what marketing is working and what marketing is not. This is a vital business lesson for you as well. Tracking what is working and what is not working WILL add to your bottom line almost immediately.

Here are the properties.

3453-3455 Braddock Street in the Harrowgate section of Philadelphia. For an approximate investment of $120,000, an investor will reap $34,600 in equity and cash at refinance, in addition to $321/month in positive cash flow. Who would not be interested in an infinite return after refinancing for that kind of dough?

5340 Wakefield Street in an up and coming neighborhood in the historic Germantown section of Philadelphia. An approximate $130,000 investment will reap a $36,551 profit upon resale.

www.CheapAssRealEstate.com provides complete turnkey solutions to investors looking for consistent profits in the real estate market. Included in the deal includes a contractor with a guaranteed not to exceed price, a realtor to handle both the purchase and sale of the property, title insurance search, facilitation of financing if needed, a property manager for rental properties, and a project manager (for an added fee).

The services and solutions provided allow YOU, the real estate investor, to work ON your business, NOT IN your business. It allows more time to pursue more deals and business opportunities, more time to spend with family and friends, more time to travel, whatever your dreams allow for you.

Until next time.

Notes from the Underground:
Dow - 13,110.05 Down 120.96
Gold - 793.60 Down 19.40
Silver - 14.40 Down 0.629
Oil - 93.75 Down 0.34

Patrick Clark

PS www.CheapAssRealEstate.com should be on your favorite list of websites. They provide a continual stream of profitable investment projects for the real estate investor. I have purchased properties from them for my own real estate portfolio.

GET PAID to ride out volatility!

noreply@blogger.com (Unknown) — Wed, 14 Nov 2007 14:43:00 +0000

Volatility increased in the markets again today after recovering from a roller coaster Monday and Tuesday. The day was pretty serene for the most part with the Dow hovering just above flat. Then at the end of the day there was a 75 point sell off.

What must be remembered here is that the market has been all over the map this past month (not to mention all year) and traders are skittish about holding on to gains for very long. If they have them, they are locking them in by selling them.

On the stock front, I have a pretty easy solution to how I handle this kind of market and skittish traders in particular. One, I hold dividend paying stocks. I GET PAID TO WAIT THIS MARKET OUT!!!! I hold dividend paying stocks for the long term, I hold BIG NAMES in there respective industries. I hold stocks that are paying out at least a 3% dividend and have the financials to grow the dividend whenever they choose.

The dividend gives me the ability to reinvest in other opportunities as they spring up in this volatile market.

For example, I am actively buying I-Shares Silver Trust (SLV) to hedge inflation. Silver and gold prices have recently pulled back due to profit taking (essentially, I am taking advantage of a dip) and the brief idea that inflation (according to the government's numbers) ain't that bad.

Remember, the Fed is LYING to you when it comes to inflation. Food and energy is not included in the number. The CPI is due to come out tomorrow and we will see how much of a fib it is this month.

I am also buying silver in particular because it is selling at a great discount to gold. Traditionally, gold trades at 17x silver, so with gold at $817/ounce, silver should be trading at $48/ounce. Instead it is hovering just about $15!!!! This is a great buying opportunity for silver which in addition to being a hedge to inflation and a precious metal used in jewelry, is also has many industrial uses and is in great demand in China and India whose economies are growing by 10% a year.

So, you could be buying silver directly, or you could be buying a paper certificate that trades on the New York Stock Exchange.

Until tomorrow, which is THURSDAY.

Notes from the Underground:
Dow - 13,231.01 -76.08
Gold - 817 +19.80
Silver - 15.03 +0.46
Oil - 93.99 -0.10

SLV - 149 +0.33

Patrick

PS THURSDAY is REAL ESTATE DAY, so draw your own conclusions to the theme of tomorrows post.

Follow the BIG MONEY!!!

noreply@blogger.com (Unknown) — Tue, 13 Nov 2007 14:41:00 +0000

How should you play the Credit Crunch?

Follow the BIG MONEY!

When I talk about BIG MONEY, what am I talking about?

Two men.

Warren Buffet and Wilbur Ross.

Everyone knows who Warren Buffet is. Mr. Buffet is the 2nd richest person in the US behind Bill Gates and the 3rd richest in the world behind Gates and Mexican entrepreneur, Carlos Slim.

Wilbur Ross may not be on your radar. Mr. Ross is a multi-billionaire investment banker who specializes in bankrupt and distressed securities. If he were a real estate investor, he would be the equivalent of a foreclosure and preforeclosure guru investor. Mr. Ross made his fortune buying steel, mining, and auto parts companies that were either in or facing bankruptcy, replacing management, and turning the companies around.

What are these two guys doing with banks and mortgage companies during the credit crunch/crisis?

For starters, Warren Buffet, through his company Berkshire Hathaway, is buying significant chunks of companies like Bank of America and Countrywide that have the bankroll to hold off the worst and then rebound when the market recovers. In the case of Countrywide, Mr. Buffet also used his influence with Bank of America to buy Countrywide convertible preferred stocks.

What is convertible preferred stock?

Convertible preferred stock are stock that pay dividends, have no voting power, but the owner can convert the preferred stock to common stock at any time. This means that once Countrywide rebounds, Mr. Buffet can convert to common stock and collect a huge capital gain. This particular deal pays a 7.25% dividend and allows the holder of stock to convert to common at an $18/share cost basis.

Wilbur Ross takes a much riskier, but much higher collateralized position on his subprime investments. Mr. Ross typically buys the debt of his target investments. Why? Because when these companies go into bankruptcy, all power shifts away from the stockholders and into the hands of the debt holders. When this happens, Mr. Ross typically organizes the rest of the debt holders, goes to the bankruptcy court, and becomes the new owner of the company. He then either brings in a new management team to turn the company around, or begins selling off pieces of the company, keeping the juiciest pieces for himself. In the subprime situation, Mr. Ross isn't even buying the debt of companies such as American Home Mortgage. Instead, he is buying their mortgage assets directly. In doing this, he is buying their most valuable assets, which are the only assets that AHM has that are worth anything, so that AHM can pay off its creditors as well as it can before silently disappearing. The advantage to Mr. Ross is that he is shortcutting the bankruptcy proceedings all together and getting the ASSETS that he wants in the process.

This situation is happening every day for us as real estate investors today.

I recently had a discussion with one of my realtors. He was telling me that he is being shown REO packages and packages directly from the mortgage banks ranging from several properties worth $500,000 to $2,000,000 in total all the way up to packages of properties worth $1 Billion in total. These packages are being divvied up and offered to individual investors at 30, 40, 50, 60 cents on the dollar. You should be calling to real estate agent to find out if he has access to them. If not, you should be calling other agents so that you can create your own fortune and get your piece of what Warren Buffet and Wilbur Ross are already enjoying!

Notes from the Underground:
Dow - 13,161.99 +174.77
Gold - 804.20 -1.60
Silver - 14.55 -0.16
Oil - 91.19 -3.43

Until Tomorrow,

Patrick

PS I have properties available on a regular basis for real estate investors. For a list of properties, go to www.CheapAssRealEstate.com and register for your password and put down my name as your referral.

Welcome!

noreply@blogger.com (Unknown) — Fri, 09 Nov 2007 14:31:00 +0000

Welcome to Underground Investing For Fun And Profits!!!!

This blog is a place for exploration and discussion of serious investing topics in a fun, light hearted way.

Why should we be cold like Wall Street on a snowy February morning?

We are all here on this planet at this time to enjoy long, healthy, productive lives...not slog through and kill everything that moves so that we can eat.

Wall Street is not here for you! The Federal Reserve is not here for you! Corporate America is not here for you!

BUT we can use what they are telling us both directly and indirectly to our advantage in our businesses, our stock investing, and in our real estate investing. And I am here to help you navigage through and pick out what those "tells" are that you, me, us can take advantage of...I will interpret and weed out all of the jargon that you are bombarded with on a daily basis.

The bottom line is, you just want the best moves for you and your family in regards to the business and investment moves that you make. And to do that, you already know that you need to know how stocks and other paper assets, real estate, and business interact with each other and with the constant economic and political data that comes out. Otherwise, you would not be reading my blog!

Well, I welcome you.

In the coming days, weeks, months, there will be many improvements made to this site. It will eventually become a full blown website complete with access to data, articles, links, webinars, and teleseminars to help you improve your financial education and your investment performance.

I will introduce you to my advisors, mentors, and colleagues who will add there ideas to mine in terms of where the markets and the economy is heading and what you can do about it.

For now, subscribe to the blog my placing your email in the box to the left. This will allow you to receive notification when I post the next entry as well as to give you updates to site enhancements.

I look forward to telling you about my investing philosophy between stocks, real estate, and business.

Notes from the Underground:

Patrick