Production by Bright Red Pixels.

A lifelong entrepreneur, Bill Gross is on the verge of a breakthrough that can make solar energy as affordable as fossil fuel-generated energy. His eSolar has a full operation factory in California that produces enough energy to power some 4,000 homes.

A system of 24,000 mirrors moving slowly to capture blazing sun rays is produced efficiently with robot-made fabricated parts rather than customized components that brings down costs significantly. And, since eSolar requires intense sunlight, its power plants are built in underutilized, arid areas that are generally deserted.

Bill Gross has always tinkered with technology and innovation, improving existing ideas and developing new ones. The commercial aspect of his inventions has come naturally as other recognized their value. In 1996, Gross started IdeaLab as an umbrella company for his hundreds of projects and startups.

The failure of many companies comes from stretching its resources, taking on too many things and eventually losing focus, Gross says. IdeaLab has given him the opportunity to develop his various projects by creating dozens of startups within the company each focusing on one idea.

Gross’ success has come at the cost of many failed attempts – his ventures were destroyed in the dot com  crash. But he lived through it, and took these million-dollars failures as very expensive classes in entrepreneurship he learned a great deal from.

We sat down with Bill Gross to find out what these crucial lessons are, and understand more about how eSolar works.

Watch more interesting videos at Business Insider >

                          

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Bill Gross: Solar is Only Cents Away from Competing with Fossil Fuels

1-16 from left to right

(Source: Bracket Science)

What do you think about some of these NCAA Tournament stats? Share your thoughts in the comment section below or click here to stop by our new Forum.

                          

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Chart Junkie: NCAA Basketball March Madness

(Source: Focus)

                          

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The Best Jobs in America

This is actually a very savvy business decision by 20th Century Fox. Many times in the movie and music business, studios and labels maintain aggressive release schedules which divert resources from currently successful or highly promising content. However, News Corp is properly maximizing their revenue from the blockbuster Avatar and will then be able to dedicate many more resources to push Wall Street 2.

In the case of delaying Wall Street 2, greed is good.

Are you waiting for the release of Wall Street 2: Money Never Sleeps? Let us know what you think in the comment section below …

                          

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Wall Street 2 Movie Pushed Back Five Months as Avatar Keeps Shining

Assuming other things are held constant, the sector indices should be trading materially higher than their 2008 and 2010 highs. The average gold producer is set to produce excellent cash flow and margins. Simply put, Gold is higher and costs are lower.

Interestingly, the best value is now at the very bottom of the food chain. Some people call these the crap juniors or the garbage juniors. I refer to them as the lower tier juniors. While the seniors and quality juniors have essentially recovered their losses from the crash, the lower tier juniors have barely recovered. Most of these stocks could rise five-fold and still be well below their 2007 or 2008 high.

That being said, these stocks are a huge risk. Most of these companies will never produce an ounce of anything, nor will most define a resource that has a good chance of ever coming out of the ground.

Why am I writing about them?

At this juncture, 95% of the risk has been priced out of these stocks. They fell more than 95% and have barely recovered. Yet, in the same time frame, Gold rose $500 and to a new high. Moreover, gold producers should be seeing record margins in 2010 and 2011 and that would put them in a better position to acquire large and small juniors.

As it is, these stocks (the ones with real prospects) are already significantly undervalued. If these companies can execute and Gold rises to $2000/oz, their share prices could rise ten fold.

Here is an example of one particular company. The stock is in the latter stages of a bottoming formation. The only problem I have with the company is that its fully diluted share count is about 70% more than its current shares, which is typical of lower tier juniors. Nonetheless it has a seasoned management team. The company is a small producer with a plan to increase production and define their resources.

In our Gold & Silver Premium service we have started to focus a bit of attention on these lower tier juniors, in search of value and quality. We believe that the bulk of one’s gold stock portfolio should be in the quality junior producers. However, now is the time to take a look further down the food chain. These types of stocks have yet to move. Odds are they probably will when Gold makes its next move. Click here to learn more.

                          

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Where is the Value in the Precious Metals Sector?

• The number of billionaires has gone from 793 last year to 1,011 this year, almost to where it was [in] the record level of 2008.
• The overall net worth of these billionaires is $3.6 trillion, up from $2.4 trillion just a year ago — a 50 percent increase.
• The United States used to account for nearly half the names on the list, but now its share is just 40 percent — or 403 billionaires.

This last stat offers a glimpse of how fortunes are shifting from the US to new economic super powers such as China. In fact, number of China’s billionaires reached 234 — a number Forbes says exhibits the “remarkable changes taking place in the global economy.”

This Forbes video offers additional insights into how different countries are creating extreme wealth:

Here is the list of the top 24 richest beings on planet Earth:

(Source: Forbes)

                          

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What Does Forbes Billionaire List Say About the Global Economy?

The latest data from the US Census Bureau show a bullish picture for exports and a strengthening economic position at home when compared to January 2009 data. Seems like US manufacturers are getting more aggressive now that domestic demand can’t carry the load alone.

According to the latest U.S. International Trade report:

“In January, the goods and services deficit increased $0.4 billion from January 2009. Exports were up $18.7 billion, or 15.1 percent, and imports were up $19.1 billion, or 11.9 percent.”

The numbers reflect across the board increases from 2009 in exports for Industrial Supplies/Materials ($7.0 billion), Automotive ($3.4 billion), Consumer Goods ($2.1 billion), Foods/Feeds/Beverages ($1.7 billion), Capital Goods ($1.6 billion), and Other Goods ($0.4 billion) ─ all bullish signs for US industries.

Services exports also increased, from $2.7 billion in January 2009 to January 2010.

As the charts indicate, although exports showed a slight decline in the month of January (0.3 percent), imports fell even more (1.7 percent). Stronger net exports contribute to a rosier GDP and a smaller the trade deficit is bullish for the dollar.

The bad news is that we aren’t seeing any corresponding strength in employment as jobless claims remain high with no relief in sight. Thus, US companies will continue to attack foreign markets in the quest for revenue growth.

                          

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US Exporters are Taking a Page Out of China’s Book

On a more positive note, guidance was strong, coming in at $0.12-$0.16/share vs. estimates of $0.09.  Furthermore, same store sales of MW’s namesake brand fell just 7.1% year-over-year, improving from a drop of 9.1% for the same quarter last year.  But the revenue numbers seem to be carrying the day, as investors have pushed shares down greater than 6% during after-hours trading.  Also not helping matters were net sales, which also came in light at $457.2 million, down 4% year-over year.

MW has struggled alongside many other clothing retailers throughout the economic downturn.  Along with many of it’s brethren, MW has lowered prices to keep customers only to watch margins wither away.  Though shares have certainly enjoyed a nice run since the panic-lows of just over a year ago, it’s questionable if MW still has legs.  After rallying from under $10 to over $27 during September ‘09, shares dropped back under $20 until popping back up to $25 last week on positive retail sales data.

Tonight’s report seems to be bringing shares back down to earth, as well as putting much of MW’s recent run into question.  Until today, shares looked as though they were going to push through the aforementioned September highs, possibly offering a good trading opportunity.  It is highly unlikely they will do so now.

Last week’s positive retail sales report has many retailers, like True Religion (TRLG), which we recommended here at wallstcheatsheet.com a couple of weeks ago, thriving.  In that kind of environment, there’s no reason to get behind companies that are under-performing their peers.  So, stay away from MW for the moment, unless you’re looking for a short.

Disclosure: No holdings in MW, TRLG.

                          

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Men’s Warehouse Beats Estimates, Sells Off On Revenue Concerns

Hedge fund manager Jim Chanos has generated some controversy over the past few months because he has had the temerity to argue that China is experiencing an asset bubble.  Skeptics argue that he misunderstands the nature of the Chinese economy.

There are four main parts to his argument:

•    GDP drives economic activity.
•    Local party bosses have an incentive to game the system
•    Real estate speculation
•    Overbuilding of industrial and commercial real estate

Let’s take these arguments one by one.

1) GDP drives economic activity

In most industrialized countries, GDP is what Chanos calls a residual: it is the result of economic activity.  But in China, GDP growth is seen as sacrosanct, and Beijing sets a GDP growth target every year.  Local party bosses act to ensure that they meet this target.

2) Local party bosses have an incentive to game the system

Since GDP growth is explicitly stated as a public policy, local political bosses have an incentive to make sure that they contribute to the country’s efforts to meet the GDP target growth rate.  In practice, this means that local municipalities can, for example, meet revenue targets by selling off land to developers.  Party bosses have an incentive to sell as much land as possible, regardless of whether doing so creates too much supply.

3) Real estate speculation

One of the main arguments advanced against Chanos’ China thesis is that real estate speculators in China have to have more equity than do their American counterparts. The implication is that China won’t suffer from a meltdown of real estate.  But this argument, while possibly correct, misses Chanos’ larger point.  Speculators in Beijing buy up multiple apartments, seeing them as a store of value, akin to commodities like gold or palladium.

Implicit in this practice is the notion that there is a greater fool down the line.  Treating real estate as a store of value, rather than an investment that produces real or imputed monthly cash flows in the form of rent defies economic logic.

4) Overbuilding of commercial and residential real estate

Perhaps the most interesting statistic cited by Chanos is that there is 2.6 billion square meters (30 billion square feet) of non-residential construction under development across China.  To put this number in context, that is enough square feet to give every person in China a 5 foot by 5 foot cubicle.  The inference here is that non-residential construction supply will outstrip demand for a very long time.  Basic economics says that if supply exceeds demand, prices (rents) will trend down.

The other consideration here is the annual maintenance expense for these tens of billions of square feet.  Not only will rents go down over time as demand fails to meet supply, but maintenance expenses for vacant office buildings and industrial parks very quickly adds up and acts as a drag on the economy.  Capital used to maintain unoccupied buildings does not grow an economy.

What do these arguments imply?

These four arguments present a pretty compelling thesis about China, and it’s not a pretty one.  Chanos notes that two very different economists, Paul Krugman and Milton Friedman (no relation to this author), have argued that economies grow over time because outputs, not inputs, increase.

But, China has thus far repeated the economic history of the Soviet Union 50 years ago: a massive infusion of capital into a previously capital-poor country has induced millions of rural citizens to move to cities, become educated, and industrialize the economy.  Those are all the inputs.  But the problem, according to Chanos, is the law of diminishing returns.

At some point, those inputs reach a theoretical maximum: there is only so much moving of people from rural areas to cities and educating of the citizenry to be done before real economic growth (i.e., increased output) has to occur.  Else all the growth is illusory.

What do you think about Chanos’ argument? Let us know in the comments below or click here to share your thoughts in our new Forum …

                          

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The Four Main Parts of James Chanos’ China Argument

For the week ending 03/05/2010, the MBA survey shows that the change in mortgage applications, for both purchases and refinancing, edged up a mere 0.5 percent.

Applications for new purchases applications rose 5.7 percent over the prior week increase of 9 percent. Not a surge by any account, but still, a positive sign. And whether or not potential buyers are sidelined waiting for prices to drop as more houses enter the market might be irrelevant. Assuming there is a larger pool of potential buyers “out there,” buyers must still qualify under stricter credit rules.  So even with government support in the form of tax credits, the market appears stalled: sellers are resisting dropping prices further while buyers are looking for lower prices and underwater homeowners lucky enough to buck the foreclosure trend are stuck in a holding pattern.

Note also that refinance applications dropped 1.5 percent from the prior week, suggesting a slowing down in home refi’s. (The average contract rate for 30-year fixed-rate mortgages was 5.01 percent last week, up 6 basis points from 4.95% for the prior week).

Enter a new incentive for short sellers via the Obama administration. Optimists may still hold out hopes for a last-minute buying surge from tax credits, but momentum slowed last week. And whether this latest move by the Obama administration is enough to get market to pick up steam is anyone’s guess, but it looks like a hefty dose of something oily is needed.

What’s your local housing market doing? Let us know in the comments below or click here to join the discussion in our new Forum …

                          

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Are US Homebuyers Sidelined or Surging?