President Obama looked tired and beat up as he unintentionally states, “I continue to be much more concerned when it comes to our security, with the prospect of a nuclear weapon going off in Manhattan” A simple slip up or something more sinister happening behind the scenes? Watch and decide for yourself.
What The Hell Is Financial Repression?
According to Bill Gross financial repression is transferring money from savers to borrowers. And according to him, we’re going to be financially repressed for decades.
This is also known as fucking the most responsible members of our financial community…the savers….for the benefit of capital misallocation and speculation. Thanks again Greenspan, Bernanke and Yellen.
All joking aside, this is an incredibly important issue to consider going forward. Until and unless the FED picks the path of savers instead of speculators, the US will never move forward. We will continue to go from boom to bust in various asset classes, giving the perception of wealth, all while the underlying economy continues to rot away. Even though the top 1% will benefit substantially it will bring an eventual collapse to the entire system. As it stands today, we would be lucky with the outcome the Japanese had over the last 24 years.
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What The Hell Is Financial Repression? Google
Bloomberg Writes: Americans Can’t Retire When Bill Gross Sees Repression
Twelve years after retiring as a telephone repairman, Roger Wood clocks 12 to 15 hours a week at a Lowe’s Cos. hardware store near Glen Allen, Virginia.
“About the same amount I made 30 years ago,” Wood, 69, says of his $12 hourly wage. “I’m worried about my portfolio because of low interest rates, even to the point of considering full-time again.”
Feeble returns on the safest investments such as bank deposits and fixed-income securities represent a “financial repression” transferring money from savers to borrowers, says Bill Gross, manager of the world’s biggest bond fund. Workers 65 and older, struggling with years of depressed yields, are the only group of Americans who are increasingly employed or looking for jobs, according to Labor Department participation-rate data.
“We’re going to be financially repressed for decades,” Gross, the 69-year-old billionaire co-founder of Pacific Investment Management Co., told Bloomberg Radio Feb. 7, citing Federal Reserve interest-rate policy that aims to cut borrowing costs. “I hate to be gloomy, but, yes, for the next 10 years, the oldsters, and I’m in that camp, are going to be disappointed in terms of the policy rate.”
About 75 million baby boomers, born from 1946 to 1964, are starting to retire and face meager returns as a byproduct of the Fed’s decision to hold its benchmark rate near zero since December 2008. Policy makers also have quadrupled the central bank’s balance sheet to a record $4.22 trillion to drive down borrowing costs.
More Needed
A 65-year-old who wanted to pay for retirement with annuities tied to bonds needed 24 percent more wealth in 2013 than in 2005, National Bureau of Economic Research President James Poterba calculated in a research paper released in February. The increase followed a drop in yields on top-rated corporate bonds to 3.8 percent from 5.4 percent, according to Poterba, whose organization is the official arbiter of when U.S. recessions start and end.
America’s Widening Retirement Gap
“The magic of compound interest works very slowly when real rates are very low,” said Poterba, also a professor of economics at the Massachusetts Institute of Technology in Cambridge. “Interest rates that have prevailed for the last few years have made it more challenging for savers to accumulate wealth, particularly if they are trying to do so in a relatively risk-free way.”
U.S. Treasury yields are at least 2 percentage points under what they would be otherwise because of the Fed’s low-rate policies and stimulus programs, said William Ford, former Atlanta Fed president who wrote a 2011 paper estimating the impact on savers of monetary easing. That reduces their income by at least $280 billion annually, his analysis shows.
‘Killing Savers’
“The costs of low interest rates are being ignored,” Ford said in an interview. “It is killing savers, elderly savers who are living on life savings that have been conservatively invested.”
Baby boomers started turning 65 in 2011, and every day for the next 16 years about 10,000 more will join them, according to the Pew Research Center in Washington. About 19.8 percent of the population will be 65 and older in 2030, compared with 12 percent in 2000, Census Bureau projections show.
Almost half of workers aren’t confident they will have enough money to retire, according to asurvey released this month by the Employee Benefit Research Institute in Washington. Thirty-seven percent of non-retirees told a Gallup poll last year they don’t expect to quit their jobs until after age 65, more than double the 14 percent who gave that answer in 1995.
Facing Crisis
Americans face a “crisis,” said Alicia Munnell, director of the Center for Retirement Research at Boston College in Chestnut Hill, Massachusetts, and a former research director at the Boston Fed. “Five more years of low interest rates are going to make providing one’s self with an adequate retirement income extremely difficult.”
The financial crunch probably will reduce consumer-spending growth in the next decade and also could hurt career prospects for younger generations, said Steven Ricchiuto, chief economist of Mizuho Securities USA Inc. in New York.
“Simple, it is a drag,” he said. Either they cut spending to boost saving or “they will just be forced to work longer, making it harder for young people to get jobs or move up the ladder.”
Side Effect
Fed Chair Janet Yellen, who succeeded Ben S. Bernanke last month, was pressed on Feb. 11 about the impact of the central bank’s policies on older Americans. During her first semi-annual testimony to Congress, she echoed her predecessor’s philosophy that difficulty for savers is an unavoidable side effect of efforts to boost employment and growth.
“A low-interest rate environment is a tough one for retirees who are looking to earn income in safe investments like CDs or bank deposits,” Yellen said. “In a stronger economy, savers will be able to earn a higher return.”
The current national average rate on a five-year certificate of deposit is 0.8 percent, compared with 2.26 percent in 2009, according to Bankrate.com. The national average for money market accounts is 0.11 percent now, compared with 0.48 percent average five years ago.
U.S. Treasuries earned coupons of 7.5 percent two decades ago. Now investing in the U.S. government generates an average coupon of 2.5 percent, according to the Bank of America Merrill Lynch U.S. Treasury Index.
The Fed isn’t planning to raise rates soon. At last week’s meeting of the policy-setting Federal Open Market Committee, officials repeated their pledge that the rate for overnight loans among banks will stay low “for a considerable time” after their asset-purchase program ends.
Tapered Program
They tapered their bond buying by $10 billion for a third time, to $55 billion a month, and predicted the benchmark rate will be 1 percent at the end of 2015 and 2.25 percent a year later, higher than previously forecast. The rate averaged about 5 percent in the year before the 18-month recession began in December 2007.
Some seniors are benefiting from the Fed’s policies, with mortgage rates the lowest in at least four decades.
Robert Fischl, 69, of Glenville, Georgia, cut his house payments by about $2,000 a year by refinancing in April 2013. His 15-year loan has a 2.3 percent annual interest rate, down from 4.63 percent on a 20-year loan. He also withdrew $5,000 during the process to help with a $15,000 sunroom expansion.
“I feel very lucky,” he said. “It is a really nice improvement to the house. We use it year-round.”
Rising Values
Rising home values and record stock prices also are helping some older Americans. The S&P/Case-Shiller home prices in 20 cities climbed 13.4 percent in December from a year earlier, down slightly from the pace in November which was the biggest gain since February, 2006. The Standard & Poor’s 500 Index jumped 30 percent last year.
“The best thing that’s happened for people looking at retirement is home prices went and up stock prices went up,” said Torsten Slok, chief international economist at Deutsche Bank AG in New York. “U.S. households have never been more wealthy.”
Even so, men and women 65 and older are staying in the labor force longer: Their participation rate was 18.9 percent in February, near a 52-year high, while the overall rate held at 63 percent, near a 36-year low.
People are working longer not only because of financial need but also because of improved health and longevity, less physically demanding jobs, more women employees, declines in company-provided retiree health insurance and changes to Social Security, according to Boston College’s Munnell.
As the risk and responsibility of saving for retirement continues to shift to employees from employers, low interest rates could force some younger workers to hold onto their jobs longer than they’d planned.
Disappearing Pensions
The number of 401(k) plans grew to about 513,000 in 2011 from 17,000 in 1984, while active participants increased to 61 million from 7.5 million, according to Labor Department data. In that time, single-employer defined-benefit pension plans fell to about 43,800 from about 165,700.
While William Pagdon knows the Fed keeps rates low to boost employment, he doesn’t like being collateral damage: He now figures he’ll have to work a decade longer than he’d wanted.
Pagdon, a 51-year-old scientist who lives in Edison, New Jersey, with his wife and young son, has about 90 percent of his assets invested in “very safe, very low-yielding” bonds and the rest in the stock market, which he fears “will crumble.”
Savings Stagnate
“My plan has been deferred about 10 years, so now I’m looking at 65 and not 55,” Pagdon says. “Interest rates have caused my savings to stagnate to close to useless.”
Loomis Sayles & Co. Vice Chairman Dan Fuss, 80, can see the impact of low rates on retirees at the grocery store near his home in Wellesley, Massachusetts.
“If you look at the average age of the people bagging the groceries, I want to help them push the cart out; and look at those riding the commuter train at rush hour, a lot of them are my age,” said Fuss, who managed the two best large U.S. bond funds during the past 10 years.
He says he’s still working because he loves it, yet empathizes with those who have no choice. “The savers are screaming.”
Warning: Biotech Is In A Giant Bubble
Josh Brown, the CEO of Ritholtz Wealth Management provides us with a superb analysis of the Biotech section (see full article below). There is very little I can add on the valuation and the fundamental side. He is right on the money. My only contribution comes in the form of WHEN.
Or….when will the Biotech Bubble blow sky high.
Based on our mathematical and timing work that time is at hand. Even thought the Biotechnology sector escaped the bear market of 2007-2009 relatively unscathed, I don’t believe that will be case this time around. Quite the opposite. I firmly believe that the Biotech sector will lead the market lower due to its relative overvaluation and massive speculation within the sector. In fact, you can equate it to the Tech Bubble of 2000 or the Real Estate/Credit Bubble of 2007.
In short, the Biotech sector (in conjunction with the Tech sector) will lead the bear market of 2014-2017 lower. That is exactly what we have seen over the last couple of days. If you would be interested in learning when the bear market of 2014-2017 will start (to the day) and it’s internal composition, please Click Here.
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Warning: Biotech Is In Giant Bubble Google
The Exchange: Yes, biotech is a bubble
Josh Brown is the CEO of Ritholtz Wealth Management. He writes daily at the widely read Reformed Broker Blog. His first book, Backstage Wall Street, is a brutally honest look at the investment business. Follow Josh’s smart and hilarious Twitter Feed >@ReformedBroker.
Let’s start here with George Soros, from a speech he delivered in June 2010:
I have developed a rudimentary theory of bubbles along these lines. Every bubble has two components: an underlying trend that prevails in reality and a misconception relating to that trend. When a positive feedback develops between the trend and the misconception, a boom-bust process is set in motion. The process is liable to be tested by negative feedback along the way, and if it is strong enough to survive these tests, both the trend and the misconception will be reinforced.
It’s likely that you’ve been exposed to the recent market conversation/freak-out du jour – “Is biotech a bubble?” If you haven’t yet, you will be, as TV producers scour the financial web for things to make segments about. Either way, more and more people are going to weigh in – many of them completely unqualified – and they’ll cloud the issue even further. One of the things I try to do is cut through the clutter for readers and present them with a good framework with which to think about a given topic.
Everyone, myself included, can and will get things wrong in the markets. The goal should be to get less things wrong as time goes on and to avoid getting things wrong for the wrong reasons – easier said than done but a highly attainable goal worthy of pursuit.
No one has all the answers, but many people don’t even have the right questions to begin with. I think having the right questions is an underrated starting point.
Back to the biotech sector. Let’s start with the positives (many of which have been cited by Elliot Turner): Time-to-market for biotech drugs has been dramatically shortened thanks to technology and the maturation of these companies’ management teams. In addition, new drug FDA approval has exploded – according to Bloomberg BusinessWeek, 2013 was “a year of 27 clearances at the FDA that included several under a new ‘breakthrough therapy’ designation prioritizing reviews of promising medicines. That followed a record 2012 in which 39 novel drugs were approved, the most in 15 years.” Also, aging populations mean almost guaranteed growth for the sector’s products while the dwindling R&D efforts and pipelines of traditional pharma companies mean a steady drumbeat of takeovers as far as the eye can see.
Okay, we can acknowledge the bull case with a straight face and no fingers crossed behind our backs. It’s legit. “But is it already more than priced in?” is the question.
Is the biotech sector in a bubble?
Yes. Full stop.
Below are the questions I’ve used to arrive at this answer (with some supporting data / links). You can ask them of yourself and possibly come up with a different answer:
Is there a divine origin story for the rally?
How it all began: From 2009 through 2011 there was no public market capital for anything even remotely risky and so young biotech companies were forced to sell out to larger drug companies on the private market. This was fine with them as valuations on the private market were actually much better – my friend Adam Feuerstein from TheStreet.com explained to me that if a biotech was going public circa 2011, it meant their science wasn’t good enough for an acquisition exit.
Meanwhile, as sluggish global growth persisted, investors began to favor secular growth stories in the stock market – companies that didn’t need GDP growth to accelerate. This favored Big Biotech, your Celgenes (CELG) and Amgens (AMGN) and the like. Unfortunately, there weren’t enough reputable biotech franchises to go around thanks to a handful of mega-mergers (buyouts of Genzyme, Genentech, Pharmasset, Amylin, Human Genome, Illumina etc) and the aforementioned dearth of public offerings. Institutions took the handful of good-sized biotech stocks that were leftover to all-time highs. Sure, fundamentals are important, but scarcity is even more important when the fever strikes.
Have the gains been astronomical?
Yes. The S&P 500′s biotech stocks are up more than 400% from the March 2009 bottom versus a gain of roughly 180% for the rest of the market. And this does not include the hundreds of small- and mid-cap biotechs that have gone up even more. The Nasdaq Biotechnology Index, which does include some of these smaller names, is up 14% year-to-date or a sevenfold return over the broader market. Last year it was up 66% or double the S&P 500′s return, which is to say the gains are accelerating in both absolute and relative terms.
Are there egregious examples of unbridled enthusiasm for lottery-esque opportunities?
There’s a biotech company called Intercept Pharmaceuticals (ICPT) that announced some positive data from a drug trial in January of this year and promptly exploded by 281%. The stock is now up some 500% year-to-date and every aggressive trader on earth has it on their screen. In addition, they’ve driven up dozens of other similar companies in the hopes of being in “the next ICPT”. Stop me if you’ve heard this one before from other bubbles in other sectors. Actually, don’t stop me, I’m not done.
Outrageous gains are not limited to smaller biotech stocks. Gilead Sciences (GILD) bought out Pharmasset for $11 billion to get their hands on Solvaldi, a hepatitis C drug. Gilead’s stock price has tripled in the less than three years following that acquisition with $85 billion in market value added! Sovaldi is hitting the market this year and is expected to generate $2.5 billion in sales annually. Awesome – but $85 billion in additional market cap awesome? To be clear, Gilead has tacked on the market cap of Goldman Sachs, Union Pacific or United Health Group in two-and-a-half years.
Is capital flowing to the sector like ambrosia and honey from the mythological Horn of Plenty?
This year, so far, there have been roughly 50 initial public offerings and half of those have been early-stage biotech companies. The average gain for these new biotech offerings through the middle of March is over 50%. Anyone with a protein compound under a microscope and a clean suit can go public right now. You actually might not even need the compound, just the idea for one.
Also, the deal activity is a runaway train. According to Pricewaterhouse Coopers, last quarter was one for the ages: M&A in the life sciences sector spiked 24% and 31 companies were bought for a total of $37 billion.
Have valuations lost all connection with reality?
With a few exceptions, yes – broadly speaking and throughout the sector, they absolutely have. Without getting into the weeds on a case-by-case basis (of course we can always find exceptions), here’s the big picture viaBrendan Conway of Barron’s:
The price-earnings ratio of the SPDR S&P Biotech ETF is a rich 33 times trailing earnings, versus the S&P 500′s 17, says Morningstar. But Morningstar removes unprofitable firms from the tally. Add them back in and tally the losses against the prices, and the P/E multiple would be a negative 19, according to ETF.com’s Matt Hougan–if such a thing were possible.
I could cite some really extreme examples and then a bull could find some cheaper examples to offset them. So let’s think about the averages here. I’ll acknowledge that, individually, any of the companies I’m lumping in as bubbly could be working on a world-changing drug that more than justifies its current lofty price. Unfortunately, this will not be the case for most of them.
Are these extreme changes in valuation wreaking havoc and bringing distortion to other parts of the market?
My friend Jon Krinsky informally crunched the numbers this weekend and shared with me that, since 2012, biotech stocks began a full-scale invasion and colonization of the health care sector. He looked at the percentage of biotech market cap weighting in the health care sector SPDR (XLV) by year and then compared health care stocks with their constituent biotechs:
% weighting of XLV that biotech makes up
March 2010 – 11.62%
March 2011 – 9.6%
March 2012 – 10.65%
March 2013 – 14.44%
March 2014 – 19%
Are we saying crazy stuff to make ourselves feel better about the frenzy?
A little, if we’re going to be honest. Here’s someone referencing Bespoke Investment Group data earlier this month saying it’s not so crazy because biotech hasn’t yet eclipsed the dot com bubble of 2000 or the home building bubble of 2005:
the 361% gain in the Nasdaq Biotechnology Index NBI since hitting a trough — along with the rest of the market — in March 2009, pales in comparison with some other recent bubbles.
For one, the Nasdaq 100 made a leap of 1,118% during the period from December 1994 to March 2000 that included the dot-com bubble. That’s over a period of 1,935 days, only slightly longer than the current 1,822-day biotech rally.
There’s at least one more bubble to examine, the note says. The housing runup of the early 2000s brought with it an 835% gain for homebuilders in the S&P 1,500, Bespoke points out. That rally was similar in length to the dot-com bubble, lasting 1,954 days.
There are other examples of excuse-making for the sector – too many to cover here. Lots of people are making money and no one wants it to end, so I get it. I’ve been guilty of this kind of rationalization in the past as well.
Josh, are you just being a hater?
This is the last question I’ll rhetorically ask, and it should always be a question we ask ourselves when discussing market trends. “How much of my reticence to accept the prevailing wisdom is due to my having missed out?” In this case, it is inapplicable. We’ve been invested in the biotech space for years. I’ve been an unabashed biotech bull in public ever since I’ve been in the public eye. Here’s me in May of 2012 calling biotechs a stealth bull market, as one example. Even now, we are highly exposed to the health care sector which is itself laden with these stocks. I’m not hating, just keeping it real.
One last thing I will say – yes it’s a bubble, but so what? Greenspan coined the phrase “Irrational Exuberance” to describe the stock market in 1996 and it took four years and hundreds of percentage points of additional upside before it mattered. What am I, the Bubble Police? Don’t let my calling it what it is affect your investing. If you’re disciplined and think you’re a big boy or girl and know how to get out in time, knock yourself out. If you’re playing small, go for it, what do I care?
But if and when the hot money moves on and these stocks come hurtling back down toward the Earth’s atmosphere, don’t be mad if I say “Told ya so.”
What You Ought To Know About Bill Gates
The Shocking Secret Behind Bill Gates’s Success Is Finally Revealed
KEY STATISTICS: (Date of Analysis: October 30th, 2013)
Full Name: William Henry “Bill” Gates III
NET WORTH: $72 Billion (2013)
Date of Birth: October 28, 1955 (age 58) in Seattle, WA, USA
Current Residence: Medina, WA, USA
Parents: William H. Gates, Sr and Mary Maxwell Gates
Education: Harvard University (dropped out)
Occupation: Chairman of Microsoft Inc, Chair of the Bill & Melinda Gates Foundation, CEO of Cascade Investments, Chairman of Corbis
Family Life: Married to Melinda Gates (1994-present). 3 Children: Jennifer, Rory and Phoebe
QUICK SUMMARY:
Gates was born in Seattle Washington to William H. Gates, Sr a prominent lawyer and Mary Maxwell Gates a businesswoman. Growing up in a very well to do family Gates was always encouraged to compete and win. At the age of 13, in 1968, Bill Gates was enrolled in the Lakeside School, an exclusive preparatory school where he fell in love with computers and programming.
Due to Lakeside’s prominent status and high level industry connections Bill Gates and a few other students were able to gain access to terminal and computer time available only to large institutions and corporations at the time. From that point on Bill could not be pulled away from programming and within a short time have developed his first game “tic-tac-toe”. Various corporate gigs followed. Even at his young age Bill Gates was already at the forefront of the computer revolution that was about to come.
In 1973, Bill Gates graduated from Lakeside with SAT of 1590 out of 1600 (indicating high level of intelligence) and enrolled at Harvard University. In his first two years at Harvard, Bill Gates showed further brilliance when working in the computer field. However, in his sophomore year Bill and his friend Paul Allen have decided to drop out to pursue their dream of building a software company. Both of his parents were supportive of the decision.
Working on various things in between, the duo registered “Microsoft” as a business in 1976. During yearly years, all employees had broad responsibilities. While Gates oversaw business details, in the first five years he was also personally reviewing every line of code the company was creating. In 1980 Microsoft worked closely with IBM to develop an operating system. Showing his brilliance once again Gates structured a deal to keep copyrights for the software while licensing it to an IBM. This was done on a hunch that the rest of the industry will use his software as well. He was, of course, right.
In 1985 Microsoft released its first version of Microsoft Windows and through various steps (and major blunders by the competitors) were able to essentially monopolize worldwide operating system market, making Bill Gates the richest man in the world in the process.
FUN FACTS ABOUT BILL GATES:
- Bill Gates intends to leave less than $10M for each if his three children “so they can make their own way” and that the family mostly drives a minivan when all going somewhere.
- Bill Gates continued to fly coach until 1997, at which point his net worth was $36 billion.
- Bill Gates has saved over five million lives by “bringing vaccines and improved healthcare to children internationally”.
- The generic silhouette outline placeholder picture in Microsoft Outlook 2010 is actually Bill Gates’ mug shot.
- Steve Jobs accused Bill Gates of stealing from Apple, Gates said, “Well, Steve, I think there’s more than one way of looking at it. I think it’s more like we both had this rich neighbor named Xerox and I broke into his house to steal the TV set and found out that you had already stolen it.”
BILL GATES QUOTES:
“I really had a lot of dreams when I was a kid, and I think a great deal of that grew out of the fact that I had a chance to read a lot.”
“Be nice to nerds. Chances are you’ll end up working for one.“
“Intellectual property has the shelf life of a banana.“
DIFFICULT TIMES AND OVERCOMING PROBLEMS:
Bill Gates’s and Paul Allen’s first company, Traf-O-Data (a device which could read traffic tapes and process the data) failed miserably. It was reported that their product wouldn’t even work. Did that stop them? Not a bit. They have looked into their failure and moved on. They went on to form Microsoft within a short period of time and the rest of history. Many will look at Bill Gates and say that the guy has never failed in his life, yet they would be wrong.
The first business failure clearly positioned them for future success, delivered a number of lessons only a failure could teach and have prepared both Gates and Allen for success at Microsoft. Then there was the battle with the Justice Department and Antitrust charges that were brought against Microsoft in 1998. It was a difficult time for both Gates and Microsoft and under certain circumstances the lawsuit could have destroyed Microsoft. Yet, through a serious of moves and sheer perseverance, Gates was able to overcome that challenge as well. He fought vigorously to defend his company and succeeded.
PERSONAL CHARACTER TRAITS:
“I never took a day off in my twenties. Not one”. – Bill Gates.
- Aggressive: From 1975 to 2006, Gates aggressively grew the company’s product range and grew the company from nothing into one of the largest corporations in the world.
- Distant: Industry insiders indicate that Bill Gates is very hard to reach and is notorious for not returning phone calls.
- Extremely Competitive: Numerous people have indicated that Bill Gates is extremely competitive. Confirmed by Microsoft’s success, there is also anecdotal evidence that Bill would study games (card, board, etc..) that he was losing in order to beat his opponents the next time they would meet.
- Demanding: Numerous Microsoft’s senior managers and program managers share first hand experiences of Bill Gates becoming verbally combative, berating managers for unsound business strategies or product shortcomings.
- Straight Shooter: Gates is known for interrupting presentations with such comments as, “That’s the stupidest thing I’ve ever heard!” and, “Why don’t you just give up your options and join the Peace Corps?
SUCCESS ANALYSIS:
There is no doubt that Bill Gates is extremely intelligent and hard working. Yet, there are numerous hidden facts that have led to his amazing success. Here they are…..
Being Born To A Wealthy Family: Without affluence he would be unable to go to Lakeside and gain access to the computers or programming at a young age. This early access to computers (when no one else had it) played a major part in his success. Without it, he would be unable to become an expert computer programmer by the age of 18.
Perfect Timing: Being born in 1958. If he would have been born just +/- 5 years, he would have lost the early window of computer revolution and his life would have taken him on a different path. Still successful, but unlikely to be as rich as he is today.
Competitive Edge: Being pushed by his parents from the very young age to be successful and to win played a significant role in his success. He always wanted to win and there was no rest until Microsoft was #1.
Supportive Family: Being supported by his parents when he decided to quit college. They could have always said NO and steered Bill towards a law degree or an MBA, closing his computer revolution window of opportunity forever.
Working Hard: In early days of Microsoft and for at least 10 years Bill Gates worked 7 days a week, putting in 80-120 hours per week. Not many human beings on this earth can sustain this kind of a schedule. He simply overworked every other competitor and grinded them under into the ground.
Winning At Any Cost: Bill is highly competitive. For him there is only two possible outcomes. Death or victory. He will work day and night, study, model and do whatever it is he believes he needs to do in order to win.
Concentrating On A Specific Area: By the time Bill Gates was 18 he has already spent well over 10,000 hours perfecting his programming and computer skills. He was an expect. He was already decades ahead of most of his peers.
Being A Demanding Asshole: I know the type because I am one. Many people don’t understand this but Bill Gates could have taken his foot of the gas by 1986. He was already a Billionaire by that point. But he didn’t.
Why?
Because for him it is not about the money. His personal preferences prove that clearly. For him it was always about building the best company in the world and changing lives. He was on the mission and no one would stop him. He knew that in order to accomplish that he had to work tirelessly to improve every little aspect of his company. He was running scared 100% of the time. He had no patience for people who wanted to coast. He wanted things done then and there. In the best humanly possible way.
He knew that anything less than that would subtract from the mission of his company and his life. It was always personal. He wanted to win and he would do anything in his power to get it done. No walls could contain him and he would not take no for an answer. He was an unstoppable force. That is the true secret to his success.
CONCLUSION:
The circumstantial points above are certainly important, yet they are not everything. Yes, he was at the right place, at the right time and from the right neighborhood, but he also worked like a madman in order to succeed.
I know that Bill Gates looks like this nice nerdy guy who got lucky. Yet, he is anything but that. He is one of the toughest competitors on the face of this earth. His net worth clearly proves that. If you stand in his way he will not hesitate for a second to cut your head off, drink all of your blood and take all of your money. He only has one gear, to win / to grow / to succeed. Anything else is unacceptable to him.
So, how can you replicate his success? While you can’t control some of the factors above, you can definitely implement the following points.
- Work Hard: If you want to perform at this level you must forget about working 8 hours a day. The chances of you being successful on that schedule are slim to none. Instead, 12-16 hour work days should become your norm.
- Become A Competitor: You must win at everything. Even if you win at finishing the dinner first. It is all part of developing this quality in yourself. Just set your mind that you must win at everything you do and soon that feeling will become a part of your life.
- Win At Any Cost: Do what you need to do in order to win. For as long as you don’t hurt others or yourself in the process.
- Concentrate On A Specific Area: Become an expert in something that will bring you success, fame and fortune. Spend as much time as possible on perfecting your skills. Forget about everything else.
- Become A Demanding Asshole: You have to be if you want success. Most people just want to get by. You must kick their ass if you want them to help you get there. You can become nice again after your first billion.
Personal Note:
No matter what your personal opinion is, I believe Bill Gates is by far the best human being living on the face of the earth right now. His personal shortcomings aside, he is directly tied to saving over 5 Million lives through his Gates Foundation. While the Pope and Dalai Lama run their mouth Bill Gates is investing most of his fortune towards betterment of humanity. While world leaders play “Liberation & Freedom” by killing tens of thousands of innocent people each year, Bill Gates has been able to convince his billionaire friends to put a foundation together whose sole purpose it is to help humanity.
As such, I salute you Bill Gates. We need more people like you.
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How Fab Five Turned To “Best Stocks To Short”
Just a few weeks ago Netflix (NFLX), Facebook (FB), Tesla (TSLA), Google (GOOG) and Priceline (PCLN) were unstoppable. Today, they are crashing to the tune of 3-5% per day.
What gives?
The above issues are acting exactly as they should under today’s market environment and as per our mathematical work. Well, at least according to our timing work. When the bear market of 2014-2017 really kicks into gear you will see the stocks above lose at least 50% of their value. For instance, Facebook has a gaping hole at $26. When it is all said and done, Facebook must go there to close the gap. While this sort of analysis is too simplistic, it is nevertheless confirms our mathematical and timing work.
In fact, when the bear market of 2014-2017 completes itself you will see most of today’s highly speculative issues cut in half. Not only the Fab 5 above. If you would like to find out exactly when the bear market will start (to the day) and it’s internal structure, please Click Here.
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How Fab Five Turned To “Best Stocks To Short” Google
Trending Tickers: Netflix leads the Fab Five lower
Today’s Trending Tickers as measured by your Yahoo Finance searches are:
Netflix (NFLX): The video streaming service is getting hit hard today. Why? A Wall Street Journal report of a potential deal between Apple and Comcast has investors getting nervous. Right now Netflix users are paying $8 a month on top of their cable bills, and a potential deal that could put Apple TV in your set top box would be a natural threat to Netflix business.
But it isn’t just Netflix getting lit up, the Fab 5 as they’re called are getting boot stomped.
Facebook (FB) is fading 4% in midday trading. A favorite momentum name, Tesla (TSLA), giving up 5% today after a rough week. Priceline (PCLN) getting price chopped to the tune of 4%. Even a behemoth likeGoogle (GOOG) isn’t immune, dropping 2%, and the selling is deepening.
What’s going on here?
There’s a principle called Occam’s Razor that philosophers, scientists and other fancy-thinkers use to solve complex problems. Occam’s Razor is simply a fancy way of saying the least complicated explanation of an event or phenomenon usually proves to be correct. I can tick through individual reasons for all of the above stock drops but that would ignore the more obvious fact that last year’s momentum stocks have been getting crushed for a week. Netflix, Facebook, Priceline and Google collectively are down an average of 6% in the last 5 days. The S&P 500 (^GSPC) is roughly flat during the same period.
Investors are running away from high-flying tech momentum names. Risk aversion is in vogue. Try not to over think these things.
Monday just hasn’t been kind to the “Fab 5.” Those are your trending tickers, We’ll see you back here tomorrow.
How To Make Money From Bitcoin
There is no question that some sort of a digital currency will be adopted over the next 10-20 years. With recent publicity, Wall Street derivative market setup and market adaptation, BitCoin has a good chance of becoming that de facto digital currency. Yet, with wild market fluctuations and no intrinsic value to speak of, how do you make money from BitCoin?
Famed entrepreneur and tech investor Marc Andreessen might have an answer. According to him….
“Andreessen is betting on the idea that there will be a big infrastructure built around currencies like this,” explains Blodget in the video above. “He’s investing in the service providers around them.” Andreessen is betting that bitcoin “is the Internet in 1993, 1994,” adds Blodget.
I think that’s a very good way to approach Bitcoin. While the currency itself might be highly volatile it will be the service providers that will make most of the money and build multi-billion companies around it. Yet, it’s not without problems. There will only be 1 or 2 winners in the space. To the likes of PayPal. With too many unknowns and uncertainties, it’s anyone’s guess what will work and what will fail.
Plus, most of these companies are in early start up phases, making an investment in them fairly difficult. With that said, it would be a good idea to watch this space and see what pops up.
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How To Make Money From Bitcoin Google
Why Marc Andreessen is betting big on bitcoin
Bitcoin is trading about 55% below its record high and Its biggest exchange is now bankrupt following a multimillion-dollar loss. Does the popular virtual currency have a future?
Marc Andreessen, the founder of Netscape, thinks so. The co-founder and partner of venture capital firm Andreessen Horowitz has invested about $50 million in bitcoin-related companies and plans to invest hundreds of millions of dollars more according to The Wall Street Journal.
Andreessen has invested $25 million in Coinbase, which creates digital wallets, and smaller sums in Ripple, a payment system as well as other bitcoin-related companies, according to The Journal.
“There appears to be some need for a digital currency that crosses borders that anybody in any country at anytime can exchange…with low transaction costs [and] can then be picked up anywhere else in the world,” says The Daily Ticker’s Henry Blodget, about the potential demand for virtual currencies.
But will that change?
Andreessen is betting on it. He expects more Internet users will use virtual currencies in the future, to transfer digital contracts, signatures and money because the costs will be less than doing the same transactions through banks and credit card companies.
“Andreessen is betting on the idea that there will be a big infrastructure built around currencies like this,” explains Blodget in the video above. “He’s investing in the service providers around them.” Andreessen is betting that bitcoin “is the Internet in 1993, 1994,” adds Blodget.
Blodget says if bitcoin does gets adopted by more people “it probably will become more valuable.” But in the meantime, says Blodget, its price “could go to a penny or a million. It has no intrinsic value whatsoever.”
Even Andreessen acknowledges the price risk. He told the Journal that bitcoin is “weird and scary and nerdy, and full of scams and frauds, just like the Internet was.”
Real Estate Collapse Update
In slew of real estate news, sales of new U.S. single-family homes fell more than expected 3.3% and hit a five-month low in February, pointing to continued weakness in the housing market. Further, Case Shiller index continues to decline for the 3rd month in a row. Down 0.08% in January. This should not come as a surprise to the readers of this blog. In fact, I have outlined exactly what will happen to the housing market here. Real Estate Collapse 2.0 Why, How & When – Read Here Take another look.
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Real Estate Collapse Update Google
Reuters: New home sales fall to five-month low
WASHINGTON (Reuters) – Sales of new U.S. single-family homes fell more than expected and hit a five-month low in February, pointing to continued weakness in the housing market.
The Commerce Department said on Tuesday that sales fell 3.3 percent to a seasonally adjusted annual rate of 440,000 units, the lowest level since last September.
January’s sales were revised down to a 455,000-unit pace from the previously reported 468,000-unit rate.
Economists polled by Reuters had forecast new home sales at a 445,000-unit pace in February. New home sales fell 1.1 percent compared with February 2013.
Last month’s drop brought new home sales in line with other data such as home resales and building activity that have offered a downbeat picture of the housing market.
Some of the housing slowdown has been blamed on an unusually cold and snowy winter. But the sector, the main channel through which the Federal Reserve has sought to stimulate the economy via monthly bond purchases, lost momentum last summer following a run-up in mortgage rates.
A dwindling supply of homes for sale and soaring house prices have also weighed. But a recovery is expected later this year as household formation accelerates after abruptly slowing in 2013.
Last month, sales in the Northeast tumbled 32.4 percent, the biggest decline since October 2012, indicating severe weather continued to hurt activity. Sales fell 1.5 percent in the South, which experienced harsh weather. They surged 36.7 percent in the Midwest, but fell 15.9 percent in the West.
Though the supply of new houses on the market hit the highest level since December 2010, inventory remains low. At February’s sales pace it would take 5.2 months to clear the supply of houses on the market.
That was up from 5.0 months in January and the most since last September. A supply of 6.0 months is normally considered a healthy balance between supply and demand.
The median price of a new home last month fell 1.2 percent from February 2013. It was the biggest drop since June 2012.
Shocking Secret Revealed: Why Sites Like ZeroHedge.com and ElliotWave.com Are Dangerous To Your Wealth
Let me start with the premise that the sites above provide a tremendous amount of useful information and market analysis. Yet, they do more harm to most investors than they can imagine. Here is why.
Both sites operate on a conspiracy angle that markets are being manipulated and the reason you are not making any money (or even worse….losing it) is because of the big bad Government, Goldman Sachs and everybody else. It is due to the manipulation by these sinister powers that the Gold is not selling at $10,000/ounce and the DOW is not at 1,000.
BULLSHIT. IT’S TIME FOR YOU TO WAKE UP.
Whether or not someone is manipulating the markets is irrelevant here. What is relevant is the fact that the market is up over 150% since the 2009 bottom while the likes of ZeroHedge and ElliotWave continue to preach the DOW 1,000. How much money did you lose shorting the market?
Case and point: Today’s quick update from ZeroHedge.
This morning’s pre-open is dominated by deja vu all over again. Just as we saw yesterday, right on cue at 830ET, gold (and silver) are unceremoniously dumped and USDJPY is pumped so as to ensure stocks look shiny for the US open (and Biotech can be dumped to the next greater fool). Oil is not moving, 30Y bonds are weaker, and the USD is flat… all makes perfect sense if you don’t think about it.Perhaps it was all about running Copper up to $300?
Seriously? Who the hell cares. You are either smart enough to trade/invest and make money from the moves above or you can be a little bitch and whine that Janet Yellen and Obama and Putin and Goldman Sachs are manipulating the markets.
Now, before you label me as a Perma Bull expecting the Dow 100,000, I am anything but that. I just know how difficult it is to get out of the bear/conspiracy mindset once you get into it. Further, my mathematical and timing work indicates an upcoming severe bear market that I have been talking about on this blog.
However, it will not get anywhere close to 1,000. It won’t even get close to the 2009 bottom. If you would like to know when this bear market of 2014-2017 will start, how low it will go and it’s internal composition, please CLICK HERE.
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What You Ought To Know About The US Foreign Policy
When it comes to foreign affairs and geopolitical issues the new sport of choice in Washington is nation destabilization. Libya, Syria, Egypt and now Ukraine. Of course we know what had happened in Libya and what is happening in Syria. Yet, US backed new governments of Egypt and Ukraine do not disappoint either. Case and point.
“The United States expressed shock Monday after an Egyptian court handed down death sentences against 529 supporters of Egypt’s deposed president Mohamed Morsi after a two-day trial.” – Shocked? Well, if you are shocked stop bankrolling their government.
“Time to grab guns and kill all the damn Russians in Ukraine– Tymoshenko in leaked tape” – Will John McCain stand with the Ukrainian people as they kill all the Russians and the Jews?
And these are the people we know about. It’s time for the US to get the hell out of other countries and start minding it’s own business. It’s time the US Government concentrates on domestic issues and our economy instead of war, destabilization or steering up geopolitical trouble. How about sending that $1-3 Billion in aid to Detroit instead of Ukraine.
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Attention: Dow Theory Predicts A Bear Market?
Compared to the mathematical and timing work we do on this site, the Dow Theory is like a bit up 1971 Ford Pinto. Nevertheless, since a lot of people follow it to try and predict the market here are my two cents.
With the Dow Industrials and the Dow Transports diverging and non-confirming a number of warnings sings have occurred. Of course, the subscribers to my premium service know exactly why there is no confirmation. At the end of the day it is all about timing. The DOW Jones is tracing out it’s exact mathematical structure that will complete only when the time is right. There is another problem with the DOW Theory. They would have to wait for the DOW to go below 15,373 for the bear market confirmation to occur.
To late in my opinion. If you would be interested in learning exactly when the bear market of 2014-2017 will start (to the day) and it’s internal composition, please CLICK HERE.
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Attention: Dow Theory Predicts A Bear Market? Google
WSJ: Morning MoneyBeat: Dow Theory Flashing a Warning Signal
MARKET SNAP: At 6:50 a.m. ET, S&P 500 futures up 0.2%. Treasury yields fall to 2.72%. Nymex up 33 cents at $99.93; gold 0.3% higher at $1315.30/oz. In Europe, FTSE 100 up 1%, DAX up 1.1% and CAC 40 up 1.1%. In Asia, Nikkei 225 down 0.4% and Hang Seng down 0.5%.
The market looked weak on Monday, saved only by a late spurt of buying that narrowed the losses. It may not be the last time it looks weak.
The much ballyhooed Dow Theory is flashing a warning sign: While the Dow Transports made a new high in March, the Dow Industrials did not. The latter’s failure to hit a new high is currently a red flag.
“This leaves a Dow Theory non-confirmation still in place,” said technical analyst JC Parets, founder of Eagle Bay Capital.
Why? Well followers of the century-old Dow Theory–popularized by Charles Dow–maintain the industrials and transports need to move in lockstep to confirm a market’s trend. A pattern of higher highs and lower lows serves as confirmation of the market’s move.
The theory is based on the thinking that making goods is one leg of the industrial economy and moving those goods around is the second leg, so their trends should be in sync.
Since the Dow Transport hit a year-to-date high of 7627.44 on March 7, both the transports and industrials have sagged. The Dow Transport closed at 7510.38 Monday, while the Dow industrials finished at 16276.69.
To see another buying signal, the Dow industrials would have to cross above its early March levels, while the transports would need to maintain its momentum.
“It would take a close above 16588 in the Dow (industrials) this week to corroborate the new high in the transports and clear the way for more near-term U.S. broad market strength,” wrote the team at Asbury Research. “Until then, this warning signal remains intact.”
A sell signal would be triggered if both made new lows, and Mr. Parets pointed to the Feb. 3 lows, 15373 for the industrials and 7054 for the transports, as the critical levels. “This would tell us that the trend has changed,” he wrote. “Until then, it’s more of a red flag (a big red flag).”
Asbury thinks the market is at a “minor inflection point,” and if new highs aren’t made between now and the end of the month, the market could turn back down (they pointed to 1825 on the S&P 500 as a key level), and it would be “the beginning of an overdue correction.”