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Saturday, February 23, 2013

Jim Rogers, Facebook, Marc Faber, Walmart, Peter Kinesa


Investors' Insights:
Week Ending February 23, 2013


FIRST FINANCIAL INSIGHTS
"Investors' Insights"


Video Summary: Nouriel Roubini, Roubini Global Economics co-founder and chairman, weighs in on the global economy, and provid...


Recent studies noted in a book review, published by The New York Times, indicate the predictions of so-called experts have a higher probability of being wrong that the statistical mean. So more half of what they saying will later prove to be win correct. That doesn't solve the problem though, as you still have to decide what prediction will be wrong and what one is going to be right. Even simply doing the opposite of what pundits are forecasting is a problem, because as the video shows, what they say is qualified and often so mixed with jargon, that you are left more puzzled than enlightened.

So enjoy the double speak, do more research and then flip a coin. Your odds are still apparently better that the experts.


First Financial Insights
February 21, 2013


Betting or Investing?




How do you spell recession Marc, doesn't it start with a "D"? 

Anyway, we have been forecasting this for a while, so sooner or later we should be right. Hmm. Our greater fear, beyond mere words, is that severe supply shortages of raw materials, energy, water and food stocks are the ingredients for a "dark age" leading to social unrest, political change and increased hostilities and protectionism.

Who knows where that will all lead?

Meanwhile. no one has really officially ended the Great Recession that began with the 2008 meltdown. Indeed, if you follow Paul Krugman, in his latest book he titles it a Depression. We have yet to hear his official fiat declaring the end of this period.

Ever get the feeling that these folks are just playing with words and not one of them really knows what the heck they are talking about. If you don't - we do!


First Financial Insights
February 20, 2013



Feeling a little depressed? 








Walmart says February month to date sales are “a total disaster.” Bad, bad, bad news. And not just for the Chinamart (sic) but for "Chiameri...

Just so everyone knows, we are doing the same thing we did with Libya. We have put Walmart on our "Stocks to Watch List" - for now.


First Financial Insights
Feruary 19, 2013

Watchmart?





Marc Faber - China Rising Tensions

This is just short comment by Marc. But it tells China is high on his radar. Same here. Transparency aside, China has too many internal and external issues for us to call it a good long-term bet. In fact, we are taking an opposing stance to conventional wisdom and foresee a lot of trouble. The ghost cities, pollution, resource supplies, corruption, cronyism, water shortages, US treasury holdings, and civil unrest are just a few of the concerns that say: this puppy is poorly managed and doomed to implode.


Moreover, its poor product quality reputation is becoming more widespread - so its leadership in manufacturing will be lost. Add higher future oil prices into the mix, and transportation costs should shift more production away from China. In fact, back to the US, Europe and Canada. Smart companies are actually already doing this. That's foresight.


Meanwhile, as Einstein once more or less said, "do not expect the same guys who created the problems to solve them." Never happens. A regime change would be good for business, politics, ecology, society and most importantly the oppressed people of this nation.



First Financial Insights
February 19, 2013


"A change is as good as a rest"





Jimmy in this phone conversation says he is neither long nor short Facebook; he is simply just not investing. In investment parlance this means, he thinks the stock is garbage and would not touch it with a ten-foot pole. We agree.

First, Facebook ascribes to one of the worst American business practices and has little "human touch" in its business model. American businesses that fail on the world stage are often swept away by global competion because they do not have a High Touch with their customers. Any company that does not have a real person available to assist customers with service issues is doomed to fail - it happens all the time. The first rule of business success: "Listen, listen, listen, and then when you have heard enough, listen again and again and again " 


And the second rule that follows: Don't let your accountants run the business - need we say more? 

Second, its software is not intuitive, particularly for business, and again faces customer service challenges that will turn this market off in the early going. This market is where the real money is made.  They will not return once they have been turned off.

Facebook faces powerful copycat competition from the likes of Google, Twitter, Microsoft and others, who have other complimentary platforms where the combined functionalities of hardware and software configurations create synergies that could easily see Facebook's consumer markets stolen. Moreover, these powerful competitors have a strong presence and trust in the more lucrative commercial markets that are critical to long-term success and profits. We don't see a lot of businesses tying their destinies to what is perceived be to a kid's fad and consumer product. 

It is unlikely that Facebook can hold its valuations. The markets may give it a couple years, at most, to generate commensurate profits. Right now, that appears highly unlikely considering the tough competition in its most lucrative markets.

We go beyond Jimmy and expect this puppy to sink well below $10 in the next 12 to 18 months. More so, if interest rates climb in this period. So don't waste your time or your money on the long side of this hyped-up generational fad.


First Financial Insights
February 18, 2013


High Tech minus High Touch, Spells Disaster