Tuesday, September 27, 2011

September 27, 2011
An ideal allocation for a dismal Economy
by Scott Ryan

Nothing has changed with regard to the fundamental reasons for buying gold. The thesis remains 100% intact. Hedge funds in the past week have been selling off their positions, causing a temporary price decline. These are short term traders who commit billions of dollars of other people's money based upon formations on a chart - not sound reasoning. A “strong dollar” is a complete misnomer. Picture a teeter totter on the deck of the Titanic. One can be “up” versus the other; however, the problem with all fiat currencies is the same. Which is “up” versus which on any given day is irrelevant in the longer term. By “longer term” I’m talking months – not years.

The greatest risk ultimately is being long fiat paper backed by the utopian fantasies of prodigal governments.

You have to be long gold. The dollar has lost 96% of value versus gold and will eventually lose the other 4%.

To mitigate volatility, as a means of diversification, I like the utility ETF - Select Sector SPDR-Utilities (Symbol: XLU) yielding over 4%.

The treacherous policy of the Fed is creating a bubble in junk bonds as it appears the only option for seniors looking to replace the yields of their maturing CDs. I do not like the junk bonds or any bonds right now. I expect bonds and bond investors to get destroyed as the government is forced to “inflate their way out of the debt”. Millions of senior citizens will fall prey to brokers all too willing to sell them the junk bonds and leveraged funds. I think the equity offered in the utilities with the dividend yield is a better place to look for current income/yield than bonds. Sure, you could go out and buy one utility alone and get a higher yield –but- the ETF provides important regional diversification. This is important in this economic climate.

I also love Microsoft here. I have rarely been excited about MSFT but here at this level, selling at a mere $200 billion market cap – it is a fraction of its former high of $614 Billion, 9 times earnings and a solid 3% + dividend. As when I was recommending Ebay at around $12.00 (2/23/2009) – my thesis was that the sum of the parts were worth far more than the market was - temporarily - appraising the whole.  I concluded the rapidly growing PAYPAL which is owned by Ebay was worth more than the current price of Ebay; thus it was only a matter of time before the value was FORCED upward by the growing cash flow and EPS.

Source of ebay rec: http://boards.fool.com/mrarbitrage-on-dakt-long-27464408.aspx?sort=postdate

I say the same for Microsoft (MSFT) here at the $25 dollar per share/$209 billion market cap.  I can envision a future where their prudent acquisition of Skype may prove to be a Bonanza. Based on what I’m seeing from Skype, I believe that Skype has the potential to be worth $200 billion alone in a few years.

So, to recap.

You must own gold.  To help offset over-all volatility, value and cash flow can be found in the utility ETF (XLU) -and- Microsoft is a compelling valuation here with a built in floor of cash, cash flow, low p/e and attractive dividend.  Then keep up to 25% in cash for the short-term needs.

Thursday, September 22, 2011

Why LIBERALS don't believe in Science - or Journalism
by Scott Ryan
The purpose of this column is not to endorse a political contender for the Republican presidential race but rather to point out the strategy of the leftist media to undermine any candidate who shows the potential of being the alternative choice to their false prophet in the White House.
The nation was recently treated to yet another child being exploited by a parent offering her son as a sacrifice of dignity on behalf of Barack 0bama.  It came not in the usual third world dictator tactic of forcing the clueless child to sing praise to the tyrant but this time in the form of a child being coaxed into asking Governor Rick Perry a question about his view on the theory of evolution – followed up by the question of why he “doesn’t believe in science” (as the unfit “mother” fed him the questions word by word before a camera). http://youtu.be/9NgmcejY8Ls

Despite the egregious manipulation involved, the media attempted to take advantage of this child abuse by running with the talking points so as to make this anti-science theme stick.
The real question begged is why liberals do not believe in parenting and why the media do not believe in journalism, nevertheless, Marketwatch.com columnist Paul Ferrell ran with this days later in his column titled:
“Why China wouldlove ‘President Rick Perry’”
His disingenuous thesis was that “China must be secretly rooting for a guy like Rick Perry as the next U.S. president. They’d love competing against an America led by another Texas governor who talks from a big hat, loves war spending and tea parties, thinks the Fed chairman is acting “treasonous,” believes Social Security is a “Ponzi scheme” and admits he’s an antiscience, antievolution, anti-intellectual who will turn back the clock to the 19th century frontier Wild West.”

"They’d love competing against an America led by another Texas governor who...???"

They wouldn't love it nearly as much as they (China) love a fellow communist lap dog who pollutes the Internet with such vile leftist propaganda pathetically disguised as journalism.

Perry is "anti-science"!

Ferrell prefers Gore and Obama's "scientific" theory that advances their global socialist program where they save us from ourselves and simultaneously make billions of dollars on a carbon credit exchange scam.

It’s sad how none of these lap dogs question the anti-science propensities of the flat Earth left when it gets in the way of their own agenda.  I suppose if 0bama could figure out how to regulate and securitize solar flares, then they would embrace real science - but since the empirical evidence doesn't support their agenda... too bad! That's Democrat style science. If only we could all be so sagacious.

These liberals try to portray themselves as though they exude scientific methodology.  The truth is their methods don't even rise to the level of specious because they are so completely moronic. That's why they have to polarize, demonize and foment anger. That way the hatred of their indoctrinated droids will overcome intellect.
Therein lies the reality. 

Liberals do not believe in science because it doesn't lend itself to their big government tax schemes.  Perhaps if we gave these scoundrels time they would devise a "scientific" reason for why AMERICANS are CAUSING 85% of all sun spots. Then they can tax the sun spots, which of course AMERICA will pay.

Eliminate the sun spots - you then eliminate the solar storms.

Has their leading genius Gore found a way to stop the North & South poles of the sun from inverting this year? It is a scientific fact that this occurs about every 11 years and tends to cause unusually active solar storms.  It will be hard to find a way to make a trading scheme in Chicago for Solar Flare credits.

See   “Prepare for the Worst, Because Solar Storms Are About to Get Ugly”

As NASA indicated "This always happens around the time of solar maximum," says David Hathaway, a solar physicist at the Marshall Space Flight Center. "The magnetic poles exchange places at the peak of the sunspot cycle. In fact, it's a good indication that Solar Max is really here."

Not to be an alarmist but as the column in Wired indicated – our growing reliance on space-based technology makes us more vulnerable than ever to their effects.” 
That means that it could cause not only interference with broadcast transmissions and GPS systems – but also power grids.  In the event of severe chaos – we will once again be treated to the typical leftist Democrat exploitation (never let a tragedy go to waste) and an aversion to the true causation (science).

Who in the reading of this piece would bet against the probability of the blame being placed not on scientific fact – but rather “climate change” caused by none other than human beings, American CAPITALIST human beings more specifically?

Regardless, this would not be a bad time to have an emergency communications plan in place involving a “primitive” cb radio in the event your more “advanced” communications should be interrupted while the left winged opportunists do as they always do - exploit.  Join your fellow constitution venerating patriots in the volunteer CB Patriot Project at http://www.cbPatriot.com