Easter is an American quintessential family holiday. We started Ash Wednesday for the beginning of Lent. This is a quite important holiday for me as an American Jew. Not in a religious sense per se. Instead, it is the starting point of Spring Cleaning for the upcoming eight days of Passover. To celebrate the misery of no bread for a week, one has to clean their house up until there is not one crumb of anything leavened in their house.

But, both holidays have one thing in mind: bring family back into what is supposed to be the American family like we see on The Brady Bunch. While the American family values get rebuilt from its slow and painful death from the 1960′s, there is an even bigger slow and painful death since then: Shopping Malls. Just like the family values of today, the shopping mall is suffering a long, long death. the industry took the MRI examination and it was confirmed they have an incurable Online Shopping Disease (OSD).

Renowned hedge fund manager Bill Ackman helped  save mall real estate investment trust General Growth Properties (GGP) from bankruptcy in 2009 . He turned $60 million into $1.6 billion in those 5 years of crisis in real estate.  But, Bloomberg reported last week that Ackman sold his final 28 million shares back to GGP via a buyback for $556 million. It looks like Ackman is taking his money and running from mall real estate. A good example is his loss of hope on JCPenney’s, one of the many dying retail companies. Sears, Macy’s, Radio Shack, and Kmart are a few of the next followers of Border’s, Caldor, and Woolworth’s.

Online retailers are basically transforming the way we shop in all advanced countries today. Mall real estate owners can always raise funds and money in three ways:

1. Raise their rental rate
2. Loan costs go down reducing interest payments
3. Market value of real estate goes up

Shopping malls have risen to the peak of their capacity in all three ways. They would lose tenants or lose capital assets. When you are at the top of Mount Hood, there is only one way to go: STRAIGHT DOWN! The picture above was the Canton Center Mall in Canton, Ohio. It gives a vision of what 2020 would look like when Cyber Monday puts Black Friday out of business.

So, where do we put our hard earned savings for investing? There exist very few Walmart, Kohl’s, TJ Maxx, or Target stores in malls. These big four retailers have a long way to compete with the online shopping revolution. They all have been vaccinated from OSD because they do a lot of online shopping services. I still prefer shopping at your local small retailer in my neighborhood. Yet, the convenience of these four retailers is amazing because they ship the product free of charge to the store of my designation the next day. Your local store would be a wait of up to a week to order a product because their inventory operations is on a much smaller scale.

Retail is not dead. Instead, it is transforming to keep up with our fast paced life. Make sure your investing ideas are also transforming with the new wave of shopping services. When companies grow, so do your dividends every 3 months.

 

 

To Your Health…

To Your Wealth…

To Your Wisdom.

 

 

Last Sunday was an all day spent with me nephew. We went off to the New Jersey Aquarium to see the otters, whales, and seals. Afterwards, we went to the Waterfront to play in the park and eat ice cream on a chilly weekend. Have you ever noticed that kids get so messy playing in the mud with all the dirt and mud? They surely have no care in the world with playing in the dirt.

It should bring back memories of your childhood. Yet, kids are much smarter than you think. They love dirt, sand, and soil. That is basically all they do: play with dirt. Well, all of us as grownups can also do the same and make out like a bandit from investing. Yes, you heard me right: investing in dirt. One of the most overlooked investments today is potash, better known as fertilizer. Both graphs below are two of the largest corporations. Plus they are two of the most hated companies by Wall Street because of that deep dive you see we had last August on the industry.

 

Motley Fool

 

 

 

Motley Fool

 

This is the secret to investing wisely and making huge profits:

• Industry is hated by everyone on Wall Street
• It is cheap
• And it has an uptrend

Looking at both companies, they were poorly performing last year compared to the S and P 500. In both companies, I put in 3 percent of my own portfolio each. This is the secret to diversification: do not put all your eggs in one basket. The same with dollars: do not put all your dollars in one investment.

Coming from a beef cattle family in Upstate New York, I can for sure be one of the many to tell you that agricultural investments is a great strategy. There are many different companies involved in your T-Bone steak dinner:

• Potash and fertilizers
• Food Processing Companies, E.X. Archer Daniels Midland
• Seed manufacturers, E.X. Monsanto
• Additives and Preservatives
• Packaging and Bottling, Crown Holdings

People are generally interested in High Technology, Big Pharma, or Banking as their key industries to focus on for investing. I strongly believe that diversification is the key to successful portfolio management. A diversified investor is one who hedges against the trying to beat Wall Street. Instead of gambling, invest by going with the flow and use Wall Street for your advantages. Do your homework and you will get an A+ in diversified investing.

 

To Your Health…

To Your Wealth…

To Your Wisdom.

We all know what is shale gas. We see Bakken reserves in North Dakota and many other reserves in Pennsylvania, Ohio, and Texas. Back in 1970′s it sounds science fiction that we get energy from solar heat called sun gas. Yet, researchers claim that natural gas power plant efficiency can be as high as 25 %. Solar ThermoChemical, LLC has coughed up a good $ 850,000 to do research in hopes of commercializing sun gas very soon.

This is great technology. But, the graph above comes from the US Environmental Protection Agency. The question is how much good it sun gas when many places have moderate or below moderate sun exposure the whole year. While it would be great technology for New Orleans, how would it be for Alaska or Manitoba? Is solar energy a dead idea on Wall Street? We can look at General Electric as an example.

General Electric has also thrown down its arms. GE had boasted of building America’s biggest solar panel factory using technology acquired from a Cd-Te startup Prime Solar. The company had said its efficiency would be higher than FSLR and its costs would be lower. GE had earlier announced that it was going slow in its expansion plans and now the company has given up by selling its technology to its arch rival FSLR and firing 50 workers. Again to any solar industry watcher, this was inevitable. I don’t foresee more than 5 thin film solar companies surviving this downturn and am not sure that First Solar will be able to keep up its thin film technology. Green World Investor

 

We see how solar energy stocks have started out the new year. People have thought of it as a hated stock with no confidence from Wall Street. These are two of the three keys to invest in a hated industry. It is missing one more; it needs to start an uptrend. When the uptrend is in motion, then all contrarian investors can make a bang with their bucks.

Just like America, Europe has has backed off the idea of solar energy being the future. China is jumping on the hay wagon while most advanced economies have lost confidence in solar energy. It would be a great technology for China because it would lessen their dependence on Russia, US, and Canada for natural resources for their 1.4 billion citizens. It is interesting also to see where China is going in 2014:

• Buying lots of gold to go back to gold standard
• Invest in solar technology to eliminate dependency of other nations
• Eliminate US Dollar in trade relations with other countries

The ideas we back off, China takes and turns it into a new age technology. I see a great opportunity in investing in solar energy in the long run. For a quick buck, go to Atlantic City and see if you can win. For growing your wealth, look at long term. With solar at the bottom, it can only go up from here. When an uptrend comes in, look for opportunities.

To Your Health…

To Your Wealth…

To Your Wisdom.

Source: Conde Nast

 

We just had the Superbowl two days ago. Now, Valentine’s Day is creeping up on us when we pay double the regular price for dinner. Pretty soon April 15th will be coming fast around the corner. Speaking about Tax Day, Germany’s Bundesbank mentioned last week that countries close to going bankrupt should tax their wealthy citizens. This is fine and dandy in the eyes of middle and working class. Yet, their paychecks come from the filthy rich. If there is less money because of taxes, then the middle and working classes get affected with lower wages.

There will be a massive migration one day of European millionaires. When taking their money, they will also be taking their companies and jobs out of Europe. More than a thousand Chinese flocked to US on the “investor’s visa”. Interestingly, people seem to not be flocking to Cayman Islands or any other small islands anymore. Now, they are flocking to productive countries to settle their money and make it work for them. Millionaires are actually creating new job by outsourcing the jobs from their tax greedy home countries.

What can governments in Europe do? Well, they can lower their taxes for one. Many countries charge income tax up to half your income when you make over 100,000 euros. So why would I go to law school for three years when a garbage man makes the same amounts of money I do after taxes? So, people do move away from steep taxes to other countries.

This is not the only cause of the worldwide financial crisis. Yet, it does help in making the situation a lot worse. At the rate of people leaving their homeland, they take their money and productive jobs with them. High taxes is what broke Israel 3,000 years ago into two kingdoms. From the wisdom of King Solomon, “there is nothing new under the sun.” It seems that there is nothing new about taxation reform in Euro Zone and United Kingdom on keeping their millionaire job creators.

What do you think US, Canada, and Europe can do about the millionaire migration happening? Comments are always welcome.

To Your Health… To Your Wealth… To Your Wisdom