Street Speculator

These are the words spoken by former Bank of America (Symbol: BAC) Chairman Hugh McColl.

Entrepreneurs take notice. These words are profound, powerful, prophetic, etc… Now we know why BofA’s predecessor, Nations Bank had grown to become one of the largest, if not the largest consumer bank on the globe. Look at the mindset of its leadership team.

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After listening to Mr. McColl’s entire statement (Video below), the SPEC’s became magnetically attached to the “Mind of a Dynasty” builder. In essence, most companies goal is to one day become a Global Empire.

The SPEC’s always wondered why companies such as Oracle (Symbol: ORCL), Cisco (Symbol: CSCO), and Google (Symbol: GOOG) have grown within the past 5 years through acquisitions instead of ORGANICALLY! Growth through acquisitions did not seem to be neither Innovative nor Entrepreneurial.

However, when your competitor constantly nips at your heels, Acquisitive Growth may be the only solution. That or Insolvency.

One reason the SPEC’s didn’t like the acquisitive growth concept is because of possible culture clash and laziness. It appeared to be a “sign-of-weakness”, or on the surface a sign of diminishing company growth and ideas. So the problem was solved by bringing in outsiders. However, with the speed of technological advances, an acquisition could add years to a company’s existence.

To all budding Entrepreneurs: Always strive for growth. You should have a monthly and annual growth outlook. Never be satisfied. Develop a Shark mentality and always strive to be #1 in your industry.

Get Moving and Good Luck!!

Sincerely,

StreetSpeculators

Jeff Greene was already a well-known real estate investor before his recent investment in that industry netted him about $1 billion. His investment decision was more common sense than analytical rationalization.

What Greene did was the direct opposite of that which Wall & Main Street America dived into. He bet on people’s greed. And Won convincingly.

What Jeff Greene did was to buy Credit Default Swaps in Florida and California sub-prime mortgage backed securities. Basically, if these loans portfolios ever defaulted, the seller of the Credit Default Swap would pay the buyer (Mr. Greene) the lost value amount.

So, if certain securities after default are worth only $.07 on the dollar (as determined by a Bankruptcy judge or credit rating agency), the CDS seller would pay the buyer the difference. In our example, the remainder value would be $.93 on the dollar. Not a bad investment return. This is especially true for those purchasing default protection without holding the underlying securities.

These CDS products were the cause of Bear Sterns and Lehman Brothers demise, while causing AIG to function daily on U.S. government life support.

Jeff Greene is the 2008 Investor of the Year! No bailouts for this man.

It was reported last week that Charlotte Bobcats owner Robert Johnson was looking to sell the team. This move surprised the SPEC’s. Most Pro-Sports Owners never sell their team. Too much pride, adoration, buzz, even in the face of annual losses.

However, the Bobcats were never profitable during Johnson’s ownership. Forbes magazine values the team at $284 million. Robert Johnson purchased the team for $300 million + in 2003. The Bobcats are currently ranked 29th out of 30 NBA teams as far as valuation. The team reported a $4.9 million dollar loss for the most recent fiscal year.

It is believed that approximately 2 to 3 years ago, Johnson made capital call requests to his limited partners of which it is believed none of them would abide.  Johnson therefore had to pony up more of his own money to cover team losses. This move also increased Johnson’s ownership percentage in the team.

Nine (9) years of losses have finally become too much for the Billionaire. The new taxpayer funded arena could not remove any losses. If there is one thing about wealthy people we know is that they do not like to loose money. “The Rich Man’s Toy” as Johnson once called Pro-Sports teams, is now become an attractive nuisance (Legal Jargon).

Ironically, Robert Johnson will probably not have trouble finding a buyer. People are always willing to purchase Pro-Sports teams. The only obstacle he may encounter is in the asking price. He will probably attempt to be made whole from his initial investment, but in this environment, any price above $290 million is steep for an NBA team anyhow. Remember, Charlotte’s largest industry, banking, has its two largest institutions running off of TARP money. That is the perception anyhow.

In the world of free-markets and entrepreneurship, there always comes a time when the indestructible Big Kid on the Block looses its dominance to rising stars.

For example look at Yahoo (Symbol: YHOO) and Microsoft (Symbol: MSFT). Both companies were in existence and had web browser technology available before Google (Symbol: GOOG) was created in a garage. Now they cannot decide on who wants to purchase and who is willing to be acquired. Now, look at who’s the king of search, Globally!!

Blockbuster (Symbol: BBI) was the king of the video rental market. Then came along Netflix (Symbol: NFLX) who 1st gave the consumer a “No Late Fee” policy. This marketing strategy was amazing as Netflix is probably the U.S. Postal Services’ largest customer while Blockbuster is becoming a DINOSAUR.

The Adobe (Symbol: ADBE) Premiere Pro software is the standard when it comes to Flash video editing. I believe it has been the dominant player in this area for the past 4 to 9 years, maybe longer. However, the SPEC’s have discovered a company we believe is based out of India, which has software to allow even the novice video creator look like a Pro.

TOUFEE: www.toufee.com, is a company whose site allows and provides the tools to create great flash video products. The company has its own platform which provides backgrounds, uploading of images and videos, text features, etc….. Once you create the video, Toufee then allows you to forward the video for publication to YouTube. However, the best feature is that Toufee also converts the video to other formats (.flv, mov, avi, etc..). This conversion feature is great for those with video players on their website.

The video conversion feature is simple. Toufee sends the user a email after a video if published to YouTube from its site. The email includes instructions for the designer/creator as to how to convert into a different format. The conversion process takes under 4 to 5 minutes, where Toufee will subsequently email the converted video to the author as well.

Most important is the Price & Customer Service. Toufee charges an annual fee for its service which allows the ability to create an unlimited amount of videos. I believe the highest annual price on the site is $199.95. Toufee also has random 1/2 price offers.

Toufee also has a “Support” feature. This is used to report any errors or bugs occuring whenever creating or editing a video. The SPEC’s have also used Support to ask technical questions about the product. The response time of the Toufee team has always been under 1 hour. Each response provided by the company was clear and solved all problems we encountered.

Any current or budding “Web Video” designers cannot go wrong using Toufee.

The predictions and calculations have finally been released. The U.S. government today released a report stating that the Social Security Trust fund will be depleted by the year 2037. Subtract 65 from 2037 and you get 1972.

It doesn’t take a math genius to see that those born in the year 1972 and beyond will more than likely have no Social Security benefits to depend on. There has always been random speculation as to when this program would bankrupt itself, but today we finally have a “concrete” date.

This announcement may spark fear in many. However, let this fear drive you and not act as a hindrance.

Now more than ever is the time to get your financial house in order. Put off all of the plans for big-ticket item purchases (Homes, Cars, Vacations, etc…). Also, save and invest like a madman (or woman). You must become frugal as well.

Plan of Action:

1. Get out of Debt (Start with your small balances 1st). Don’t go back in!!

2. Put away at least 15% of your earned income or more if possible.

3. Take as many “legal” deductions as possible (Tax Planning).

4. Ignore April the 15th, you want your immediately & not once a year.

5. Pay off your mortgage. Tax writeoffs for interest paid on DEBT is Dumb Accounting.

The above principles are very basic. More will definitely need to be done. This is just a message to prepare you as to what lies ahead.

SPEC’s