Street Speculator

The StreetSpeculators will return on 8.4.08 for an upgrade to our system.

These are the StreetSpeculators.com top Business movies.

You definitely should take a look as they all will make you want to conquer the world.

1. Wall Street

2. Pirates of Silicon Valley

3. Barbarians at the Gate

4. SYRIANA

5. ENRON: The Smartest Guys in the Room

If you know of anymore, please leave the names.

Two additional government bank bailouts within the past 48 hours. The victims: First National Bank of Nevada and First Heritage Bank of California.

On a good note, not soon after taking them over, the feds subsequently sold them to Mutual of Omaha. And, as reported on yesterday, Foreclosures jumped by 121% in the second quarter or 1 in every 171 U.S. households.

The future of the U.S. economy does not look good. Governments are not good at running businesses. You don’t believe me, look at the current fiscal deficit. The same dinosaurs who created this fiscal mess now tell us they have a plan to get us out.

The solution: MOVE YOUR MONEY OUT OF THIS COUNTRY.
My research has led me to other countries that have a DEPOSITORY INSURANCE SYSTEMS (Similar to our FDIC, where the government guarantees a certain amount of bank deposits). You can do further research and find exactly what specific dollar these governments guarantee. Not all guarantee up to $100,000 like the U.S., but unlike the U.S. many of these governments are not experiencing troubles in its financial sector.
The reason I present this story is because I have a family member who thinks there will be anarchy in this country in a few years, due to the financial problems of the U.S. consumer. People do not know what is next and are very pessimistic about the future.
Also, it would be wise to see what the value of the U.S. dollar is to the currency of these nations. You may be able to double your money, although in another country’s currency. Ex. $1.00 U.S. dollar = $2.00 in Belize currency.

Here are a few choices:
Bahamas, Barbados, Bahrain, Canada, Croatia, Greece, Honduras, Hong Kong, Hungary, Iceland, India, Ireland, Italy, Jamaica, Japan, Jordan, Lebanon, Lithuania, Malaysia, Mexico, Morocco, Netherlands, Nigeria, Norway, Oman, Peru, Philippines, Poland, Portugal, Puerto Rico, Romania, Singapore, Sweden, Switzerland, Taiwan, Tanzania, Trinidad and Tobago, Turkey, Uganda, United Kingdom, Venezuela, Vietnam, and Zimbabwe (Zimbabwe surprised me).
If you Google “The International Association of Deposit Insurers” you can find additional countries on the list.

In conclusion, definitely consider moving some money you have into another country.

The market dropped significantly, especially the financial sector. The DOW (DJIA) dropped by 283 points. The NASDAQ dropped by 45 points. The news that caused such drop was the latest report in the drop in home sales.

Ignore that news and look into these two companies. Our analysis is based on the business models of VISA (Symbol: V) and MASTERCARD (Symbol: MA). Although both are usually affiliated with the “credit card” industry, neither company are exposed to the same risks as other companies in the financial sector.

Unlike Discover, Capital One, and American Express, neither VISA nor Mastercard “lend” money. They are networking companies. What they do is allow electronic transactions to flow through their networks from 1 location to another. One illustration of what these networks do is when money travels from a bank (Through swiping a credit or debit card) to a merchant during a sales transaction. VISA and MASTERCARD charge fees to the merchants based on the transaction value (or price of the purchase) and they charge a fee to banks for the rights to use their logo on the branded cards (Logo on Check Cards, Gift Cards for Merchants, Credit Cards, etc…)

EX. You, Consumer A, purchase a TV from Wal-Mart using your Bank of America (BAC) Check Card. The purchase price is $400. Visa (or Mastercard) may charge Wal-Mart 2% of each transaction where a purchase was made with a card containing their logo, which subsequently have to travel through their networks. In this case the fee charged is $8, charged to Wal-Mart.

Online purchases are also included. The fees charged to the merchants by VISA (V) and MASTERCARD (MA) is determined by the type of transaction, DEBIT or CREDIT. From our understanding, the fees charged for debit transactions may be a bit higher than those where the consumer pays as a credit purchase.

I would classify both companies as CASH COW’s with little or no inherent risk, except sharks, I mean lawyers. They definitely look to be great investments for the long-term. Look at some of their fundamentals:

as of 7.24.08

VISA (V)

Price: $70.08   52wk high: $89.84  Cash: $5.64 billion  Debt: $112 million

Was the largest IPO (Initial Public Offering) in history, raising $17.9 billion

MASTERCARD (MA)

Price: $259.08  52wk high: $320.30  Cash: $2.66 billion  Debt: $229 million

IMP: Both companies report quarterly earnings on July 31, 2008. They are highly volatile where there is heavy trading activity daily on the stock exchanges. Do not be surprised if both stock prices raise $10 or more in on the 31st if they report better than expected earnings.

Most of our discussion is about equity market investing. Investing in these markets is valuable and often very lucrative for many. There are however many squeamish and fickle minded individuals who would not put a dime of their money into speculative investment unless they can see INSTANT DOLLAR SIGNS $$.

To those of you with this mentality, the SPECULATORS offer an alternate investment vehicle for you today. Become a Limited Partner (LP) in some start-up or existing business venture.

A Limited Partner (LP) is an investor in a business venture (Usually in a Limited Partnership, but not always) who has no voice in the management of the company and having limited personal liability for the organizations debts while sharing in the profits.

Limited Partners are very popular in today’s business environment. Participating as a Limited Partner is another way to generate a monthly revenue source for the investor.

Where do you begin?

First, you do need cash up front (Small investors sources: 401K, savings, home equity, etc….). Find some business which you are familiar with including the particular business environment it is included in. We are not talking about searching for THE NEXT BIG THING. It can be something simple, for starters, such as a local franchise, a child-care operation, entertainment venture, professional services company, etc… We suggest you look at an operation where you have an existing relationship with the current owner and/or investors.

Next, with the help of a lawyer and an accountant, research the financials of the company (Last 4-5 years of tax returns, salaries of present management, liabilities, expenses, future marketing plans). This is where a company’s net worth is determined.

If you are certain of this company as an investment, make a proposal to the owner(s). Your interest (as a Limited Partner) is determined by the dollar amount invested against the value of the company.

Ex. Company A is worth $100,000. Limited Partner A invests a total of $20,000. This makes Limited Partner A’s interest in Company A at 20%. The Limited Partner would be entitled to 20% of the profits and 20% of any liabilities. If the monthly profit (money left after expenses are paid) is $15,000, the Limited Partner would receive $3,000.

Start small initially. My first LP investment was in a siblings child care business. I invested $5,000 and received a monthly payments of $200.

A Limited Partner (LP) investment is more stable than in an erratic stock market. Consider becoming a Limited Partner as an alternative investment, but continue trading in stocks as well. Below are some examples of Limited Partners who profited well off of their investments.

BET (Black Entertainment Television): Owned and founded by Bob Johnson.  John Malone (former Chairman of TCI Cable) also had a percentage ownership as one of BET’s initial investors. BET was sold to Viacom for $3billion, John Malone’s take was estimated to be around $650 million.

Facebook: Owned by Mark Zuckerberg. Company received a $240 million dollar investment from Microsoft, giving Microsoft a 1.6% stake in Facebook and valuing Facebook at $15 billion. Therefore, if/when Facebook is sold for any amount over $15 billion, Microsoft receives 1.6% of the sales price.

Before investing as a Limited Partner do your homework. We cannot stress this more. Make sure everyone understands that 2+2=4 and that the owners are not taking extraordinary salaries while leaving little for company growth and future investments.