Girl: I had a wonderful childhood. (looks at photos of a child) Boy: Yeah? I fuckin' had to listen to Tim Curry narrating nursery rhymes... That's terrifying.
Hobo: Hey! Is that a cell phone? Lady with thick NY accent: Yes, it is, sir. Hobo: We're going to be eating them next week. Lady, without missing a beat: Yeah, they taste great with butter.
Girl #1: Yeah, her mom looks weird. Girl #2: Yeah, she looks like a troll driving. Girl #1: Well, she looks like a troll all the time. Girl #2: Sure, but what's more awkward...a troll or a troll driving?
Hobo to bunch of hipster teenagers in line for a show: Is this the line for a shelter? Teenagers: No. Mini hipster girl, after he goes away: Oh, hell no. Did he just think I was homeless? I'm wearing fucking American Apparel.
Hispanic guy, noting hot chick passerby: Hey, baby. Hot chick: (rolls eyes) Hispanic guy: (takes off shirt and puts it on the ground for her to walk over) Hot chick, stopping: I'll give you some credit for that one...but fuck off. (continues walking)
--50th & 9th
Overheard by: passerby
Headline by: ddv
Runners-Up: · "A Dramatization Of Citibank's Credit Protocol" - NoCredit · "But...I Would Have Taken You to 4th Meal!" - Maddy · "How Many Credits Do I Need to Save Up For a Blowjob?" - mark · "It Was a Bad Day To Forget That He Was Wearing a Sports Bra" - Nick Pollotta · "Matthew McConaughey Finally Gets Some Cred...." - RaindanceRichard · "Next Time He Won't Give a Shirt" - Sim Etrias · "Raleigh Gets the Old "Fuck Ye" From Elizabeth Yet Again" - Laureen
Mom: First it will be spring, then summer, then time for you to go to kindergarten. Four-year-old boy: Will there be nice kids there? Mom: Are there nice kids at your day care now? Four-year-old boy: Yeees... Mom: You're the only bad kid at day care. Four-year-old boy: I knooow!
Suit #1: So I said to them "happy anniversary, here's your cemetery plot." Suit #2 (astonished): What? You really bought them cemetery plots for their anniversary? Suit #1: Yeah. I knew he was gonna drop soon, so I bought them. Suit #2: Well, I guess it's the gift that keeps on giving.
Guy to girl sipping drink: Can I try some? (takes a sip) That tastes like the stuff I used to get lice out of my hair! Girl, taking another sip: Yeah, it totally does! Another girl at table: Gimme some!
Ya sabíamos que Microsoft andaba preparando una aplicación de Facebook para Windows Mobile, que finalmente ha desvelado hoy y que ya se puede descargar y probar en los móviles equipados con este sistema operativo.
Esta aplicación es, de momento, la única que permita la subida de vídeos a Facebook desde el propio móvil, aunque no es la única funcionalidad que incluye. Los usuarios podrán ver las actualizaciones de estado de los contactos, ver y escribir mensajes en el muro, compartir fotos, enviar mensajes, cambiar la imagen del perfil,...
Además, muchas de las actividades que realicemos en Facebook se podrán compartir en diferentes servicios de Windows Live, como por ejemplo las fotos o las actualizaciones de estado.
De momento la aplicación puede descargarse gratuitamente, pero para próximas versiones del sistema operativo, como en Windows Mobile 6.5, facebook para Windows Mobile vendrá preinstalada, por lo que no será necesaria su descarga.
Aunque su aspecto externo haya variado ligeramente desde que lo vimos por primera vez, el Novatel MiFi sigue manteniendo las características que lo hacían destacable, especialmente su tamaño compacto.
Este router 3G, que empieza a distribuir Movistar, nos permite conectarnos a la red sin cables de ningún tipo, ya que la conexión se realiza a través de Wi-Fi. De este modo, podemos acceder con diversos dispositivos al mismo tiempo siempre que tengamos cobertura móvil.
El Novatel MiFi ofrece velocidades de descarga de hasta 7.2 megabits por segundo y de hasta 5.7 megabits por segundo de subida, además de permitir almacenar ficheros gracias a su ranura MicroSD. La batería interna permite utilizarlo hasta cuatro horas sin necesidad de recargar.
El precio variará dependiendo de la tarifa de datos con la que lo adquiramos:
Con la Tarifa Plana de Internet, con 1 GB de datos y un coste de 30 euros mensuales, el precio será de 59 euros.
Con la Tarifa Plana de Internet Plus, con 1 GB de datos pero mayor velocidad de bajada y un coste de 39 euros mensuales, el precio será de 49 euros.
Con la Tarifa Plana de Internet Premium, con un coste de 59 euros mensuales, el precio será de 29 euros.
Vlingo es una utilidad que nos permite realizar controlar diversas acciones del teléfono mediante la voz. Sólo hay que pulsar una tecla y decir al teléfono lo que queremos hacer.
Las acciones disponibles son variadas y bastante útiles, las más usadas frecuentemente. Podemos hacer búsquedas en Internet, dictar mensajes SMS o correo electrónico, llamar a nuestros contactos o a un número concreto, crear notas y tareas, o lanzar aplicaciones. Vlingo utiliza un reconocimiento de voz inteligente que aprende con el tiempo, por lo que no es necesario un entrenamiento previo para comenzar a utilizar el programa.
La semana pasada pude hablar con uno de sus creadores. Me contó que el motor de Vlingo también mejora cuantos más usuarios lo utilizan. Ahora mismo disponen de unos mil usuarios utilizando la versión en castellano y acaban de publicar nueva versión beta para Symbian en fase pública. Vlingo necesita de conexión a Internet para funcionar y también esta disponible de forma gratuita para iPhone y BlackBerry.
John Reese is one of the best marketers of our time. His accomplishments are legendary in this industry. I originally met John because one of the other admins at the Digital Point forums was talking about this guy who promoted his software product and he did hundreds of thousands of dollars in sales in 24 hours. He said the guy just sent out a email recommending his product. I was like WTF I gotta meet this guy. I shot him a email and he asked if I was going to AdTech. I was and we agreed to meet up.
I originally met John at AdTech San Francisco in 2007. I was telling him about this advertising network I was doing called AuctionAds. He listened to me give my pitch then proceeded to gave me about 2 notebooks full of tips on how to market it. It was a HUGE tipping point for AuctionAds. I followed John’s advice and it made a dramatic impact right away.
In the years since I have learned from John more with what he does then directly interacting with him. From his monstrously successful Traffic Secrets programs to some that did not go so hot like Blog Rush.
John shares an enormous amount of knowledge through his successes and failures.
Today John launched opportunity.com . A training program to teach people affiliate marketing. Its free to sign up and get a peek what he is up to. I highly recommend it.
Watching John work might inspire you in coming up with your next big thing.
I'm used to explosive gains in the biotech world, but I've never seen a moonshot quite like this… As I write (TIME), shares of Vanda Pharmaceuticals (Nasdaq: VNDA) are up 712% today.
After closing at $1.08 per share last night, the stock opened at $9.99 this morning on news that the company's schizophrenia drug, Fanapt, was FDA-approved.
Even for a biotech veteran like me, a one-day percentage move like this is unprecedented.
But that's the thing about FDA approvals for small-cap biotech companies. They're huge catalysts for the stock in question. Unfortunately, separating the contenders from the pretenders is a tricky job. And even when you reel in a big winner, you need to know when to dash off with the money. Here are some tips…
Popping the Champagne on Small-Cap Biotechs
No doubt some VNDA investors are popping champagne corks today, following the small-cap biotech's liftoff. It's probably made their year.
Others, however, are still trying to recoup their losses from the stock - even after today's monumental surge. That's because two years ago, VNDA was trading around $25.
As the resident biotech expert here, I wouldn't be surprised to receive e-mails asking why I didn't recommend VNDA.
When I first looked at the company three years ago, I thought the story was interesting. But the risk was just too high.
My pessimism was right, as shares plummeted.
And despite today's news, it was only last summer that the FDA rejected Fanapt, saying that it was too similar to other drugs on the market. The stock dropped below $1.
Things got so bad that the stock was trading below its cash value and activists were demanding that the company be liquidated and cash returned to shareholders.
The bottom line is this…
Small-Cap Biotech Investing - The Risk-Reward Ratio Is Critical
Small-cap biotech investing is risky. I want to lower that risk whenever possible. That doesn't mean I'll avoid risk all together - on the contrary.
But what it does mean is that any position that I enter will have significant upside potential to offset that risk. The more risk… the more profit potential I need to recommend the stock.
As I mentioned, FDA approvals are obviously major catalysts for small biotech companies. Sometimes, good news is already priced into a stock. In this case, it clearly wasn't. The reason why VNDA shares were so explosive today is because virtually no one expected Fanapt to get the green light.
There's another big reason for paying more attention to the risk-reward ratio with biotech. And a profitable one, too…
Small-Cap Biotechs: 3 Benefits of Locking In Profits
I'm a big proponent of taking partial profits on a winning position when appropriate. If a small-cap biotech stock is up significantly, locking in some gains serves three purposes:
Returns Investment Capital: While remaining in the position, I now have capital to put into other opportunities.
Helps Weather The Downside: If I still believe in the company and the investment, taking partial profits allows me to give the stock more room to fluctuate, as I'm no longer concerned with losing my original investment.
Participate In Upside: Having secured my original investment, I can now allow my winners to run. That's where truly large gains happen.
Recently, when I recommended that subscribers take partial profits in a top-performing stock, I received a ton of email asking why… particularly when I expect the stock to go significantly higher.
I emphasized the reasons above - that taking some profits lowers our level of risk, while still allowing us to go for the home run.
I'll give you another specific example…
In my small-cap healthcare service, Access, we took 65% gains in half our position in SIGA Technologies (Nasdaq: SIGA). That's allowed us to let the stock run to current levels, which are now 158% above our entry price.
So while VNDA blasted its way higher today, remember that it's a perfect example of how volatile the market can be - and how things don't always happen the way you expect.
One of the best ways to make sure that volatility doesn't negatively impact your portfolio is to play with the house's money whenever possible.
President Barack Obama sent lawmakers a budget package today (Thursday) that proposes to shrink or eliminate 121 federal programs and save almost $17 billion in the fiscal year that begins Oct. 1. But the budget plan contains cuts that will face vigorous opposition in Congress and fierce resistance from special interest groups.
The package of proposed reductions fills in the fine print of a $3.55 trillion budget outline approved by lawmakers in April that contains Obama's top agenda items, including a healthcare overhaul, a push for renewable, clean-energy sources and changes in education funding.
The President wants to cut or end a number of programs that he feels are wasteful or ineffective to take the first toward getting spending under control. But the administration's attempt at bringing fiscal discipline to Washington has already been met with skepticism by analysts.
The cuts are miniscule compared to the overall budget package and deficits that will be ushered in the next few years. The $787 billion stimulus package Obama pushed through Congress combined with the $700 billion Troubled Asset Relief Program (TARP) bank bailout will come on top of the $1 trillion deficit the administration inherited when he took office in January.
Total savings from the cuts, even if they were accepted by Congress in their entirety, would represent a paltry 0.4% of the overall budget. The Congressional Budget Office projects the deficit will be $1.85 trillion this year, about four times the previous record, and $1.38 trillion in fiscal 2010.
Only about 80 of the proposed cuts are new - the others had been previously revealed. And most of the cuts will be from the "discretionary" budget, avoiding the so-called untouchable "third-rail" entitlement programs of Social Security and Medicare.
Those two programs account for more than 40% of government spending, meaning the more difficult work on deficit reductions has been left for another day. "More serious efforts at deficit reduction are going to require entitlement and tax reform - that's where most of the money is." Marc Goldwein, policy director of the bipartisan Committee for a Responsible Budget, a Washington-based research group, told Bloomberg. "To really get the deficit under control, we're going to have to start thinking bigger," he said.
But some in Congress defended the administration's approach, saying the list of program reductions is just the start of a more comprehensive effort to cut spending and pull the reins on the skyrocketing deficit.
"It depends on what it means over the scope of five and 10 years." Representative John Larson (D-Conn.) told Bloomberg. It's a "deep, cavernous hole where we have been left, we're looking a long way up but it's a steady climb" using the budget plan agreed to by Obama and Congress, he said.
Yesterday it was leaked to the press that Bank of America has to come up with another $34 billion in capital – and guess what… The markets rallied.
That means just one thing… there's a head of steam going right now, and it's something you can play for some fast gains. Fact is, you can capture the next 2% or 3% on the Dow by buying the index… Or you can use this momentum to turn $15 into $384… or even $1,500 into $34,834.
You can do it almost like clockwork – and with a higher degree of safety than buying the whole market. The next set of gains is set for May 21, 2009. Investment Director Keith Fitz-Gerald has the full story on this unique recommendation. I think you'll be amazed at how simple and easy it is to multiply this rally by 5 to 18 times in a matter of a day…
Gold isn't going to $2,000 an ounce. Before you gag on your coffee or suffer chest pains, allow me to explain.
We're about eight years into the bull market, and gold has breached the $1,000 level twice and has spent weeks trading above the old high of $850. Some observers are now saying that gold's pretty much had its day and that once the recession is over, it will retreat for good.
However, the four-digit gold price we've seen so far is with no price inflation to speak of, no effects of the atrocious increase in the money supply, and despite a rising dollar. What happens to gold when each of those pictures gets turned upside down – high inflation, excess cash jolting the economy, and a falling dollar? After all, gold's performance to date has been powered only by general anxiety, not by any visible erosion in the dollar's value.
I decided to take a fresh look at calculations that could be used to appraise gold's upside potential. No one of them, by itself, comes with compelling logic. But they all point in the same direction.
Gold's Percentage Rise in the Last Bull Market: What if gold in this bull market repeats the percentage rise in the last bull market? In the 1970s gold rose from $35 to $850, a factor of 24.28. Our low in 2001 was $255.95. Multiply that by 24.28 and you get a gold price of $6,214 per ounce.
U.S. Gold Holdings to Money Supply: The M1 money supply consists of currency and checkable deposits. The U.S. government currently holds 286.9 million ounces of gold. If the government were to make each dollar redeemable by the amount of gold it possesses, we'd arrive at the following price for gold: $1.569 trillion ÷ 286.9 million oz. = $5,468.80 per ounce
Gold/Dow Ratio: The ratio was about "1" when gold peaked in 1980, meaning the Dow and gold were the same price. To restore that relationship at today's stock prices would mean when the Dow is at 6,626, gold should be at $6,626/oz. Of course, we think it likely that the Dow will get a lot lower before gold peaks. But even if it drops all the way to 4,000, that would imply a gold price of $4,000/oz.
All the Money in the World vs. Gold Reserves: If the public eventually sees the paper game being run by the central banks for what it is, governments will be forced to back their currencies with gold (and perhaps other tangibles like silver). Assuming they had to go into the market and buy the gold needed to restore faith in their currencies, the numbers might look like this: Total central banks reserves (including gold holdings) = $4.8 trillion, divided by 929.6 million ounces total gold reserves held by all official institutions that issue currency = $5,246 gold price.
U.S. Gold Holdings to U.S. Foreign Trade Deficit: The size of a country's deficit or surplus would be of no consequence if all currencies were convertible into a fixed amount of gold. However, the dollar is increasingly considered a hot potato, and when the trade balance reverses, as it must, dollars will flow back to the U.S. and fuel domestic price inflation. Based on the cumulative trade deficit of $9.13 trillion (up from $6 trillion since June '07!) and U.S. gold holdings of 286.9 million ounces, the corresponding price of gold would be $31,822 per ounce.
U.S. Gold to U.S. Government Liabilities: Finally, the GAO (Government Accountability Office) calculates an income statement and balance sheet for the U.S. government. As you'd suspect, it is dominated by future liabilities for Medicare and Social Security. What if they had to be backed by the supply of gold? Official U.S. government liabilities now ring in at an incredible $55.2 trillion. To make good on that would require a $192,401 gold price.
No, we don't think gold will hit $192,000 or even $32,000. And there really isn't any surefire way to forecast the eventual high. But it's clear that every weathervane is pointing in the same direction. So, yes, gold isn't going to $2,000; it's going higher.
When determining how to keep your wealth safe, the state of global affairs can be a powerful reminder that gold should be part of the strategy. And today our world, essentially, is on fire.
- Eastern Europe borders on bankruptcy. Brazil's economy is falling off a cliff. Ditto Mexico.
- Protests have erupted in Latvia, Chile, Greece, Bulgaria, Iceland, Dublin, and parts of the U.S. Workers have gone on strike in Britain and France.
- In the U.S., 36 states and the District of Columbia have proposed or implemented reductions in the civil workforce. (You think customer service is poor now…)
- An astounding one in nine homes, 14 million, sits empty in the U.S. The December median price of a home sold in Detroit was $7,500. More than 8.3 million homeowners were upside down on their mortgage in the fourth quarter. Freddie Mac's new CEO resigned after six months on the job.
- Last quarter, 12 U.S. banks failed, bringing the 2008 total to 25, the highest one-year death rate since 50 failed in 1993. More foreboding, another 252 banks joined the FDIC's "problem list." So far this year, 19 banks have failed.
- The central bank of Ukraine banned the early redemption of term deposits, the most popular form of savings in the country. Bank deposits have dropped 20% since September, as bank customers dodge the risk of getting locked in.
- The projected US$1.75 trillion federal budget deficit is almost four times the nation's previous record-high budget deficit. The Times Square debt clock reads over $11 trillion. Japan's now reads $7.8 trillion.
- High unemployment has become a worldwide epidemic, with the infection spreading.
- With world economies taking it on the chin, it's little wonder that investor interest in gold as a safe haven is growing – a trend we expect to continue. And just wait until the dollar resumes its slide, the expanding money supply jolts the real economy, and inflation kicks in.
Given the ongoing turmoil and the swallowing darkness at the end of the crumbling economic tunnel, our recommended strategy here at BIG GOLD remains keeping one-third in cash, one-third in physical gold, and one-third in our selected gold stocks. New money for investment should be split among the same three categories; we just don't see any safer places to be.
As economies around the world continue to shrink and governments continue administering larger doses of the wrong medicine, we'll sit in relative comfort with our gold for protection and our stocks for profit. We expect the prices of both to rise as others join us.
The housing market is considered the antagonist to this global financial mess. But inside all the hate is a well-balanced company that has had no problem beating the market.
Here is an interesting question for you. Over the last year, the worst in post-war history for investors, what would you rather own, Toll Brothers (NYSE:TOL) or a sample of the entire market like the S&P 500?
Off the top of their heads, most investors would likely want to own the market. After all, how in the world would a homebuilder be able to "beat the market" during a horrific crash in housing prices?
Here's the surprising answer…
If you went with the S&P, you would have lost double what you would be down in Toll Brothers. Yes, the nation's most prominent homebuilder, a company that helped us get into this financial fiasco, beat the pants off the market over the last year.
Toll's shares are down 16%. The S&P is down 35%. It is even beating the index over a five-year range:
The gap between the two is only going to get bigger as the economy and the real estate sector recover. Toll's future looks significantly brighter than most publicly traded companies.
Don't hate me because I'm beautiful
One of the most interesting facets of the current economic downturn is the horrific impact it has had on the nation's builders. In this world, it is true only the strong survive. The notion is especially poignant in the housing industry.
Toll Brother's recently issued debt with a coupon rate of just 8.9%. That figure is less than many folks are paying for a used car loan and is indicative of an extremely strong balance sheet.
The company will be able to use this sort of leverage to overpower its competitors. In the high-end construction business, few builders are able to get construction loans. Even fewer can do it as cheaply as Toll.
A valuable portfolio of high-quality land assets is also not hurting the company's long-term chances. While competitors are forced to turn to the faster-moving low-end market, Toll is sitting on top-notch properties that are bound to pay off in as little as a few years.
Toll is not the kind of investment short-term speculators want to mess with. This company is a long-term winner that will become even more dominant in an industry that is slowly but surely rebuilding.
Granted, Toll will never be the fast-growth wealth generator it was just a few years ago, but that industry is gone. In its place is a more secure, dare I say more conservative, industry where fundamentals matter and a strong market stance will propel a company towards healthy long-term revenue streams.
It goes against much of what mainstream investors believe these days, but the housing market is not the death trap so many folks believe it is.
They're tearing down houses out west…as you've probably heard. It's cheaper than going through all the necessary steps to get the houses mortgaged out, so banks are just bulldozing McMansions.
And closer to home, toxic drywall has become the scourge of South Florida.
It's particularly bad in St. Lucie County. They're now saying thousands of homes could possibly be contaminated…that the nearly-toxic levels of sulfur might have seeped into the foundation, meaning the homes will need to be demolished.
And the rest of the U.S. housing market is just as shocking. The free-fall in home prices is still accelerating. 20% of American homeowners are underwater on their mortgages…some 11% (and maybe more) of all the homes in America are unoccupied and unsold…
But most Americans still don't recognize the biggest mistake they made during the boom…
And That's Confusing Real Estate Speculation With Real Estate Investment
It didn't even occur to me until just a few weeks ago.
I was watching a presentation from Frank Trotter of EverBank, and it gave me a renewed bearishness for housing. As one of America's few responsible bankers, Frank has an intimate knowledge of the U.S. housing market…and since his bank isn't holding a boatload of "toxic assets," he tells it like it is.
He insisted that houses are not investments; they're utilities. Buying a house for US$150,000 in 1975….then selling it for ~US$850,000 in 2005…sounds great, but after inflation, you only made about 1.5% a year.
That's a nice little gain, but not on an investment. The house required upkeep…the lawn had to be mowed…you can look at the 1.5% as a return on your time.
And yet, as Frank answered questions following his presentation, the audience asked questions about when…and where…they should be buying houses. "Is it a good time to buy in Austin?" they asked…
And I realized that we've all been fooled. Hoodwinked you might say.
You see, the bubble saw prices rising like a rocket ship; and anyone with a piece of the action stood to make a ton of money. Even I watched the shows on TLC – saw a few nervous, amateurish homeowners flip a house and clear US$100,000 – and I was fascinated. "If they could do it…" we all thought.
But that was during the bubble. And as prices fall across the board, so do the profits to be had from speculation. And just because houses might start to seem cheap doesn't mean the market's in for the same kind of rising prices we saw in recent years. In other words; speculation is dying a pretty quick death in U.S. housing markets.
And indeed, most bubble-based "investment" really turned out to be speculation. These deals exposed "investors" to a heap of leverage…and as the old saying goes… "Leverage makes poor men rich, and rich men poor."
But at the same time, falling prices are making true Real Estate investment more and more attractive, as houses and apartments reach crucial rent ratios and rates hit all-time lows.
So what is true Real Estate investing?
It's All About Cash Flow!
And in some ways it's easier…and far safer…than any form of Real Estate speculation.
Our Executive Editor – Justin Ford – has been investing in Real Estate for years. He's taught courses and seminars on the subject…made a bundle off of cash-flowing properties…organized deals for other investors…and he knows firsthand the profit potential of true real estate investment.
And unlike most people, Justin still sees mortgages as a great way to build your wealth with relative safety. In a recent conversation with some of the younger members of our staff, Justin laid out a scenario where Real Estate investment could make them a fortune by the time they reach their 50's…
"Go out and buy some houses selling for ultra cheap prices," Justin says. "Buy at 4 to 5 times annual rent. You’ll be able to pay management, all expenses and debt service, allow for 10% vacancy and put a few dollars in your pocket every month. But make sure you get a fixed rate. Because the mortgage will then “kill off” the balance through amortization."
"So buy a house today for $50k that was worth $125k at the peak"
"Have it professionally managed. 30 years from now, the mortgage will be zero. If you throw the extra cash flow at the principal, you’ll probably pay it off in 20 years or a little less. You’ll own the $50k house, free and clear."
"And if it goes up just 1% or 2% a year on average (and it could go up a LOT more than that thanks to inflation) your $80k or $100k is yours free and clear. And you put in just $15k to buy it. (That’s $10k down payment and $5k closing costs and reserves.)"
"So you turn $15k into $50k, plus get net income in a scenario where there is ZERO appreciation for decades. Highly unlikely…given the major correction is probably more than halfway over (some homes, after all are selling for less than replacement cost, even if you got the land for Free!)"
"Add to that all the money pumping out of DC," Justin concludes, "…and the prospect for inflation, including housing inflation, in the next five years or sooner is strong."
We'll be going into more detail on Real Estate investing in future A-Letters. But one thing is certainly clear; with the stock market still up for grabs and many other investments still suffering, true Real Estate investment could be one of the best profit opportunities at these levels…one that pays a steady cash-flow and gives you a real, tangible investment for your money. It's at least worth considering.
Casino stocks have been more than down on their luck lately. In fact, they've been on the ropes more than one of their prizefighting boxers. And it's no wonder.
The recession has hit consumers hard. And many have cut their spending, doling out their dollars for the necessities: food, shelter, clothing and gasoline - but little else.
To say business has been bad doesn't really capture the scope of the damage.
It's easy to see the effects on casinos - the top dogs in most markets - and we don't always notice the impact to the rest of the food chain.
Restaurants have plenty of empty tables these days. Those little beepers you get while waiting in line are just sitting around collecting dust.
Malls resemble ghost towns; most of the visitors are store employees themselves. Many of the weekend customers are teenagers, with little more to spend than time.
That's why it's so surprising to find a company that's doing well, much less a casino.
Amidst all of this economic devastation there are companies who have been holding their own and putting up impressive earnings figures. We've found one casino stock in particular that has a unique business model of drive-to locations that's been succeeding where Vegas hasn't.
Casino Stocks Drop As The Travel Industry Suffers
The travel industry is suffering right now. And while it's put a bite on tourism, it's hurt most casinos much worse.
And no place got hit harder than Las Vegas. "Sin city" experienced a 10% drop in visitors in January and February. Unfortunately, that's the good news. Gaming revenues were a paltry $937 million, down almost 20%.
More visitors equal more spending in the gambling capital of the world.
And when you consider that over 37 million visitors go to Vegas every year, a 10% drop equates to 3.7 million people not adding tens of millions to the economy - or a casino's bottom line.
As the infamous strip has grown, mega-casinos have popped up as well with each casino supporting thousands of workers and capable of adding billions to their parent company's bottom line. A 20% drop in revenue for many casinos means that they aren't able to pay their fixed expenses.
That sobering statistic has translated into a huge problem for many of the gaming companies, who now find themselves scrambling to stay solvent. They've laid off thousands of employees and slashed expenses in an effort to stem the red ink.
But it hasn't been enough: Las Vegas-based MGM Mirage (NYSE:MGM), Riviera Holdings (AMEX:RIV) and Station Casinos are all in discussions with their lenders and bondholders. The topic? Missed debt payments.
Station Casinos missed a payment last week, and Riviera missed a $4 million interest payment on its $25 million line of credit on March 30.
Casino Stocks - It's All About Location, Location, Location…
At first glance, you might think all gaming companies and casino stocks are in similar straits. But they're not. An important difference sets at least one of them apart: casino location.
Not too surprisingly, with fewer people willing to shell out money for airline tickets, a greater percentage of Vegas visitors are coming from drive markets like Southern California.
It's not that people don't want to gamble - they just don't want to shell out hundreds or thousands of dollars for plane tickets to get there.
So it stands to reason that if we wanted to "invest in sin," we should take a look at gaming operators who own casinos primarily served by drive markets, whether it be Las Vegas or elsewhere.
Ameristar Casinos, Inc. (Nasdaq: ASCA) isn't the biggest casino operator, but it's certainly one of the most profitable. None of its eight casinos are in Las Vegas, and all of them cater to local, drive-to clientele.
Cactus Pete's and Horseshu are both located in the town of Jackpot, Nevada - a popular recreational vehicle destination in the northeastern part of the state. With a full hookup RV park right next to the casino, Cactus Pete's - the largest gaming and entertainment destination in northeast Nevada - allows RV gamblers easy access to casino facilities.
The Ameristar Casino Hotel in East Chicago, Indiana - one of the largest casinos in the Midwest - is a short drive for its Windy City clientele.
The company recently completed a 130,000 sq. ft. addition to its casino in St. Charles, Missouri. With its seven restaurants, Resort Spa St. Charles is a short 20-minute drive from downtown St. Louis.
The company's Kansas City, Missouri 3.5-acre casino floor features more than 3,000 slots, 105 gaming tables, 12 restaurants, an 18-screen movie theater complex and a Kid's Quest childcare facility. And it's a mere five minutes from downtown.
The Council Bluffs, Iowa crowd need only head down to the Platte River, where three full decks of gaming await on the largest riverboat casino in Iowa. Ameristar also owns a large land-based AAA 4-Diamond hotel adjacent to the riverboat.
The company's Casino Black Hawk is located about 70 miles from Golden, Colorado. A major regional gaming and entertainment destination, the Black Hawk complex, sports a 1,550-space parking garage, one of the largest in the area.
The Casino Hotel Vicksburg, another riverboat casino located on the mighty Mississippi, is the largest dockside casino in the southwest part of Mississippi. Number one in its market for the past several years, this facility sports a colorful blues bar and a state-of-the-art gaming center.
Casino Stocks: Ameristar's Business Model Is Working…
So how well is Ameristar's "drive-to" business model working? Quite well, thank you. Last quarter, it achieved record earnings - chalking up $0.52 per share - compared to a net loss of $1.07 for the same quarter in 2008.
"Ameristar achieved record EPS in the first quarter," said Gordon Kanofsky, Ameristar's Chief Executive Officer and Vice Chairman. "This was largely because of our sustained emphasis on achieving operational and marketing efficiencies, particularly during the current recession."
Even more impressive, the company achieved these results on revenues of $315 million, $10 million lower than the previous year.
To experience a decline of only 2.7% when the rest of the industry's looking at 20% declines speaks to the validity and diversity of the company's business model.
Since most of the casinos are located in travel destinations, hotel occupancies remain high, offsetting small declines in gaming revenues.
The company remains well capitalized, having recently amended its credit facility with its lender through 2012.
CEO Kanofsky commented on the company's future outlook: "Despite expected continued difficult economic conditions in 2009, we believe Ameristar is well positioned to continue to drive year-over-year margin growth.
"We also believe that regulatory reform in three of our key markets - coupled with significant investments in two of those markets - should drive future revenue growth, enabling Ameristar to emerge from the recession stronger and more profitable."
We wholeheartedly agree. If you're looking at investing in sin through casino stocks, Ameristar Casinos sports some of the best odds outside of Las Vegas.
The bulls went on another rampage during Wednesday trading on the Canadian Markets as investors gobbled up resource stocks. For the tale of the tape, the TSX Exchange added 2.66%, while the TSX Gold Index surged 4.5% and the TSX Venture Exchange, Canada's largest junior exploration bourse, tacked on 1.70% with the advancers swamping the decliners by a 500 to 391 margin on good volumes of 213 million shares traded.
Yamana Gold (NYSE:AUY) tabled first quarter earnings of $86 million or $0.12 per share on revenues of $224.3 million. Production rang in at 271,482 gold equivalent ounces with cash costs hitting $379 per ounce. Yamana ended the day up C$0.39 at C$10.33.
Kinross Gold (NYSE:KGC) earned $76.5 million or $0.11 per share in the first quarter on production of 526,888 gold equivalent ounces. Revenue rang in at $532.7 million with cost of sales coming in at $419 per ounce. Kinross closed at C$19.70 for a C$0.50 gain.
Northern Freegold Resources completed its earn-in on Atac Resources‘ Golden Revenue project in the Yukon. Atac received C$100,000 and 1 million Freegold shares as it final payment and Atac retains a 1 percent net smelter return royalty. Atac ended the day up C$0.025 at C$0.215, while Northern Freegold added C$0.01 at C$0.59.
Alexco Resource (AMEX:AXU) stated that initial underground chip-channel results from the Bellekeno resource in the Yukon returned up to 57.3 ounces of silver per ton over 6.04 metres. Alexco ended the day up C$0.05 at C$1.79.
Fewer than expected job losses in the United States during April and a robust rise in Canadian building permits in March caused euphoria on the Canadian markets. Clearly this logic is somewhat flawed given the overall weak numbers but who am I to argue with a stellar bull run. We shall see what Thursday trading has in store.
The base metals were all solidly in the green on Wednesday. Copper started moving higher early in the pre-dawn hours, and continued the trend pretty much straight through the day, just coming off its intraday highs to finish at $2.1725/lb., up more than 12½ cents.
Nickel was flat until mid-morning, then it too caught fire and shot up to close at its intraday high of $5.7516/lb., up more than 43 cents. Zinc made a strong upmove, ending at $0.713/lb., up nearly 4 cents. Aluminum was solid, adding over a penny and three-quarters, to $0.6926/lb., while lead posted a modest gain to $0.6453/lb., up just under a penny.
Copper led the industrial metals higher, making a powerful move that took it up the most in a month after the better-than-expected jobs data left traders with hope that the economic worst is in the rear-view mirror. It was the metal's fifth positive session in the past six.
"I think people are feeling pretty confident that the economy is in fact bottoming and we are starting to see the light at the end of the tunnel," said Matthew Zeman, of LaSalle Futures Group in Chicago.
"It’s just one in a long line of more encouraging economic data that has been coming out in the last couple of weeks," said Gayle Berry, an analyst at Barclays Capital (NYSE:BCS).
The jobs report notched another positive in a week that has featured less-than-dismal numbers from the service industries in the U.S., manufacturing in China, U.S. construction spending, and the housing market.
Berry added that market participants are coming around to "the view that global output may now be starting to pull itself out of the hole it fell into at the end of last year."
Oddly on such a strong day, the supply situation failed to be supportive. Copper inventories monitored by the LME were up sharply yesterday, rising by 7,225 metric tons, to 402,150 tons.
That could signal a slowing of the movement of copper from Europe to China, since the price differential has narrowed of late.
"Because the arbitrage halved over the past couple of weeks and physical premiums have come off, maybe we’ll see less European metal going into China," Berry said. "But [we don't want] to read too much into one day’s trend."
The results of the government's bank stress tests won't be released until 5 p.m. today, but people familiar with the tests and banks involved have already leaked some of the results.
Bank of America Corp. (NYSE: BAC) faces a $34 billion shortfall, the largest among the 19 banks tested. Wells Fargo & Co. (NYSE: WFC) must raise $15 billion; GMAC LLC (NYSE: GMA), $11.5 billion; Citigroup Inc.(NYSE: C), $5 billion; and Morgan Stanley (NYSE: MS), $1.5 billion, the Journal reported.
J.P. Morgan Chase & Co. (NYSE: JPM), Goldman Sachs Group Inc. (NYSE: GS), MetLife Inc. (NYSE: MET), American Express Co. (NYSE: AXP), Bank of New York Mellon Corp. (NYSE: BK) BB&T Corp. (NYSE: BBT) and Capital One Financial Corp. (NYSE: COF) are in the clear in terms of having adequate capital cushioning, according to Bloomberg News.
Results for Fifth Third Bancorp (NASDAQ: FITB), KeyCorp (NYSE: KEY), PNC Financial Services (NYSE: PNC), Regions Financial Corp. (NYSE: RF), State Street Corp. (NYSE: STT), SunTrust Banks Inc. (NYSE: STI), U.S. Bancorp (NYSE: USB) are not yet available.
The banks will have until June 8 to develop a plan to raise the required capital and face a Nov. 9 deadline to implement it. They may choose to raise the funds in a variety of different ways. They may sell assets, court private investment, or convert the government's existing preferred shares into common stock.
Citigroup has already announced plans to convert a portion of the government's $45 billion stake to common stock, a move that will give the federal government a 36% stake in the company. Other banks regional banks such as Fifth Third or Regions Financial could be forced to take similar action, but are loath to do so, as it would dilute the value of their common stock.
Morgan Stanley plans to close its capital gap by selling assets or stock to private investors, a person briefed on the plan told TheNew York Times.
While Bank of America has said it doesn't agree with the Fed's conclusions, the bank yesterday outlined its strategy to accommodate the government's demands. BofA is exploring the sale of business units such as First Republic and asset manager Columbia Management, the Journal reported.
The sale of those businesses could raise a combined $4 billion David Hendler of CreditSights Inc. told the Journal. BofA could also get about $8 billion for its partial stake in China Construction Bank Corp.
Beyond that, BofA would have the options of converting the government's existing $45 billion investment or $33 billion in private preferred shares to common stock.
Inbox too full? Subscribe to the feed version of Contrarian Stock Market Investing News - Featuring Bargain Stocks in a feed reader.
If you prefer to unsubscribe via postal mail, write to: Contrarian Stock Market Investing News - Featuring Bargain Stocks, c/o Google, 20 W Kinzie, Chicago IL USA 60610
In August, 2008, California's governor approved a bill providing that on and after January 1, 2010, any instrument, whenever executed, that became irrevocable on or after January 1, 2001 the law regarding no contest clauses will change.
Vlingo es una utilidad que nos permite realizar controlar diversas acciones del teléfono mediante la voz. Sólo hay que pulsar una tecla y decir al teléfono lo que queremos hacer.
Subscribe to the feed version of BOLDATPORN in a feed reader.
Post a Comment