Monthly Archives: May 2018

How To Make A Billion (More Or Less In 50 Years)

&l;p&g;&l;img class=&q;dam-image getty size-large wp-image-679290702&q; src=&q;https://specials-images.forbesimg.com/dam/imageserve/679290702/960×0.jpg?fit=scale&q; data-height=&q;689&q; data-width=&q;960&q;&g; Painting by Jean-Michel Basquiat.&a;nbsp; DON EMMERT/AFP/Getty Images

&a;ldquo;Many see pictures without knowing what to look at.&a;rdquo; – Bernard Berenson, &l;em&g;The Italian Painters of the Renaissance&l;/em&g;.

Maybe, this piece should be headed &a;ldquo;How Not To Die Broke.&a;rdquo; Making serious money in financial markets is the hardest thing to do consistently. Few of us escape the &a;ldquo;Great Humbler.&a;rdquo;

Consider: The S&a;amp;P 500 Index got halved during the financial meltdown of 2008 &a;ndash; &a;lsquo;09. It took NASDAQ 15 years to regain its 2000 bubble peak. Don&a;rsquo;t ask me to go back to the Volcker induced crunch of 1982. Even worse. The market touched down at book value with 5-year Treasuries yielding 15%. Yes, 15%! It made Black Monday in &a;lsquo;87 look like just a chart squiggle.

Financial data at the margin unfolds daily. Some 95% of what you see online or in the financial press is just noise which you disregard as garbage. Your macro point of view must diverge from the consensus. Later on, the consensus does fall into line. Over 6 months, if the facts don&a;rsquo;t confirm your thesis, fold your hand. Don&a;rsquo;t rationalize yourself into the poorhouse. But, close reading of quarterly reports and 10Ks is a must to gauge the dynamics of unfolding growth.

The reason for corporate due diligence is to muster your courage to build on or unwind positions without inhibition. I did this years ago with Citigroup, Bank of America, Sirius XM Holdings, Gilead Sciences, Boeing and Las Vegas Sands. Conversely, I couldn&a;rsquo;t buy into the technology rout back in 2000 – &a;lsquo;01 because there were serious valuation issues and inventory gluts while capital spending had dried up in the country.

Historical memory is useful as an evaluation tool in appraising the entire market, but not for specific stocks. I had to terminate a bright fiftyish tech analyst because his image of IBM, Texas Instruments and Motorola was formed a decade earlier. Later, he missed Apple and preferred Yahoo over Google. I&a;rsquo;ve grabbed corporate files a foot thick and dumped them in the trash basket as impediments to perception.

Unlike many operators of my generation, I&a;rsquo;ve eschewed short selling because it screws up my head, making me anxious. I&a;rsquo;ve bought calls and written puts but only to quiet me down and re-concentrate on maximizing bull market plays. Anyone left who hasn&a;rsquo;t studied Buffett&a;rsquo;s style should at least read one of his annual reports.

Over 40 years ago, Secretariat won the Belmont Stakes, going away by 31 lengths. Big Red&a;rsquo;s record of 2:24 for 12 furlongs still stands. Alas, the stock market contains no big capitalization properties in Secretariat&a;rsquo;s class. Apple started it&a;rsquo;s run from low thirties so we&a;rsquo;re talking near 30 times on your money. Alphabet remains a contender to Apple but 2014 was a negative year.

Mike Milken and his crowd came close to Secretariat&a;rsquo;s bold moves. But, they did it with OPM (other people&a;rsquo;s money) raised for the honchos using 10 to 1 leverage on takeovers. Mike lugged around 2 lawyers briefcases filled with &a;ldquo;deal&a;rdquo; papers that were actionable.

Facebook and Alibaba may contain hearts as big as Secretariat&a;rsquo;s, but they first went to the moon backed by V.C.s (venture capitalists). During Secretariat&a;rsquo;s reign, 1973, the market faltered badly, a wet track, one horrendous recession induced by real estate overspeculation.

Early sixties, great fortunes were made by tech honchos and later some conglomerateurs, more a 1980s phenomenon. In the sixties, few investors even knew how a hedge fund operated. A pool of $20 million tabbed you as a big operator. Microsoft first went public in the early eighties. Today, there are dozens of $20 billion money pools, some concentrated in Apple, Micron Technology, even General Motors.

My patience and perseverance are found elsewhere, but frustrations and mistakes of commission and omission are enormous, namely selling artworks prematurely. I&a;rsquo;m talking about the contemporary art market scene where my involvement dates back to early fifties when abstract expressionism was taking off in the Big Apple.

&l;!–nextpage–&g;

Namely, Jackson Pollock, Mark Rothko, Willem de Kooning, Clyfford Still, Jasper Johns, Roy Liechtenstein and others were young and prolific along with Franz Kline, Alberto Giacometti and guys on the C&a;ocirc;te d&a;rsquo;Azur, the great colorist Marc Chagall was entrenched, happily.

My excuse was I liked Rothko et al but in 1954 couldn&a;rsquo;t come up with even $1,200 for a canvas at his initial &a;lsquo;54 show at Betty Parsons Gallery in New York. Just back from the Korean War, penniless and unemployed. My M.O. was buying canvases from friends, artist without galleries. The going rate was $300 and you paid off your purchase $25, monthly.

There ain&a;rsquo;t space to enumerate all my stupidities in the art market which embraced Warhol, Richter, Jeff Koons and Christopher Wool&a;rsquo;s later paintings. Like stocks, I sold paintings when they began to bore me. This is a no-no, because there&a;rsquo;s always another generation coming along getting its feet wet in terms of perception and taste. Such honchos dangle in the grip of advisors and auction house executives. Art for them is a commodity like pork bellies and gold. They&a;rsquo;re told to put 10% of wealth in art and mainly comply.

In the art world there are juicy back stories. Now, for mine. Jean-Michel Basquiat&a;rsquo;s best work was painted in 1982. An &a;lsquo;82 piece recently went off at auction for $100 million. Back in &a;lsquo;82 I was introduced to Basquiat&a;rsquo;s work by Mary Boone whose gallery was housed next door to Annina Nosei&a;rsquo;s space where she had confined Jean-Michel in her basement. He was painting fast and furiously, knocking off a piece in a couple of hours and then moving on.

&a;ldquo;You should buy a couple,&a;rdquo; Mary said to me. &a;ldquo;They&a;rsquo;re $2,500 apiece.&a;rdquo;

&a;ldquo;Mary, don&a;rsquo;t screw up my head with what&a;rsquo;s one step above graffiti,&a;rdquo; I said. &a;ldquo;Find me more work from the German Neo-Expressionists. Keep showing me Kiefer, Baselitz and Immendorf.&a;rdquo;

I could have bought half a dozen Basquiats in 1982 for $15,000, now worth half a billion. No 10Qs to read or conferences to attend. Just put &a;lsquo;em in the warehouse or on your walls for 50 years.

Collectors I know buy 20 or 30 pieces by one artist, warehouse them for decades and then feed them out into the auction market. If you refer to a compound interest table you&a;rsquo;ll find these are better returns than Buffett logged over 50 years of intensive investing.

Even contemporary art indices based on auction prices don&a;rsquo;t do justice to the tremendous moves within subcategories. We&a;rsquo;re talking more like V.C. rates of return. Steve Cohen and Steve Wynn are blue chip buyers in the art market, but more intensive speculators in securities. Subliminally, they must know they&a;rsquo;re overmatched in art but not on the Big Board. Same goes for Leon Black.

To make even hundreds of millions in financial markets you can&a;rsquo;t afford any big down years. Don&a;rsquo;t ever own a property that can&a;rsquo;t come back big. Polaroid and Eastman Kodak come to mind, maybe Xerox and IBM today. Dead paper.

The way money is managed by big institutions for passive investors is a sham. They&a;rsquo;ll put you in 10 to 20 investment categories covering everything from gold to emerging market debt. There is no underlying theme therein, except saving the money manager from extreme underperformance and criticism.

Short of entrepreneurial genius, options leverage and raking off 20% of the profits running $10 billion hedge funds or a private equity construct, these individual players must put together a long string of felicitous investment results. Commodity plays, gold and currencies seem too treacherous.

Subscribe to a chart service, not a stock market technician&a;rsquo;s music sheets, but quarterly economic charts that date back 50 years. The objective is to understand historical norms, how the country and major corporations function and what turns them dysfunctional.

Keeping up with macro numbers earns you the right to call inflection points and take a contrarian point of view. Thoughtful individual investors may not have great information retrieval capacity but do make calls on tsunami events like the Cuban missile crisis, Black Monday, the Lehman Brothers bankruptcy and the 2008 &a;ndash; &a;lsquo;09 financial meltdown. You do all this by relating panic lows to historic valuation yardsticks.

When the market touches down at book value and yields over 5%, push your chips into the pot. You&a;rsquo;re on firm ground, historically speaking. Today, the market sells at 2 times book value, yields under 2% with the price-earnings ratio at 17 on projected 12-month forward earnings, not at 10 times market lows. The question now is how long can the good times last? Maybe next week I&a;rsquo;ll deal with financial cycles.

Comparing real rates of return for mainly emotional plays like art with financial assets since 1900, art comes between stamps and violins, but is outdistanced by equities nearing 150%. Since 2000, both art and equities traced W-like formations, not topped until late 2014. Art&a;rsquo;s 3% hundred-year rate of return compares with 7% for equities.

Putting serious money in art is betting against history. Where will Jeff Koons, Basquiat and Warhol sell 50 years from now? My guess is lower than today&a;rsquo;s prices. If you&a;rsquo;re early, smart and don&a;rsquo;t rely on making money in art you&a;rsquo;ll probably come out a big winner.

I&a;rsquo;ve learned all this by making my own mistakes. If I somehow had bought a Mark Rothko piece even late fifties and assuming current auction prices of say $40 million, annualized compound rate of return for 50 years approximates 25%. Now you know how Buffett made his gelt.

For the Sosnoffs there was an invisible crossover point where the art collection exceeded financial assets. Never dreamed of this happening but time works on peculiar ironies. Conceptually, I didn&a;rsquo;t give enough weight to how newly made billionaires would throw money into art as objects of value.

If lightning strikes for you, assume nobody believes you short of an audit. In 1964, I phoned my dad in Key West and excitedly blurted out I was a millionaire. Pop dismissed this utterance out of hand. His Russian peasant&a;rsquo;s mentality couldn&a;rsquo;t accommodate such largesse embracing his family.

Transactions in art annually, tot up to no more than a few hours trading on the Big Board. For Bernard Berenson, owning a 34,000-volume library at Villa I Tatti outside of Florence, a good rough test of value was whether you felt reconnected with life upon looking at a painting. The research came later.

The final irony is new money foolishly marked up my collection. I lucked out.

&a;nbsp;

&l;strong&g;&l;em&g;Sosnoff and his managed accounts own: Citigroup, Bank of America, Las Vegas Sands, Alphabet and General Motors.&l;/em&g;&l;/strong&g;

msosnoff@gmail.com

&a;nbsp;&l;/p&g;

Top Penny Stocks To Own Right Now

Every week, I compile a table of all U.S.-listed stocks with dividend yields of 10% or higher. Some of the names come and go, while others reappear time and again. I’ve become familiar with many of them, and can safely say that the list is dominated by tiny companies with market caps between $50 million and $300 million.

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Some of these are even smaller nano-caps, such as medical device maker Digirad (Nasdaq: DRAD), whose entire market value is just $36 million.

There is absolutely nothing wrong with small businesses. I own shares of quite a few in my personal account. But for the most part, I use them to fill out the growth sleeve of my portfolio and don’t consider them stable income producers.

Top Penny Stocks To Own Right Now: Summit State Bank(SSBI)

Advisors’ Opinion:

  • [By Max Byerly]

    ValuEngine upgraded shares of Summit State Bank (NASDAQ:SSBI) from a hold rating to a buy rating in a research note released on Saturday.

    Separately, TheStreet raised Summit State Bank from a c+ rating to a b rating in a report on Wednesday, February 14th.

Top Penny Stocks To Own Right Now: Xinyuan Real Estate Co Ltd(XIN)

Advisors’ Opinion:

  • [By Shane Hupp]

    Xinyuan Real Estate Co., Ltd. (NYSE:XIN) declared a quarterly dividend on Wednesday, May 30th, RTT News reports. Stockholders of record on Monday, June 11th will be given a dividend of 0.05 per share by the financial services provider on Friday, June 22nd. This represents a $0.20 annualized dividend and a dividend yield of 3.74%.

Top Penny Stocks To Own Right Now: China Pharma Holdings Inc.(CPHI)

Advisors’ Opinion:

  • [By Logan Wallace]

    These are some of the news headlines that may have impacted Accern Sentiment’s scoring:

    Get Scynexis alerts:

    Steady Activities: SCYNEXIS, Inc. (NASDAQ:SCYX), LPL Financial Holdings Inc. (NASDAQ:LPLA) (oracleexaminer.com) Do Analysts Think You Should Buy SCYNEXIS Inc (NASDAQ: SCYX) (stockspen.com) Notable Runner: SCYNEXIS, Inc. (SCYX) (nasdaqplace.com) Most Active Stocks Now: SCYNEXIS, Inc. (NASDAQ:SCYX), China Pharma Holdings, Inc. (NYSE:CPHI), Kala … (journalfinance.net) Overview on price to free cash flow: SCYNEXIS, Inc. (NASDAQ:SCYX), InfuSystem Holdings Inc. (NYSE:INFU) (stocksnewspoint.com)

    Several research analysts have recently issued reports on the company. Roth Capital assumed coverage on Scynexis in a research note on Tuesday, May 8th. They set a “buy” rating and a $6.00 price target for the company. Seaport Global Securities assumed coverage on Scynexis in a research note on Tuesday, April 10th. They set a “buy” rating and a $4.00 price target for the company. Zacks Investment Research raised Scynexis from a “hold” rating to a “buy” rating and set a $1.25 price target for the company in a research note on Tuesday, May 8th. HC Wainwright assumed coverage on Scynexis in a research note on Monday, May 7th. They set a “buy” rating and a $5.00 price target for the company. Finally, ValuEngine raised Scynexis from a “sell” rating to a “hold” rating in a research note on Wednesday, May 2nd. One research analyst has rated the stock with a hold rating and six have assigned a buy rating to the stock. Scynexis currently has an average rating of “Buy” and an average target price of $4.45.

Top Penny Stocks To Own Right Now: First Financial Northwest Inc.(FFNW)

Advisors’ Opinion:

  • [By Logan Wallace]

    Get a free copy of the Zacks research report on First Financial Northwest (FFNW)

    For more information about research offerings from Zacks Investment Research, visit Zacks.com

Boston Beer (SAM) Hits New 12-Month High and Low at $255.13

Boston Beer Company Inc (NYSE:SAM) shares reached a new 52-week high and low on Wednesday . The stock traded as low as $255.13 and last traded at $255.35, with a volume of 1165 shares traded. The stock had previously closed at $251.50.

Several research analysts have recently weighed in on the stock. ValuEngine raised shares of Boston Beer from a “hold” rating to a “buy” rating in a research report on Tuesday. Zacks Investment Research raised shares of Boston Beer from a “hold” rating to a “buy” rating and set a $257.00 target price on the stock in a research report on Monday, April 30th. Macquarie lifted their target price on shares of Boston Beer from $200.00 to $225.00 and gave the stock a “neutral” rating in a research report on Thursday, April 26th. Stifel Nicolaus lifted their target price on shares of Boston Beer from $169.00 to $235.00 and gave the stock a “hold” rating in a research report on Thursday, April 26th. Finally, BMO Capital Markets reissued a “hold” rating and issued a $210.00 target price on shares of Boston Beer in a research report on Wednesday, April 18th. Thirteen analysts have rated the stock with a hold rating and two have given a buy rating to the stock. The stock presently has a consensus rating of “Hold” and an average price target of $189.08.

Get Boston Beer alerts:

The stock has a market cap of $2.82 billion, a P/E ratio of 42.63, a P/E/G ratio of 3.43 and a beta of 0.48.

Boston Beer (NYSE:SAM) last announced its quarterly earnings data on Wednesday, April 25th. The company reported $0.55 EPS for the quarter, beating the Zacks’ consensus estimate of $0.30 by $0.25. Boston Beer had a net margin of 11.09% and a return on equity of 18.74%. The firm had revenue of $190.50 million for the quarter, compared to the consensus estimate of $174.87 million. During the same period in the previous year, the firm posted $0.45 earnings per share. The firm’s revenue was up 17.8% on a year-over-year basis. research analysts expect that Boston Beer Company Inc will post 7.37 EPS for the current fiscal year.

In other Boston Beer news, VP David L. Grinnell sold 1,000 shares of Boston Beer stock in a transaction that occurred on Thursday, April 26th. The shares were sold at an average price of $235.00, for a total value of $235,000.00. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Insiders sold 4,000 shares of company stock valued at $880,000 over the last quarter. Corporate insiders own 29.20% of the company’s stock.

Hedge funds and other institutional investors have recently bought and sold shares of the business. The Manufacturers Life Insurance Company lifted its stake in Boston Beer by 6.8% in the fourth quarter. The Manufacturers Life Insurance Company now owns 23,669 shares of the company’s stock valued at $4,524,000 after acquiring an additional 1,500 shares during the last quarter. Renaissance Technologies LLC lifted its stake in Boston Beer by 294.3% in the fourth quarter. Renaissance Technologies LLC now owns 41,800 shares of the company’s stock valued at $7,988,000 after acquiring an additional 31,200 shares during the last quarter. Goldman Sachs Group Inc. lifted its stake in Boston Beer by 1.1% in the fourth quarter. Goldman Sachs Group Inc. now owns 123,880 shares of the company’s stock valued at $23,674,000 after acquiring an additional 1,385 shares during the last quarter. Smith Asset Management Group LP lifted its stake in Boston Beer by 12.9% in the fourth quarter. Smith Asset Management Group LP now owns 24,103 shares of the company’s stock valued at $4,606,000 after acquiring an additional 2,763 shares during the last quarter. Finally, Oppenheimer & Co. Inc. acquired a new stake in Boston Beer in the fourth quarter valued at approximately $219,000. Hedge funds and other institutional investors own 73.47% of the company’s stock.

About Boston Beer

The Boston Beer Company, Inc produces and sells alcohol beverages primarily in the United States. The company's flagship beer is Samuel Adams Boston Lager. It sells approximately 60 beers under the Samuel Adams brand names; 10 flavored malt beverages under the Twisted Tea brand name; 20 hard cider beverages under the Angry Orchard brand; 5 hard sparkling waters under the Truly Spiked & Sparkling brand name; and approximately 50 beers under 4 brand names.

Who Is Uber’s CEO?

Dara Khosrowshahi was hired in August 2017 to run Uber, but a lot of our readers are still asking, “Who is Uber’s CEO?”

Khosrowshahi was the CEO of Expedia Inc. (Nasdaq: EXPE) from 2005 until 2017.

And he knows how to make a business – and its shareholders – a lot of money…

VideoWho Is Ubers CEO?
Over the last five years, the EXPE stock price has climbed 111.01%. In comparison, the Dow Jones Industrial Average has only climbed 63.24% during that same time.

And in just two years, the former Expedia CEO helped Expedia’s market cap climb from $8.3 billion in 2015 to $21.75 billion in 2017.

He’s proven himself as a capable leader, but he has a challenging road ahead of him with Uber.

Most importantly, he has to figure out a way to stop Uber from losing billions of dollars each year.

Here’s what Uber’s new CEO will have to change, as well as how you can profit on the tech unicorn even before an IPO…

Uber CEO Dara Khosrowshahi Has a Long Road to Change Uber

In November 2017, Khosrowshahi said he wants to take the company public by 2019, according to a Nov. 9, 2017, CNBC report.

But before that happens, Uber’s new CEO wants the company to stop bleeding money…

moneymorning.com/wp-content/blogs.dir/1/files/2018/05/uber-75×50.jpg 75w, moneymorning.com/wp-content/blogs.dir/1/files/2018/05/uber.jpg 550w” sizes=”(max-width: 300px) 100vw, 300px” title=”” />In an Aug. 30, 2017, CNBC report, Khosrowshahi told Uber’s staff his priority is to “pay the bills.”

In 2016, the ride-hailing app lost $2.8 billion. In 2017, Uber’s losses increased 60.71%, to $4.5 billion.

On top of billion-dollar challenge, the new Uber CEO is tasked with a complete overhaul of the company’s controversial work culture.

There were almost too many scandals to count in 2017 for Uber, but these were some of the most publicized.

19, 2017: Susan Fowler, a former engineer for the company, alleged in a blog post that she was sexually harassed. 23, 2017: Alphabet Inc. (Nasdaq:GOOGL) sues Uber for intellectual property theft. 27, 2017: Former CEO Travis Kalanick asks Uber Senior Vice President of Engineering Amit Singhal to step down amid emerging sexual harassment allegations from when he formerly worked at Google. March 25, 2017: Uber suspended its self-driving car program in Arizona after a vehicle was involved in a crash.

Even though Khosrowshahi may be a great leader for Uber, we don’t want anything to do with an Uber IPO right now.

The company isn’t profitable, and there could be more fallouts from scandals before Khosrowshahi’s tenure that emerge.

However, we still have a way to profit from Uber without having to buy a single share of Uber stock.

Yes, Uber isn’t profitable, but private investors are willing to fork over billions of dollars to keep the company running. Uber has raised nearly $22 billion since 2009, according to CrunchBase.com.

And because Uber seems to have an endless supply of money to pay its bills, the best way to make money from the ride-hailing app is to become its landlord.

BIG, FAST PROFITS: This one pick paid 100% in seven days, then 205% the next day, and 410% by the next week. You’ve got to see how it’s done…

Uber operates in 633 cities worldwide, which means it needs a lot of office space.

Fortunately, you don’t need millions of dollars to buy a building and rent it out to Uber.

Through investing in a specific real estate investment trust (REIT), you can profit from Uber’s growth.

And with a Money Morning Stock VQScore of 4, this company is a must-own…

This Is a Much Better Profit Opportunity Than Buying Uber Stock

Join the conversation. Click here to jump to comments…

Glenmark Pharma hits 52-week low on weak Q4; price erosion in US rises to 12%

Shares of Glenmark Pharma touched 52-week low of Rs 483.60, falling 9 percent in the opening trade on Wednesday on the back of poor fourth quarter numbers.

The company has reported 17.5 percent fall in its Q4 net profit at Rs 151.6 crore against Rs 183.7 crore in the same quarter last fiscal.

Revenue of the company was down 7 percent at Rs 2,279.8 crore against Rs 2,457.7 crore

The operating profit or EBITDA of the company was down 26 percent at Rs 326.8 crore and margin was at 14.3 percent.

related news Bank of India shares tank over 6% on Q4 loss BHEL shares surge nearly 6% on robust Mar quarter show Godfrey Phillips Q4 profit down 22% at Rs 43 cr on weak operating income

The board has recommended dividend at 200 percent i.e. Rs 2 per share for the financial year 2017-2018.

For FY19 the company keep the guidance of 10-15 percent topline growth, while ex-US, the other geographies should grow 10-15% in FY19.

The company has filed 7 ANDAs with USFDA this quarter and registered a price erosion at 12 percent against 10-12 percent in US.

US market will continue to remain a challenging environment for next 4 quarters, company said.

Glenn Saldanha, Chairman & MD, Glenmark Pharmaceuticals said, While FY 2018 was a challenging year mainly on account of pricing pressure in the US, our other key markets like Europe and India performed well on the back of new product launches.

Even though we expect pricing pressure to persist, we are glad that FY 2019 has started on a positive note for us with approval s for some interesting products in the US, he added.

The company at its meeting held on May 29 approved the draft share purchase agreement to acquire 100 percent stake in Zorg Laboratories for an aggregate consideration of Rs 5 lakh before adjustments and subject to legal and financial due diligence.

At 09:17 hrs Glenmark Pharma was quoting at Rs 508.45, down Rs 22.55, or 4.25 percent on the BSE.

Posted by Rakesh Patil
First Published on May 30, 2018 09:29 am