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Dr. Robin McCutcheon
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No matter what Econ101 teaches us -- my tips for you: Follow the money - you'll always find the right answer. Do your own research - do lots of your own research so you know the truth when it hits you in the face. When the data points you in a particular direction, forget theory, go that direction.
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  • Ebenezer Scrooge Is Seriously Misunderstood

    Mr. Ebenezer Scrooge is seriously misunderstood by most people, Dickens included. For the umpteenth year in a row, I’ve watched the movie, A Christmas Carol, with Patrick Stewart as Ebenezer Scrooge, and have finally put pen to paper and vent my frustration. 

    Contrary to popular belief, Mr. Scrooge was a pure Capitalist, as opposed to a crony capitalist. In his own words, Scrooge supported the union work houses, and was of the opinion that those who’d rather die than go to them didn’t deserve his charity. Scrooge’s charity was allotted for the people who proved to be hard workers, like Cratchett’s eldest daughter, who was a factory worker. Like Mr. Ben Franklin, Scrooge's motto was, "I am for doing good to the poor, but...I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. I observed...that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer."

    In the movie, Scrooge was from a middle-class family and had to boost himself up by his own bootstraps. Left nearly orphaned as a young child, he learned the trade of accounting and finance, and worked his way up the corporate ladder under Fezziwig’s careful tutoring. At nearly middle-age, he began his own business with life-long friend and partner, Bob Marley. Their business struggled during the late 18th and early 19th Century, yet became somewhat prosperous, and in late 1836, when Mr. Marley passed on, the business passed to Ebenezer.

    Scrooge vowed to his dearly departed partner, Mr. Marley, that he’d make his counting house the most prosperous in the country. With one clerk, Bob Cratchett, and keen business sense of stock markets, finance and accounting, Mr. Scrooge pushed his counting house into the top of its class, garnering the admiration and envy of other less productive businessmen.

    You see, Mr. Scrooge loved business, not money. He loved the hustle and bustle, the long, straight columns of numbers, the balancing of accounts to the penny, and the importing and exporting of goods and services. He loved business. And because he loved business, every aspect of business, he excelled at it. And, by excelling at it, he became sought after –people paid him more money because he was a shrewd businessman. In fact, Scrooge really didn’t know what to do with all his wealth, so he stored it. And that’s where the trouble starts. People who envied him saw his stored cash and called him stingy and a hoarder of money because he didn’t share it with anyone.

    But, why should he share it with people who he saw working less efficiently or less diligently than himself? Notice that in the movie, Mr. Scrooge was a some-what-lowly born individual, who in the age of a strict class society, used his talents to leap over the other noble born classes of people by building his own empire of money and fame. He worked at becoming the best businessman in the country. His long-time girl-friend left him because he’d leapt over her class, claiming that he loved money more than her. Scrooge didn’t love money, he loved business. If you bother to look, you can see that he was perplexed at the sentiment coming from people who worked less hard than himself at his storing of his wealth. Didn’t you store it until you found what to spend it on? That’s what Scrooge did.

    Scrooge had surplus cash because of finely developed habits of frugality from early in life. He never really new how to enjoy his vast wealth–other than amassing more of it. These frugal habits allowed him to be generous later in life to people for which he had affection, but at the time of his Christmas Eve Nightmares, he had really no idea how to spend all his money.

    Perhaps it was consuming a bad turnip, or British beef as he told the first Ghost of Christmas Past that induced the nightmares plaguing him the night of Christmas in 1842. No one will really know. But, the outcome is there for everyone to see.

    The first Ghost of Christmas Past reminded Scrooge of all the mistakes he’d made. Mistakes for which he was totally not responsible: the death of his mother, the estrangement from his father, the separation from his beloved sister, Fran. But did Scrooge complain? No. He simply threw himself into his work, because in business it’s just about business, not emotions. So, from an early age, Scrooge shut himself off from all his emotions except loving business: it was the key to his survival. For us, the future observer of Scrooge’s tale, it is paramount to recognize that Scrooge accepted the unearned and undeserved guilt of events that were not within his control. In other words, Scrooge accepted guilt for situations that were outside his control. In my opinion, that's just silly!

    During his early to late twenties, while engaged to his girl-friend, he worked diligently at Fezziwig’s Counting House—learning the craft of accounting and finance, but also seeing his boss treating the employees with respectful care. He was strict without being a micromanager. A truly good soul to work for, thought Scrooge, looking back with nostalgia.

    Then, just as he’s starting out with Bob Marley in his own counting house, his girl-friend accuses him of loving money more than her. Poor Scrooge. He didn’t know how to tell her that he could still love her and love business as well! For Scrooge, it was not a "one or the other" situation; Scrooge could love both his woman and his business. But, to survive a bad break-up, he threw himself into his work, burying himself in accounts and measures.

    The second Ghost of Christmas Present shows Scrooge of all the miserable poor people. In fact, the implication is that the poor are more noble in their poor-ness than the person who has spent his lift picking himself up by his own bootstraps. The message to Dickens’ reader, and thus the movie watcher, is that it’s far better to be poor and unhappy than rich. The Ghost implies that Scrooge ought to feel guilty because he’s done well for himself. Unfortunately, Scrooge accepts this unearned and undeserved guilt because his whole life he’s been waiting for other’s to pat him on the back and say, “Well done, Ebenezer!” instead of patting his own back and giving himself his own accolades. Scrooge doesn’t know how to be self-satisfied until the end of his life.

    The third Ghost of Christmas-Yet-To-Come completes the guilt-dumping exercise by showing Scrooge a future that is not-yet certain. Heaping more unearned and undeserved guilt upon himself, Scrooge reasons that if the future can be changed then there is a way out of his nightmare, and he sets out to find the path to rid himself of all the unearned and undeserved guilt.

    Note that Mr. Scrooge does not sit down to rationally think any of this through, which, I imagine would be difficult in the middle of a nightmare. But, he makes some astounding discoveries upon his awakening.

    Discovery #1: he sends a massive turkey to the Cratchett Household, unanimously. Why unanimously? Why didn’t Scrooge announce it to the whole world? Wouldn’t he have gotten his “Well Done!” from the defenders of the noble poor? Perhaps Scrooge reasons that no, that would not be the case, and so sending the unanimous turkey was how Scrooge patted himself on his own back for being a good boss. (Perhaps Scrooge reasons that for some people sending the biggest turkey would be just the start of consessions.)

    After all, he’d always been strict, yet flexible by allowing Cratchett to arrive at work after the 9am starting time. For years, he allowed Cratchett a day off for Christmas at a time when every day that passed was business under the bridge. He mostly ignored how easily distracted Cratchett could be, and kept him employed when in most other businesses Cratchett would have been fired.

    Discovery #2: Scrooge finds that he really does want to be part of a family, and visits his nephew, Fred, on Christmas Day. He begs forgiveness for the sin of being too busy with business, something for which I believe Scrooge did not really feel guilt –but to make amends with family, he was willing to take on more unearned and undeserved guilt.

    Discovery #3: Scrooge did not pay any attention to the nay-sayers speaking behind his back about his newly found generosity. He kept Christmas in his own way, and in his own heart rejoiced and patted himself on his own back. He didn’t wait for others to pat him on the back, he did it himself. That was the best discovery of all...that he kept Christmas in his own way.

    So, you see, Dickens had Scrooge all wrong. Dickens wants his reader to feel that being rich is a bad thing; that being wealthy by inheritance is a far better way of gaining status than actually working and earning the money; that the truly productive business people who do it because they love their occupation is something for which to feel guilt. Working hard in the coal mines was a far nobler occupation in Dickens’ view than being a hard-working, wealthy businessman.

    In this season of Christmas stop and review why you do what you do. Are you doing your occupation because you love it? Are you accepting unearned and undeserved guilt for being the best at what you do? When was the last time you patted yourself on the back, and told yourself, “Job well done!”? If your answers are “Yes”, “Yes”, and “Not in a long time”, then your New Year’s Resolution ought to be: I’ll do my own back-patting in 2012, and lay aside the unearned and undeserved guilt that others try to pawn off on me.

    Final comment: you don’t have to do this, but once you see that the entire story told by Dickens is just Socialism for Christmas, you can get on with the celebration and let go of your long-held, ill-deserved guilt.
     

     

    Dec 14 3:20 PM | Link | Comment!
  • Profit from Socialist Exposure

    First, a bit of history, then I'll tell you how to profit from it.
    December 6, 2011, in Osawatomie, Kansas, a speech was made. In it were the following statements“My grandparents served during World War II. He was a soldier in Patton's army; she was a worker on a bomber assembly line. And together, they shared the optimism of a nation that triumphed over the Great Depression and over fascism. They believed in an America where hard work paid off, and responsibility was rewarded, and anyone could make it if they tried – no matter who you were, no matter where you came from, no matter how you started out."

    And these values gave rise to the largest middle class and the strongest economy that the world has ever known. It was here in America that the most productive workers, the most innovative companies turned out the best products on Earth. And you know what? Every American shared in that pride and in that success – from those in the executive suites to those in middle management to those on the factory floor."

    “…there's been a raging debate over the best way to restore growth and prosperity, restore balance, restore fairness."

    I believe that this country succeeds when everyone gets a fair shot, when everyone does their fair share, when everyone plays by the same rules. These aren't Democratic values or Republican values. These aren't 1% values or 99% values."

    These aren't Democratic values or Republican values. These aren't 1% values or 99% values. They're American values. And we have to reclaim them. You see, this isn't the first time America has faced this choice.”

    The general concept is right. . . This isn’t the first time we Americans have faced the choice of recognizing Socialism-in-your-face. We’ve faced this before, and the general consensus has always been to throw the bums out.

    The following was also stated, Theodore Roosevelt disagreed. He was the Republican son of a wealthy family. He praised what the titans of industry had done to create jobs and grow the economy. He believed then what we know is true today, that the free market is the greatest force for economic progress in human history. It's led to a prosperity and a standard of living unmatched by the rest of the world.

    But Roosevelt also knew that the free market has never been a free license to take whatever you can from whomever you can. He understood the free market only works when there are rules of the road that ensure competition is fair and open and honest. And so he busted up monopolies, forcing those companies to compete for consumers with better services and better prices. And today, they still must. He fought to make sure businesses couldn't profit by exploiting children or selling food or medicine that wasn't safe. And today, they still can't."

    And in 1910, Teddy Roosevelt came here to Osawatomie and he laid out his vision for what he called a New Nationalism. "Our country," he said, "means nothing unless it means the triumph of a real democracy … of an economic system under which each man shall be guaranteed the opportunity to show the best that there is in him." "

    Now, for this, Roosevelt was called a radical. He was called a socialist – even a communist.”

    Roosevelt, by his own words WAS a “Progressive”, a “Socialist”. He liked what Marx had to say. That was why he founded the Bull Moose party, and became the defacto leader of the Progressive Movement in early twentieth century America. 

    That’s right. Roosevelt was a Socialist. And he lost that election in 1912.

    How about we stop pretending that the current Administration are not Socialists? Why do we continue to pretend that they believe in rugged individualism?

    The Administration acknowledges that rugged individualism built this country, but then pretends that it 'didn't really work'.  Are you pretending that, too? That rugged individualism doesn't really work? Do you pretend that your parents and grandparents did not work hard to make the life you have now?

    Why are we, the real rugged individuals, the day-traders and investors, pretending that the Socialists are not trying to steal our country, our rights, and our private property right out from under our noses?

    Roosevelt's mission was the total subversion of the US Constitution to the tenants of Progressive Socialism, the robbing of American Citizens of their Unalienable Individual Rights (Life, Liberty and the Pursuit of Happiness), and the enslavement of every productive person to the needs of every unproductive person according to Marx's Theorem: From Each According to His Ability, To Each According to His Need. The current Administration is happy to help the Socialists complete the mission that Teddy began in 1911.

    Clearly, for those with eyes to see, yesterday, Socialist Party we call Democrats were outted in the 100-Year Anniversary speech. That party is complicit in the robbery of all American’s individual rights. (Before you think I'm only bashing Democrats, better look at the Republican's statements to-date as well.)

    Ok, so, you care very little about Socialists and Communists. That’s fine. You just want to know how to have this piece of information make you more profit.

    History shows us, if you care to look, that when the socialists and communists are nigh to taking over, the economy goes to heck in a hand basket. (Are we there, yet, Mom?)

    If you are one of the productive people, you are in the line of sight of the Administration. Clearly, since you are productive you must be a slave to those who are not productive. You must be your Brother's Keeper.

    Therefore, you have to protect your wealth, and if you’re lucky, build more without having it stolen. Now is the time. The Socialists are speaking clearly that they want to take over. It’s Marx’s ideas, not rugged individualism, they say really work. This is your head’s up. Because generally, from here on out, it gets messy.

    So, how do you profit from all this 'head's upping'?

    Buy gold and silver, in bullion, bars, and mining stocks. Options are fine as well. I still like junior miners Paramount Gold & Silver Corp (NYSEMKT:PZG) and Great Panther Silver Limited (NYSEMKT:GPL). They’re cheap. They’re mining. They’re making money. But other senior miners are good buys, too. Barrick Gold (NYSE:ABX), Gold Fields (NYSE:GFI), Kinross Gold (NYSE:KGC), and Goldcorp (NYSE:GG). Penny stock miners are risky and because they are less than $1, I cannot mention them, but I like them!

    By the way, the Administration stated yesterday that rugged individualism is in our DNA. That's right. It is. And sooner or later that rugged individualism will wake up and boot the Socialists out. But generally that’s a messy affair and when it happens you want to have your wealth protected.



    Disclosure: I am long PZG, GPL.

    Additional disclosure: Macro View, Gold & Precious Metals, Commodities, Politics & Economy
    Dec 09 12:36 PM | Link | Comment!
  • Profiting Off the Animal Spirits of Young, Technology-Driven Companies

    Patrick Allen, of CNBC, wrote, “World Facing ‘Crisis of Capitalism’, quoting George Magnus that “the private sector has no choice but to deleverage, exacerbating the economic impact of the loss of past growth drivers. Untimely financial attrition in the public sector, therefore, is going to add to the economic predicament.”  

    “No choice.” Really? No person has a choice? Not one? Well, perhaps Mr. Magnus has a point, but only in this sense: perhaps people aren’t seeing the big picture, and in avoiding looking at the big picture they are not taking into account all the choices they do have.

    What, you ask, is the big picture? And, the even better question, “How do I see the big picture and make it work for me so I come out of this situation profitably?”

    So, first you must see the bigger picture. And, you must recognize that we’ve seen this picture before, only most of us weren’t born yet when last time this picture was present. The world has faced a crisis of capitalism about 80 years ago, when the industrialized world deleveraged in late 1929. The hue and cry was “capitalism has failed us!” ‘Experts’ assured us that it was all capitalism’s fault, that, and greedy bankers. Sound vaguely familiar?

    Here we are, some 80-plus years later and again the hue and cry is that capitalism has failed us, again. I know what you’re thinking, “If we’ve been here before, and we got out, how do we get out this time?” Production and technology closely connected with a currency of renowned value were our answers last time.

    Most economists are honest enough to confirm that the majority of job growth is generated by small, upstart businesses. These small businesses need to use technology to be productive and profitable with their current number of workers. Apple and Google are the perfect examples of companies that used technology to make their starting companies grow large with technology. Where are our Apples and Googles now? What small businesses are just below the horizon, using technology to grow in which we can invest?

    I have three, fairly risky, buy it and forget it recommendations: TLC Vision Corporation, Advanced Cell Technology, Inc., and Positive ID Corporation.

    TLC Vision Corporation, (TLCV) an eye care services company, operates refractive centers and provides eye care and doctor services in the United States and Canada. It operates in three segments: Refractive Centers, Doctor Services, and Eye Care. The Refractive Centers segment owns and manages refractive laser centers that treat common refractive vision disorders, such as myopia, hyperopia, and astigmatism, as well as provide corrective laser surgery services. 

    Advanced Cell Technology Inc. (ACTC)  Advanced Cell Technology, Inc., a biotechnology company, focuses on the development and commercialization of human embryonic and adult stem cell technology in the field of regenerative medicine. Its embryonic stem cell research programs include cellular reprogramming, reduced complexity program, and stem cell differentiation research programs. The company’s cellular reprogramming involves in the development of therapies based on the use of genetically identical pluripotent stem cells generated by its cellular reprogramming technologies. Advanced Cell Technology, Inc. also generates stable cell lines with particular focus on blood lineage and vascular epithelial cell lines from hemangioblast cells. In addition, it is developing an autologous myoblast transplantation therapy to restore cardiac function in patients with advanced heart disease. The company’s stem cell-based therapy would provide treatment for a range of acute and chronic degenerative diseases. (Michael J. Ray also posts on ACTC here, but no one else seems to be writing about these speculative biotech stocks, yet.)

    PositiveID Corporation (PSID) develops medical devices and biological detection systems focusing primarily on diabetes management, rapid medical testing, and airborne bio-threat detection. It also focuses on the development of microfluidic systems for automated preparation of and performance of biological assays. The company engages in the development of the GlucoChip, a glucose-sensing microchip; iglucose, a stand-alone self-contained unit that automatically queries a diabetic user’s data-capable glucometer for blood glucose data and sends that data through encrypted text messaging to the iglucose online database; Easy Check, a non-invasive breath glucose detection system; and the rapid flu detection system.  

    All three of these companies, while risky as investments, serve as reminders that our entire way of life is built on businesses using technology and taking risks to grow. TLC Vision has over 800 employees among them Prof. Richard L. Lindstrom  founder and attending physician of the Minnesota Eye Consultants, Adjunct Professor Emeritus at the University of Minnesota Department of Ophthalmology, is a board-certified ophthalmologist and  internationally recognized leader in corneal, cataract, refractive and laser surgery. He has been at the forefront of ophthalmology's evolutionary changes throughout his career, as a recognized researcher, teacher, inventor, writer, lecturer and highly acclaimed physician and surgeon.

    Advanced Cell Technology is small and dynamic with 22 employees, among them Dr. Robert Lanza
    world renown in eyeball research and is an American Doctor of Medicine, scientist, Chief Scientific Officer of Advanced Cell Technology (ACTC) and Adjunct Professor at the Institute for Regenerative Medicine, Wake Forest University School of Medicine 

    Positive ID Corp has 18 employees, among them Dr. Jonathan Musher  who has been Vice President for Medical Affairs and Chief Medical Officer of VeriChip Corporation since April 12, 2007. In this position, Dr. Musher oversees VeriChip's medical activities related to the continued implementation of the VeriMed Patient Identification System, including clinical research and medical information. He served as a Consultant of Golden Living Centers (formerly Beverly Enterprises Inc.) He has over 20 years of clinical hands-on medical experience. His expertise spans the spectrum of acute care and long-term care services, from inpatient and ambulatory care through home and hospice care to skilled nursing care.
     

    Note that none of these three gentlemen are couch potatoes and their companies are all working in the direction of better health conditions for us. They’ve been at the forefront of technological innovation and health service for most of their adult lives! Will their companies still be here in five years? With nearly 70 million baby-boomers nearing and reaching age 65, indicating our need for their type of research and health technology, these three companies will probably make it. The question is, are you going to start looking for companies like these three to build your future?

     

     



    Disclosure: I am long ACTC.OB, OTCQB:PSID, TLCV.PK.
    Sep 13 9:41 AM | Link | Comment!
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