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Illuminati Investments
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Aerospace engineer who is seeking to learn as much about investing as possible in hopes of one day managing more than just my own money.
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  • Merger Mania!

    In honor of some of the questionable deals we've seen lately, such as Microsoft (NASDAQ:MSFT) buying Minecraft maker Mojang for $2B, to Amazon (NASDAQ:AMZN) shelling out $1B for Twitch, which allows people to watch other people play video games (seriously), I thought I'd speculate on some other illogical tie-ups that could happen as merger mania and irrationally exuberant acquisition action kicks into high gear!

    1. Clothier Chico's FAS (NYSE:CHS) buys a privately held restaurant chain to create the chic burger joint White Castle / Black Market, which satisfies the cravings of middle aged women and stoners with the munchies.

    2. Soon to go public Shake Shack buys the rotting carcass of RadioShack (NYSE:RSH) in order to further their aggressive expansion onto every street corner, strip mall, airport, and gas station. Shake Shack Shack should fetch a high valuation since it offers an exciting business model with almost no competition, other than McDonald's, Burger King, Wendy's, Whataburger, In 'n Out, Five Guys, Smashburger, etc...

    (click to enlarge)

    3. Shopping center REIT Kimco (NYSE:KIM) weds pipeline MLP Kanye Anderson (NYSE:KYN) to form Kimye, parent company of NorthWest (NYSE:NWN).

    4. Uranerz Energy (NYSEMKT:URZ) becomes an unlikely white knight to rental car company Hertz (NYSE:HTZ), which was under siege from Carl Icahn, who said "At least I got what I wanted from you shareholders and made Uranerz-Hertz in the process."

    See any other potential deals you think would be as absurd as these? Let us know in the comments section!

    Disclosure: The author is long MSFT.

    Sep 16 7:47 PM | Link | 1 Comment
  • Time To Play Benioff Buzzword Bingo!

    With salesforce.com (NYSE:CRM) about to report earnings, it's almost time to play everyone's favorite game: Benioff Buzzword Bingo!

    To play, just print out the Bingo card below and listen to the quarterly earnings call to see how many words you can match:

    (click to enlarge)

    Or make your own card and try to predict which superlatives our blustering, bombastic, big-talking baron of balderdash babbles, blabs, and blurts out! Phenomenon-GAAPreposteroustaculargemendous!

    Aug 17 9:18 PM | Link | 5 Comments
  • Kandi: The World's Greatest Non-Candy Company

    Wouldn't it be nice to invest in the best business in the world? Now, I don't want to hyperbolize, but I believe I have uncovered the greatest investment opportunity in the history of the universe. This perfect company goes by the sweet name of Kandi Technologies (NASDAQ:KNDI). Now, I know what you're probably thinking: "Mmm, candy..."

    If this is the case, you're either A) Homer Simpson, or B) Hungry. Why are you still reading this? Go fix yourself a snack or grab some actual candy, because it's going to take a while to describe just how incredible this company is.

    Are you back? Good. Anyway, contrary to what you were probably thinking when on your candy break, the company Kandi is actually a manufacturer of Electric Vehicles in China. Now, wait just a minute, you ask out loud, causing your spouse, dog, or coworkers to look at you like a crazy person, "Isn't China irredeemably corrupt?"

    The answer, of course, is yes. But it's only their politicians. Oh, and some of their CEOs. So basically it's exactly the same as here in the good old US of A, except slightly less socialist. The main difference is that they have a much larger population than us, the US. Wikipedia, the main source of information for lazy writers like yours truly, estimates that they have over 1.3 billion people. That's billion, with a B. Or whatever letter of the alphabet that "billion" starts with in Chinese.

    But, no matter how you ignorantly translate it, this is a fairly large addressable market. If every man, woman, and child in China were to buy an electric vehicle, this could help solve global warming, assuming it is not a myth. An affordable electric vehicle, that is, not global warming, which is clearly a scientific theory, like Intelligent Design. All of these (except ID, which, unlike here, their backward education system doesn't allow them to teach) Kandi can help solve, perhaps mainly by causing a bit of a traffic jam, as many urban Chinese are not used to driving, especially the aforementioned children.

    But, no matter, Kandi has a solution to this problem as well, which will probably allow them to gain considerable market share in China, as well as in other progressive countries like California. This is a revolutionary CarShare program, where the vehicles are sold not directly to consumers, but rather to cities, which will then rent them out of high tech garages to make them more accessible to the masses. Especially the aforementioned children, who will probably be the only ones capable of operating such an advanced technological system. Now, if you'll excuse me for a sec, I have to go ask my 6 year old nephew to show me how to cut and paste an image of the car sharing garage into this article...

    Ah, there we go. Wait a minute, buddy, how do I make it larger? I can't read it without my glasses! Come back here! Ah, never mind, it'll have to do, with the added benefit that the image of the car in the photo is now shown at actual size. What, you were expecting some big honking road hog like we drive here in the States to compensate for our physical and fiscal insecurity?

    No, the Kandi electric vehicle is perfectly sized for the Chinese market. Not because the people there are small, that would be presumptuous to presume, as well as possibly racist even though perhaps factually true. Except for Yao Ming, obviously, he probably wouldn't even be able to stand up in the garage, much less fit into the actual car.

    But anyway, to arrive at my point in a roundabout way, street smart pun intended, the space saving design of both the garage and car is perfect for China's crowded cities, where space is at a premium. Also, fresh air is at a premium as well, with smog approaching pea soup thickness in some cities. Or to use a more appropriate culinary analogy, egg drop soup thickness. Or egg drop soup with peas thickness, although I hate when restaurants ruin perfectly good egg drop soup with vegetables!

    Regardless, air/soup quality is a major problem that Kandi's product can help solve. Well, not the soup problem, as the electric motor on these cars is not quite powerful enough to run a blender at a high enough speed to get the right consistency in a soup. But it does power these cars at speeds up to 30 mph, which is even faster when translated into kilometers per hour, or whatever unit of time the Chinese use. I believe it is the yuan, since after all, time is money in any language.

    So, assuming the exchange rate stays constant, you can cruise along in your Kandi EV at up to 48 km/yuan, which may or may not be the speed limit in China, but I'm too lazy to even bother looking it up on wikipedia. But won't driving at such a high speed drain the battery, leading to performance anxiety? Did I say performance anxiety? Sorry, Freudian slip, I meant range anxiety. Range anxiety, of course, is the fear that your battery might not have the juice to go all night long. Or day, if you're driving in the daytime, which come to think of it is probably much more likely and less of a double pun-tendre.

    But, having beaten around the bush long enough before reaching my climactic point (I've found the trick is to think about baseball), I will now reveal that Kandi's solution to this problem is a battery exchange system, shown as follows:

    This QBEX system, short for Quick Battery Exchange Xstem, quickly and easily swaps out a flaccid battery for a fully charged one, like electric Viagra. If this system looks familiar, it's probably because Tesla (NASDAQ:TSLA) blatantly ripped it off for their own battery swap system. This is no surprise, given Elon Musk's history of stealing great ideas, for as everyone knows the Winklevoss twins really invented the Model S. But I wouldn't trust Tesla's Supercharger, a grandiosely named but clearly cheap knockoff product, since have you ever tried generic versions of Viagra? No, of course not, me neither. It was a rhetorical question, what are you implying?

    However, even though Kandi has had to put up with the corporate espionage of lesser electric vehicle manufacturers, they have managed to keep research and development spending in check. In fact, since completely overhauling their product lineup from their legacy ATV and go-cart business to become a global electric vehicle powerhouse, they have only spent several million dollars per year on R&D. Contrast this with the irresponsible wasting of several hundred million taxpayer dollars per year, which Tesla has dumped into boondoggles like R&D with not much to show for it, other than the greatest car of all time.

    But this is nothing compared to what Kandi has been able to achieve, not only an impressive lineup of small appliances/vehicles, but also all the impressive infrastructure to support them like smart parking garages and battery exchange systems. To imagine that Kandi has developed all this on a mere hundredth of the R&D spending, fills my mind with wonder until it strains the credulity of my tiny brain. But of course this can be easily explained when you consider that unlike me, Kandi's founder and CEO, Xiaoming Hu, is a certified genius. Yes, he literally has a certificate, as you apparently can get any sort of official document drawn up in China for the right price.

    But, all kidding aside, which would have made this article quite a bit shorter and probably saved some eInk and eIQ points, the man must be brilliant to have built such an incredible company with so many innovative products on such low R&D spending. Apparently he retained some patents from his illustrious career as a government scientist, which he donated to Kandi pro-bono, which is Latin for "in exchange for a majority stake". These decades old patents laid the foundation for Kandi's impressive lineup of EVs, which may be why most of them look somewhat like a Yugo from the early '90s.

    But say what you will about aesthetic styling, Hu was ahead of his time. You might say he was first, well ahead of when Tesla got into the game. Hu was first, and with his design, the battery responds with power in a second. I'm not sure even Tesla can match that acceleration, and I can't even name the third place finisher in this contest. So to recap: Hu's on first. Watts are second. I Don't Know's in third.

    So in conclusion, Kandi Technologies has developed a cutting edge product for a huge market at a very low cost, which is the holy grail of business. And you can buy a share of this company and own 100% of Continental Development Limited, which owns 100% of Zhejiang Kandi Vehicles, which owns 30% of Jinhua Three Parties New Energy Vehicle Services Company and 50% of Zhejiang Kandi Electric Vehicles, which owns 100% of Kandi Electric Vehicles and 19% of Zhejiang ZouZhongYou Electric Vehicle Service, where Zhejiang Kandi Vehicles owns 100% of Yongkang Scrou Electric, 90% of Kandi Electric Vehicles and 50% of Jinhua Kandi New Energy Vehicles, which also owns 10% of Kandi Electric Vehicles.

    Obviously, this labyrinthine corporate structure is for the benefit of shareholders, to get around Chinese ownership laws, allow them to more easily form lucrative joint ventures, and/or to save on taxes, or something similar that sounds good in SEC filings, when they actually bother to disclose relevant things like that in them.

    But hey, that's just a minor issue when you own the greatest company in the world. I'm sure their impending massive profits will eventually find their way back into your pocket. After all, you're certainly not a fool for reading this story today and wanting to buy the stock, so the joke's on those who merely laugh at this article and miss out on these April showers of profits.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Apr 01 1:46 AM | Link | 26 Comments
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