Friedrich is the name given to our algorithm for analyzing companies that trade on the global stock markets. In creating Friedrich we concentrated on analyzing each company’s Main Street operations through various established ratios, along with our own unique ratios that we developed over the last 30 years. What we came up with is a final "Main Street" price per share based on Generally Accepted Accounting Principles (GAAP), which is a framework of accounting standards, rules and procedures defined by the professional accounting industry, which has been adopted by nearly all publicly traded U.S. companies. We feel that our Main Street price result is what each company would need to trade at in order to be attractive to a businessperson on Main Street looking to buy at a bargain.
Since the only constant in the universe is change, the results for each company fluctuate by varying degrees. No company is an island unto itself, but each operates in a world of constant change and at times in areas where Chaos is the norm. By analyzing a company’s Main Street operations over time, Friedrich is able to give the potential investor a decade long analysis (opinion) as well as offering a Trailing Twelve Month (TTM) analysis (opinion), as well. Thus our readers will not only get as close to a real time view of operations on Main Street as is possible, but then can measure the consistency of the company’s operations over time to determine if s/he should invest or not.
Through our Friedrich algorithm we can analyze ten years of Balance Sheet, Income Statement and Cash Flow Statement data for each company all at once and generate one final result in seconds. Friedrich was designed to be ultra-conservative and thus will cut zero slack to any company under analysis and will do so with zero emotion. Companies must be exceptional in order to get an attractive Main Street valuation and the ideal investments according to our backtesting are the ones that have been consistent over time.
By being so ultra conservative Friedrich is designed to identify bargains that Wall Street investors may have overlooked. Companies shares may trade on the stock market but the companies themselves operate on Main Street, so Friedrich is designed to generate a Main Street price per share first and only then does he go to Wall Street and see the price for which Benjamin Graham’s “Mr. Market” is offering the shares.
The Chinese already got rid of their US dollars and US bonds by getting loans and credit lines from American and European banks collateralized against US bonds (thus US dollars). That's how the Chinese HID the fact that they already spent the dollars they have so as not to crash the dollar's exchange value before they got rid of them all.
The Chinese are buying natural resources and profitable Companies throughout the world. They will announce the effective extinction of their dollar reserves once they're done shopping with the last of their (borrowed) US dollars and crash the US dollar(s that they own outright) in the process while revaluing the Chinese Yuan 200-300% in one fell swoop and thus greatly enhance their purchasing power instantaneously.
(The US bonds that the Chinese now hold on paper are mere instruments of financial mass destruction to be used at the most opportune moment. Do you really think that the Chinese are that STUPID and did nothing to protect themselves when we are screaming in their faces 'til we ourselves are blue in the face that we are going to INFLATE the dollar into oblivion and repay our debt to the Chinese with electronic digits that are worth NOTHING?)
On that day (which will be in early 2012 but possibly before that), your wealth will disappear if it was still denominated in US dollars.
Why do you think the Fed lowered US interest rates to practically ZERO? On the face of it, such interest rate policies are counterproductive for (1) they scream market manipulation and economic irresponsibility and (2) they reek of irrationality, for any viable business can generate 5-20% return on capital and thus is perfectly capable of absorbing 2-3% interest rates as the cost of doing business. The REAL reason for the Fed's zero interest rate policy is the Chinese. The Chinese DEMANDED and obtained zero interest rates, for they are not interested in holding depreciating US bonds which only represent the "faith and credit" of a bankrupt people who reneged on their own contractual and legal obligations -- including the US Constitution. The Chinese acquiesce to playing the monetary musical chairs game as long as America (the Fed) gives them dollar credits that they can freely spend, collateralized against the US Bonds that the Chinese own. This way, everyone gets to have their cake and eat it too -- for a little while longer at least. The Chinese get to spend their dollar-denominated reserves without crashing the dollar's value and the Americans can pretend that foreign investors are willing to invest in US debt because the dollar is as good as gold...
The US dollar is a PLAGUE and pure FRAUD.
FRAUD=NOT a good investment.
Leave the sinking ship behind! Save yourselves from USA Titanic by jumping into the economic lifeboat known as GOLD (and SILVER)!
What a disingenuous article.
Gold is a flat line between 1900-1972 because the currency was, by law, fixed to it.
So lets use your math and go back and recalibrate our answer.
Gold rose from $35 to ..hmm.. current prices.. we'll call it $1350 to close the year out in 38 years. Or an increase of 3857% ... Meanwhile the DJIA was 900 in 1972 ... and is about 11500 now. Or an increase of 1277%
My simple math tells me that the Dow hasn't kept pace with the price of gold over the entire course of US history where we've had a fiat currency.
I'm sorry.. you were saying something? You're either wholly disingenuous, in which case this article is malicious. Or you're a moron, in which case please. PLEASE keep selling gold. We need you on the other side of this trade."
Brian Bleifeld is a CPA who has a hobby of analyzing markets for small inefficient behaviors. Markets Brian likes to investigate Financial, Sports, Social, Political Capital and Internet trends.
Since some of his findings involve financial areas he posts content on Seeking Alpha.
Brian is a graduate from Texas A&M University and Sam Houston State University in Texas and holds a BBA in Accounting and a BA in History. He is a financial controller for WorleyParsons an ASX traded engineering firm. Brian also runs the website www.LibraryofTea.com which contains articles and videos about the love of tea.
You can find him
Linkedin at http://www.linkedin.com/in/bleifeld/