The Mark-to-Market Mantra

Replacement accounting is as old as the financial hills. Realistic asset valuation is one of the first things an honest auditor or credit rater will question. These are also means of corruption. Dishonest and inept regulators will mark-to-market their personal portfolios, even as they turn blind official eyes to the savings of the citizens they are sworn to serve. 

Mark-to-market works both ways. You can use the regulatory shield to hide enormous assets from acquisitive eyes. This is the route favored by the Washington elite which builds nest-eggs for retirement while enjoying the vast powers of office. Brands are typical examples of assets that are not reported on financial statements. Land is another basis of manipulation: you can get away with any valuation you like. Greenspan is an authority on this. He not only predicted the housing melt-down, but is a consultant for cronies who have made top-dollars out of the mess. 

Join the powerful since you cannot beat 'em. Use brands and under-stated land values to make a killing out of the current stock market misery. Use retail audits and 10-Q submissions to achieve this. You can also use your hands and feet and generate primary data.

Write to me at drsbanerji@gmail.com or post below if you need top stock picks based on the Mark-to-Market Mantra. 

How to Dodge the Tab for the Bail Out Bill

The world is both global and unipolar. That means we all feel ill when the United States wheezes. The Emergency Economic Stabilization Act of 2008 divides all of us in to two camps: the fortunate few who will benefit, and the masses that will foot the bill. Where do you stand?

Washington's bail out plan has Wall Street pulling unseen strings. It is an 'us versus them' thing. Large banks have proved that trust is for the birds. It is up to each of us to build investment portfolios for retirement that can weather all storms. Here are 5 top leads to a bail out plan that works for you:

1. Invest in the domestic economies of the BRIC block. 

2. Buy stocks of companies with mines

3. Invest in corporations with brands at low and multiple price points

4. Support organizations that use environmental conservation as a competition lever

5. Add biotechnology and nanotechnology to your stock portfolio

Do you need help to make this bail out plan work? Just write to me at drsbanerji@gmail.com

A Stock to Treasure

The NASDAQ trading symbol is sure to catch your eye. However, there is more than a name to draw attention to this wonderful stock. Converted Organics Incorporated turns organic waste in to cash. This is exactly the kind of thing we need to climb out of the current Financial Sector morass. Politicians may spend interminable hours chewing the cud on Capitol Hill, but you can gain most by investing in the right stocks.

The management has acquired appropriate technology for organic waste conversion. This converts avoidable cash outflows in to valuable assets. The company also has long-term lease options in places such as Rhode Island. This makes the late-September 2008 stock price of around $6 a rare bargain. It is an opportunity to grab without delay.

Write to me at drsbanerji@gmail.com or post below for more leads to stocks such as COIN.

Debate Time and Petticoal Mirror Stock Investing

Debate time will not be the useful fun. It is hard to enjoy sparring between Presidential candidates at a time of such financial distress. We can be reasonably certain that Wall Street will get its bail-out in substantial form. However, all we have with respect to jobs, incomes, and homes, are strings of banal statements, and apprantly good intentions.

This is not to say that debate time has to be wasteful/ The trick is to listen intently for what is not said, and the non-verbal communication. Everyone can put best feet forward for the cameras, but it is what goes on behind the hidden portions of podiums that tells the whole story. This is what we learn from the expletives of President Bush, recorded when he thought that no microphones were around to pick up his verbal habits.

The Petticoat mirror has followed hemlines to extinction. Liberated ladies no longer need these aids to check on appendages of modesty and decent upbringing. However, the unscrupulous will continue to use convex optics to steal furtive glances at what most women still like to hide. Fortunately, there are no sanctions against using petticoat mirror concepts in business management and stock investing. Indeed, using markers to detect business issues that executives like to hide, is the crux of top stock investing strategy.

The current economic imbroglio could have been avoided if figurative petticoat mirrors had been used. It would have been apparent that auditors had become parties to valuing assets fictitiously. Similarly, hectic derivative activity could have been reviewed to realize that purchased debts were worthless. I have written about excessive leverage in an earlier post, and even a novice stock investor can uncover this fundamental financial tort.

Use debate time to improve your skills at making profitable stock picks. Learn to sniff out points of discomfiture, and realize that an Achilles heel may lie beneath that part of the surface. A particular candidate may try and dodge debate time altogether, while a more pushy one may prefer to smile and bluster a way through every weak spot. It is the same with quarterly events at which executives and Boards meet with stock owners.

Fortunately, the last lap of 2008 debate time and a reporting season will coincide. Use the confluence to your advantage, or write to drsbanerji@gmail.com if you need a financial concierge to get stock skeletons out of your retirement portfolio.

What If You Were Responsible for JP Morgan Chase Business and Stocks?

The JP Morgan Chase & Co stock seems to be a rare gem of a Financial Sector stock. The September 25 2008 stock price crossed $43. The price was well under $30 not so long ago. The Price to Earnings Ratio remains comfortably below 15. The Forward Price to Earnings Ratio is slated to fall below 11. What distinguishes this stock, and are investors right in their support of the iconic Money Center Bank?

Purchase of a peer in distress seems to have triggered contrary stock price movement. Is the JP Morgan Chase & Co management right in its appraisal of the Washington Mutual business? I do not think so.

JP Morgan Chase & Co has earned less than 1% on Average Assets during the last one year. Who can be sure how much the assets may be worth in reality? What if the Fed selectively bails out competitors who take more profitable risks? The Payout Ratio of JP Morgan Chase & Co is more than twice the norm for its industry. This raises questions about the long-term commitment of the management.

I can point you to stocks with better sensitivity profiles to their Forward Price to Earnings Ratios. Do not follow the stock market herd. Write to me at drsbanerji@gmail.com to know more.

Business Management and Stock Investment in a Bush Economy

The Laws of a Jungle serve the mighty. Might is Right and Cash is King. The Ruler has control over shared resources, and can even conjure virtual ones. The Bush bailout is selective, and by all accounts, deliberately so. Click to another page if you are a part of Wall Street. Stay on this page if you have no connections with the Fed.

Small, independent, and ignored eco-systems are part of any jungle. Large carnivores are most prominent in their naked lust, but there are many small critters that carry on business as usual. The Regional Banks industry is a top example of this phenomenon. Many unsung heroes of the blighted Financial Sector in the United States. Allies of this once-great nation may hang on to every word that Washington utters, but the real action is at Ground Zero in the hinterland.

We have similar situations in many industries and countries as well. A macro part of the economy languishes in mis-management, while individual stocks continue to perform on par. The reverse may also be true. It appears that Freakanomics works for the stock market just as it does to understand sumo wrestling and the profits from growing opium in Afghanistan.

The good news is that you can continue to rake in the moolah even as politicians, bureaucrats, and their ilk continue to struggle with the monster of unbridled and corrupt capitalism. It is simply a matter of diligent Business Management. Get back to the basics of evaluating the worth of an enterprise. Craft strategies based on facts not dromology.

Write to me for effective ways to shore up your business in trying times, or to build a valuable stock portfolio. You can also post below.

 

The Nicolas Sarkozy Way of Business Management

I must confess to confusion over the following link:

http://www.eubusiness.com/news-eu/1222182157.67

Does Nicolas Sarkozy wish to suggest that business is not regulated? Every financial institution, including the ones on Wall Street, are audited at least once a year. Each corporation has a governing Board. All management teams report to their stock owners once a quarter.

The Basel norms for prudent banking and investment have been around for years. The United States stands out for refusing to comply with professional safeguards for banks.

What will a new world summit achieve? I think it is better to merely ask regulators to do their jobs. This is important for stock markets, because each exchange has its own regulatory mechanism. NASDAQ stands out for being ruthless in de-listing corporations that do not meet regulatory norms. It is different from the NYSE in this respect.

A first step that all of us can take is to switch our investments to stock exchanges that are professionally managed. The stock market is an adequate model of the 'regulated capitalism' that Nicolas Sarkozy would like to reinvent.

You can build a resilient portfolio of valuable stocks regardless of what happens in Washington and Wall Street. You can enjoy dividends that beat the bank rate, liquidity when you need it, and overall, financial security. Business Management has all the prescriptions you need. Write to me at drsbanerji@gmail.com or post below if you would like my help in building a portfolio of top stocks.