2008 December « Enterprising Investor Forum

Born to Steal: G. Weiss Monday, December 15, 2008

Posted by ei-forum in Book Reviews.
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born-to-steal1

Not really and investment book or guide but still a great read!

Gary Weiss recounts the story of Louis Pasciuto who went from just being a kid on the street to a million dollar earning ‘not-so-legit’ broker connected to the Mafia in just a couple of years.

The tale has it all: the money, the power, the strippers, celebrities, mafia beatings, wise guys, etc.. and as usually happens, Louis ended up being just another bright but shooting star, finally having to become an FBI informant to safe his own life…

The book offers a different look into Wall Street and what role the Mafia played in chop shops (basically, fake brokerages pumping/selling penny stocks), bucket shops and in the overall scheme of things. In certain ways it is similar to the tales of the real Wall Street from the 80s but the main difference here is that it shows you the other side of the Street, the one controlled but the Mafia but in a strange kind of way (apart from the beatings and other obviously violent/illegal activities), there are quite a few similarities.

Definitely worth reading – Enjoy!

We’re Back! Monday, December 15, 2008

Posted by ei-forum in Miscellaneous.
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Indeed, we had trouble posting this past week but we’re back at full speed as of today!

More to come soon….

OIL: How long will this last? Wednesday, December 3, 2008

Posted by ei-forum in Miscellaneous.
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Using the iPath Crude Oil Index (OIL) in this graph, we wanted to highlight the spectacular fall in crude prices:

The question most people are asking is: How long will this last? Well, apparently, the technical specialists seem to think that there could be another 50% slide from current prices and more fundamental analysis also suggest a bit more down side, but not more than another 20%. However, the bottom line is that, as the worldwide economy worsens and governments fight to get countries back on track, OIL prices will suffer.

One of the key issues here is how OPEC will deal with the slow-down and if they will start to adapt supply but cutting production. This is a tricky balancing act as if they cut too much, once things start to get better the increased demand will probably lead to a jump in prices and with speculators jumping back in, we could see another prolonged spike. On the other hand, if prices fall below 35 USD per barrel, something drastic might have to be done, as this seems to be an important P/L benchmark for the OIL industry (most planning is done at 50-55 USD levels – meaning a 40-50% gross margin).

Nevertheless, what is safe to say is that:

Commodities always follow these kinds of cycles
The world is far from being able to replace OIL will alternative energy in the short-term
The world-wide economy will slowly recover and so will emerging market growth
We feel it is extremely likely that OIL prices will move back to a minimum of 80 USD per barrel in the next 12 months.

As always, we welcome your comments!

Cramer: Obama Good for Markets Tuesday, December 2, 2008

Posted by ei-forum in Investing.
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It’s been a while since we posted something from Cramer.. here he argues that the President-elect’s stimulus plan creates a more confident market by acknowledging the issues America faces and by putting in place a team to tackle these issues: