Free Money Trade

LONG ATPGP (ATP Oil & GAS Preferred stock) Yielding 16% + 11.25% Face SENIOR BONDS (ATP Bonds Cusip # 00208JAE8)  vs DEEP OUT OF MONEY PUTS = Company either Bankrupt, puts save you, or debt keeps paying, you can slowly cover your puts for cheaper if the company keeps performing using dividend proceeds. Very nicely hedged, little downside apparent because assets of these guys at current oil prices at a bankruptcy auction are going to be bid up considerably. Oil is at $110. They have a ton of it and some top of the line technology (link to octagon review) They have some awesome real estate for deep oil gulf drilling as well as a potential home run in Israel's off shore Natural Gas shale.

***CAUTION*** 

 Trading pink sheet securities are NOT regulated like NYSE or NASDAQ listed securities. You are not due a fill even if the stock trades below your limit order. It's the Wild West out there, you have to be extremely careful, or you WILL GET BURNED. A market order will nearly ensure that you receive a price 10% higher than the previous print. Only use limit orders when trading pink sheets and never enter your entire position in one trade. Patience will help you achieve a good average price. Buy in 1/3 to 1/4 increments of what your total preferred exposure would be, using time to gain a feel for the trading style of this lightly traded preferred.

 http://seekingalpha.com/article/439131-how-to-invest-in-the-most-undervalued-asset-in-the-world-natural-gas

Which Way are the Markets Headed Next?

With the whipsaw action seen recently in ther international markets, many retail, professional and hedge fund investors are all thinking the same thing. Which way is the market headed next? Do we crash back down to Dow 1000? Or is it possible that the 'speculators' push the markets back up to challenge recent highs?

Thinking with the extremely greedy part of my brain I decided that the money would be much easier to make if the market was slowly marched upwards, rather than attempting to crash to further lows. Lets face it, fear and blood were in the streets. Pundits were panicking. Europe is eternally doomed. The USA is no longer considered AAA sovereign credit in a world of easily printed fiat currency.

Everyone knows that. The resolve the market has shown in the past few days to battle back from an overnight panic low will absolutely prove that the lows for 2011 are in. I may be a maniac or a pollyanna, but I truly think that now the game is different. Bernanke said safe investments are worthless until "mid-2013" at least. I can smell the greedy money on the sidelines waiting for a chance to put their riches to work. No one likes earning 0% on a CD or T-bill.

We will challenge our highs for the year in the upcoming 6 months. The fast money will pile right back in once the theoretical 'all clear' signal is given by Bernanke via QE3 or some positive economic numbers. In the long run, markets want to go up, and money needs to be made. There is always a bubble somewhere, and Bernanke is committed to making sure that our stocks are not going to be the first one to burst.

Long NCT, HGT, SJT, GAIN, MPB, VLCCF, FRO, JMF (all recent purchases)

Citron Research Going 'All In' on Short of Harbin Electric

It is now apparent that Andrew Left and the short sellers at Citron Research have risked their well-known reputation on their continued attack on Harbin Electric. It has been made clear throughout SEC filings, the buyout financing by China Development Bank and other regulatory statutes have been (to date) satisfied. The only thing investors are waiting on is a definitive proxy statement and a date for the vote in favor of the management led buyout, including CEO Tianfu Yang and Abax Capital, as well as other insiders. 


The past successes of Citron Research have possibly led to a high-level of hubris and shoddy detective work. Many of the accusations are supported by innuendo, guilt-by-association, and selective fact checking. The latest attempt at a 'hit job' came today and the stock was punished severely (being down 19% intraday). As the investors had time to read through Mr. Left's sloppy hit job, the stock ended up recovering and finished the day up nearly 5%. 


It obviously helped that Harbins' CEO Yang came out and stated a very clear rebuttal of Citron's accusations, saying, "a patchwork of fabricated evidence, falsehoods, selective use of information, and clearly biased and dishonest reporting, showing that the authors' only intention is to drive our stock price down. We are aware that there are over 7 million shares of short interest outstanding as publicly reported. We condemn this attempt to further hurt our shareholders and want to reassure them, once again, that we stand by the accuracy of all our filings with the Securities and Exchange Commission ("SEC"),".


I understand not being able to change your opinions and 'sticking to your guns', but according to this Bloomberg article, the owner of Citron research (Andrew Left) was, "disciplined by the National Futures Association for accusations in 1995 that he “cheated, defrauded and deceived commodity futures customers,” according to the association’s website."


"Let he who has not sinned cast the first stones" 


Mr. Left would do well to remember that sacred script. He is doing what most Americans would consider unethical and shady. Printing half-truths and poorly thought out 'gumshoe detective work' on his website without any clear evidence of any legal wrong doing. This is all while he has a devout horde of short-seller subscribers that are short Harbin Electric. (His firms' track record on Chinese stocks up to date is commendable).


This is another blatant case of using the idiocy of the crowd who copy trades without due diligence in any meaningful way. A poop-and-scoop, if you will, rather than a pump-and-dump. It appears to most who have watched this circus that Citron Research has decided to roll the dice of its long-term credibility on the outcome of this buyout. The reporting work and facts presented are all but concrete and clearly based on innuendo and misleading information. It is a shame that what started out as a seemingly helpful researcher to investors, now appears to be nothing more than another greedy short-selling outfit all about the cash, not the truth.

Top 5 Stocks to Buy on a Market Correction

I am going to share with everyone stocks on my buylist for purchase during the ongoing correction, especially if we get a 5% selloff day with Greece/Euro panic or another flash crash type glitch.

1. CSR - China Security and Surveillance is in the midst of a management led buyout and there is significant premium on the table for those who are willing to wait the 4-6 months until it closes. 50%+ premium on the table for those who are not too chicken shit to invest in anything Chinese.

2. GST - Gastar is a small E&P that is highly levered to the marcellus shale play and has a very advantageous JV setup to lower their drilling cost for the next year. They have great opportunity to see prices above the $5.00 range once they start showing they own some great assets and reporting drilling statistics. They have a ton of wells coming online in Q3-Q4 in the 'wet' area of the marcellus. You want to get in this guy as close to $3.00 as possible for a trade to $5.00+.

3. ATPG - This is a highly levered oil play that is inolved in drilling offshore Gulf of Mexico and has some fantastic production capabilities. They have been hampered by the governments lack of business insight in delaying the responsible drillers ability to produce oil in the Gulf however, and have been punished accordingly. This will be a $25 stock within a years time. Buy close to $15.

4. Large Cap Technology companies with decent Growth possibilities as well as very strong balance sheets. I would include (DELL, MSFT, NOK, HPQ, GOOG, AAPL) on this list, and place your buy orders approximately 5% down from current prices. These offer good long-term value to prudent investors.

5. C - Citi Group. I know, the widely talked about bank also known as Shitty Group. Surprising pick for me as well, but out of all the domestic banks, they have the largest global footprint, and therefore probably the best growth capabilities going out 1-3 years. If the banking sector keeps getting slaughtered this is the pony to bet on. Buy this little slut around $37 if the market takes a dump.

6. Others to consider: EROC, NCT, MPB, AIG, KOG.

And remember, don't be a peasant, don't panic, and be a skeptic. The overlords of Wallstreet will not continue to manipulate and rob the average citizen of their assets if we wake up and quit acting like sheep. I am here to help guide individual investors and lead the revolution against the Wall Street manipulators/speculators who would sell their grandma up river for a gold coin.

Finding Value in Coffee Holding Co. (JVA)

Coffee has two virtues: it’s wet and warm.


A cup of coffee shared with a friend is happiness tasted and time well spent.


No one can understand the truth until he drinks of coffee’s frothy goodness.


I don’t have a problem with caffeine. I have a problem without caffeine.


Chocolate, men, coffee – some things are better rich.


The morning cup of coffee has an exhilaration about it which the cheering influence of the afternoon or evening cup of tea cannot be expected to reproduce.  


and my favorite


I believe humans get a lot done, not because we're smart, but because we have thumbs so we can make coffee.


Ok, now one to making money.


While Coffee Holding Company may not be a direct competitor to Starbucks (SBUX) any time soon, but they do offer a great value in the delightful coffee industry. We all know a great cup of coffee keeps the world spinning round, and it is also common knowledge that people will skimp on their breakfast before their coffee. To be able to invest in a $20MM market cap., family owned and operated business for a P/E ratio of 9 is a no-brainer. 

From  CoffeeHolding.com,

Coffee Holding Co., Inc. (CHC) is a family operated business for over 30 years. The management and operating team at CHC represents three generations of committed, knowledgeable professionals.


Andrew Gordon, President, CEO, and CFO
Andrew Gordon has served as Chief Executive Office, President, Treasurer and in the capacity of director since 1997 and as Chief Financial Officer since November 2004. He is responsible for managing our overall business and has worked for Coffee Holding for over 21 years, previously as a Vice President from 1993 to 1997. Mr. Gordon has worked in all capacities of our business and serves as the direct contact with our major private label accounts. In addition, Mr. Gordon publishes a weekly report that is distributed to our customers and is perceived by many of his peers and customers as a coffee market expert. Mr. Gordon received his Bachelor of Business Administration degree from Emory University. He is the brother of David Gordon.


David Gordon, Executive Vice President and COO
David Gordon has served as Executive Vice President—Operations, Secretary and one of our directors since 1995. He is responsible for managing all aspects of our roasting and blending operations, including quality control, and has worked for Coffee Holding for over 23 years, previously as an operating Manager from 1989 to 1995. He is a charter member of the Specialty Coffee Association of America. Mr. Gordon attended Baruch College in New York City. He is the brother of Andrew Gordon.


Sterling Gordon, Founder
Sterling Gordon founded Coffee Holding Co., Inc. in 1971. He possesses over 50 years of experience in the coffee business during which time he has developed a reputation in the industry as an expert in coffee blending and quality. He is the father of Andrew and David Gordon.

Also, insiders still own 53% plus of the float, I doubt they will be willing to sell at the $4.00 level. The float is currently listed as being only 1.42MM according to Yahoo!Finance. That means ANY positive news, and this stock is above $5.00 in the blink of an eye. A 25% gain in this market is nothing I am willing to pass up. 


From their website regarding the newest coffee sensation to enthrall the elites, artists, and youths of America, Specialty Green Coffee.

"Coffee Holding Inc. purchases only the finest specialty green coffee from around the world. The coffees are cupped prior to shipping from origin and upon arrival in the United States must meet our demanding standards. Our cupping team includes Sterling, David, and Karen Gordon who collectively have over 75 years of experience. Everyday we cup new offerings from around the world striving to provide the best selection for our roasting clientele. We have grown our offerings to include Organic, Fair Trade, Rainforest Alliance, and Utz Kapeh certified coffees. Using our roasting experience and years of industry knowledge, our helpful staff is willing to aid all of our customers in selecting a single origin offering or the blend that works best for their business."

The bottom line is, you get an extemely under-valued coffee company including a family-based management team with over half a century experience in the coffee business. They also have their own incentives clearly aligned with shareholders with their sizeable insider stakes in the company. The fact that this equity's price remains so subdued is greatly influenced by the lack of public recognition of this security. I would put a true intrinsic value of this company based on buyout potential at this moment at approximately $7.50. 

10 Chinese Value Stocks with < 10 P/E

While I have been patiently waiting for the market to correct from irrational levels, I have been running methodical screens and diligently creating a 'buy list' in preparation for lower equity prices. Today I am going to share with everyone 10 Chinese companies that have shares listed here in the USA, and that I feel warrant further investigation upon continued equity weakness.

Chinese equity issues offer an attractive investment opportunity for American investors because the well known divergence of foreign equities compared to domestic markets. While these shares are traded on domestic exchanges, they are ownership stakes of companies whose primary business is in China. As most investors know, the US equity markets have greatly outperformed Chinese equities in the past year, mostly due to artificial stimulation and support of stock prices by our Federal Reserve. Now may be a great time to rotate out of high-flying US stocks and rotate into some unloved Chinese value companies with strong fundamentals before QE2 ends.

I have chosen these Chinese stocks for my buy list for multiple reasons:

1. They are currently out of favor with hedge funds, mutual funds, average investors, and the mainstream media outlets.

     2.  They are being severly discounted over worry about accounting practices,             and lack of expertise in shareholder relations that is common with American           companies

     3. They trade at very reasonable P/E multiples, in this case < 10

     4. China will remain an important engine of growth in the global economy, and            while it will be undoubtedly a bumpy ride, long-term the growth prospects are          hard to beat.

In this screener I chose to include stocks whose P/E are less than 10, which have been trading on major exchanges for at least a year, and that have easily understandable business models.

Name                              Symbol  

 

 

ZST Digital Networks...     ZSTN    

China Security & ...          CSR        

Changyou.com Limited    CYOU

China Natural Gas, Inc.    CHNG

Advanced Battery Tech.. ABAT

Concord Medical...           CCM        

Fushi Copperweld, Inc.     FSIN      

Yingli Green Energy...      YGE        

Huaneng Power Intl...       HNP        

ReneSola Ltd. (ADR)       SOL    

I would recommend either selecting your favorites out of this list, or diversifying by placing bids for initial positions in these securities 5-10% below current prices. Then when a moment of panic hits the markets, you will be granted an ownership stake in solid companies at a great entry point. While there are plenty of problems with investing in Chinese companies, the risk-reward ratio is beginning to look very appealing for grabbing a stake in Chinese companies that have the benefit of great future organic growth. I think allocating 10-25% of your assets in these Chinese companies provides great diversification and potentially very profitable trades in a well-balanced portfolio. 

Wednesday Chat & 6 Stocks to Buy

Below is an excerpt from my Premium Member Discussion Board:


"Idk about Nat gas. I'm tempted to avoid it.  Chk and SD recently are switching from mostly natty to almost all oil.  And they are well informed esp Chk CEO mecclendend sp? Who seems pretty sharp. I think thy realized the us through lobbyists and pre est infrastructure ain't switching to the t boone plan anytime soon even though its obv better  imo I'm not super informed on natty + Idk what use buy anyway trusts seething net top of valuation and ung is a shitty product"


Pitbull Trading : 


"Isnt Mclellan the same guy that levered up on CHK stock and got a margin call when the market crashed and was forced to bail on his position? I guess the contrarian in me would say that the facts you state make me tempted to like NG even more, with the focus on crude oil (chasing high prices) and therefore limiting the supply on the market of NG (low prices), longer term makes me feel like NG is a better prospect for investing right now. But I guess the question would be how long you are willing to wait. I think the guys you would want to look at buying would be some of the small-mid size companies with leases in great plays that are as of yet under-developed. There is a new shale in texas called the eagle ford that is suppose to be a game changer as well, Ive done some research but nothing jumped out at me as a screaming buy, the valuations are all kindve high because of the growth prospects. CHK and SD and things like that look stupid on a chart and I hate buying highs. Trusts dont look that great either. I really would be more tempted to get into something like oil sands in canada, SU, or a small E&P like GST, or even an off shore driller with an obvious catalyst that will bring it up 25-50% within the next year or so (lifting the moratorium on their platforms and bringing their massive amount of reserves to market at these huge prices) I know I am a bit too conspiracy theorist on the oil crap but in reality prices above 100 based on supply demand info Ive read are out of line and should come back down. Demand destruction will be real with the worlds middle-lower classes unable to afford basic foodstuffs and gasoline. And despite the stock markets nascent rise I dont believe that the middle-class americans who are depended upon to consume 70% of our GDP really are recovering all that nicely, look at recent housing data, true unemployment considering those who have already stopped looking, etc. Eventually corporations will have to either shift all their focus on exports and international business, or else start paying their workers legit wages here and hiring, which would crimp profits I think. 

Some things I would consider buying on pullbacks are:

1. ZBB at 1.00-1.05. 

2. NCT at $7.00 - $7.10

3. ATPG at $15.50 - $16.25

4. OPTR at $11.00 - $11.25

5. VGR at $15.00 - $15.50 

6. AIG at $35.00 - $38.00

Also with AIG I was thinking that since the government owns 80% and we know they are not selling, it seems like that would buoy the share price and provide some strength until they start unloading their shares... That is unless the shorts attack the stock thinking there will be an imminent offering that would crash the sp.

On an unrelated topic, take a moment to read about 'Ego-Death':

"...a sense of being controlled by frozen block-universe determinism with a single, pre-existing, ever-existing future. Experiencing this model of control and time initially destabilizes self-control power, and amounts to the death of the self that was conceived of as an autonomous control-agent. Self-control stability is restored upon transforming one's mental model to take into account the dependence of personal control on a hidden, separate thought-source, such as Necessity or a divine level that transcends Necessity."


As always, do your due diligence, and use stop losses where appropriate.

Turmoil in the Middle East, Pt. 2

The events that unfolded in the Middle East and the stock market were predicted in my Post dated 02-11-2011: 


"The way the human race is able to communicate is evolving at a clip faster than any moment in our history, we certainly live in unpredictable and exciting times. We will see many regime changes in the next decade due to the current state of affairs facing the global economy. Even a country like Saudi Arabia is not as untouchable as many may think."


and


"Markets are setting up like a crowded theater before someone yells 'fire'. When there is a sudden and surprising rush for the exits, things will get pretty ugly. This will offer up some intriguing long-term buys, but it is best to be defensive or bearish right now. It is better to sit out and wait for volatility to return than be the last one to the party. Breaking multi-year highs on pathetic volume does not show me anything. I think TZA, VXX, TVIX and short-medium expiration puts on select names such as NFLX, AMZN, and CMG look good here. I know fundamentals don't matter right now but the market can't stay irrationally exuberant forever." 


Thats 17 points of profit in Chipotle, 15 in Netflix, 4.5 in VXX, 11 in TVIX, and 10 in Amazon! If you did the options recommendations, you would be looking at even better money. And it's not over yet...


Well if you had taken my advice, you would be looking quite nice on every single one of your trades. And while I may be tooting my own horn a bit, being a contrarian against an army of maniacal buyers is extremely mentally challenging, and I needed this small allowance of smug satisfaction.  


The leading indicator for this correction can be seen by the VIX index's odd trading behavior over the last week, it rose continually with the markets, and this told me that something was afoot. Call it gumshoe detective work or common sense, but that was a sign I didn't believe I could ignore-the market telling me that even as equities rose, so did the 'perceived risk' associated with owning these stocks at higher prices. 


Here is a sample of a response to a question posed by a premium member of my blog:


"so do u know whos leading in the new party formation in these turd
countries?   also i saw that mubaurk's estimated wealth is b/n 1 and
70B   upper end of that would be redic... some of those saudies must
be worth a $%#@ tonn"

The House of Saud are some rich people. "Over decades of oil revenue-generated expansion, estimates of royal receipts have varied, ranging as low as an unlikely $50 billion and as high as well over $1 trillion." If we see unrest in Saudi Arabia, then things will get very dangerous quickly, and the USA might even be forced to become involved based on our gluttonous oil habit. I haven't looked into the new parties too much. Seems though that in Libya they have tribes and many systems and cultures, so they could end up in civil war and one strong faction coming into power. Would need to research more... Really this thing starts to reek of the smell of manipulating crude prices now with Qaddafi threatening to explode and sabotage oil facilities in Libya to spike up prices. The real effect to crude supply may not be that enormous, but thats not what makes things move in the markets now days, the media's biased take on the events and coverage will really dictate price action. When our corporate overlords, and Bernanke's bankster puppeteers decide the investing environment is getting a little sketchy, watch out, because the pain train's comin to town. This rush to the exits could be spectacular, the market has made lots of gains on very poor volume, leading me to believe that serious selling pressure could bring the S&P 500 back to a more reasonable 1250-1275 level of support. That is only a 3-5% correction, but it could happen faster than you may believe. This is not taking into consideration the problems the USA is facing in the near term: Unsustainable Government debt levels, Unsustainable State debt levels, QE2 ending in June, European debt contagion (It is still out there in reality, if not in the headlines), as well as soaring commodity and food prices.

This is going to be an interesting couple of weeks. Buckle up.

How Inflation is Hurting Corporate America

The nations that compose the global economy are intricately connected; economic imbalances currently spread faster through the system than history would predict. 

Ben Bernanke recently stated that “There is not really an indication in our financial markets that, in the United States, there is an expectation of inflation.”

I believe that our well respected Chairman of the Federal Reserve is wrong about that. If the financial crisis showed us anything, it is that the global economy is so interrelated that economic imbalances spread faster than ever before. That means emerging markets and commodity inflation in developing nations can very well effect prices here in America. Proof of inflation is abundant-go fill up your gas tank or buy a cart full of groceries. 

Here is a sample of what 'Blue-Chip' American companies are recently telling us about their experiences with commodity and food inflation.

Kraft (KFT): 

Even as the food giant hikes prices, high commodity prices should continue eating away at margins. 

Chipotle (CMG): 

"In addition, while difficult to predict with certainty, we expect commodity inflation will steadily increase our food cost during each of the next two or three quarters. So rather than strike preemptively by raising prices now, we plan to hold tight on our menu pricing till the second half of the year both to allow our transaction to hold as strong as possible and to allow us to fully see the timing and magnitude of sustained inflation, even though this means our margins will be pressured over the next few quarters. 

Pepsi (PEP): 

"Soft drinks maker PepsiCo has cut its earnings forecast for 2011, warning that higher commodity prices will push its costs up and citing a weak economy." 

HanesBrands (HBI): 

Cotton prices have surged to a new record high amid global imbalances. The cost of the commodity has jumped 150% since 2010 began. "Hanesbrands' fourth-quarter results reflected strong top-line growth but weaker margins because of higher cotton prices.

Even America's favorite beverage, Beer is not saved from the pain. 

(TAP):

"U.S. Brewers really have to be imaginative these days. They are facing the paradox that while sales are dropping, the costs to produce products is increasing in the form of commodity ingredients. Molson Coors Brewing Company reported yesterday its Q4 net income fell by more than half partially because of ingredient costs."

(KFT):

Many large consumer goods companies are reviewing their business models in the face of rising commodity costs to mitigate the effect on profits and their bottom line "Whether through raising prices, cutting costs, adjusting product size or altering ingredient mix, companies such as Unilever PLC, Reckitt Benckiser, and Kraft Foods Inc. are all having to take action as rising input costs show no sign of abating. As escalating costs have hit all categories of commodities, no single company is better placed than another, so their differing strategies will be under close scrutiny."

Inflation has many negative side-effects, the ones I believe we may be experiencing are:

1) Rising prices creates uncertainty. In a climate of uncertainty both domestic and foreign entrepreneurs will be reluctant to invest. This will slow down the potential for economic growth.

2) Low savings is a factor contributing to the cycle of poverty. During periods of inflation households that do have surplus funds are reluctant to save. Inflation erodes the real value of saving and hence there is less incentive to forego current consumption. Decreasing levels of savings and hence of investment will lead to a decline in economic growth and development.

3) Rising prices causes worsening poverty as the essentials for survival become more expensive and thus less attainable to those with low incomes. In an economy where unemployment and underemployment is increasing, family incomes are less able to purchase the basic requirements such as staple foodstuffs.

So as an investor, how do we profit from the sinister rise of inflation? The basic answers most investors would say are Gold (GLD), Oil (USO), and Interest Rates (TBT). I think a better overall play would be something like RJA, the commodity basket created by expert investor Jim Rogers. According to one popular stock website "RJA is one-stop shopping for the indecisive investor. The ETN features weights of 13.6% to corn and wheat, respectively, and a 12% weight to cotton. Coffee, cattle, cocoa and sugar can also be found among the ETN's top-10 holdings."

I will close out with Congressman Ryan Paul's recent remarks to Ben Bernanke regarding the effects of the Quantitative Easing II program on the American people,

"There is nothing more insidious that a country can do to its citizens than debase its currency,"  

Google, Facebook, and the Internet Riots

With the riots exploding onto the world stage in Tunisia, Egypt, Lebanon, Yemen, Jordan, and Algeria, the world watches passively as the down-trodden attempt to overthrow their governments. This is a very interesting scenario that could result in unforeseen negative (and positive) events that shape the future of the Middle East's political balance. With increasing internet adoption rates throughout the developing world and social networking mediums providing a convenient way for the angry masses to gather en masse; riots of the many against the few are becoming surprisingly easier to organize. In the past, it was much harder to gather huge numbers of protesters together to demonstrate against a tyrannical regime. Now it is as simple as a tweet, forming a Facebook page, or posting it on your blog, and instantly thousands ,or millions, are updated with the latest information.


The reasons for the revolts are largely similar in nature, the elitist few in the government and corporate business are strangling the lower stratas of society in order to live opulent, extravagant and greedy lifestyles. With poor economic opportunities, a large unemployed youth base, blatant oppression of basic human rights, and the United States exporting inflation through the Federal Reserve's QE2 money printing, people are pissed! "According to the United Nations Food and Agricultural Organization, food prices in Algeria rose 32 percent between June and December 2010, and are expected to rise further." For a great summary of causes of the recent Middle East revolts, click here. This becomes a serious problem quickly for those countries like Egypt who have 20% of their population living on $2.00 a day or less. 


Another interesting statistic is that Africa only has a 10.9% internet penetration rate, with Asia sporting 21.5%, and the Middle East a modest 29.8% according Internet World Stats. This shows that even with the exponential growth rates of internet adoption over the past decade, there is lots of room to the upside. I am convinced that we will continue to see unrest and riots as long as the disparity of wealth grows larger in these areas. Those who are similarly oppressed in a given area are increasingly able to communicate, empathize, and organize. They will seek to better their lot in this world by any means necessary, and we all know what humans are capable of when they have children they can't afford to feed. 


This all happens to have an interesting parallel with the world's number one brand name: Google. Yes the company that's motto is "Do No Evil" and states, 

• "The need for information crosses all borders."

"Our company was founded in California, but our mission is to facilitate access to information for the entire world, and in every language. To that end, we have offices in dozens of countries, maintain more than 150 Internet domains, and serve more than half of our results to people living outside the United States. We offer Google‘s search interface in more than 110 languages, offer people the ability to restrict results to content written in their own language, and aim to provide the rest of our applications and products in as many languages and accessible formats as possible. Using our translation tools, people can discover content written on the other side of the world in languages they don‘t speak. With these tools and the help of volunteer translators, we have been able to greatly improve both the variety and quality of services we can offer in even the most far–flung corners of the globe. "


Could Google actually be a willing co-conspirator with the underprivileged masses who are attempting to overthrow corrupt, evil, and oppressive governments? Making all information readily available to all segments of a population is a cause for alarm in and of itself. Dictators have known for a long time that you have to keep the propaganda machine rolling along full steam and manipulate the people into submitting to your will. If the oppressed knew exactly how they were being manipulated, it would ruin the whole plan. 


An obvious example of this would be the situation that evolved with Google in China. The Chinese know very well how real the threat of the peasants revolting over food prices and lack of employment is. When Google's rally cry for freedom of information and 'Do No Evil' was found to be at odds with the will of the Chinese Communist Party, they walked. Google is an obvious advocate for the open, unadulterated, and free flow of information on the internet. Knowing this is part of Google's core value system, do you find it that odd that one of their executives, Wael Ghonim, was behind a Facebook page that played a vital role in organizing the protests in Egypt?


Given Google's political clout, ubiquitous presence, creative talent,  massive cash reserves, and golden image, they are quickly becoming a world force that may be unrivaled by anything the world has ever seen. The way the human race is able to communicate is evolving at a clip faster than any moment in our history, we certainly live in unpredictable and exciting times. We will see many regime changes in the next decade due to the current state of affairs facing the global economy. Even a country like Saudi Arabia is not as untouchable as many may think.


I would be willing to establish a position in Google starting at the $550 level. Markets are setting up like a crowded theater before someone yells 'fire'. When there is a sudden and surprising rush for the exits, things will get pretty ugly. This will offer up some intriguing long-term buys, but it is best to be defensive or bearish right now. It is better to sit out and wait for volatility to return than be the last one to the party. Breaking multi-year highs on pathetic volume does not show me anything. I think TZA, VXX, TVIX and short-medium expiration puts on select names such as NFLX, AMZN, and CMG look good here. I know fundamentals don't matter right now but the market can't stay irrationally exuberant forever.