By
Tom Dyson, publisher, The Palm Beach Letter
Wednesday, April 22, 2009
There's never been a better time to be seeking fortune in America.
Right now, we're in a period of great turbulence. Everything in America is up for sale at "panic liquidation" prices. Each foreclosed property and bankruptcy headline you hear about represents another opportunity to make money.
One man goes bust and another man makes a fortune. It's the beauty of American capitalism. Assets never die; they just change owners. Take Kirk Kerkorian and Carl Icahn, for example.
Kirk Kerkorian is the majority owner of MGM Mirage, a gigantic casino and hotel company. In Las Vegas, it owns half the casinos on the Strip. MGM also owns huge casino resorts in Reno, Atlantic City, Detroit, Biloxi, and Macau.
In the boom times, like in 2005 and 2006, MGM's management borrowed too much money. Now Vegas is in a bust, and the company is having problems paying back what it owes. It has been furiously selling assets to raise cash... but it hasn't been enough.
Carl Icahn holds MGM's accumulating debt. As a debtholder, he'll be in control of MGM's assets if it declares bankruptcy. Once MGM's debt comes due, Icahn will simply foreclose MGM's remaining assets and seize its properties. Unless Kerkorian can borrow more money, Icahn may acquire the hotels, casinos, golf courses, and everything else MGM owns.
Right now, hundreds of companies like MGM are "up for sale." The financial crisis has pushed a big swirling cloud of valuable assets into the air like the dust in front of a leaf blower... and these assets can be grabbed up by anyone who wants them.
Last week, AbitibiBowater, the world's largest producer of newsprint, declared bankruptcy. Abitibi owns millions of acres of timberland, paper mills, and saw mills.
General Growth Properties (GGP) also filed for Chapter 11 last week. GGP owns 158 shopping centers around the country.
Timberland and shopping malls are valuable assets... especially with the authorities blasting cash into the economy like they are.
The Federal Reserve is injecting trillions into the economy. In just the last 25 days, it has added $56 billion from the printing machine. The federal government will inject another trillion dollars or more this year. There's so much cash coming out of the government, I can almost see it accumulating on the sidewalks. All we need to do is stoop down and pick it up.
The point is, America is the greatest country on Earth for building a fortune... and now it's as easy as ever, thanks to the financial crisis and the government's cash.
In my next column, I'll discuss some of the strategies I'm going to use to make a fortune in the next few years. Until then, start thinking about how you'll take your share of the money that's flying around...
Good investing,
Tom
Editor's note: Tom Dyson is a regular contributor to DailyWealth, a free investment newsletter focused on the world's best contrarian opportunities. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments.
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In mid-January, we placed the stock market on "volume watch."
Back then, the stock market was bouncing of its December lows. Many people were feeling bullish… They thought the worst was over for stocks. But our "volume watch" called for the market to show us healthy and rising trading volume in order to believe in the rally. Instead, the market went on to suffer a 20% decline.
We're in a similar situation this week. The market just staged a huge rally, as measured by the popular S&P 500 fund (SPY). But look at how trading volume has tailed off in the past few weeks. A truly healthy market has lots of "big money" buyers piling in to support prices. Those buyers are still on the sidelines.
We're not saying the market will fall 20% again. But we're still in the Jerry Maguire camp… meaning we need the stock market to "show us the money" in the form of healthy and rising volume during advances. Until we see this money, we're still skeptical.
Hong Kong Is About to Skyrocket By Dr. Steve SjuggerudTuesday, April 21, 2009
Today, we have the ultimate recipe for stocks in Hong Kong to skyrocket. The Fed has cut interest rates to essentially zero (causing Hong Kong rates to be next to zero in its unique money system). And yet Hong Kong stocks are incredibly cheap.
An Income Portfolio that Yields a Safe 13% By Tom DysonMonday, April 20, 2009
Combine the cheap valuations, the dominant competitive advantages, rich option premiums, and you have yourself a very safe stable of income stocks.
Do This, And You'll Never Suffer Another 2008 By Dr. Steve SjuggerudFriday, April 17, 2009
If you've got a winner, you ride it for what it's worth. And if you have something that doesn't work out, you don't make excuses. You don't say, "It's going to bounce back eventually." You get rid of it.
Now Is a Once-in-a-Lifetime Opportunity for Income Investors By Dan FerrisThursday, April 16, 2009
Most World Dominators are past their capital-intensive, high-growth cycle... so they can funnel surplus cash to shareholders in the form of dividends and share buybacks. Instead of funding growth, cash goes to you.
