Wednesday, October 27, 2004

New Info: Terrorist Video

Is this new terrorist threat video a clue that guarantees an attack between now and the election? Many are frightened by this video and the words used. I would agree that the words used should elicit fear in any human. I mean "blood flowing through our streets" and "so many dead" that we won't be able to count. This is not normal every day speech that you hear. This is scary stuff.

But if this video is even authentic, I believe that this lessens the possibility that there will be an attack before the election. I said before that these terrorists were not stupid and I still believe that they aren't. I also believe that the terrorists are full of themselves right now and have huge egos and therefore are more daring at this point.

I believe that this new terrorist video is just a scare tactic, if it is authentic. They don't have any plans to blow anything up before the election so the next best thing is a video that scares the hell out of every American into not voting for GW. In Spain they had a plan and it worked. In the US they do not have any lethal plans to get John Kerry elected, but this could work as well (they think).

I don't believe the terrorists are dumb enough to advertise their plots unless they are that cocky right now. There still is a threat but I think this recent video lessens the possibility from around 50% to around 20% or 30%. This is obviously all just my opinion, but hopefully it will get you thinking.

Best Regards,

The Soothsayer of Omaha

Why so worried?

One of the reasons purported by the media for an ailing stock market is that the election is not going to be a blow out. We don’t really know who is going to win this one. This causes uncertainty and uncertainty in any market is bad. It leads to miscommunication and misinformation, which leads to losses. Therefore, the big boys are on the sidelines not willing to risk their capital.

November 2nd could be the day that the larger players are waiting for, but it might not just be directly caused by the election. Do you remember what happened in Spain right before their elections? Is a terrorist attack right before the elections possible in the US? Some say no and others say yes.

The Washington Post reported last Saturday that "U.S. intelligence and law enforcement officials say they have found no direct evidence of plans for an election-related terror attack after a five-week investigation". This contradicts other reports that say that US intelligence has found credible evidence that there is a plot occurring. I don’t think that the US intelligence community wants another blunder under their belts so I don’t think they are slacking here or lying or covering up or any "black helicopter" type stuff. But, what if? I’m not saying that a terrorist attack is going to happen before November 2nd, I’m saying it’s a high possibility.

I don’t have fancy computers that have intercept capabilities or a legion of spies dedicated to my every whim, but I do have common sense. My common sense tells me that the possibility of there being a terrorist attack before the elections here is greater than 50%. This is a greater probability than me knowing whether GW or Mr. Kerry is going to be sitting in the Oval Office.
I believe there is a greater than 50% chance because these terrorists are not stupid. This could be their last chance to make a difference for quite some time. Will they attack the US while John Kerry is the President? I doubt it since abstaining from blowing things up for four years will show that GW was the bad guy and the terrorists were just being picked on. These guys are patient…if anything, they are patient and they will wait for the right moment.

These terrorists (not insurgents) have also seen that their blowing up of things actually works. I’m not going to blame the Spaniards for anything, but they have proven to these fanatics that their "work" can actually change the world. The terrorists are on a high right now. Their messages are being heard around the world every hour of every day. They are getting cocky. This will lead to a mistake…cockiness usually does. This mistake could be another terrorist attack on US soil.

This is not a prediction, just thought provoking (hopefully). This is reason enough to stay on the sidelines in the markets though. I will be making stock picks pretty soon and putting my $5,000 to work. I can’t wait to begin showing 20 and 30 somethings that they can retire wealthy without the help of the government or Wall Street. But, my stock picks probably won’t begin until after November 2nd and maybe not until the new year. So, beware Mr. Buffett; my picks are coming…along with the capital gains. For if I don’t invest, the terrorists win. (My sad attempt at humor. My apologies.)

Best Regards,
The Soothsayer of Omaha

Here are some links for you to check out for yourself and as always you can Google this stuff:

Tuesday, October 19, 2004

The Soothsayer Versus The Oracle: An Introduction

“A $10,000 investment in 1965 would be worth over $50,000,000 in 2003” or so the story goes when you hear about Warren Buffett’s Berkshire Hathaway. He is the “Oracle of Omaha” (Where he was born and lived/lives). The Midwestern boy who made good with his hard work and smarts. He is considered by many as the best investor who ever lived.

Well, Buffett definitely is one of the best in his niche. His niche is value investing, which was taught to him by the father of value investing himself, Benjamin Graham. There definitely is something to be said about growing your capital 5,000 times over a 38-year period. This equates out to a gain of around 25.15% per year for 38 years. That is extremely impressive since the average gain for the S&P 500 during that same time period was about 10.85% per year. So, maybe Mr. Buffett does deserve to be called the greatest investor of all time. He certainly would be the greatest investor of all time if that feat could not be repeated or even broken.

I also grew up and live in Omaha, NE. I also know a thing or two about value investing. There is, although, a difference between Mr. Buffett and myself (besides the few billion dollars). I also know how to use technical analysis as well as fundamental analysis. Technical analysis is something Mr. Buffett would consider witchcraft against his “Oracle” status.

The thing is I bet I could show Mr. Buffett a thing or two and beat Mr. Buffett at his own game. I will use value-investing criteria, but I will also use technical analysis in my investing decisions. I will be known as the “Soothsayer of Omaha” (Can you really give yourself a nickname…hopefully I’ll earn it!). So, here are the rules:

• A P/E ratio below 20

• A Price/Book ratio below 1.5

• Current Ratio greater than 2

• Revenue Growth greater than 15%

• Stock trading at a 25% discount or better to intrinsic value

38 years is quite a long period of time. These articles would be perfect for any individuals looking to retire within that time frame (or anyone looking for longer term value picks). Are you in your twenties and looking to retire between the ages of 50 and 60 with millions of dollars in your possession? If your answer is “Yes”, then I would keep a close watch on these articles and their contents.

A lot of these types of articles/newsletters promise the moon. How do you know the person writing the article or newsletter is legit? Well, I could explain to you why I am legit, but I would rather show you. I’m putting my money directly where my mouth is! I will be investing right along side you. We will be taking on the “Oracle of Omaha” together. That’s right; I will be posting my account status each and every month. Every buy and every sell will be there for all to see…right or wrong.

Unlike Mr. Buffett, we will not be starting out with $10,000. Not many twenty somethings I know have enough capital for that size of an account yet. But, I’m sure that many could get half of that scraped together. So, we will be starting out with a $5,000 account and in 38 years or hopefully less will be pulling $25,000,000 out of our accounts and retiring in style. Along the way you will learn a lot about investing and quite a few other things as well. I will be posting at least two articles a month. So, join the journey and let’s take on the “Oracle of Omaha” together.

Best Regards,

The Soothsayer of Omaha