Archive for May, 2012

Whether to Invest in Foreign Companies

Posted in Investing on 27, May 2012 by nathanbusch

I have taken some notice of negative comments regarding investing in foreign companies, particularly those that pay a substantial dividend such as Total, S.A. To my way of thinking, the decision as to whether to invest in a foreign company is resolved by the same method by which the decision to invest in a domestic company is resolved.

I analyse the margin of safety for each possible investment in the following manner: set a six-year time horizon; start with the entry price; account for the past five-years, as well as the projected three-years, EPS long-term average growth rate, which is linear (EPS-LAGR); include the trailing five-year dividend long-term average growth rate, which is also linear, (D-LAGR); assume the use of a DRIP net of taxes on the dividends; account for the U.S. state and federal capital gains taxes, assuming that the shares would be sold at the end of the six-year time horizon; account for the U.S. rate of inflation, which has averaged 3.74% since 1950. Then I compute the margin of safety as the ratio of the current purchase price to the value of the shareholding at the end of the time horizon discounted to present value based upon inflation. If the ratio is below 0.50, then I pass on to the next possibility; if the ratio is above 0.50, then I allocate no more than 5% of my net assets to the investment opportunity.

Also, I am intimately familiar with the international income and capital gains tax treaties with the United Kingdom and France as I work primarily in the area of international law. Under the treaty, and as applied by the U.S. IRS, the income and capital gains taxes paid in either France or the United Kingdom are recognized and are deductible as against income and capital gains that accrue in the United States. It just takes a bit of work to manage the paperwork. If, however, the transaction costs associated with reporting the income and capital gains taxes and declaring the deduction exceed the amount of the dividend income, or capital gains, then do not bother with the investment.

To me, TOT is no different.

I hope this helps.

Nathan A. Busch

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“John Bell”, 24th May 2012

Posted in Internet Frauds and SCAMS on 25, May 2012 by nathanbusch

At 0428h today, 24th May 2012, I received an e-mail from our mysterious “John Bell” that contained the following text:

************

Before I explain why the Facebook IPO sucked big time – A quick word on my upcoming pick.

I promised you the pick at the end of this month. That isn’t gonna happen.

It’s probably gonna be in the first week of June (about two weeks from now).

Why the delay?

Well it’s kinda the same reason the Faceboom IPO sucked.

Facebook was probably one of the most anticipated IPO’s ever. And it bombed.

The reason is quite obvious – It opened at far too high a level.

At $38 Facebook was valued at $104bn!

To put that in perspective. Facebook earnings are “just” $1bn.

So Facebook had a price-to-earnings ratio of 104.

(15 is about the average in corporate America).

All the hype. All the media attention, the eyes of the entire world couldn’t keep Facebook at that lofty height.

This is why I always tell you:

It’s not enough to find a “hot” company. You have to find it BEFORE everyone else.

If I’m risking my capital I wanna make at least a 2x return (with a chance of a 10x or “ten-bagger”).

There was absolutely no possibility Facebook would rise to $200bn (i.e. double within the first few days).

Yet there was a huge possibility it would crash. Like how is currently happening.

John Bell

P.S. How does this relate to my pick being delayed again?

I’m waiting for a better entry point. Where the downside risk is lower and the upside is greater.

Keep watching your emails.

************

Our mysterious writer claims that the Facebook IPO bombed because, along with some secondary reasons: (1) the initial price was too high relative to earnings; and (2) the potential short-term gains could not be realised. The real reason that the Facebook IPO failed is that once the ecstacy of the opening bid had subsided, reasonable investors understood that there was no way that a company with a declining revenue stream, approximately one third of which was derived from on-line gaming, could increase in market capitalization above the already lofty levels achieved at the opening. In short, the opening value was the result of hyperbole of the media and promoters.

Come to think of it the rapid rise of JAMN from pennies per share to over $6.12 per share was due to hyperbole from a stock promoter, who was our “John Bell”. In this aspect, there appears to be no sunlight between Morgan Stanley and “John Bell”.

It is vacuous and disingenuous for “John Bell” to use the failed Facebook IPO as an excuse to delay his “magic stock pick”. The timing of the Facebook IPO was not what caused the failure: the failure was the herd mentality soon turning sober to the reality of the situation. “John Bell” appears to be in his usual “I am waiting for the opportune moment” strategy with the hope that that strategy will cause a lot of ill-informed sucker investors to be rapidly pulled into yet another penny stock SCAM.

Nathan A. Busch

Westlake and Phillips 66, 9th May 2012

Posted in Investing on 10, May 2012 by nathanbusch

Today, 9th May 2012, a Credit Suisse analyst, Edward Westlake, initiated an analysts’ report for Phillips 66 and gave the company an “outperform” rating. The analyst urged that the 12-month target price would be $42.00 per share. As a result, the share price of Phillips 66 jumped about 7.9% in late afternoon trading to about $32.49 per share. It is not possible that the value of Phillips 66, as a company, is 7.9% higher today than its value yesterday. The justification offered by Westlake was as follows: (1) the spot and futures price for natural gas has declined to the lowest level in a decade and, therefore, raw materials costs for Phillips 66 chemical plants have declined markedly, which should increase the profit margin; and, (2) crude oil production has increased in the upper midwest which is driving down the raw materials costs for the Phillips 66 refineries.

Neither of these assertions provide any basis for either the marked increase in the share price seen today or in the short-term prospect that the shares deserve a price of $42.00. As to the natural gas issue, if the 2012-2013 winter is hard the price of natural gas will increase dramatically reversing any benefit that Mr. Westlake might see for Phillips 66. Also, the price for natural gas has been quite low for a substantial amount of time and has already been priced into the price of chemicals made from that raw material. That it will remain low until some point in the future will not increase the profit margin of Phillips 66. Further, the profit margin for the chemicals business of Phillips 66 will increase only when a substantial uplift in demand exists. With the troubled economies in Europe and, to some extent, in the United States, I cannot see anywhere near a 29% increase in the chemicals business (that is, from 32.49 to 42.00).

As to the cost of petroleum at Cushing, Oklahoma, this will not improve the situation at any of the downstream refineries, including Phillips 66. The analyst failed to recognize that the split between the price of Brent Sweet Light and West Texas Intermediate is, in significant part, attributable to the lack of pipelines to transport the oil from Cushing to the refineries and the lack of storage capacity at Cushing. Even when the increase in storage capacity at Cushing is completed, the problem be alleviated only on a short term basis. With the current depressed price for West Texas Intermediate, the profit margin for refineries is slim, at best, and this is also true for Phillips 66. A substantial reason for this narrow, or negative, margin arises from the decline in demand for the refined products, including gasoline. A further problem plagues the refinery business: a substantial portion of the refineries are located at an unreasonable distance from the largest markets, which are the east and west coasts. Again with demand stagnated, at best, or declining, in reality, it is not likely that the profit margin from the refineries for the next year will justify a 29% increase in the price of the shares.

In addition the aforementioned few points, Mr. Westlake failed to recognize the following paramount piece of information. The costs of raw materials today are almost identical to the costs of raw materials during the weeks and months before Phillips 66 was spun off from ConocoPhillips. It may reasonably be expected that the profit from the downstream operations, including refineries, will remain approximately the same as before Phillips 66 became an independent refinery. In his missive, Mr. Westlake has failed to recognize that Phillips 66 plans to shut down and sell unprofitable assets, meaning refineries. Thus, the price of West Texas Intermediate at Cushing, Oklahoma, including oil from the upper midwest, will have nothing to do with improving the profit margin of the refineries held by Phillips 66.

The important point to remember as time passes, is that the large institutional investors are keenly aware that the refinery business, and chemicals business, will struggle for some time to come. Thus, for them, shedding shares of Phillips 66 to reinvest the cash in companies with greater long-term returns is the sensible move.

Nathan A. Busch

John Bell, 4th May 2012

Posted in Internet Frauds and SCAMS on 5, May 2012 by nathanbusch

On Friday, 4th May 2012 at 0425 AM, our mysterious “John Bell” sent out the following rhapsody:

****************
Look, I really think my upcoming pick could be my best yet.

In fact, I’m so confident I’m gonna make you a promise:

If this pick doesn’t at least DOUBLE in price, then I’ll never send you another pick again!

Remember in my last email I told you this is a “fast money” pick. That means the action is going to be very fast and very exciting.

When searching for a trade or a “fast money” pick I look for one thing.

I look for a company where the line of least resistance is upwards.

This is often because there is just not a lot of sellers in the market.

When the price starts to rise, it just keeps rising because there is little resistance.

The same pattern can occur in commodities and it’s the very reason Gold has quadrupled in the last decade.

As the price of gold rose, there was no excess supply (So the path of least resistance was upwards and gold just kept going up and up!)

Get ready for my “fast money” pick!

John Bell

****************

Now, we have our familiar “John Bell” at work. His missives are starting to look and sound like those sent before JAMN was “officially” announced. An interesting point to recognize: before TFER, he sent a couple of e-mails that contained no energy weakly explaining two of the key metrics underlying the Magic Stock Formula of Joel Greenblatt. The Greenblatt technique pertains only to investing in companies that exhibit deep value at the time that the fundamentals are examined. Here, our “John Bell” reverts to concepts found in technical analyses to support his argument that the price of this particular company will rise very rapidly.

As with the Motley Fool, the only reason that these stock picks rise is because a stock promoter conveys excitement in the published missives. The excitement is infectious and the gamblers, who read the missives, buy without fully understanding what they are buying. One clear example of such a situation, and one that was heavily promoted by Motley Fool, is Netflix.

As I stated earlier: if you are inclined to gamble on this next “John Bell” pick, or anything promoted by Motley Fool, set your buy at a one-half percent discount to current market price, set your sell at at 17% premium to the current market price for the upside, and set the stop loss limit at a 8% discount to the purchase price. This strategy will minimize the loss, and provide about 10% gain after transaction costs and income taxes.

Or, you could exercise your own good judgment and intelligence and buy solid companies in the commodities markets on the dips, use DRIPs, and hold for 12 to 20 years.

Nathan A. Busch

Conoco and Phillips, 1st May 2012

Posted in Investing on 4, May 2012 by nathanbusch

On 1st May 2012, ConocoPhillips spun off its refining, transportation, and chemicals divisions. The upstream exploration and production divisions will remain with Conoco (NYSE:COP) and the downstream and chemicals divisions have become Phillips 66 (NYSE:PSX). It is anticipated that the price of Phillips 66 will drop after 1st May 2012. This decline is expected because of the low profit margin of the refining business and that Phillips 66 is expected to have a market capitalization of about $22 billion, which will cause some of the large institutional investors to divest themselves of the Phillips 66 shares. Also, a number of investors may not want to hold companies that are in the refining business. Once the market clears the weaker investors and the first financial statements arrive from both COP and PSX, it is thought that the price of these two companies will rise substantially. This situation creates a special opportunity for those willing and able to purchase at the correct time.

In addition, the dividend yield for COP is expected to be 4.5% based upon a price of $54.52 and the dividend yield for PSX is expected to be 2.24% based upon a share price of $35.68. With the future price of petroleum, and petroleum products, set to rise for the foreseeable future, one might reasonably expect that each of these two companies will afford a total return of between 8% and 10% per year.

Table 1: Closing Prices for Conoco and Phillips 66. “WTI” is the spot price for West Texas Intermediate Crude at Cushing, Oklahoma, as reported by the Energy Information Administration.
Date   COP PSX CVX MPC MRO TOT E WTI
30 Apr   54.52 35.68 106.56 41.61 29.34 48.11 44.56 104.86
01 May   56.51 32.76 108.27 41.21 30.19 48.42 44.76 106.17
02 May   54.59 32.00 105.69 41.49 28.88 47.62 44.10 105.25
03 May   54.26 31.39 105.99 40.36 27.65 47.39 43.78 102.56
04 May   53.17 30.16 103.72 40.36 26.80 46.51 42.70 98.49
07 May   53.35 29.35 103.31 39.66 26.32 47.05 43.57 97.86
08 May   54.31 30.10 102.84 38.52 26.17 45.83 43.37 97.13
09 May   53.47 32.49 101.78 38.21 26.44 44.65 42.73 96.80
10 May   54.22 32.48 103.36 38.20 26.98 45.44 42.78 97.10
11 May   53.50 31.83 102.69 37.21 26.18 44.99 43.22 96.03
14 May   52.93 31.32 101.94 35.82 25.45 44.16 42.15 94.75
15 May   52.53 31.67 100.90 35.30 24.81 43.63 41.04 93.97
16 May   52.32 32.10 100.10 35.27 24.51 44.31 40.70 92.76
17 May   51.19 31.26 100.14 34.87 24.16 43.71 40.29 92.56
18 May   50.82 31.38 98.46 34.92 24.13 43.83 40.27 91.48
21 May   51.71 32.19 99.69 35.96 24.52 44.53 39.66 92.57
22 May   51.67 31.63 99.32 35.93 24.33 44.39 40.14 91.44
23 May   52.09 31.41 99.00 35.42 24.52 44.03 39.19 89.40
24 May   52.14 31.13 100.06 35.80 24.88 43.76 39.26 90.36
25 May   52.11 31.30 98.86 36.88 25.29 43.89 39.36 90.64
29 May   53.27 31.01 100.24 37.23 25.52 43.98 39.21 90.75
30 May   52.04 30.44 97.63 36.58 24.86 42.83 37.92 87.79
31 May   52.16 30.03 98.31 36.07 24.91 43.07 38.54 86.52
01 Jun   51.19 29.92 96.41 35.24 23.89 42.17 38.11 83.17
04 Jun   51.30 29.53 96.58 34.28 23.84 42.60 38.66 83.95
05 Jun   51.87 29.90 96.49 35.20 23.94 42.89 38.84 84.31
06 Jun   53.58 31.53 99.80 36.32 24.96 43.87 40.23 85.05
07 Jun   53.81 31.83 100.93 37.24 25.00 43.64 40.19 84.78
08 Jun   53.97 32.12 100.84 37.76 25.03 43.55 40.04 84.08
11 Jun   53.88 32.60 99.91 37.88 24.42 43.22 39.54 82.58
12 Jun   54.71 33.49 100.74 39.07 24.76 43.60 40.00 83.35
13 Jun   54.10 32.77 100.13 38.76 24.47 42.82 39.86 82.56
14 Jun   54.68 33.53 101.92 39.40 24.61 43.39 40.60 83.83
15 Jun   55.46 34.90 104.33 40.15 24.87 44.34 41.24 84.03
18 Jun   55.07 33.86 103.46 39.84 24.21 43.83 40.42 83.26
19 Jun   55.64 33.86 104.06 40.87 24.81 44.73 41.66 83.99
20 Jun   55.44 34.66 103.63 42.80 24.69 44.77 41.67 81.06
21 Jun   52.76 33.48 100.02 41.33 23.32 43.30 40.56 77.91
22 Jun   53.41 34.16 100.44 41.79 23.74 43.50 40.72 79.33
25 Jun   52.96 32.87 99.08 41.34 23.69 42.36 39.12 78.76
26 Jun   53.64 32.58 100.95 42.55 24.00 42.14 39.12 79.34
27 Jun   54.45 31.89 102.57 42.52 24.40 42.65 39.80 80.27
28 Jun   54.53 32.31 103.46 44.19 24.66 42.69 40.14 77.72
29 Jun   55.88 33.24 105.50 44.92 25.57 44.95 42.52 85.04
02 Jul   55.73 34.00 105.86 46.07 25.30 45.50 43.10 83.72
03 Jul   56.41 34.24 107.37 45.36 26.01 46.54 44.26 87.74
05 Jul   55.28 33.80 106.03 44.20 25.47 45.14 42.67 87.11
06 Jul   54.75 33.37 105.07 44.51 24.96 44.57 41.54 84.37
09 Jul   54.33 33.25 104.46 44.39 24.55 44.49 41.86 85.93
10 Jul   53.48 32.68 103.88 43.99 24.09 43.89 41.28 83.92
11 Jul   54.36 33.48 104.85 44.39 24.64 44.22 41.55 85.88
12 Jul   53.98 33.01 105.03 43.43 24.27 43.65 41.22 86.02
13 Jul   54.98 34.94 106.01 44.95 24.87 44.18 41.43 87.15
16 Jul   55.46 34.10 106.78 44.85 25.58 44.24 41.22 88.41
17 Jul   56.28 36.69 107.43 45.45 26.01 44.43 40.95 89.07
18 Jul   56.77 37.10 107.88 46.83 26.58 45.02 41.37 89.88
19 Jul   56.37 35.60 108.84 45.51 26.75 45.02 41.36 92.78
20 Jul   53.99 35.32 109.19 45.56 26.54 44.10 39.86 91.56
23 Jul   55.05 35.02 107.95 45.86 25.95 43.32 38.37 87.77
24 Jul   54.64 35.23 106.30 44.44 25.42 42.71 36.85 88.28
25 Jul   53.24 35.40 106.06 44.51 25.34 42.54 37.16 88.80
26 Jul   54.40 35.96 108.27 45.82 26.30 44.19 39.50 89.40
27 Jul   54.97 36.52 109.26 47.20 27.03 45.92 41.98 90.13
30 Jul   54.87 37.64 109.88 47.46 26.91 45.64 41.38 89.80
31 Jul   54.44 37.60 109.58 47.30 26.47 45.95 41.24 88.08
01 Aug   55.22 38.27 110.50 46.80 26.52 46.48 41.27 88.99
02 Aug   54.65 38.30 109.25 48.00 25.73 45.68 40.19 87.22
03 Aug   55.71 39.67 111.12 49.39 26.72 47.73 43.51 91.40
06 Aug   55.89 40.07 111.33 49.35 26.71 48.12 43.81 92.30
07 Aug   56.45 39.77 111.95 50.44 27.40 49.37 44.73 93.68
08 Aug   57.17 40.15 112.14 49.47 27.58 49.46 44.64 93.39
09 Aug   57.09 40.32 112.63 48.79 27.59 49.25 44.00 93.39
10 Aug   57.28 40.00 113.55 49.56 27.90 49.31 44.11 92.94
13 Aug   57.31 40.15 113.28 49.56 27.55 49.15 41.24 92.76
14 Aug   57.35 39.93 113.32 49.13 27.38 49.22 44.04 93.40
15 Aug   57.24 40.36 112.57 49.72 27.48 49.29 43.97 94.35
16 Aug   57.55 41.18 113.32 49.71 27.36 49.80 44.23 95.66
17 Aug   57.39 42.77 112.66 49.25 27.10 49.71 44.24 96.00
20 Aug   57.03 43.07 112.52 49.55 27.16 50.00 44.09 96.03
21 Aug   56.63 41.55 111.98 48.92 27.02 50.15 44.60 96.55
22 Aug   56.68 41.48 112.15 49.25 27.68 50.06 44.44 96.89
23 Aug   56.16 41.33 111.29 49.04 27.70 48.34 44.09 95.87
24 Aug   56.36 41.36 112.01 48.75 27.84 49.11 43.46 95.78
27 Aug   56.38 41.07 111.73 49.60 27.62 49.20 43.56 95.54
28 Aug   56.46 41.96 112.35 49.83 27.96 49.46 44.03 96.30
29 Aug   56.35 41.98 111.80 49.72 27.67 49.39 43.85 95.50
30 Aug   56.11 42.48 110.93 50.81 27.26 49.17 43.29 94.61
31 Aug   56.79 42.00 112.16 51.75 27.82 49.86 44.11 96.47
04 Sep   56.21 42.41 111.22 50.79 27.45 49.64 43.54 95.34
05 Sep   54.87 41.74 110.77 50.32 27.18 49.49 42.95 95.37
06 Sep   55.79 43.42 113.03 50.92 28.28 51.07 44.78 95.58
07 Sep   56.64 44.26 114.00 51.89 28.61 51.84 46.05 96.41
10 Sep   56.18 44.54 113.96 52.36 28.47 51.37 45.35 96.52
11 Sep   56.37 45.59 114.18 53.35 29.22 52.65 46.08 97.03
12 Sep   56.54 46.28 114.48 53.48 29.06 52.79 46.11 97.02
13 Sep   57.65 46.64 116.56 54.67 29.85 53.69 47.58 98.30
14 Sep   58.21 46.73 117.25 55.61 31.09 54.51 48.97 98.94
17 Sep   58.30 46.14 117.14 53.64 30.80 53.96 48.30 96.51
18 Sep   57.82 45.52 116.97 52.07 30.31 53.66 47.83 95.25
19 Sep   57.31 45.57 116.60 53.21 30.40 53.19 48.06 91.97
20 Sep   57.59 45.78 117.85 53.37 30.39 52.16 47.20 92.14
21 Sep   57.36 46.82 117.80 53.72 30.78 52.25 47.94 92.64
24 Sep   57.96 46.74 117.78 53.45 30.34 52.35 46.57 91.68
25 Sep   57.41 45.98 116.93 53.65 30.03 52.00 45.81 91.07
26 Sep   57.01 45.53 116.30 53.00 29.57 51.04 45.06 89.92
27 Sep   57.39 46.53 117.20 54.53 30.02 51.57 45.28 91.89
28 Sep   57.18 46.37 116.56 54.59 29.57 50.10 43.84 92.18
01 Oct   57.41 46.56 117.25 55.34 29.85 50.39 44.41 92.44
02 Oct   57.37 46.42 117.96 55.39 29.88 50.59 44.62 91.88
03 Oct   56.77 45.16 116.14 54.52 29.41 49.84 44.08 88.19
04 Oct   57.40 45.39 117.15 55.59 29.84 50.07 44.55 91.69
05 Oct   57.58 46.02 117.50 54.87 29.54 50.27 45.13 89.87
08 Oct   57.62 45.93 117.62 57.92 29.60 49.93 44.74 89.43
09 Oct   57.80 46.09 117.36 57.13 29.60 49.44 44.46 92.42
10 Oct   57.24 45.15 112.45 55.30 29.56 49.16 45.05 91.24
11 Oct   56.63 44.60 113.06 54.66 29.30 49.78 44.89 92.19
12 Oct   56.17 43.92 112.07 54.30 29.38 49.62 44.80 91.83
15 Oct   56.79 44.38 112.82 54.38 29.87 50.21 45.45 91.84
16 Oct   57.62 46.49 114.09 55.05 30.64 51.54 46.68 92.07
17 Oct   58.12 46.65 115.18 55.75 31.33 52.29 47.42 92.04
18 Oct   58.27 45.56 114.65 54.79 31.23 51.99 46.81 92.00
19 Oct   57.45 44.64 113.38 54.94 30.59 51.39 45.93 90.00
22 Oct   57.04 45.58 112.74 54.52 30.09 51.62 46.13 88.30
23 Oct   56.06 44.92 109.38 53.25 29.56 50.10 44.80 86.65
24 Oct   55.95 44.78 109.71 53.70 29.86 50.16 45.08 85.39
25 Oct   57.16 45.03 110.96 53.96 30.20 49.98 45.13 85.59
26 Oct   57.31 47.50 111.18 55.61 29.91 50.04 45.23 85.84
31 Oct   57.85 47.16 110.24 54.93 30.06 50.40 45.89 85.52
01 Nov   58.42 47.38 111.46 54.03 30.37 50.74 46.14 85.65
02 Nov   57.65 46.21 108.37 53.05 29.95 50.42 45.64 86.23
05 Nov   57.53 47.76 109.19 54.76 30.51 49.98 45.05 87.05
06 Nov   58.22 50.04 110.36 56.98 31.21 50.19 45.81 84.90
07 Nov   56.77 49.46 107.51 55.46 29.96 48.75 44.82 85.64
08 Nov   55.86 49.00 105.87 54.31 29.86 47.88 44.05 88.62
09 Nov   55.67 47.41 105.84 53.12 30.44 48.15 44.16 84.50
12 Nov   55.64 47.35 105.93 53.88 30.23 48.10 44.40 85.07
13 Nov   55.35 46.86 105.28 53.90 30.16 47.65 44.14 86.08
14 Nov   54.77 45.76 102.50 53.13 30.05 47.51 44.06 85.56
15 Nov   54.59 45.34 101.62 54.06 30.53 47.56 44.35 85.38
16 Nov   55.03 45.77 102.40 54.34 30.86 47.43 43.89 86.32
19 Nov   55.73 48.12 104.35 56.57 31.13 48.94 45.24 85.45
20 Nov   55.63 49.06 103.56 57.00 31.50 48.89 45.40 86.62
21 Nov   56.05 49.39 104.10 57.83 31.50 49.14 45.71 89.05
23 Nov   56.67 49.82 105.47 58.98 31.93 49.98 46.78 86.46
26 Nov   56.80 49.56 104.99 59.06 31.00 49.92 46.47  
27 Nov   56.18 50.06 103.38 58.59 31.04 49.07 46.04  
28 Nov   57.06 51.00 105.58 59.25 31.07 49.68 46.63  

It should not go un-noticed that between 1st May and about 23rd june 2012, the price of Chevron (NYSE: CVX) was approximately linearly related to the spot price of West Texas Intermediate Crude. During that time, the correlation coefficient was about 0.52 and the slope of the line with abscissae WTI and ordinate CVX was about 0.20. However, after 23rd June 2012 the function of the price of a share of CVX, in relation to the spot price of West Texas Intermediate Crude, was shifted to the left: this means that the price of CVX in relation to the price of WTI is higher after 23rd June than before 23rd June. This would seem to suggest that the share price for CVX has been manipulated, after 23rd June, to be artificially high with respect to the normal price of the shares.
Nathan A. Busch

John Bell, 1st May 2012

Posted in Internet Frauds and SCAMS on 3, May 2012 by nathanbusch

Interestingly, our mysterious “John Bell” sent his latest notice on May Day. I could write volumes as to the irony of his choice of dates, but I will spare my readers the trouble.

On Tuesday, May 1, 2012 at 4:51 AM, I received an e-mail from “John Bell” that contained the following text:

**************
Listen up, I have a new pick I’ll be releasing in two weeks time.

This pick will be what I call a “Fast Money” pick.

Why do I call it a “Fast Money” pick?

Because I expect this pick to reach its peak within just weeks of the official announcment!

Some of my picks are long-term holds with a 2 or 3 month time horizon.

But every so often I release one of these fast picks… And BOY are they exciting!

For all you thrillseekers interested in a quick buck, this is the pick for you.

My “Fast Money” picks have been known to triple and quadruple in price.

Make sure you’re ready for it.

More information to come.

John Bell
**************

I am coming to enjoy his hyperventilating missives about the latest penny stock SCAM. By the way, I would not be surprised that it is SEFE. Should you want to gamble, here is what I suggest: set a “buy” at market and a stop limit at a 17% profit. That will give you the 1% transaction costs going in and coming out; one-third for income taxes as you will have short term capital gains, and hopefully not a loss, and will yield a net of about 10% on your money. If you are a true investor, just enjoy the show whilst sitting on the sidelines knowing that you are not giving your money to these SCAM artists.

Nathan A. Busch