S&P 500 Doubles it's 2009 Low

I will admit that I have been fairly bearish in the market as of late. I have not sold off any assets, as I am still a long term investor, but I have been preparing for a correction for the last two weeks or so. I have been reading quite a bit into the unrest in Egypt, as well as some of the budgetting issues here at home. Combine that with the markets recent stellar run, and I felt that it was over-inflated and could not last. I was prepared for a drop of 1.5-2% over the course of a couple of days and then a levelling off period, but it hasn't come. sure there have been off days here and there, but nothing like the correction I was expecting, and why I was leaning more conservatively with my trading. I can certainly admit when I am wrong, and in this situation, I have played too conservatively. I would have thought this an excellent time to take profits, but that would have meant missing out on the steady increases that we have seen. As I write this, the Dow is close to 12300, while the S&P has doubled since its 2009 lows, and I stand corrected on my bearish leanings.

The reason for this I beleive is that the unrest in Egypt has had very little effect on the oil imports. True, Egypt controls the Suez canal, but it produces very little oil (in relation to other gulf states) and the civil unrest in the region seems to have had little effect on the shipment of oil from other areas. Another factor is that Egypt, Tunisia, and Yemen, where the bulk of the unrest has been, play only very small roles in the emerging markets trade, while Brazil and India are still holding strong.

There is still a threat out there in the form of Iranian sabre rattling - just enough to spook investors into bearish tendancy's, but as situations calm down overseas, I see a continued steady increase in the general market, and possibly a drop in oil prices as the shipping lanes become more secure.

No Small Feat

Read THIS in yesterday's Orange County Register, and to say the least, it is a bit disturbing. This state is having serious economic woes, and instead of offering tax breaks, incentives, and stimulus packages to improve on the local economies (such as hard hit areas like Michigan and Florida have done), they have increased the small business tax, and stood strong on beaurocratic red tape that just strangle small businesses in their infancy. It is no wonder why businesses are moving elsewhere. Something needs to be done, and I am not entirely sure that Jerry Brown is the man to make the changes we need.

Full Article here: http://www.ocregister.com/articles/shop-287761-business-wine.html

 
No Small Feat:
By Jan Norman

After several decades working in corporate America, Laguna Niguel residents Heidi and Bob Fisher started looking for a business to buy.


On a lark, Bob Fisher started selling wine for some friends who owned a winery in Paso Robles, so they thought a wine shop would be fun and lucrative. They bought the Salt Creek Wine Company, a retail shop that carries 300 types of wine, in Laguna Niguel two years ago

But even before the deal was finalized, they discovered that buying and running a business in California is entangled in red tape.

Fees, taxes and bureaucracy make it tough to turn a profit, Heidi Fisher said. California isn't the only place where government rules and regulations tie up small businesses, according to the Office of Advocacy within the U.S. Small Business Administration. Federal regulations alone cost U.S. businesses $1.75 trillion a year, 59 percent higher than in 2005, a new study for the agency claims. And the burden is heaviest on the smallest businesses, it adds: $10,585 per employee for firms with fewer than 20 employees, compared to $7,454 per employee at businesses with 20 to 499 employees and $7,756 at companies with more than 500 employees.
That study doesn't include state and local paperwork, the Fishers learned.

Among the forms and reports they encountered upon buying the Salt Creek Wine Company:

•One form had a hundred boxes to check or leave blank. "If you don't check the right box, you get the whole thing back but they don't tell you want you missed."

•An S corporation must file its officers every year. "If you file too early, it's rejected; if you do it too late you jeopardize your corporate standing."

•A wine shop collects sales tax and reports to the Board of Equalization

• The Fishers pay property tax to the county for all the equipment inside the shop

•Even though the shop only has a couple of employees who work just a few hours a month, it is cheaper for the shop to get these employees through a temporary staffing agency than to do the paperwork for payroll taxes and buy workers compensation insurance that is required for even a single part-timer.

•The city of Laguna Niguel doesn't require a business license but it does charge a fee to post temporary signs, such as for a sale. It cut the fee in half last year, she said. "It all adds up and it's time consuming to figure out. I have a college education, had a corporate career and knew a lot about business," Heidi said, "but the forms and processes you go through are not easily understandable." When the Fishers were in the process of buying an existing wine shop, Heidi was directed to go online to download mandatory government forms. The information was contradictory, confusing and overlapping, she said.

She doesn't recall the website, but California has CalGold.ca.gov, whose motto is "business permits made simple." (More recently, Gov. Schwarzenegger set up the Governor's Office of Economic Development, GoED.ca.gov, to help businesses navigate various layers of government. That website is still live but it's unclear whether new Gov. Jerry Brown will keep it as he has already cut his office's budget by 25 percent.)
The CalGold website is somewhat generic. Although it promises to list all the permits needed to start any type of business, a search for "wine shop," returns six possibilities including a smog test shop and a print shop. For a winery, which might be more complex than a retail outlet, the website lists six pages of city, county, state and federal agencies to contact for possible requirements. Some are obvious, such as occupancy permit and alcoholic beverage license; some questionable such as wastewater discharge permit and pesticide licensing.

Heidi said, "It has always been obvious to me that California has more onerous regulations for business, but after buying this shop a little over two years ago, I see it from a different perspective. Everything from the liquor license to the hoops you have to jump through add up."
She's quick to add that she agrees with some requirements. "I would hate to see someone with a criminal background running such a business as ours," she said.
She's a native Californian who finds it hard to imagine living anywhere else, but given her experience with buying and running a small business here, "I understand now why businesses leave," she said.


Contact the writer: 714-796-7927 or jnorman@ocregister.com

Blackbeard's sword found?

Discovered this gem of a story a few weeks ago and figured yall might like to hear about it. Being from Florida's gulf coast, I always thought pirates were pretty cool, and Blackbeard (AKA Edward Teach) was one of the baddest of them all. I'm not sure if Blackbeard would have left behind his personal sword on the Queen Anne's Revenge when it was abandoned, but I also doubt that he only had one, and a fancy blade like the one pictured is likely to have been in the Captain's armory. Enjoy!

Was this Blackbeard's Sword?
by: Brett Michael Dykes

Is this the hilt of Blackbeard's sword?

It's one of the latest finds aboard the remains of the ship the Queen Anne's Revenge, known at one time to be the flagship of Edward Teach, a.k.a. Blackbeard. The vessel ran aground on a North Carolina sandbar in 1718 and was abandoned; modern archaeologists have been excavating the shipwreck for more than a decade. The design and ornamentation of this newest discovery have led the researchers to believe it likely belonged to the notorious pirate himself.

Click image to see Blackbeard's recovered ornaments

NC Department of Cultural Resources

An imposing figure to begin with, according to historians, Blackbeard cultivated a ferocious appearance to seem even more menacing: a long dark beard, numerous  knives, swords and pistols strapped to his chest -- even lighted fuses in his hair. In May of 1718, he used the ship to blockade the port of Charleston, S.C., and effectively hold the city hostage until he collected a considerable ransom.

He was eventually killed in battle off North Carolina by the Royal Navy, his head suspended from a naval sloop to warn other pirates.

Photos courtesy of the North Carolina Department of Cultural Resources. For more pirate finds, visit the department's dedicated website, the Queen Anne's Revenge Shipwreck Project.

Carlos Slim Commentary

A few days ago I posted an article on Carlos Slim, the worlds wealthiest man. I had some technical difficulties with posting the full article, and did not get an opportunity to go as in depth as I would have liked in my evaluation and opinion.

Slim has been demonized for refusing to donate half his fortune to charity, like such notable billionaires like Warren Buffet and Bill Gates. Slim, has responded with his desire to be taxed to the full extent of his income – meaning that instead of donating to charities, the money goes to the government (Slim pays taxes to the US on his American holdings, as well, as to the Mexican federal government.) for use where the nation sees fit. This in itself is very admirable, especially considering a country like Mexico that is so lacking in significant infrastructure and education, and taxes on his billion dollar a year industry would do a world of good. Though where this may be an issue is the rampant political corruption in Mexico, and I question how much of the money would actually go to the public good.

I see excellent points on both sides of the fence on this issue – and feel that donating to those charities that one feels are worth your money will never be inappropriate, especially since it ensures your money goes to the areas where you would want it to. On the other hand, taxes pay for national defense, infrastructure, public education, and public works that although many oppose (like Welfare) are still a reality, and necessity in our society, and denying the federal government these funds seems a bit selfish. I do not enjoy taxes, and plan on getting as much of a return or credit as I can, but still, render unto Caesar what belongs to Caesar. Carlos Slim and Warren Buffet know more about money that I do, and I am sure they are making informed decisions about what to do with their fortunes, but I would not vilify any who chooses to keep his money, and render unto the government their 30 pieces of silver.

True Food Kitchen

This week has been restaurant week here in Newport Beach, where many select and fine dining establishments showcase their talent at discounted and reasonable prices. Unfortunately, with my MBA courses starting up again, and some other factors contributing, I was only able to make it out to one of the featured restaurants.

We picked True Food Kitchen based on their menu posted on the Restaurant week's home page - though in truth, almost all of the featured restaurants had very appealing fare. Located in Fashion Island, True Food Kitchen had all the potential to be uppity and snooty,, but the staff and environment gave it a very laid back, karma type atmosphere. It struck me as similar to a restaurant at a day spa – not that I have been to a day spa or anything, but if one had a restaurant, it would be like True Food Kitchen. Everything about the place is organic, soothing, and and just well, nice. Thats not to say that you don't get the standard small dog carrying Newport Beach socialite crowd, but given the location, that is hardly avoidable.

The food was excellent. True food was one of the only places in Restaurant week that offered specialty drinks as part of the fare. The Hangover Rx was great – coconut milk, orange juice and pineapple juice, while the Medicine man had too much straight soda water for me to enjoy it.

For appetizers we had the hummus and the caramelized onion tart. Both were excellent, and clearly made with freshest ingredients southern California has to offer. For lunch there was the chicken chopped salad, which offered an exquisite combination of flavors in its chicken, cheeses, dates and cranberries. I haven't been much of a chopped salad fan until recently, and this salad is one of the reasons why I started to like them. The Steak tacos were good. Well cooked and full of flavor, but I didn't take too well to the flour tortilla shells. Maybe I'm not used to organic foods, or the specific flavors of them, but I always thought that the shell was meant to augment the flavor of the taco, not overpower it. Overall, they were just too... flour-ey I guess.

For deserts we tried the apple crisp and the Chocolate Banana Tart. The apple crisp came out warm and delicious, but it is hard to mess up an apple crisp. The ice cream a la mode was interesting though, with a subtle mocha flavor that really complemented the crisp. The chocolate banana tart was incredible – caramelized bananas on a chocolate cookie with a type of whipped cream topping was more than I ever expected from a health food billed restaurant.

The staff was very friendly and accommodating, and helped us out with the vast choices of karma-riffic food. There is a very laid back feel to the place, but with a subtle elegance that gives the entire establishment a very nice environment – if a tad pretentious... but what chic place in Newport is not?

I think it comes out a bit on the pricey side, but you definitely get what you pay for. This will be a place we return to sooner rather than later.

Carlos Slim - Worlds Wealthiest Man

By Michelle Caruso-Cabrera Carlos Slim, the world's wealthiest man, is bullish on Mexico and says he is staying in the country despite the dramatic rise in violence. A mansion that he bought in New York is too big to live in—it's purely for investment. Carlos Slim In a wide-ranging interview, the telecom magnate put to rest rumors about a large mining acquisition, explained his rationale for buying nearly $200 million in New York real estate, and also why he is not making the pledge to give away half his wealth like Warren Buffett and Bill Gates. A wave of violence has left more than 30,000 dead in three years in the Latin American country, as President Felipe Calderon wages an all-out war against the country's drug cartels. As a result, Mexican executives living near the US border are said to be moving to places like Texas and Florida. Slim says he is not one of them. Instead, he is investing heavily in Mexico by purchasing real estate and spinning off two companies just this month that are newly listed on the Mexican Stock Exchange. In fact, he says those choosing not to invest in Mexico are making a big mistake: They will lose. "If they are already here, they will lose market share. If they are not here they will lose a very big market. We are 110-112 million people, and growing the economy," Slim says. On donating half his fortune to charity like billionaires Buffett and Gates are doing, Slim says it's the wrong way to resolve the world's problems. "What we need to do as businessmen, is to help to solve the problems, the social problems," he explains. "To fight poverty, but not by charity." In addition, he says donating the money to charity will result in huge tax deductions, depriving governments of much-needed tax revenue. "I think it will be a big mistake that companies like Microsoft [MSFT  28.3525    -0.1175  (-0.41%)   ] , Apple [AAPL  332.68    -6.16  (-1.82%)   ] —the leaders of the world in technology—be sold by the founders to put the cash to fund charities. They shouldn't. It is more important that they continue manage the companies." As for his recent purchase of a mansion on Fifth Avenue in New York for $44 million, he scoffed at the notion that someone would live there, suggesting that it was too big because it has at least eight floors. Instead, he is going to turn it into several apartments and perhaps lease part of the building to a restaurant at the street level. Slim himself lives in a modest home in Mexico City and says he doesn't like owning homes outside the country because they are too much of a headache. He says he would rather stay in a hotel. Slim said rumors that he wants to buy the Fresnillo mining company, listed in London, are completely untrue. Slim already has a mining company, Minera Frisco, that he just spun off and listed on the Mexican stock exchange this month. Its products include zinc, silver, and gold. He is very pleased with his investment in The New York Times [NYT  10.74    0.66  (+6.55%)   ] he says, and is not interested in buying the company the way Rupert Murdoch bought Wall Street Journal owner Dow Jones. Slim owns 10 million shares and lent the company $250 million with a 14 percent interest rate in late 2009. He is making $35 million in interest payments alone every year. Plus, he received warrants giving him the rights to 15.9 million shares. "It was a financial investment. We made a convertible bond, a bond with warrants. We are very happy with the formula," he says. Slim added, "We are not asking them how the business is going. We are looking from the outside. What they are going to do? What are their plans? We are not asking about that. We know that they are doing a good job." The next goal for his telecom companies is broadband penetration levels of up to 70 percent in Latin America. The number currently stands at less than 20 percent. Now that wireless penetration is nearing 100 percent or more (because some people have more than one phone), the next step is providing internet connections via smart phones on a large scale.

36 hours in Palm Springs

So, Sunday night we decided to embark on a little 36 hour vacation. With Spring semester beginning, and new jobs and the like coming up very quickly, on top of the January heat wave here in California, we figured a quick trip to Palm Springs would be well worth it.

The drive from Newport Beach wasn't that bad. All the map sites had put the trip at right around 2 hours, but we shaved it down to a little over and hour and a half, with no toll roads, and some beautiful scenery through the rolling hills of southern California. The weather was gorgeous, and we watched the temperature climb as we moved more and more inland. By the time we were in Palm Springs, it was 88 degrees of sun drenched warmth.

The town itself is a bit of a cheese resort town and retirement community. Not much seemed to stand out as far as things to do or night life, but that also likely had to do with it being Monday night.

We had chosen the Spa Resort Casino before hand. It was the cheapest of the nicer looking hotels in the area, and had booked online. The casino portion looked nice enough, but the hotel had a bit of a rundown, retro appearance. This was a bit frustrating, but at $77 a night, it wasn't bad. The outside of the hotel was deceptive, as inside, and the rooms, were very nice. Make sure to request a balcony, and the view of the nearby mountains is spectacular.

The pool area was small, but there were two huge mineral spas that felt incredible. The feel to the whole area was very retro – it had a very “Fear and Loathing in Las Vegas” vibe going for it. The reasonably priced drinks at the pool cabana – some of the best margaritas I have ever had, and everyone around the pool smoking (a rarity in California) just augmented this... Hunter S Thompson would feel right at home, and the bright, overexposed, 70's-80's retro vibe felt like I was in the last half of Goodfellas. Not in a bad way, mind you, it was very Rat Pack.

We had dinner Monday night at Share, a tapas and wine restaurant in the Hyatt hotel just a few blocks away. The restaurant was spectacular, though completely deserted. The menu was excellent, and fairly priced, especially considering the surroundings. The bruschetta was outstanding, and I highly recommend it. The whole feel was more like a Vegas nightclub, or an upscale Manhattan restaurant, and they pulled it off very well. Service was lacking, but I got the idea that there was only the hostess there that evening.

The spa resort casino was my first foray into gambling in California, and let me tell you, it was an experience. I have gone to casinos all over the country, and even tried my luck in Puerto Rico and Monte Carlo, but California is the only place where they make everything a card game. When I first stepped up to the craps table, it blew my mind. The dealer was shuffling two sets of cards, A-6, and turning over one of each set to get the score on the dice. There were the same odds, the same number of results, the same bets, and the same payouts, just using cards instead of dice. The dealers were very friendly in explaining California state gaming laws to me, and quite sociable in general, but playing with cards instead of dice just didn't sit well with me. It seemed to slow the game down considerably (though the dealer said it actually made play faster) and it wasn't nearly as social and energetic as throwing the bones in other states. Drinks on the floor are not comped either – which was frustrating, as I found this out only after I order some cocktails. Again, this is a result of California law, and not a reflection of the casino. After playing for a few hours – Blackjack, Craps, and Roulette (which is something else when only using cards... think wheel of fortune) I walked away up about 30% and was happy with the performance.

Overall, the mini stay-cation was nice and relaxing. I have a nice tan to start classes with, and some great experiences to share. I want to try out a few more of the casinos in the area, but Spa Resort is a nice one that is worth a look, and I am looking forward to my next trip to Palm Springs.